Top Story Compliance Related

The FDIC has announced settlements with Cross River Bank, Teaneck, New Jersey, and its institution-affiliated party, Freedom Financial Asset Management, LLC (FFAM), San Mateo, California, for unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission Act related to the marketing and origination of Consolidation Plus Loans (C+ Loans). In addition, the FDIC found the bank and FFAM violated TILA and EFTA.

As part of the settlement, Cross River Bank and FFAM stipulated to the issuance of Consent Orders, Orders for Restitution, and Orders to Pay Civil Money Penalties and required restitution to harmed consumers. Twenty million dollars have been placed in a segregated account for the purpose of providing restitution to harmed consumers. Additionally, the FDIC Orders assess civil money penalties of $641,750 against the bank, and $493,500 against FFAM.

For additional information and links to the FDIC's orders, see our Penalty page.

The SEC and FINRA have issued settled orders for $1.3m in penalties against Aegis Capital Corporation, a New York-based brokerage firm, which has admitted that it failed to file SARs on numerous suspicious transactions. The SEC’s order found that Aegis willfully violated an SEC financial recordkeeping and reporting rule. Aegis agreed to pay a $750,000 penalty and retain a compliance expert. FINRA also announced a settlement with Aegis that includes an additional $550,000 penalty. For additional information, including additional enforcement orders against individuals involved in the matter, see our Penalties page.

The CFPB has announced the tenth in its Call for Evidence series of Requests for Information to ensure the Bureau is fulfilling its proper and appropriate functions. The latest RFI seeks comments and information from interested parties to assist in assessing the overall effectiveness and accessibility of its guidance materials and activities, including implementation support. The Bureau is also considering whether it would be appropriate to make changes to the formats, processes, and delivery methods for providing this guidance, and whether it would be appropriate to make changes to the disclaimers used on certain forms of guidance. Publication of the RFI is scheduled for Monday, April 2. A 91-day comment period will end Monday, July 2, 2018.

The Federal Trade Commission has announced that its Bureau of Consumer Protection (BCP) has filed a comment with the Consumer Financial Protection Bureau in response to the Bureau’s request for information to help it assess the processes it uses to issue Civil Investigative Demands (CIDs). The Commission said that CIDs are key tools in investigating potential law violations and bringing enforcement actions to stop illegal conduct and provide relief to consumers.

The comment period on the CFPB's request for information on Bureau investigative demands and associated processes ends on April 26, 2018.

The OCC has announced it will host two workshops in Memphis, Tennessee, on May 8 and 9, for directors of national community banks and federal savings associations.

• The Compliance Risk workshop on May 8 will address the critical elements of an effective compliance risk management program. The workshop also focuses on major compliance risks and critical regulations. Topics of discussion include the Bank Secrecy Act, Flood Disaster Protection Act, Fair Lending, Home Mortgage Disclosure Act, Community Reinvestment Act, and other compliance areas of interest.
• The Operational Risk workshop on May 9 focuses on the key components of operational risk—people, processes, and systems. The workshop also covers governance, third-party risk, vendor management, internal fraud, and cybersecurity. The fee for each workshop is $99 and each session is limited to 35 registrants.

The OCC has announced it will host a workshop in Glendale, California, May 1–2, for directors, senior management team members, and other key executives of national community banks and federal savings associations supervised by the OCC. The Building Blocks: Keys to Success for Directors and Senior Management workshop combines lectures, discussion, and exercises to provide practical information on the roles and responsibilities of board participation. Taught by seasoned OCC supervision staff, the workshop focuses on duties and core responsibilities of directors and management, discusses major laws and regulations, and increases familiarity with the examination process.

The Federal Reserve Board is publishing amendments to Regulations A and D in today's Federal Register. The Regulation A amendment changes the interest rates in § 201.51(a) for primary credit and in § 201.51(b) for secondary credit provided to depository institutions by the Federal Reserve Banks to 2.25 percent and 2.75 percent, respectively, effective today, and applicable to credit extended beginning March 22. The Regulation D amendment increases the interest rates in § 204.10(b)(5) paid by the Federal Reserve Banks on required and excess reserves to 1.75 percent effective today and applicable to reserve balances beginning March 22. Both changes have been posted to BankersOnline's Regulations pages.

The Treasury Department has announced that, in a coordinated action with the U.S. Department of Justice, OFAC has designated one Iranian entity and 10 Iranian individuals under Executive Order (E.O.) 13694, “Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities,” as amended. The entity and individuals designated on March 23 engaged in the theft of valuable intellectual property and data from hundreds of U.S. and third-country universities and a media company for private financial gain.

As a result of Friday’s action, all property and interests in property of the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. For identification information, see our March 23, 2018, OFAC Update.

The Federal Reserve Board has announced that it is seeking to permanently bar Raysos Villalobos, a/k/a Ray Galvan, a former employee of Frost Bank, San Antonio, Texas, from employment in the banking industry and to impose a $9,819 fine and require a payment of $35,000 in restitution to Frost Bank. The former personal banker is alleged to have misappropriated approximately $30,000 from a bank customer's safe deposit box. The Board's notice of enforcement action alleges that Villalobos’ conduct constituted violations of law and unsafe or unsound banking practices.

The CFPB has announced the ninth in its planned series of a dozen requests for information (RFIs) as part of Acting Director Mack Mulvaney's "call for evidence" to ensure the Bureau is fulfilling it proper and appropriate functions to best protect consumers. This RFI focuses on the Bureau's inherited regulations and inherited rulemaking authorities. The RFI is scheduled for publication on March 26, to be followed by a 91-day comment period ending on June 25, 2018.