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01/14/2022

D&B to change operations and issue refunds

The Federal Trade Commission announced on Thursday that Dun & Bradstreet (D&B) has agreed to an FTC proposed order requiring substantial changes in the firm’s operations that will benefit small- and mid-sized businesses.

D&B is a leading provider of business credit reports, which can impact firms’ ability to build relationships with vendors and other counterparties. But many businesses have complained of errors in these reports that have cost them time, expense, and opportunities. As detailed in the FTC’s administrative complaint, D&B failed to give these businesses a clear, consistent, and reliable process to get these errors fixed. Moreover, D&B profited from businesses’ pain by selling them a line of products that purported to help them improve their reports. In fact, for many businesses, these benefits proved illusory, while the costs were all too real.

Under the order, D&B will also provide refunds to certain businesses that purchased the company’s products in the belief that using the products would improve their business credit scores and ratings.

01/14/2022

IRS issues FAQs on 2021 Recovery Rebate Credit

The Internal Revenue Service yesterday announced it has issued frequently asked questions (FAQs) regarding the 2021 Recovery Rebate Credit.

Individuals who did not qualify for, or did not receive, the full amount of the third Economic Impact Payment may be eligible to claim the 2021 Recovery Rebate Credit based on their 2021 tax year information. Individuals may have received their third Economic Impact Payment through initial and "plus-up" payments in 2021. To claim any remaining credit for 2021, eligible people must file a 2021 tax return, even if they usually do not file taxes.

Also, people who did not receive all of their first and second Economic Impact Payments in 2020 can receive those amounts only by filing a 2020 tax return (or amending a previously filed return) and claiming the 2020 Recovery Rebate Credit. They should review the IRS Recovery Rebate Credit webpage to determine their eligibility.

01/14/2022

REO listing period expanded

The Federal Housing Administration (FHA) has announced it is increasing its exclusive listing period on certain HUD single-family real-estate owned (REO) homes to allow more time for owner occupants, HUD-approved nonprofit organizations, and governmental entities to submit bids for the purchase of these homes before they become eligible for purchase by investors. This expansion is the latest action consistent with the Biden-Harris Administration’s housing supply announcement on September 1, 2021, that it would seek to make more HUD-owned properties available to owner-occupants and non-profit organizations.

01/14/2022

CFPB Bulletin on unlawful medical debt collection and reporting

Yesterday, the CFPB announced it has issued Bulletin 2022-01, "Medical Debt Collection and Consumer Reporting Requirements in Connection with the No Surprises Act," to remind debt collectors and credit bureaus of their legal obligations in light of the No Surprises Act, which protects consumers from certain unexpected medical bills.

Companies that try to collect on medical bills that are prohibited by the No Surprises Act, or who furnish information to credit bureaus about such invalid debts, may face significant legal liability under the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA). The bulletin advises credit bureaus that the accuracy and dispute obligations imposed by the FCRA apply with respect to debts stemming from charges that exceed the amount permitted by the No Surprises Act.

01/13/2022

FDIC regulatory relief for Washington institutions

The FDIC's Financial Institution Letter FIL-5-2022, issued yesterday, describes steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of the State of Washington affected by flooding and mudslides November 13–15, 2021. FEMA declared a federal disaster for the area on January 5, 2022 (the FIL states "January 5, 2021, in error). Currently, the area covered by the declaration comprises Clallam, Skagit, and Whatcom counties, and the Lummi, Nooksack, and Quileute Indian Reservations.

01/13/2022

OFAC targets supporters of DPRK weapons programs

The Treasury Department on Wednesday announced that OFAC had designated five Democratic People’s Republic of Korea (DPRK) individuals—Choe Myong Hyon, Sim Kwang Sok, Kim Song Hun, Kang Chol Hak, and Pyon Kwang Chol—responsible for procuring goods for the DPRK’s weapons of mass destruction (WMD) and ballistic missile-related programs. These actions are in line with U.S. efforts to prevent the advancement of the DPRK’s WMD and ballistic missile programs and impede attempts by Pyongyang to proliferate related technologies.

In a related action, the Department of State designated DPRK national O Yong Ho, Russian national Roman Anatolyevich Alar, and Russian entity Parsek LLC pursuant to E.O. 13382 for having engaged in activities or transactions that have materially contributed to the proliferation of weapons of mass destruction or their means of delivery by DPRK.

