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Third-round EIPs completed

The Internal Revenue Service announced today that all third-round Economic Impact Payments have been issued and reminded people how to claim any remaining stimulus payment they're entitled to on their 2021 income tax return as part of the 2021 Recovery Rebate Credit.


New home sales for December

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau yesterday jointly announced new residential sales statistics for December 2021.

New Home Sales
Sales of new single‐family houses in December 2021 were at a seasonally adjusted annual rate of 811,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.9 percent above the revised November rate of 725,000 but is 14.0 percent below the December 2020 estimate of 943,000.

Sales Price
The median sales price of new houses sold in December 2021 was $377,700. The average sales price was $457,300.

For Sale Inventory
The seasonally‐adjusted estimate of new houses for sale at the end of December was 403,000. This represents a supply of 6.0 months at the current sales rate.


Federal Reserve releases FOMC statement

The Federal Reserve Board has issued the Federal Open Market Committee Statement following yesterday's Committee meeting.

"The Committee decided to keep the target range for the federal funds rate at 0 to ¼ percent. With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate. The Committee decided to continue to reduce the monthly pace of its net asset purchases, bringing them to an end in early March. Beginning in February, the Committee will increase its holdings of Treasury securities by at least $20 billion per month and of agency mortgage‑backed securities by at least $10 billion per month. The Federal Reserve's ongoing purchases and holdings of securities will continue to foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses."

The FOMC also provided information regarding its planned approach for significantly reducing the size of the Federal Reserve's balance sheet:

  • The Committee views changes in the target range for the federal funds rate as its primary means of adjusting the stance of monetary policy.
  • The Committee will determine the timing and pace of reducing the size of the Federal Reserve's balance sheet so as to promote its maximum employment and price stability goals. The Committee expects that reducing the size of the Federal Reserve's balance sheet will commence after the process of increasing the target range for the federal funds rate has begun.
  • The Committee intends to reduce the Federal Reserve's securities holdings over time in a predictable manner primarily by adjusting the amounts reinvested of principal payments received from securities held in the System Open Market Account (SOMA).
  • Over time, the Committee intends to maintain securities holdings in amounts needed to implement monetary policy efficiently and effectively in its ample reserves regime.
  • In the longer run, the Committee intends to hold primarily Treasury securities in the SOMA, thereby minimizing the effect of Federal Reserve holdings on the allocation of credit across sectors of the economy.
  • The Committee is prepared to adjust any of the details of its approach to reducing the size of the balance sheet in light of economic and financial developments.


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.


Agencies warn of risks of doing business in Burma

OFAC reported Wednesday that the U.S. Departments of the Treasury, State, Commerce, Homeland Security, Labor, and the Office of the U.S. Trade Representative have issued a business advisory on the "Risks and Considerations for Businesses and Individuals with Exposure to Entities Responsible for Undermining Democratic Processes, Facilitating Corruption, and Committing Human Rights Abuses in Burma (Myanmar)."


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.


FDIC to collaborate with Operation Hope

The FDIC has announced a collaboration with Operation HOPE, Inc., to promote financial education using the FDIC’s Money Smart curriculum and other resources and to help educate minority- and/or women-owned businesses on how to do business with the agency. The arrangement expands upon a longstanding relationship between the FDIC and Operation HOPE to promote economic inclusion and increase consumer access to affordable credit.

The collaboration agreement outlines a number of activities that the FDIC and Operation HOPE will engage in to promote financial education using the FDIC's Money Smart curriculum and to share technical assistance and other resources to educate minority- and/or women-owned businesses on how to effectively compete for opportunities related to FDIC contracts, asset purchases, and investments.


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.


House prices continue upward

The Federal Housing Finance Agency has reported house prices rose nationwide in November, up 1.1 percent from the previous month, according to the latest FHFA House Price Index. House prices rose 17.5 percent from November 2020 to November 2021. The previously reported 1.1 percent price change for October 2021 remained unchanged.

For the nine census divisions, seasonally adjusted monthly house price changes from October 2021 to November 2021 ranged from +0.5 percent in the West North Central division to +1.9 percent in the South Atlantic division. The 12-month changes ranged from +13.3 percent in the West North Central division to +22.8 percent in the Mountain division.


