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The Federal Reserve Board has announced it has issued a notice of prohibition against two institution-affiliated parties of Regions Bank, Birmingham, Alabama. The individuals, who held senior positions at Regions Equipment Finance Corporation (REFCO), a Regions Bank subsidiary, were recently indicted for bank bribery, wire fraud, money laundering, and conspiracy. According to the indictment, they conspired to defraud Regions and REFCO by directing REFCO to purchase insurance policies from a shell company that paid kickbacks to them. The indictment further alleges that they attempted to conceal those kickbacks by establishing additional shell companies to receive the kickbacks.

The Federal Reserve Board has announced the execution of a written agreement with Rock Bancshares, Inc. and its subsidiary, Heartland Bank, both of Little Rock, Arkansas.

OFAC has announced its designation of seven individuals and eight entities under two Executive Orders related to Russia and Ukraine, and identified two vessels as blocked property. In addition, the names of twenty-six entities identified as subsidiaries of the Russian Agricultural Bank and Novatek were added to the Sectoral Sanctions Identification (SSI) list. See our December 20, 2017, OFAC Update for the details.

The CFPB has announced its filing of complaints against four Virginia-based companies — Spotsylvania Gold & Pawn, Inc.; Fredericksburg Pawn, Inc.; Pawn U.S.A., Inc.; and A to Z Pawn, Inc. The CFPB alleges that the companies misled their customers about the costs of their loans by disclosing deceptively low annual percentage rates (APRs) that did not reflect all of the fees and charges tacked onto the loans.

The Federal Reserve Board has announced its approval of a rule requiring for the first time that large banking organizations publicly disclose certain quantitative liquidity risk metrics. The disclosures will provide market participants and the public with reliable and timely information for evaluating the financial strength and resiliency of the nation's largest banking organizations. The final rule requires large banking organizations to disclose their consolidated Liquidity Coverage Ratio (LCR) each quarter based on averages over the prior quarter. Firms also are required to disclose their consolidated high-quality liquid assets (HQLA) amounts, broken down by HQLA category. Additionally, firms are required to disclose their projected net stressed cash outflow amounts, including retail inflows and retail deposit outflows, derivatives inflows and outflows, and several other measures.

UPDATE: Published at 81 FR 94922 on December 27, 2016, with effective date of April 1, 2017.

In remarks at the University of Baltimore mid-year commencement, Federal Reserve Board Chair Yellen discussed the job market. She said, “while I expect workers will continue to face some challenges in the coming years, I believe, for two reasons, that the job prospects and career opportunities for new graduates at this time are very good. First, after years of a slow economic recovery, you are entering the strongest job market in nearly a decade. The unemployment rate, at 4.6 percent, is near what it was before the recession. This is a level that has been associated with good job opportunities. ...The second reason for optimism is that you have already done the one thing that research shows is most important to a successful and stable working life: earning the degrees you will receive today. Economists are not certain about many things. But we are quite certain that a college diploma or an advanced degree is a key to economic success. Those with a college degree are more likely to find a job, keep a job, have higher job satisfaction, and earn a higher salary.”

The OCC, Federal Reserve, FDIC and NCUA have issued an interagency "Frequently Asked Questions on the New Accounting Standard on Financial Instruments – Credit Losses" to assist financial institutions and examiners with the new accounting standard, Accounting Standards Update 2016-13, Topic 326, “Financial Instruments – Credit Losses,” issued by the Financial Accounting Standards Board (FASB) on June 16, 2016. The FAQs:

• summarize key elements of the new accounting standard, focusing on such concepts as effective dates, scope, transition and measurement approaches;
• highlight areas within existing U.S. generally accepted accounting principles that will change with the new accounting standard;
• discuss initial supervisory views with respect to measurement methods, portfolio segmentation, use of vendors, scalability, data needs, and allowance processes; and
• outline certain steps that financial institutions are encouraged to take to prepare for the transition to the new accounting standard.

• OCC Bulletin 2016-45
• FDIC FIL-79-2016
• Federal Reserve Board SR 16-19

Related stories:

• FASB issues new guidance on credit losses accounting - June 16, 2016
• Agencies' statement on new accounting standard - June 20, 2016

The Office of the Comptroller of the Currency (OCC) has published a final rule in today's Federal Register addressing the conduct of receiverships for national banks that are not insured by the Federal Deposit Insurance Corporation (FDIC) (uninsured banks) and for which the FDIC would not be appointed as receiver. The final rule implements the provisions of the National Bank Act (NBA) that provide the legal framework for receiverships of such institutions. The final rule adopts the rule as proposed on September 13, 2016, without change. It becomes effective on January 19, 2017. As of December 2, 2016, the OCC supervised 52 uninsured banks, all of which are national trust banks.

The Federal Emergency Management Agency has published a final rule in this morning's Federal Register identifying communities in Brazoria, Chambers, Fort Bend, Galveston, Harris, and Montgomery Counties, Texas, that are scheduled for suspension from the National Flood Insurance Program (NFIP) on January 6, 2017, for noncompliance with the floodplain management requirements of the program.

The CFPB has posted a Bureau Blog article announcing the key areas on which its fair lending team will focus in 2017:

• Redlining. It will continue to evaluate whether lenders have intentionally avoided lending in minority neighborhoods.
• Mortgage and Student Loan Servicing. It will determine whether some borrowers who are behind on their mortgage or student loan payments may have more difficulty working out a new solution with the servicer because of their race or ethnicity.
• Small Business Lending. Congress expressed concern that women-owned and minority-owned businesses may experience discrimination when they apply for credit, and has required the CFPB to take steps to ensure their fair access to credit.