See the January 12, 2022, BankersOnline OFAC Update for identification information for the designated individuals and entity.

01/13/2022

Fed releases January 12 Beige Book

The Federal Reserve Bank of Kansas City has released the Federal Reserve's January 12, 2022, edition of the Beige Book, with observations collected on or before January 3 on the economy in each of the Federal Reserve Districts.

01/13/2022

Reserve Banks issue 2 Outstanding CRA ratings

Our monthly review of the Federal Reserve System's archive of Community Reinvestment Act evaluations has found that the Reserve Banks made 16 evaluations public in December. Fourteen of those evaluations were rated Satisfactory. We congratulate the two banks whose evaluations received Outstanding ratings:

01/13/2022

HUD awards $140.7M to protect families from housing hazards

HUD yesterday announced it has awarded nearly $104.7 million to 60 non-profit organizations, and state and local government agencies located in 29 states to protect children and families from home health hazards. The grants are awarded through its Healthy Homes Production Grant Program which will help grantees identify health and safety hazards in low-income families’ homes. The grants will protect children and families with incomes at or below eighty percent of the area median income level by targeting significant lead and health hazards in over 7,400 low-income homes for which other resources are not available.

01/12/2022

Unauthorized banking alert

The OCC has issued an Unauthorized Banking Report identifying two entities—Fedro Asset Bank N.A. and Ledge Community Credit Union, N.A.—claiming to operate banking facilities in the state of Florida. The January 11, 2021, BankersOnline Alerts & Counterfeits entry has additional information on the names under which these entities have been operating and their purported locations.

01/12/2022

OFAC settles with Hong Kong company for $5M+

On Tuesday, OFAC announced a settlement with Sojitz (Hong Kong) Limited ("Sojitz HK"), a Hong Kong, China-based company that engages in offshore trading and cross-border trade financing. Sojitz HK agreed to remit $5,228,298 to settle its potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR).

In its Enforcement Release, OFAC said that this case "demonstrates the importance of effective risk-based internal controls to identify, interdict, escalate, and prevent activity prohibited by the sanctions programs administered by OFAC. Even where elements of a reasonable compliance program are in place, employees may act on their own initiative to pursue profit over compliance and find ways to circumvent their organization’s policies and procedures. In such cases, their actions can result in violations attributable to their organizations. This case also highlights the risks and potential costs that non-U.S. companies are exposed to when the U.S. financial system is used for transactions that may involve sanctioned persons or jurisdictions."

Details of the Sojitz HK conduct that led to the settlement can be found in the January 11, 2022, BankersOnline Penalty page.

01/12/2022

FDIC & FinCEN announce digital identity proofing tech sprint

On Tuesday, the FDIC and FinCEN jointly announced a Tech Sprint to develop solutions for financial institutions and regulators to help measure the effectiveness of digital identity proofing—the process used to collect, validate, and verify information about a person. The agencies said that through the Tech Sprint, they seek to increase efficiency and account security; reduce fraud and other forms of identity-related crime, money laundering, and terrorist financing; and foster customer confidence in the digital banking environment.

The challenge to Tech Sprint participants is to answer the question, "What is a scalable, cost-efficient, risk-based solution to measure the effectiveness of digital identity proofing to ensure that individuals who remotely (i.e., not in person) present themselves for financial activities are who they claim to be?"

Additional information on the Tech Sprint is available in Measuring the Effectiveness of Digital Identity Proofing for Digital Financial Services.

01/12/2022

NCUA extends self-assessment deadline

The NCUA yesterday announced that, to allow federally insured credit unions more time to complete and submit the voluntary Credit Union Diversity Self-Assessment, the agency has extended the deadline from January 15 to January 31, 2022. The Self-Assessment is a tool designed to help credit unions evaluate and advance their diversity policies and practices. Credit unions can voluntarily use the online tool to create a baseline for action, such as making the commitment to develop new products and services aimed at addressing the needs of communities of color, increasing investment in underserved areas, or improving community marketing and outreach.