$3.7M+ returned to defrauded consumers

The Federal Trade Commission has announced it is returning more than $3.7 million to consumers who lost money because of unfair and deceptive loan servicing practices by online lender Avant, LLC. In April 2019 the Commission sued Avant, LLC, alleging that the company falsely advertised that it would accept payments by credit or debit cards, when in fact it did not. This often resulted in customers being charged additional interest on their loans as they tried to arrange a different form of payment. The FTC also alleged that the company withdrew money from customers’ bank accounts or charged their credit cards without authorization, failed to properly and timely credit payments made by check, provided deceptive payoff quotes to customers, and tried to collect more money than the quoted payoff amount. The FTC is sending checks to 17,367 consumers who were harmed by Avant’s practices.


OCC hearing on charges against two former Texas bankers

The Office of the Comptroller of the Currency has announced a public virtual hearing before an administrative law judge beginning January 31, 2022. The OCC will litigate enforcement actions against two individuals formerly associated with First National Bank, Edinburg, Texas (closed in 2013) — Saul Ortega, former chief financial officer, director, president, chief executive officer, and chairman of the board, and David Rogers Jr., former chairman of the board.

The OCC has charged Ortega and Rogers with engaging in violations of law and OCC orders, unsafe or unsound banking practices, and breaches of fiduciary duty regarding bank loans issued to finance a capital raise, bank loans issued to finance sales of the bank’s other real estate owned, and the bank’s accrual of interest on loans in non-accrual status. The OCC also alleges that Rogers breached his fiduciary duty with regard to bank loans to a family member’s businesses.

The OCC seeks orders that would bar Ortega’s and Rogers’ further participation in the conduct of the affairs of any insured depository institution. In addition, the OCC seeks to assess civil money penalties in the amount of $250,000 against each of them.

The virtual hearing will commence at 9:30 a.m. EST on Monday, January 31, 2022. OCC administrative hearings are open to the public as required by federal law, and the public may view the hearing. Pursuant to the joint virtual hearing protocol adopted by the administrative law judge, the press and public are not permitted to record the hearing.

Details about how to view the proceedings online and listen by telephone are available here.


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.


IRS revamps Child Tax Credit site

Treasury and the White House have announced the re-launch of the website with several new features to help taxpayers file their taxes and access the remainder or full amount of the expanded Child Tax Credit as tax filing season begins. The website’s new features include a tool that directs taxpayers to the best free filing options based on answers to a handful of simple questions. These options include both virtual and in-person support in multiple languages. It also features clearly written, reliable information about the Child Tax Credit, eligibility, and how to get it.


CFPB report on its websites and digital services

The CFPB has published its report to Congress on the "State of Bureau Websites and Digital Services," in accordance with the 21st Century Integrated Digital Experience Act, also known as the 21st Century IDEA. The Act, which is applicable to the Consumer Financial Protection Bureau as an executive agency, mainly seeks to improve the digital services of executive agencies.

According to the Act, the Bureau’s Director is required to submit information to Congress and to the Director of the Office of Management and Budget about the state of Bureau websites and digital services as compared with best practice requirements detailed in the Act. These best practices include accessibility in accordance with section 508 of the Rehabilitation Act of 1973, consistent visual design, attention to user needs, functionality on mobile devices, and providing web services over a standard secure connection.


IRS Reminder - File accurate return to speed refund

An urgent reminder has been issued by the IRS to taxpayers to take extra precautions this year to file an accurate tax return electronically to help speed refunds. Most taxpayers face an April 18 deadline this year due to the Emancipation Day holiday in Washington, DC, falling on April 15. Taxpayers in Massachusetts and Maine will have an April 19 deadline due to the Patriots Day state holiday; disaster victims have later filing deadlines in some locations.


SEC charges former financial advisor with stealing $5.8M

The Securities and Exchange Commission has charged German Nino, a former securities broker and investment adviser representative for UBS Financial Services Inc., with stealing $5.8 million from a long-standing client.

The Complaint filed by the SEC alleges that Nino, of Weston, Florida, stole the investment funds from his client’s accounts over nearly a six-year period and used the majority of the money, $4.2 million, on gifts for several women with whom he had romantic relationships. Nino allegedly employed various methods to conceal his misconduct from his client, including creating fake account statements, forging signatures on letters of authorization, and altering UBS’s records for an affected account to prevent electronic notifications of wire transfers.


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).


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.


FedNow payment flow video posted

The Federal Reserve's FedNow Instant Payments project team has posted a four-minute video explaining the payment flow from start to finish and showing what financial institutions need to know about their role in the process. The
FedNow Instant Payments Network plans to be operational by 2023.


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.


FDIC final rule simplifying deposit coverage regulation

The FDIC on Friday announced it has approved a final rule to simplify parts of its deposit insurance coverage rules at 12 CFR Part 330.

