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Top Story Compliance Related


SEC reopens proposed exec compensation disclosure rule

The Securities and Exchange Commission yesterday reopened the comment period on proposed rules under the Dodd-Frank Act requiring disclosure of information reflecting the relationship between executive compensation actually paid by a company and the company's financial performance.

In 2015, the Commission proposed rules to implement the Dodd-Frank Act's "pay versus performance' requirement," but the rule was never finalized. In this reopening release, the SEC is considering whether additional performance metrics would better reflect Congress's intention in the Dodd-Frank Act and would provide shareholders with information they need to evaluate a company’s executive compensation policies.

The reopening in part is due to certain developments since 2015 when the proposing release was issued, including developments in executive compensation practices. The reopened comment period permits interested parties to submit further comments and data on the rule amendments the Commission first proposed in 2015 and welcomes comments in response to certain changes from the 2015 proposal that the Commission is considering, as well as additional questions being raised by the Commission in its reopening release.

The public comment period will remain open for 30 days following publication of the release in the Federal Register.


CFPB initiative to 'save Americans billions in junk fees'

The CFPB on Wednesday announced an initiative to "save households billions of dollars a year by reducing exploitative junk fees charged by banks and financial companies," describing a Bureau request for information as a "chance for the public to share input that will help shape the agency’s rulemaking and guidance agenda, as well as its enforcement priorities in the coming months and years."

The Bureau cited as examples hotels and concert venues that advertise rates, only to add "resort fees" and "service fees" after the fact, and fees purportedly charged to cover individual expenses, like paperwork processing, that "often exceed the actual cost of that service" and singled out "punitive late fees" of major credit card companies and 2019 bank revenue from overdraft and non-sufficient funds fees of over $15 billion.

The CFPB is interested in hearing about people’s experiences with fees associated with their bank, credit union, prepaid or credit card account, mortgage, loan, or payment transfers, including:

  • Fees for things people believed were covered by the baseline price of a product or service
  • Unexpected fees for a product or service
  • Fees that seemed too high for the purported service
  • Fees where it was unclear why they were charged

The CFPB is also interested in hearing from small business owners, non-profit organizations, legal aid attorneys, academics and researchers, state and local government officials, and financial institutions, including small banks and credit unions. Comments on the Bureau's request for information will be accepted through March 31, 2022.

Financial trade groups have already reacted to the Bureau's request for information, calling it "misguided" and saying it "paints a distorted and misleading picture" of the financial service industry.


FTC banning entities from student loan debt relief business

The Federal Trade Commission on Wednesday announced the remaining defendants in a deceptive student loan debt relief scheme are being permanently banned from providing all student loan debt relief products and services in settlements with the Commission.

The settlements with Jay Singh, the two corporate defendants he controls, and seven other corporate entities resolve charges the FTC brought in November 2019 against these and other defendants alleging that they lured borrowers by using fraudulent ads, pretending to be affiliated with the Department of Education, and promising to reduce or even eliminate consumers’ monthly student loan payments and principal balances in exchange for illegal upfront and monthly fees.

The stipulated order against Singh, American Financial Support Services Inc., and US Financial Freedom Center includes a monetary judgment of $7,557,001.10, which was partially suspended due to an inability to pay after the payment of $743,386.00. The stipulated order against the Arete Financial Group and related corporate defendants imposes a monetary judgment of $22 million, which is partially suspended based on their inability to pay. It also requires them to forfeit all of their frozen funds held by the receiver. The Commission plans to use the money recovered in this case for consumer refunds.

In addition to the bans on debt relief services, the orders also prohibit the defendants from making misrepresentations in connection with the sale of any products or services or violating the Telemarketing Sales Rule.


OSHA withdraws COVID rule

In recognition of recent a Supreme Court decision, the Department of Labor's Occupational Safety and Health Administration has published [87 FR 3928] a notice in today's Federal Register withdrawing its November 5, 2021, emergency temporary standard (ETS) that would have imposed a COVID-19 vaccination or testing and masking mandate on employees of companies with 100 or more employees. The withdrawal is effective today. The ETS also serves as a “proposed rule” for a “proceeding” to promulgate an occupational safety or health standard. OSHA is not withdrawing the ETS to the extent that it serves as a proposed rule.