01/12/2022

IRS updates 2021 Child Tax Credit FAQs

The IRS has issued an Update of its FAQs on the 2021 Child Tax Credit and Advance Child Tax Credit to help eligible families properly claim the credit when they prepare and file their 2021 tax return. The extensive update includes multiple streamlined questions for use by taxpayers and tax professionals. The 21-page document covers 12 topics:

  • Topic A: General Information
  • Topic B: Eligibility for Advance Child Tax Credit Payments and the 2021 Child Tax Credit
  • Topic C: Calculation of the 2021 Child Tax Credit
  • Topic D: Calculation of Advance Child Tax Credit Payments
  • Topic E: Advance Payment Process of the Child Tax Credit
  • Topic F: Updating Your Child Tax Credit Information During 2021
  • Topic G: Receiving Advance Child Tax Credit Payments
  • Topic H: Reconciling Your Advance Child Tax Credit Payments on Your 2021 Tax Return
  • Topic I: U.S. Territory Residents and Advance Child Tax Credit Payments
  • Topic J: Unenrolling from Advance Payments
  • Topic K: Verifying Your Identity to View your Payments
  • Topic L: Commonly Asked Shared-Custody Questions

01/11/2022

Tax filing season begins January 24

The IRS has announced that tax season will start on Monday, January 24, 2022, when the agency will begin accepting and processing 2021 tax year returns.

The IRS anticipates that most taxpayers will receive their refund within 21 days of when they file electronically, barring any issues with processing their tax return. The IRS urges electronic filing to avoid delays in processing and to utilize information letters provided by the agency when filing their returns to avoid errors that can lead to delays.

01/11/2022

OFAC designates Nicaraguan officials

The Treasury Department yesterday announced OFAC has designated six officials of the Government of Nicaragua pursuant to Executive Order 13851. The targeted individuals are identified in the January 10, 2021, BankersOnline OFAC Update.

As a result of this action, all property and interests in property of these persons that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more in the aggregate by one or more of such persons are also blocked. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.

01/11/2022

Bureau sues United Holding Group for debt collection practices

Yesterday, the CFPB announced it has sued United Debt Holding (UDH), JTM Capital Management, United Holding Group (UHG), and their owners, Craig Manseth, Jacob Adamo, and Darren Turco, for illegal debt-collection practices. The Bureau alleges that the defendants placed consumer debt with, or sold consumer debt to, collection companies that used unlawful and deceptive collection tactics, and that the defendants knew, or should have known, the collection companies made false threats and false statements to consumers.

The Bureau reports that UHG, headquartered in Williamsville, New York, was founded by Manseth, Adamo, and Turco in May 2017. Before co-founding UHG, Manseth owned UDH, Turco worked at UDH as a manager, and Adamo owned JTM. All three companies are debt collectors that buy debt portfolios from creditors, or other debt sellers, and then place the portfolios with or sell them to other collection companies. From September 2017 through April of 2020, claims the CFPB, the defendants collectively placed debts with a face value of more than $8 billion. The three individuals formed UHG, and UHG then managed ongoing business for UDH and JTM. According to the CFPB's complaint, the Bureau alleges all three companies allowed third-party collection companies to deceive consumers and placed or sold debt portfolios to collection companies engaged in unlawful behavior.

  • The defendants received hundreds of complaints that their collection companies were threatening arrest, jail, or lawsuits if consumers did not pay their debts imminently.
  • The defendants also received recorded phone calls in which some of their third-party collection companies falsely threatened suits or made false statements about credit reporting.
  • From 2015 through January 2017, UDH’s compliance staff reviewed recorded phone calls from JTM’s collection companies and found that many contained major violations of federal law.
  • Instead of terminating its relationship with JTM, UDH increased the amount of business it sent to JTM.
  • By 2017, UDH was using JTM almost exclusively for debt placements despite objections by UDH’s compliance manager.

The CFPB is seeking monetary relief for consumers, disgorgement of unjust gains, injunctive relief, and a civil money penalty.

The complaint is not a final finding or ruling that the defendants have violated the law.

01/11/2022

Fed finalizes rule streamlining subscription reporting of member banks

The Federal Reserve Board has announced it has finalized a technical rule that will streamline reporting requirements for member banks related to their subscriptions to Federal Reserve Bank capital stock. The final rule is substantially similar to the proposal published on April 13, 2021.

The final rule amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to Federal Reserve Bank capital stock, except in the context of mergers.

The rule will be effective 30 days after publication in the Federal Register.