The final rule simplifies FDIC insurance coverage for deposits held in connection with revocable and irrevocable trusts by merging these two deposit insurance categories and applying a simpler, common calculation to determine coverage. The change will make the trust rules consistent and easier to understand for bankers and depositors and will facilitate prompt payment of deposit insurance by the FDIC in the event of an insured depository institution’s failure. The FDIC expects that the vast majority of trust depositors will experience no change in the coverage for their deposits when the final rule takes effect.

Additionally, the final rule amends the rule that governs coverage for mortgage servicing accounts to allow principal and interest funds advanced by a mortgage servicer to be included in the deposit insurance calculation.

The rule will take effect on April 1, 2024. The amendments have been posted to the BankersOnline Regulations pages for 12 CFR Part 330

  • Fact sheet
  • FIL-07-2022, Final Rulemaking on Simplification of Deposit Insurance Rules for Trust and Mortgage Servicing Accounts


Fed Board release CBDC discussion paper

The Federal Reserve Board on Thursday released a discussion paper, Money and Payments: The U.S. Dollar in the Age of Digital Transformation, that examines the pros and cons of a potential U.S. central bank digital currency, or CBDC. It invites comment from the public and is the first step in a discussion of whether and how a CBDC could improve the safe and effective domestic payments system. The paper does not favor any policy outcome.

The paper summarizes the current state of the domestic payments system and discusses the different types of digital payment methods and assets that have emerged in recent years, including stablecoins and other cryptocurrencies. It concludes by examining the potential benefits and risks of a CBDC, and identifies specific policy considerations.

While a CBDC could provide a safe, digital payment option for households and businesses as the payments system continues to evolve, and may result in faster payment options between countries, there may also be downsides. They include how to ensure a CBDC would preserve monetary and financial stability as well as complement existing means of payment. Other key policy considerations include how to preserve the privacy of citizens and maintain the ability to combat illicit finance. The paper discusses these and other factors in more detail.

To fully evaluate a potential CBDC, the Board's paper asks for public comment on more than 20 questions. Comments will be accepted for 120 days and can be submitted to the Federal Reserve at


Fed Board bans former Buffalo banker

The Federal Reserve Board has issued a Consent Order of Prohibition to Tylifa A. Milton, a former institution-affiliated party of Manufacturers and Traders Trust Company, Buffalo, NY.

The Order states that Milton charged unauthorized personal expenses to a corporate credit card issued by the bank and fabricated hotel receipts and entered false entries into the bank’s records to document some of the unauthorized expenses to make them appear legitimate. Milton’s actions violated the bank’s policies, and caused the bank to incur losses of over $30,000. The Order also indicates that in July 2020, Milton was charged with third-degree grand larceny and pleaded guilty to petit larceny, and was sentenced to probation and ordered to make restitution to the bank of $31,721.


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


OFAC targets Russian-backed actors destabilizing Ukraine

Treasury yesterday announced that OFAC has sanctioned four individuals engaged in Russian government-directed influence activities to destabilize Ukraine. This action is separate and distinct from the broad range of high impact measures the United States and its Allies and partners are prepared to impose in order to inflict significant costs on the Russian economy and financial system if it were to further invade Ukraine.

Designated yesterday were Taras Kozak and Oleh Voloshyn, two current Ukrainian Members of Parliament from the party led by Victor Medvedchuk (Medvedchuk), who is already subject to U.S. sanctions for his role in undermining Ukrainian sovereignty in 2014; Volodymyr Oliynyk, a former Ukrainian official who fled Ukraine to seek refuge in Russia; and Vladimir Sivkovich, the former Deputy Secretary of the Ukrainian National Security and Defense Council.

For identification information for the four designated individuals, see the January 20, 2022, BankersOnline OFAC Update.


FTC advisory opinion on Holder Rule, attorneys fees and costs.

On Thursday, the Federal Trade Commission issued an advisory opinion stating that the Holder Rule does not prevent state law from providing costs or attorneys’ fees against loan holders, as some courts have incorrectly concluded.

The Holder Rule protects consumers who enter credit contracts by preserving their right to assert claims and defenses against any holder of certain loans and credit sales contracts, even if the loans or contracts are assigned to a third party. The Rule requires the seller to include the Holder Rule Notice in such contracts so that claims and defenses about seller misconduct – such as a seller’s misrepresentation or breach of contract – are available to the consumer against the loan holder.

