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Top Story Compliance Related


Equifax Alternative Dispute Resolution Program

Equifax has settled a suit (Thomas v. Equifax Information Services, LLC) in the United States District Court for the Eastern District of Virginia. The court approved the settlement related to claims that Equifax included inaccurate information on its credit reports about tax liens and civil judgments, including how they were disposed (or described), or that did not belong on the credit reports.

Equifax has established an Alternative Dispute Resolution Program (“ADR Program”) for consumers who were injured by an Equifax credit report containing an inaccurate civil judgment or tax lien. Affected consumers can participate now. If they are able to show they were injured, they can get a payment of $1,500. The ADR Program is available until December 31, 2021. Consumers may be included if Equifax sent their credit report to a third party between June 28, 2015 and May 14, 2019, and the report contained a tax lien or civil judgment that was inaccurate or did not belong to them.

Consumers should visit the ADR Program website to fill out a form to participate in the program.


Court rules for FTC in student-loan debt-relief scam case

The Federal Trade Commission has announced that the U.S. District Court for the Central District of California has ruled in favor of the Commission in a case against the operators of a student loan debt relief scheme. The defendants are banned from telemarketing or providing debt relief services.

The court found that the operators, doing business as Federal Direct Group, Mission Hills Federal, The Student Loan Group, and National Secure Processing, falsely claimed that consumers’ loans would be forgiven or their payments reduced to a specific amount, and that defendants would take over servicing of consumers’ loans and apply most or all of consumers’ monthly payments to pay down their student loans. The defendants then charged consumers hundreds to thousands of dollars in illegal upfront fees. The defendants also obtained consumers’ student loan credentials to log in and change consumers’ contact information, effectively hindering or entirely preventing consumers’ loan servicers from communicating with consumers. The defendants' actions violated the Federal Trade Commission Act and the Telemarketing Sales Rule.

In addition to permanently banning the defendants from telemarketing, and debt relief businesses, the court's ruling also imposes a $27.6 million judgment from which the FTC may provide redress to affected consumers.

The defendants subject to the order are Elegant Solutions, Inc. (also doing business as Federal Direct Group); Trend Capital Ltd. (also doing business as Mission Hills Federal); Dark Island Industries, Inc. (also doing business as Federal Direct Group and formerly known as Cosmopolitan Funding, Inc.); Heritage Asset Management, Inc. (also doing business as National Secure Processing); Tribune Management, Inc. (also doing business as The Student Loan Group); and four individual defendants, Mazen Radwan, Rima Radwan, Dean Robbins, and Labiba Velazquez (née Radwan).


CFPB issues annual Reg Z inflation adjustments

The CFPB has issued a final rule revising certain dollar amounts in Regulation Z, based on the annual percentage change reflected in the Consumer Price Index (CPI) in effect on June 1, 2020.

  • For open-end consumer credit plans under the CARD Act amendments to TILA, the adjusted dollar amount in 2021 for the safe harbor for a first violation penalty fee will remain unchanged at $29 and the adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will also remain unchanged at $40.
  • For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages in 2021 will be $22,052.
  • The adjusted points-and-fees dollar trigger for high-cost mortgages in 2021 will be $1,103.
  • For qualified mortgages, the maximum thresholds for total points and fees in 2021 will be
    • 3 percent of the total loan amount for a loan greater than or equal to $110,260;
    • $3,308 for a loan amount greater than or equal to $66,156 but less than $110,260;
    • 5 percent of the total loan amount for a loan greater than or equal to $22,052 but less than $66,156;
    • $1,103 for a loan amount greater than or equal to $13,783 but less than $22,052; and
    • 8 percent of the total loan amount for a loan amount less than $13,783.

The rule will be effective January 1, 2021. The amendments have been added to BankersOnline's Regulations pages for Regulation Z §§ 1026.32, 1026.43, and 1026.52.


ADA 30th anniversary webinar

The National Credit Union Administration has posted a reminder that federally insured credit unions can join a meaningful conversation on the importance of financial inclusion for persons with disabilities and the 30th Anniversary of the Americans with Disabilities Act (ADA) during a webinar hosted by the NCUA on Thursday, July 23, beginning at 2 p.m. EDT.