Update on publication and effective date:Published [87 FR 2027] on January 13, 2022, with effective date of February 14, 2022. The amendments have been posted to the BankersOnline Regulations pages.

01/11/2022

Clarida leaving Fed Board at end of week

Richard H. Clarida has announced his intention to resign from the Board of Governors of the Federal Reserve System on January 14, 2022. He has been a member of the Board and Vice Chair since September 17, 2018. His term as Governor is due to expire at the end of the month.

01/11/2022

SEC awards whistleblowers over $4 million

The SEC has announced two awards totaling more than $4 million to whistleblowers who provided information and assistance in two separate covered actions.

In the first order, the SEC issued an award of approximately $2.6 million to one whistleblower. The whistleblower, who reported internally before reporting to the Commission, provided significant new information during an existing investigation that alerted SEC staff to misconduct occurring overseas, which would have been difficult to detect in the absence of the whistleblower’s information.

In the second order, the SEC issued approximately $1.5 million to joint whistleblowers who provided substantial ongoing assistance throughout the course of the investigation that led to the success of the covered action. The joint whistleblowers had multiple communications with SEC staff and provided information about key witnesses.

01/11/2022

Minutes of Fed discount rate meetings on December 6 and 15, 2021

The Federal Reserve Board on Tuesday released the minutes of its interest rate meetings on December 6 and December 15, 2021.

01/10/2022

Materials for December 31 Call Report

FDIC FIL-3-2021, released Friday, conveys materials pertaining to the Consolidated Reports of Condition and Income (Call Report) for the December 31, 2021, report date and provide guidance on certain reporting issues. This Financial Institution Letter and the attached Supplemental Instructions should be shared with the individuals responsible for preparing the Call Report at your institution.

01/10/2022

Consumer credit increases

The Federal Reserve has released its G.19 Consumer Credit data for November 2021, which indicates that consumer credit increased at a seasonally adjusted annual rate of 11.0 percent during the month. Revolving credit increased at an annual rate of 23.4 percent, while nonrevolving credit increased at an annual rate of 7.2 percent.

Preliminary data for November indicate total outstanding consumer credit balances of $4,415 trillion, with $1,037 trillion in revolving credit and $3,377 trillion in nonrevolving credit.

01/10/2022

Treasury reports record ERA funding

The Treasury Department has reported a new record for Emergency Rental Assistance set in November as state and local governments provided assistance to approximately 665,000 renters and landlords with funding through the Department of the Treasury’s Emergency Rental Assistance (ERA) programs, bringing the total number of payments for the ERA programs to more than 3.1 million. The $2.9 billion in ERA expenditures from both ERA 1 and ERA 2 funds in November 2021 represents the largest amount of assistance paid to eligible households and the largest number of payments made in any month since the programs were created.

01/10/2022

Fed FAQs on approach to covered savings associations

The Federal Reserve Board has posted a series of frequently asked questions and answers regarding its approach with regard to OCC-regulated federal savings associations and federal mutual savings banks that choose to exercise the option to become a “covered savings association,” as allowed by § 206 of the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act. The law provides additional flexibility for institutions chartered under the Home Owners Loan Act. The FAQs address implications for covered savings associations of the Bank Holding Company Act, Federal Reserve Act, and related regulations and reporting requirements.

01/10/2022

Lead generator to pay $1.5M FTC penalty

The Federal Trade Commission has reported that a lead generation company that collected sensitive information from millions of consumers under the guise of connecting them with lenders will pay $1.5 million in civil penalties and face restrictions on their operations as a result of a Federal Trade Commission lawsuit.

The Commission's complaint alleges that since at least 2012, ITMedia Solutions LLC, a number of affiliate companies, and their owners and officers have operated hundreds of websites that were designed to entice consumers into sharing their most sensitive financial information—including their Social Security numbers and bank account information. The defendants sold that information to marketing companies and others without regard for how the information would be used, according to the complaint.

The suit alleges that the defendants -- who have used cashadvance.com, personalloans.com, badcreditloans.com and websites with similar names -- promised consumers that their information would be shared with “... our network of trusted lenders...” or would “... only be shared with qualified lenders.” Some sites promised that loans were available for people with bad credit histories without credit score requirements.