When loan holders unsuccessfully dispute claims or defenses covered by the Rule, some consumers may seek court costs and attorney’s fees from the losing parties. The Commission previously addressed the impact of the Rule on costs and attorneys’ fees in a May 2019 Federal Register Notice, but some courts and finance companies have misinterpreted the Commission’s statements to suggest that the Rule preempts state laws that authorize attorney fee awards against loan holders. The advisory opinion emphasizes that the Rule does not eliminate any rights a consumer may have as a matter of separate state, local or federal law.


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.


CFPB to examine colleges' in-house lending

On Thursday, the CFPB announced it will begin examining the operations of post-secondary schools, such as for-profit colleges, that extend private loans directly to students. The CFPB is issuing an update to its exam procedures including a new section on institutional student loans. As the CFPB begins its supervision, the exam procedures inform industry about practices that CFPB examiners will review, including placing enrollment restrictions, withholding transcripts, improperly accelerating payments, failing to issue refunds, and maintaining improper lending relationships.

Private education loans are extensions of credit made to students or parents to fund undergraduate, graduate, and other forms of postsecondary education. Private education loans may be offered by banks, non-profits, nonbanks, credit unions, state-affiliated organizations, and institutions of higher education, including both for-profit schools and non-profit schools. These loans are typically not affiliated with federal student loan programs administered by the U.S. Department of Education. When the loans are made directly to students by the school they attend, they are often referred to as institutional student loans.

The CFPB said it is concerned about the borrower experience with institutional loans because of past abuses at schools, like those operated by Corinthian and ITT, where students were subjected to high interest rates and strong-arm debt collection practices. Schools have not historically been subject to the same servicing and origination oversight as traditional lenders.


FDIC guidance to assist banks in Tennessee

The FDIC has issued FIL-06-2022 with guidance to help financial institutions in areas of Tennessee affected by severe storms, straight-line winds, and tornadoes on December 10 and 11, 2021.

The Federal Emergency Management Agency (FEMA) declared a federal disaster for selected areas affected in Tennessee on January 14, 2022. FEMA may make additional designations after damage assessments are completed in the affected areas. As of January 19, the affected areas in Tennessee include Cheatham, Davidson, Dickson, Gibson, Henderson, Henry, Lake, Obion, Stewart, Sumner, Weakley and Wilson counties. An updated list of designated areas will be available at


$120 billion in credit card interest and fees a year

The CFPB has posted a blog article, "Americans pay $120 billion in credit card interest and fees each year," reporting that, at almost a trillion dollars outstanding, credit cards are the largest consumer lending product by number of users – over 175 million consumers have at least one credit card – and one of the largest sources of consumer debt.

From 2018 to 2020, the CFPB estimates that Americans paid roughly $120 billion per year in credit card interest and fees. That works out to about $1,000 per year for every American household. During the pandemic, credit card debt started to decline as many households reduced their borrowing and paid down more. But, as the economy has improved, credit card debt is on the rise again.


Report on financial services diversity and inclusion

The CFPB’s Office of Minority Women and Inclusion (OMWI) has released the CFPB Report on Diversity and Inclusion within Financial Services.

As part of the mandate of Section 342 of the Dodd-Frank Act, OMWI is charged with developing standards for assessing diversity and inclusion at the financial entities the Bureau regulates. To further that effort, CFPB engaged in analysis of public data to gain a better understanding of diversity and inclusion within the financial services sector and compiled a report to share its findings. The report can help the industry understand more about diversity and inclusion initiatives that their peers are undertaking and the various options available to entities of different sizes.


IRS Wage Statement reminder

The Internal Revenue Service yesterday urged employers to be aware of the January deadline to file Forms W-2 and other wage statements. Timely filing of these documents helps employers avoid penalties and helps the IRS in fraud prevention.

A 2015 law made it a permanent requirement that employers file copies of their Form W-2, Wage and Tax Statements, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by January 31. Forms W-2 are normally due to workers by January 31. Forms 1099-MISC, Miscellaneous Information and Forms 1099-NEC, Nonemployee Compensation, are also due to taxpayers by January 31. Various other due dates related to Form 1099-MISC and Form 1099-NEC, including dates due to the IRS, can be found on the forms' instructions.