Notwithstanding the withdrawal of the Vaccination and Testing ETS, OSHA continues to strongly encourage the vaccination of workers against the continuing dangers posed by COVID-19 in the workplace.


FTC annual update of transaction reporting thresholds

The Federal Trade Commission has announced that, for 2022, the size-of-transaction threshold for reporting proposed mergers and acquisitions under Section 7A of the Clayton Act will adjust from $92 million to $101 million. Also, the 2022 thresholds under Section 8 of the Act that trigger prohibitions on certain interlocking memberships on corporate boards of directors are $41,034,000 for Section 8(a)(1) and $4,103,400 for Section 8(a)(2)(A).


FinCEN proposes pilot on sharing SARs with foreign branches

The Financial Crimes Enforcement Network has published, at 87 FR 3719 in today's Federal Register, a Notice of Proposed Rulemaking seeking public comment on the proposed establishment of a limited-duration pilot program, subject to conditions set by FinCEN, to permit a financial institution with a SAR reporting obligation to share SARs and information related to SARs with the institution’s foreign branches, subsidiaries, and affiliates for the purpose of combating illicit finance risk, in accordance with Section 6212(a) of the Anti-Money Laundering Act of 2020 (AML Act).

Comments on the proposed rule will be accepted through March 28. 2022.


FFIEC best practices for exam information requests

The Federal Financial Institutions Examination Council has announced it has issued a statement announcing best practices for requesting examination information from supervised entities, and a common authentication solution for secure access to the FFIEC members’ supervision systems. The statement presents the results of the final phase of the Examination Modernization Project in which FFIEC members addressed the feedback provided by supervised entities regarding examination requests and authentication requirements for FFIEC members’ supervision systems.

The FFIEC members have identified the following principles as best practices for requesting examination information from financial institutions:

  • Information requests should be risk-focused and relevant to the examination.
  • Supervised institutions should be given sufficient time to produce new or additional requested information.
  • Examiners should coordinate information requests among the examination team to avoid duplicative and/or redundant requests.
  • Information requests should be made through the supervised institution’s designated regulatory examination point-of-contact, if applicable, to avoid placing burden on other institution staff.
  • Information requests and supplemental information requests should be clearly articulated in writing.


International Hizballah network sanctioned

The Department of the Treasury on Friday announced that OFAC has designated Hizballah-affiliated financial facilitator Adnan Ayad, as well as members of an international network of facilitators and companies connected to him and to Adel Diab.

For the names and identification information of the individuals and entities designated on Friday, see the January 21, 2022, BankersOnline OFAC Update.


OFAC activity yesterday

OFAC has issued another Venezuela-related General License concerning transactions related to a Petróleos de Venezuela, S.A. 2020 8.5 percent bond and updated a related Frequently Asked Question.

OFAC also is amending and reissuing its Transnational Criminal Organizations Sanctions Regulations and amending the definition of "applicable schedule amount" to make that amount automatically rise with OFAC's civil money penalty amounts when adjusted annually for inflation. Both of these amendments were published in today's Federal Register, and are effective immediately.

For more information and links to the License, FAQ, and amendments, see this BankersOnline OFAC Update.


OCC December enforcement actions

The OCC has released a list of enforcement actions taken against national banks, federal savings associations and individuals during December 2021. Included were

  • the previously announced $1,000,000 civil money penalty assessed on CommunityBank of Texas (coordinated with an $8,000,000 penalty levied by FinCEN)
  • a $3,620,000 civil money penalty assessed against Flagstar Bank, FSB for a pattern or practice of multiple violations of the Flood Disaster Protection Act and implementing regulations
  • an order of prohibition and for payment of a $150,000 civil money penalty against Carroll Green, former CFO, board chairman, CEO and president of Beauregard FSB, DeRitter, Louisiana, for multiple violations of Regulation O and for falsifying loan applications of bank borrowers


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