The FTC alleges that 84 percent of the loan applications collected through these websites since January 2016 were not sold to lenders, but instead disseminated to an array of marketers, debt relief and credit repair sellers, and companies that would resell consumers’ information without regard for how the information would be used. According to the complaint, in many instances, ITMedia was not even aware of the purpose for which a company was buying consumers’ data, or at times even the physical location of the company. In addition to misleading consumers and selling their data without permission, the complaint alleges that ITMedia violated the Fair Credit Reporting Act (FCRA) by unlawfully obtaining and reselling the credit scores of consumers who submitted information. The FCRA limits the purposes for which businesses can obtain credit scores and using scores to market leads is not a permissible purpose.

The defendants agreed to settle the FTC charges against them and, in addition to the civil penalty, the proposed settlement order will prohibit the defendants from making misleading statements to consumers, including about how their personal information will be used. The order will also prohibit the defendants from selling consumers’ personal information outside of a limited set of circumstances, and the order requires them to screen the recipients of that information.

01/07/2022

SEC awards whistleblower $13M+

The Securities and Exchange Commission yesterday announced it has approved an award of more than $13 million to a whistleblower whose information and assistance prompted the opening of an investigation and significantly contributed to the success of an SEC enforcement action. The whistleblower promptly alerted SEC staff to an ongoing fraud and provided extensive assistance to SEC staff by meeting in person and helping the staff understand the mechanics of the fraudulent scheme. The whistleblower’s information also helped the Commission obtain emergency relief to minimize investor losses.

The SEC has awarded approximately $1.2 billion to 238 individuals since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards.

01/06/2022

OFAC sanctions Milorad Dodik and media outlet

Yesterday, OFAC designated Milorad Dodik, a member of the Presidency of Bosnia and Herzegovina, as well as one entity under his control, Alternativna Televizija d.o.o. Banja Luka, his personal media outlet, in response to Dodik’s corrupt activities and continued threats to the stability and territorial integrity of Bosnia and Herzegovina.

This is OFAC's first action under Executive Order 14033 (June 8, 2021).

For identification specifics, see yesterday's BankersOnline OFAC Update.

01/06/2022

FHFA makes targeted increases in fees

On Wednesday, the Federal Housing Finance Agency announced targeted increases to Fannie Mae and Freddie Mac's (the Enterprises) upfront fees for certain high balance loans and second home loans. High balance loans are mortgages originated in certain designated areas above the baseline conforming loan limit. The new fees will go into effect for deliveries and acquisitions beginning April 1, 2022, in order to minimize market and pipeline disruption.

To ensure that the Enterprises continue to provide strong support for affordable housing, the existing beneficial pricing treatment of certain programs such as HomeReady, Home Possible, HFA Preferred, and HFA Advantage will not be altered by the new fees. In addition, loans to first time homebuyers in high cost areas with incomes at or below 100 percent of area median income will have no specific high balance upfront fees.

In April, upfront fees for high balance loans will increase between 0.25 percent and 0.75 percent, tiered by loan-to-value ratio. Fannie Mae and Freddie Mac refer to these mortgages as high balance loans and super conforming loans, respectively. For second home loans, upfront fees will increase between 1.125 percent and 3.875 percent, tiered by loan-to-value ratio.

01/06/2022

Fed Board posts December 14–15 FOMC minutes

The Federal Reserve Board has released the minutes of its joint meeting with the Federal Open Market Committee held on December 14–15, 2021.

01/06/2022

CFPB zings national credit reporting agencies

The CFPB yesterday took aim at the "Big Three" consumer credit reporting agencies—Equifax, Experian, and TransUnion, releasing a new analysis that reveals how changes in complaint responses provided by nationwide consumer reporting companies resulted in fewer meaningful responses and less consumer relief. In 2021, reports the CFPB, Equifax, Experian, and TransUnion together reported relief in response to less than 2% of covered complaints, down from nearly 25% of covered complaints in 2019.

According to the CFPB—

  • Consumers submitted more than 700,000 complaints to the CFPB regarding Equifax, Experian and TransUnion from January 2020 through September 2021, which represented more than 50% of all complaints received by the agency for that period.
  • Consumers submit more complaints about inaccurate information on their credit and consumer reports than about any other problem.
  • Consumers most frequently assert that the inaccurate information belongs to someone else, and consumers often describe being victims of identity theft.