HUD disaster assistance announced

The Department of Housing and Urban Development issued two press releases yesterday announcing federal assistance for declared disaster areas in Tennessee and Alaska. HUD is:

  • providing immediate foreclosure relief in counties or boroughs covered by the disaster declarations
  • making mortgage insurance available
  • making insurance available for both mortgages and home rehabilitation
  • sharing information on housing providers and HUD programs
  • providing flexibility to Community Planning and Development grantees, public housing agencies, and tribes
  • assisting with housing discrimination incidents


Fed Board issues C&D order to Nano Banc and holding companies

The Board of Governors of the Federal Reserve System has issued an Order to Cease and Desist to Nano Banc and its holding companies, Allegiant United Holdings, LLC and Nano Financial Holdings, Inc., all of Irvine, California. According to the Order, the bank is operating without a permanent chief executive officer and chief financial officer, or a sufficient number of board members. In December 2021, the California Department of Financial Institutions ordered the bank's board to increase the number of directors to comply with state law.

The Fed Board's order requires that:

  • Within 10 days, the holding companies and bank must propose qualified permanent executive officers to fill the role of chief executive officer, chief financial officer, and chief credit officer of the bank
  • Within 10 days, the holding companies and bank must propose a sufficient number of qualified directors required under California law, with a majority being outside directors
  • Nano Financial and the bank must provide the Reserve Bank of San Franciso 30 day's written notice before certain changes to their boards of directors or executive officers.
  • The bank must submit a written plan to the Reserve Bank to enhance the bank's compliance with Regulation O and engage an independent third party acceptable to the Reserve Bank to identify and review all extensions of credit between insiders and the bank during the two years preceding the Order
  • The bank must submit written lending and credit administration policies to the Reserve Bank
  • Pending approval of the lending and credit administration policies by the Reserve Bank, the bank may not directly or indirectly approve, extend, modify or renew any "covered loan" without prior approval of the Reserve Bank. "Covered loans" comprises (i) loans classified as "loss," "doubtful," or "substandard" in the most recent Report of Examination; (ii) loans made to shareholders, senior executives, directors, and/or any entities which they control; (iii) commercial real estate loans; (iv) commercial and industrial loans; and (v) loan to finance commercial real estate, construction, and land development activities (not secured by real estate).
  • The bank and its holding companies must act to ensure the bank complies with sections 23A and 23B of the Federal Reserve Act and with Federal Reserve Board Regulation W, and the bank must submit a written policy acceptable to the Reserve Bank regarding transactions between the holding companies and the bank. The holding companies and the bank must correct the violations of sections 23A and 23B and Regulation W cited in the most recent Report of Examination.
  • The bank must take specified action with regard to compensation governance, policies, procedures and internal controls.


    CFPB bans Brightspeed Solutions and former CEO

    The CFPB on Tuesday announced it has filed a proposed final judgment and order to resolve a March 2021 lawsuit brought by the CFPB against BrightSpeed Solutions and its founder Kevin Howard. The CFPB alleges that between 2016 and 2018, BrightSpeed and Howard knowingly assisted companies profiting from fraudulent services and products. BrightSpeed and Howard processed payments for companies that claimed to offer technical-support services and products to consumers over the internet, but in reality, the companies tricked consumers into purchasing expensive and unnecessary antivirus software or services.

    Many of the targeted consumers were older adults unaware of clickbait scams and that the software and services they purchased were actually available for free. If entered by the court, the order would require BrightSpeed and Howard to pay a civil penalty of $500,000 and permanently bar them from multiple consumer financial products and services industries.

    Chicago-based BrightSpeed was a privately owned, third-party payment processor founded in 2015 and operated by Howard. BrightSpeed ceased operations in March 2019. From 2016 to 2018, BrightSpeed and Howard processed remotely created check payments for more than 100 client companies totaling more than $70 million. The CFPB alleges that many of BrightSpeed’s client companies purported to provide antivirus software and technical-support services to consumers, particularly older adults, but they instead scammed consumers into purchasing unnecessary and expensive computer software and services for amounts as high as $2,000. The client companies allegedly sold their products and services through fraudulent telemarketing schemes and received payments through remotely created checks processed by BrightSpeed.


    OCC conditionally approves SoFi Bank, N.A.

    The Office of the Comptroller of the Currency yesterday conditionally approved applications from Social Finance Inc. (SoFi) to create SoFi Bank, National Association (SoFi Bank, N.A.), as a full service national bank headquartered in Cottonwood Heights, Utah. As part of the transaction, SoFi Bank, N.A. will acquire Golden Pacific Bank, National Association, a national bank insured by the Federal Deposit Insurance Corporation.

