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10/01/2020

Treasury continues targeting facilitators of Assad regime

On Wednesday, Treasury announced that it took action against key enablers of the Assad regime that are associated with the Fourth Division of the Syrian Arab Army, the Syrian General Intelligence Directorate, and the Central Bank of Syria. Specifically, Treasury's Office of Foreign Assets Control (OFAC) added three individuals and 13 entities to the Specially Designated Nationals and Blocked Persons List, pursuant to Syria sanctions authorities.

At the same time, the State Department acted against three Syrian persons pursuant to Section 2 of Executive Order (E.O.) 13894, “Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Syria.”

For identity information on the six individuals and 13 entities added to the SDN List, and another individual added under the Cuba sanctions, plus information on a new Syria General License, see BankersOnline's OFAC Update.

10/01/2020

Fed proposes update to capital planning requirements

The Federal Reserve Board has invited public comment on a proposal that would update the Board's capital planning and stress testing requirements in Regulations Y, LL, and YY to be consistent with other Board rules that were recently modified.

The Board has finalized a framework that sorts large banks into different categories based on their risks, with rules that are tailored to the risks of each category. The current proposal updates the Board's capital planning requirements—which help ensure that firms plan for and determine their capital needs under a range of different scenarios—to reflect that new framework. In particular, firms in the lowest risk category are on a two-year stress test cycle and not subject to company-run stress test requirements and the proposal reflects those changes. The proposal also would seek comment on the Board's existing capital planning guidance applicable to all firms.

The proposed rule, which would not change firms' capital requirements, has a comment period that will end November 20, 2020.

10/01/2020

New and amended OFAC sanctions regulations

OFAC has posted a notice of recent actions announcing it is adding new Part 520 to 31 CFR Chapter V regulations [85 FR 61816] to implement Executive Order 13928 of June 11, 2020 (“Blocking Property of Certain Persons Associated With the International Criminal Court”).

In addition, OFAC is amending the Weapons of Mass Destruction Proliferators Sanctions Regulations and Iranian Transactions and Sanctions Regulations at 31 CFR Parts 544 and 560 [85 FR 61823].

The new regulation and the amendments to Parts 544 and 560 are effective upon publication today in the Federal Register,

10/01/2020

OCC updates TILA exam procedures booklet

The OCC has issued Bulletin 2020-84 announcing its issuance of a revised "Truth in Lending Act" booklet of the Comptroller's Handbook to reflect revised interagency examination procedures adopted by the Task Force on Consumer Compliance of the Federal Financial Institutions Examination Council (FFIEC). The Bulletin rescinds OCC Bulletin 2018-31, “Truth in Lending Act: Revised Comptroller's Handbook Booklet and Rescissions.”

10/01/2020

NCUA Issues one prohibition notice

The NCUA issued one prohibition notice in September to a former employee of Members 1st Federal Credit Union in Mechanicsburg, Pennsylvania, who had been sentenced on the charge of theft in connection with her employment. She is prohibited from participating in the affairs of any federally insured financial institution.

10/01/2020

Morgan Stanley pays $5M for SHO violations

The SEC announced yesterday it had settled charges against Morgan Stanley & Co. LLC for violations of Regulation SHO, the regulatory framework governing short sales. According to the SEC’s order, the structure of Morgan Stanley’s prime brokerage swaps business resulted in violations of teh regulation. As set forth in the SEC Administrative Order, Morgan Stanley hedged synthetic exposure to swaps by purchasing or selling the securities referenced in the swaps, and it separated its hedges into two aggregation units – one holding only long positions, and the other holding only short positions. According to the order, Morgan Stanley was able to sell its hedges on the long swaps and mark them as “long” sales without concern for Reg SHO’s short sale requirements.

10/01/2020

Fed extending capital resilience measures

The Federal Reserve Board announced yesterday it will extend for an additional quarter several measures to ensure that large banks maintain a high level of capital resilience in this period of continued economic uncertainty during the pandemic. For the fourth quarter of this year, large banks—those with more than $100 billion in total assets—will be prohibited from making share repurchases. Additionally, dividend payments will be capped and tied to a formula based on recent income.

10/01/2020

FinCEN seeks comments on CDD and EDD requirements

FinCEN published [85 FR 61104] in the September 29 Federal Register a 60-day notice to renew the Office of Management and Budget (OMB) control number assigned to the regulatory requirements to conduct due diligence and enhanced due diligence over foreign correspondent accounts and private banking accounts.

In the notice, FinCEN proposes for review and comment a methodology to expand the scope of future estimates of cost and time for purposes of the Paperwork Reduction Act to be more granular in the estimates of resources expended to comply with these regulatory requirements. The notice requests feedback from the industry on or before November 30, 2020.

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