The CFPB forwards consumer complaints about Experian, Equifax and TransUnion to the companies when the consumer appears to have previously attempted to fix the problem with the companies directly. The companies are then required to report their determinations and actions for these complaints to the CFPB. The Bureau's report shows—

  • Equifax most often promised to open investigations and send the results to the consumers at later dates, but it would fail to provide the CFPB with the outcomes of the investigations.
  • TransUnion made similar promises and frequently failed to provide the outcomes of investigations to the CFPB. It often stated it would take no action on complaints because it believed the complaints were submitted by third parties.
  • For many complaints, Experian frequently stated it would take no action because it believed the complaints were submitted by third parties, however, it did respond to the remaining complaints with substantive responses.
  • Equifax, Experian, and TransUnion relied heavily on template complaint responses instead of providing meaningful and thorough responses to consumers, despite having up to 60 calendar days to respond.
  • Beginning in early 2020, Experian and TransUnion stopped providing substantive responses to consumers’ complaints if they suspected that a third-party was involved in submitting a complaint.
  • In many instances, Equifax and TransUnion promised to investigate but failed to provide the outcomes of their investigations to the CFPB and instead stated that they would forward the complaints to their “dispute channel.”

Related link:
CFPB Annual report of credit and consumer reporting complaints

01/06/2022

Reserve Banks' chairs for 2022 announced

The Federal Reserve Board on Wednesday announced the Chairs and Deputy Chairs of the 12 Federal Reserve Banks for 2022. Each Reserve Bank has a nine-member board of directors. The Board of Governors in Washington appoints three of these directors and each year designates one of its appointees as Chair and a second as Deputy Chair.

01/06/2022

Relief for Colorado and Arkansas banks

The FDIC has announced steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Colorado affected by wildfires and straight-line winds and areas of Arkansas affected by severe storms and tornadoes.

01/06/2022

Merchant cash advance providers banned and fined

The Federal Trade Commission has announced that two of the defendants behind an alleged small business financing scheme, RAM Capital Funding, LLC and its owner Tzvi Reich, will be permanently banned from the merchant cash advance and debt collection industries, and required to pay $675,000 to settle Commission charges that they used deceptive and illegal means to seize assets from small businesses, non-profits, and religious organizations.

Merchant cash advances are a type of alternative small business financing. Generally speaking, merchant cash advance companies provide funds to businesses in exchange for a percentage of the businesses’ revenue. Typically, a merchant cash advance company will make daily withdrawals from the business’s bank account until the obligation has been met.

The FTC alleged that since 2015, the defendants deceived small businesses and other organizations in violation of the FTC Act and the Gramm-Leach-Bliley Act by requiring personal guarantees and upfront fees from consumers after representing they wouldn’t make these demands, providing less funding to consumers than promised, and by debiting more from consumers’ bank accounts than they said they would. The agency also alleged that the defendants made unauthorized withdrawals from consumers’ accounts and used unfair collection practices, including sometimes threatening physical violence. In addition, the FTC alleged that the defendants illegally weaponized “confessions of judgment,” contractual terms that allowed defendants to pursue customers’ personal assets in court and obtain uncontested judgments against them. As part of the settlement, the defendants are being ordered to vacate any judgments against their former customers and to release any liens against their customers’ property. The proposed order would also ban these defendants from making these and similar misrepresentations, and from further violations of the Gramm-Leach-Bliley Act.

01/06/2022

Phony CD scammer charged

The Securities and Exchange Commission yesterday announced it has charged Allen C. Giltman, a former registered investment professional, with allegedly participating in a long-running fraudulent scheme to lure investors into buying fictitious certificates of deposit. The scheme resulted in victims, primarily older adults investing their retirement savings, losing at least $40 million.

According to the SEC’s complaint, Giltman purchased internet ads targeting investors searching for CDs with high interest rates. The ads allegedly included links to phony websites Giltman helped create, many of which mimicked those of existing financial institutions, in order to offer investors fictitious CDs, which the websites falsely claimed were FDIC-insured. As alleged in the complaint, when investors called the phone numbers listed on the websites, Giltman impersonated registered representatives at the legitimate firms and instructed victims to wire funds to domestic or foreign bank accounts, purportedly to purchase the CDs. The SEC alleges that investor funds were then misappropriated as part of the scheme, with Giltman receiving a portion of the funds. The SEC also alleges that Giltman used a variety of methods to evade detection, including attempting to anonymize his digital footprint by using the identities of victims to register for online services used in the scheme.