During the webinar, Chairman Hood will discuss how organizations can expand their efforts to ensure the disabled have equal access to opportunities and resources with Michael Morris, director of the National Disability Institute, and Jennifer Laszlo Mizrahi, a disabilities rights advocate and president of RespectAbility. Online registration for the two-hour webinar is now open.


OFAC targets Chinese drug traffickers and Ortega inner circle

On Friday, Treasury reported that OFAC had designated four individuals and one entity under the Fopreiogn Narcotics Kingpin Designation Act for providing support to the Zheng Drug Trafficking Organization.

Treasury also announced that OFAC had designated Juan Carlos Ortega Murillo, son of Nicaraguan President Daniel Ortega; Jose Jorge Mojica Mejia; and two companies they use in an effort to distribute regime propaganda and launder money.

For identity information on the individuals and entities designated, see BankersOnline's OFAC Update, which also includes a list of removals and an update made by OFAC on Friday.


CFPB updates COVID-19 consumer complaint data

The CFPB has issued an updated Complaint Bulletin, analyzing the more than 8,000 complaints it received from January through May 2020 that mention coronavirus or related terms. The bulletin shows that mortgage (19 percent), credit card (18 percent), and credit or consumer reporting (18 percent) complaints top the list of those the Bureau has received that mention coronavirus keywords.

  • In 55 percent of mortgage complaints, consumers identified struggling to pay the mortgage as the issue.
  • In 23 percent of credit card complaints, consumers identified a problem with purchase shown or statement as the issue.
  • In 55 percent of credit or consumer reporting complaints, consumers identified incorrect information on their credit report as the issue.


FTC sends $1M+ to scam victim businesses

The Federal Trade Commission reports it is sending refunds totaling more than $1 million to business owners who were victims of a deceptive scheme that sold labor law posters.

According to lawsuits brought by the FTC, the Florida Office of the Attorney General, and the Texas Office of the Attorney General, Thomas Henry Fred, Jr., and Starwood Consulting, LLC, also doing business as Corporate Compliance Services, sent mailers that looked like invoices from government agencies to newly established businesses. The notices directed them to pay $84 for posters and warned that, “Failure to comply with posting regulations can lead to fines of up to $17,000.” To convince businesses that the mailers were invoices that must be paid, the mailers cited multiple federal statutes and listed a “Business ID” number and a response deadline. The FTC is mailing 26,817 checks with a value of $40.80 each to victims of the scheme.


FinCEN alert on Twitter virtual currency scam

FinCEN has issued an Alert [FIN-2020-Alert001] emphasizing a high-profile scam exploiting Twitter accounts to solicit fraudulent payments denominated in convertible virtual currency (CVC). Cyber threat actors compromised the accounts of public figures, organizations, and financial institutions to solicit payments to CVC accounts, claiming that any CVC sent to a wallet address would be doubled and returned to the sender. Persons who receive one of these solicitations should not send money or provide any personal or confidential information to these individuals without independent verification of authenticity.

The Alert says it is critical that CVC exchanges and other financial institutions identify and report suspicious transactions associated with this type of activity as quickly as possible. For example, a CVC or other financial account may receive a high volume of payments in a short period of time from previously unaffiliated accounts and/or multiple originating CVC addresses.


Labor Department seeks info on Family and Medical Leave regs

The Department of Labor has published [85 FR 43513] a request for information regarding the department's regulations implementing the Family and Medical Leave Act of 1993.

The Department is asking the public for information concerning the effectiveness of the current regulations and to aid the Department in its administration of the FMLA. The information provided will help the Department identify topics for which additional compliance assistance could be helpful, including opportunities for outreach to ensure employers are aware of their obligations under the law and employees are informed about their rights and responsibilities in using FMLA leave.

Comments will be accepted through September 15, 2020.


OFAC amends Nicaragua Sanctions regulations

OFAC has published a final rule [85 FR 43436] in this morning's Federal Register amending the Nicaragua Sanctions Regulations at 31 CFR 582 to incorporate the Nicaragua Human Rights and Anticorruption Act of 2018 by updating the authority citation and the prohibited transactions and delegation sections. OFAC also added a general license authorizing certain United States government activities. The rule is effective today.


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