Top Story Compliance Related

The Treasury Department announced Monday that OFAC and the State Department have targeted Pakistan-based terrorst group Lashkar e-Tayyiba (LeT) and its political party, the Milli Muslim League (MML) by designating MML and seven of its officials as Specially Designated Global Terrorists. The State Department amended the designation of LeT (designated in 2001) to add the alias MML, as well as another alias, Tehreek e-Azadi-e-Kashmir (TaK).

As a result of Monday’s designations, all property and interests in property of these persons subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. Treasury's announcement said "Those working with the Milli Muslim League, including providing financial donations, should think twice about doing so or risk exposure to U.S. sanctions.”

Identifying information on the seven individuals designated on Monday and the changes to the Lashkar e-Tayyiba listing can be found in our April 2 and April 3 OFAC Updates.

The CFPB has adopted its first official seal. An article with a graphic of the seal and an explanation of its symbolism has been posted on the CFPB Blog.

The FDIC has released a list of orders of administrative enforcement actions taken in February 2018 against banks and individuals. The administrative enforcement actions in those orders consisted of one consent order; four Section 19 orders; seven removal and prohibition orders; one civil money penalty; two terminations of consent orders; one termination of insurance; and one order of restitution. Additionally, the FDIC made public a termination of consent order and a termination of insurance issued in December 2017, and a Section 19 order issued in January 2018.

The order for a civil money penalty, which also included an order for removal and prohibition, was issued to a former North Carolina bank vice president whose lending to a nominee borrower resulted in a loss of over $105,000 to his bank.

The Federal Reserve Board has submitted to Congress its annual report outlining the Office of Minority and Women Inclusion’s activities, successes, and challenges.

A U.S. District Court judge has invalidated a provision of the National Credit Union Administration's Field of Membership rule added in 2016 that allowed community credit unions to serve large regions covering multiple metro areas with huge populations. Overturned in a memorandum opinion from Judge Dabney Friedrich of the U.S. District Court for the District of Columbia were the expanded definitions found in the NCUA's December 7, 2016 [81 FR 88412] rule for the terms "local community" and "rural district." The Court ruled that the NCUA violated the Administrative Procedure Act in expanding the scope of the two definitions by "exceeding the agency's statutory authority."

The Federal Emergency Management Agency has published a rule in today's Federal Register identifying communities in California, Colorado and Iowa that have been scheduled for suspension from the National Flood Insurance Program on April 4, 2018, for noncompliance with the floodplain management requirements of the program. Communities to be suspended include:

• CA: City of Thousand Oaks, Ventura County; unincorporated areas of Ventura County; City of Westlake Village, Los Angeles and Ventura Counties.
• CO: Cities of Brush and Fort Morgan, Morgan County; unincorporated areas of Morgan County.
• IA: City of Corwith, Hancock County; Forest City, Hancock and Winnebago Counties; City of Garner, Hancock County; City of Woden, Hancock County; unincorporated areas of Hancock County.

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.