01/05/2022

CFPB: HMDA filing period has begun

The CFPB has notified email-update subscribers that the filing period for HMDA data collected in 2021 opened on January 1, 2022.

Access the HMDA Platform to begin the filing process for data collected in 2021 at https://ffiec.cfpb.gov/filing.

Passwords to the Platform are reset every 90 days. If a user has forgotten their password or it has expired, they can use the "Forgot Password?" link on the log in page to reset their password.

Users will receive a confirmation email upon submission of their HMDA data. The email will be sent to the email account of the user that has submitted the data.

Testing
The 2021 Beta Platform found at https://ffiec.beta.cfpb.gov/filing/ will remain available on an ongoing basis for filers wishing to test their submissions. Please note that the Beta Platform is for testing purposes only. No data submitted on the Beta Platform will be considered for compliance with HMDA data reporting requirements. To submit your HMDA Data for 2021, visit the live HMDA Platform at https://ffiec.cfpb.gov/filing/.

Questions regarding the HMDA Platform may be submitted using the webpage at https://hmdahelp.consumerfinance.gov/.

01/05/2022

FDIC lists CRA evaluation ratings

The FDIC on Tuesday released a list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act whose evaluation ratings were assigned in October 2021.

Of the 41 banks listed, 38 received evaluation ratings of Satisfactory. We congratulate the three banks that earned Outstanding evaluation ratings:

01/05/2022

President lists nominees

The White House Briefing Room has issued a statement listing presidential nominations sent to the Senate. Among those listed were:

  • Alvaro M. Bedoya, of Maryland, to be a Federal Trade Commissioner for the term of seven years from September 26, 2019.
  • Lael Brainard, of the District of Columbia, to be Vice Chairman of the Board of Governors of the Federal Reserve System for a term of four years.
  • Todd M. Harper, of Virginia, to be a Member of the National Credit Union Administration Board for a term expiring April 10, 2027. (Reappointment)
  • Jerome H. Powell, of Maryland, to be Chairman of the Board of Governors of the Federal Reserve System for a term of four years. (Reappointment)
  • Sandra L. Thompson, of Maryland, to be Director of the Federal Housing Finance Agency for a term of five years.

01/05/2022

HUD announces disaster assistance

HUD has announced the implementation of federal disaster assistance for areas in Arkansas affected by severe storms and tornadoes from December 10 to December 11, 2021, and areas in Colorado affected by straight-line winds and wildfires from December 30, 2021, and continuing.

01/04/2022

Airbnb Payments settles with OFAC

Airbnb Payments, Inc., a registered money services business incorporated in Delaware and headquartered in San Francisco, California, and a wholly owned subsidiary of Airbnb, Inc., has agreed to pay $91,172.29 to settle its potential civil liability for apparent violations of sanctions against Cuba administered by the Office of Foreign Assets Control. This activity included payments related to guests traveling for reasons outside of OFAC’s authorized categories as well as a failure to keep certain required records associated with Cuba-related transactions. The settlement amount reflects OFAC’s determination that Airbnb Payments’ apparent violations were voluntarily self-disclosed and were non-egregious.

01/04/2022

OCC releases CRA evaluation ratings

The OCC on Monday released a list of 23 Community Reinvestment Act performance evaluations that became public in December 2021. The evaluations were of national banks, federal savings associations, and insured federal branches of foreign banks.

Of the 23 evaluations, 16 were rated Satisfactory, and the evaluations of these seven institutions received Outstanding ratings:

01/04/2022

Virginia bank reports counterfeit cashier's checks

Are you looking for a "side gig"? Would you agree to having your car wrapped with an organic dairy company ad for 10 weeks? If you have received a cashier's check and a letter via Priority Mail with such an opportunity (or you know someone who has received a mailing like that), all you need to do is deposit the check and keep $500 for your first week's "salary," and forward the rest of the money to the decal installers.

Skeptical? You should be, because this describes a counterfeit cashier's check scam reported by Powell Valley Bank in Big Stone Gap, Virginia. The OCC has posted its first Counterfeit Check Alert of 2022 describing the scam and the counterfeit Powell Valley Bank checks. See more details in BankersOnline's Alerts & Counterfeits post.

