Top Story Compliance Related

The National Credit Union Administration has published in the Federal Register a notice and request for information [81 FR 36600] on ways the agency can modernize and improve two vehicles it uses to collect information for regulatory oversight of federally insured credit unions: the Call Report and Profile. The NCUA is seeking stakeholder input in several specific areas, including:

• Specific areas of the Call Report and Credit Union Profile that users find challenging;
• Sections or items that could be made optional for small or non-complex credit unions without compromising the agency’s ability to assess risk in these institutions;
• Items that could be added to the reports to enhance the agency’s analysis of the system’s performance trends;
• Whether Call Report database fields align with a credit union’s internal accounting;
• How the Call Report and Credit Union Profile could be reorganized to reduce credit unions’ reporting burden; and
• Additional suggestions or ideas from credit unions for collecting financial and non-financial information.

Comments must be received by 5 p.m. ET on August 1, 2016.

The CFPB has announced the update of its eRegulations platform by adding Regulations C (HMDA), X (RESPA), and DD (TISA). In addition, the Regulation Z eRegulation has been updated to include all amendments through May 2016.

The Consumer Financial Protection Bureau has filed a complaint in federal court against payment processor Intercept Corporation and two of its executives, Bryan Smith and Craig Dresser, for allegedly enabling unauthorized and other illegal withdrawals from consumer accounts by their clients. The Bureau announced the filing, which alleges that Intercept turned a blind eye to blatant warning signs of potential fraud or lawbreaking by its clients, including actions by federal and state authorities and "sky-high" rates of returned payments because of unauthorized withdrawals, insufficient funds, or invalid or closed accounts.

UPDATE: The U.S. District Court for the District of North Dakota granted the defendants' motion to dismiss without prejudice the complaint against Intercept Corporation et al. on March 17, 2017. The court found that the CFPB complaint did not contain sufficient factual allegations to back up its statements regarding Intercept's allegedly unlawful acts or missions; failed to sufficiently allege facts tending to show that industry standards were violated; failed to plead facts sufficient to support a legal conclusion that consumers were injured or likely to be injured; and failed to include allegations to support a finding that Intercept interfered with consumers' ability to understand the terms of their dealing with Intercept's clients or to support a finding that Intercept took unlawful advantage of consumers.

The Federal Trade Commission has provided its 2015 Annual Enforcement Activities Report to the CFPB. The report covers enforcement and related activities regarding Regulations Z (Truth in Lending Act), M (Consumer Leasing Act), and E (Electronic Fund Transfer Act). It addresses, among other things, the Commission’s enforcement actions related to non-mortgage credit -- including automobile purchases and financing, car title loans, payday lending, and consumer electronics financing -- and mortgage-related credit such as forensic audit scams; rulemaking, research, and policy development related to truth in lending; and consumer and business education regarding truth in lending requirements. It also addresses consumer leasing enforcement actions, as well as negative option and other cases involving electronic fund transfers, and rulemaking related to electronic fund transfers.

The 2015 terror assets report has been released by OFAC. This is the twenty-fourth annual report to Congress on the assets in the U.S. relating to terrorist countries and international terrorism program designees.

The Federal Trade Commission has charged a nationally advertised gold and silver marketing operation with bilking millions from consumers. The FTC seeks to recover money from the defendants to return to their customers, many of whom allegedly lost thousands of dollars to the scheme. According to the FTC’s complaint, the defendants marketed gold and silver as investments, but often failed to deliver the goods. Operating as Discount Gold Brokers, the defendants offered gold and silver “at discounted prices,” with “zero commissions, fees, or expenses,” and at “zero percent above dealer cost.” In response, many consumers used their retirement savings to buy the precious metals, with individual orders ranging from $1,000 to $300,000. The complaint alleges that the defendants required up-front payment via check or wire and some consumers used their family trust or retirement accounts to pay.

The defendants—DiscountMetalBrokers Inc. (formerly known as Discount Gold Brokers Inc. and Discount Metal Brokers Inc., and doing business as Discount Gold Brokers and North American Discount Gold.com); Donald Lee Dayer; Katherina Dayer; and Michael Scott Berman—are charged with violating the FTC Act and the FTC’s Mail, Internet or Telephone Order Merchandise Rule, which requires sellers soliciting orders via mail, internet, or phone to have a reasonable basis to expect that they can ship merchandise within any advertised time frame, or within 30 days if no specific time frame is promised.

OFAC has announced the removal of an entity with an SDNTK designation from the SDN list. See our OFAC update for the details. OFAC also published a new Kingpin Act/Panama-related General License.

The FDIC has released the ratings received by 67 state nonmember banks recently evaluated for compliance with the Community Reinvestment Act. Three of the banks were rated outstanding, 63 were found to be satisfactory, and one obtained a needs to improve rating.

The Federal Reserve Board has announced it has approved an advance notice of proposed rulemaking (ANPR) inviting comment on conceptual frameworks for capital standards that could apply to systemically important insurance companies and to insurance companies that own a bank or thrift. The Board also approved a proposed rule that would apply enhanced prudential standards to systemically important insurance companies designated by the Financial Stability Oversight Council.

Update: The ANPR on Capital Requirements for Supervised Institutions Significantly Engaged in Insurance Activities was published at 81 FR 38631 on June 14, 2016. Comments are due August 17, 2016. The proposed rule on Enhanced Prudential Standards for Systemically Important Insurance Companies was published at 81 FR 38610 on June 14, 2016. Comments are due August 17, 2016.

Update: On 7/25/16, the Board announced an extension of the comment period through September 16, 2016.

The OCC has released a list of the CRA evaluation ratings received by 21 national banks and federal savings associations that became public during May. Five received an outstanding rating, fifteen were rated satisfactory and one garnered a needs to improve rating.