01/04/2022

IRS extends tax deadlines for Colorado fire victims

The IRS on Monday announced victims of the past weekend's wildfires in Colorado will have until May 16, 2022, to file various individual and business tax returns and make tax payments.

Following the recent disaster declaration issued by the Federal Emergency Management Agency, the IRS is providing this relief to taxpayers affected by wildfires that took place starting on December 30, 2021, in parts of Colorado. Currently, relief is available to affected taxpayers who live or have a business in Boulder County, but the IRS will provide the same relief to any other Colorado localities designated by FEMA. The current list of eligible localities is always available on the disaster relief page.

The tax relief postpones various tax filing and payment deadlines that occurred starting on December 30. As a result, affected individuals and businesses will have until May 16 to file returns and pay any taxes that were originally due during this period. This includes 2021 individual income tax returns due on April 18, as well as various 2021 business returns normally due on March 15 and April 18. Among other things, this means that affected taxpayers will have until May 16 to make 2021 IRA contributions.

In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 will now have until May 16, 2022 to file their 2021 return and pay any tax due.

The May 16 deadline also applies to quarterly estimated income tax payments due on January 18 and April 18. Among other things, this means that individual taxpayers can skip making the fourth quarter estimated tax payment, normally due January 18, 2022, and instead include it with the 2021 return they file, on or before May 16.

In addition, the quarterly payroll and excise tax returns normally due on January 31 and May 2, 2022, are also now due on May 16. Penalties on payroll and excise tax deposits due on or after December 30 and before January 14 will be abated as long as the deposits are made by January 14, 2022.

01/04/2022

NCUA issues prohibition order

The NCUA has reported that it issued one prohibition order in December to Dianne Richardson, a former employee of Pioneer West Virginia Federal Credit Union, Charleston, West Virginia. Ms. Richardson is prohibited from participating in the affairs of any federal insured financial institution. The order recites that Richardson was a teller at the credit union and pleaded guilty to embezzling funds from the credit union's vault.

01/03/2022

FDIC updates FAQs on Brokered Deposits Rule

The FDIC has updated its "Questions and Answers Related to Brokered Deposits Rule" as of December 29, 2021. Three questions were added to cover (1) under what circumstances third parties can qualify for the exception for third-party administrators of health savings accounts; (2) filing deadlines and penalties for filers who rely on the “primary purpose” exception for instances where an agent has less than 25% of the total “assets under administration” for its customers; and (3) filing deadlines and penalties for the annual certification under the “enabling transaction” test.

01/03/2022

FDIC November enforcement actions announced

The FDIC has released a list of orders of administrative enforcement actions taken against banks and individuals in November 2021. Among those orders were:

  • an order that Renasant Bank, Tupelo, MS, pay a civil money penalty of $132,000 for violations of the Flood Disaster Protection Act
  • an order that Nebraska State Bank, Oshkosh, NE, pay a civil money penalty of $6,500 for violations of the Flood Disaster Protection Act
  • an order that William P. Durell, formerly a vice president and commercial lender of South State Bank, Columbia, South Carolina (now South State Bank, National Association, Winter Haven, Florida), pay a $2,500 civil money penalty for having downloaded files with sensitive bank information from the banks systems and removed them from the bank, causing the bank to incur more than minimal expenses to recover the information.
  • a removal and prohibition order issued to Susan W. Wright, a former office manager of Summit Community Bank, Moorfield, WV, after a finding that she processed 14 unauthorized withdrawals from two customers' accounts and failed to file records of the withdrawals, resulting in a loss of $26,380 to the bank.
  • a removal and prohibition order issued to Shelley M. Bayless, a former teller at Balboa Thrift and Loan Association, Chula Vista, CA, after a finding she had misappropriated funds from two certificates of deposits of a bank customer.

01/03/2022

McWilliams leaving the FDIC

The FDIC on Friday announced that Chairman Jelena McWilliams had notified President Biden of her intent to resign as chairman effective February 4, 2022. Her resignation comes following dissension among the FDIC’s directors over the powers of the agency’s chairman and board. Observers expect that former board chairman and current director Martin Gruenberg will assume the role of acting chairman.

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