    Upon consummation of this transaction, SoFi Bank, N.A., will have $5.3 billion in total assets and $718 million in capital at the end of the first year of operation, and will continue to offer a range of local commercial-focused loan offerings and deposit products previously offered by Golden Pacific. The bank will also provide a fully digital, mobile-first national lending platform for consumers across the country. The conditions imposed require specific capital contributions, adherence to an Operating Agreement, and confirmation that the resulting bank will not engage in any crypto-asset activities or services. In addition, the parent company of SoFi Bank, N.A., SoFi Technologies, has applied to the Federal Reserve to become a bank holding company and therefore subject to consolidated supervision.

    Related links:


    Fed releases SFOS results

    The Federal Reserve Board has released results of a survey of senior financial officers at banks about their strategies and practices for managing reserve balances. The Senior Financial Officer Survey (SFOS) is used by the Board to obtain information about deposit pricing and behavior, bank liability management, the provision of financial services, and reserve management strategies and practices. The most recent survey was conducted in collaboration with the Federal Reserve Bank of New York between November 5, 2021, and November 19, 2021, and includes responses from banks that held approximately three quarters of total banking system reserve balances at the time of the survey.


    Overcharged LendingClub members to receive $10M+

    The Federal Trade Commission has announced it is returning more than $10 million to consumers who were charged undisclosed fees by online lender LendingClub Corporation.

    The FTC sued LendingClub in April 2018, charging that the company falsely promised loan applicants that they would receive a specific loan amount with “no hidden fees,” when in reality the company deducted hundreds or even thousands of dollars in hidden up-front fees from the loans. The FTC also alleged that LendingClub told consumers they were approved for loans when they were not and took money from consumers’ bank accounts without authorization.

    The FTC is distributing refunds directly to more than 15,000 LendingClub customers and encouraging additional LendingClub customers to apply for refunds. The FTC is sending refunds via PayPal to 15,748 LendingClub customers who complained to the company or the FTC about the hidden fees. In addition, between January 18 and 20, the FTC will email additional LendingClub customers who took out loans before January 6, 2017 and repaid the loan. The email will provide instructions on how to request a refund.


    HUD awards $83M to 74 tribal communities

    The Department of Housing and Urban Development yesterday announced it has awarded more than $83 million in Indian Community Block Grant-American Rescue Plan (ICDBG-ARP) grants to 74 tribal communities to prevent, prepare for, and respond to the COVID-19 pandemic. This is the third round of ICDBG-ARP awards.


    OFAC sanctions Hizballah financiers in Lebanon

    On Tuesday, the Department of the Treasury announced that OFAC has designated three Hizballah-linked financial facilitators—Adel Diab, Ali Mohamad Daoun, and Jihad Salem Alame— and their Lebanon-based travel company, Dar Al Salam for Travel & Tourism, under Executive Order 13224, which targets terrorists, leaders, and officials of terrorist groups, and those providing support to terrorists or acts of terrorism.

    Identification information on the designated individuals and entity can be found in the January 18, 2022, BankersOnline OFAC Update.

    As a result of today’s action, all property and interests in property of the designated individuals and entity and of any entities that are owned, directly or indirectly 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons, must be blocked and reported to OFAC. Unless authorized by a general or specific license issued by OFAC or otherwise exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of designated or otherwise blocked persons.


    Bureau settles suit over taskforce report

    In October 2019, the CFPB chartered a Taskforce on Federal Consumer Financial Law to provide recommendations to improve consumer financial laws and regulations. On January 5, 2021, the Taskforce released its report and recommendations. Shortly thereafter, the National Association of Consumer Advocates, U.S. Public Interest Research Group, and Professor Kathleen Engel brought suit against the CFPB, alleging that the Taskforce did not comply with the Federal Advisory Committee Act (FACA).

    The Bureau has announced it entered into a stipulated settlement agreement that required that the CFPB release all Taskforce records that would have been made public if the Bureau had complied with FACA's "sunshine" requirements by March 22, 2022. The Taskforce records will also be made publicly available on the CFPB's website. A disclaimer has been added to the Taskforce's report noting that the CFPB failed to comply with FACA and that the report should not be relied upon as a product of a FACA-compliant federal advisory committee.

    Taskforce report (amended 1/14/2022):


    CSBS withdraws suit challenging OCC charter

    The Office of the Comptroller of the Currency has announced that the Conference of State Bank Supervisors on Thursday withdrew its lawsuit challenging the OCC's authority to charter an uninsured deposit-taking national bank.

    In December 2021, Figure Technologies amended its charter application for Figure Bank, National Association, to offer FDIC-insured deposit accounts. In connection with this amendment, the organizers will apply to the Federal Deposit Insurance Corporation (FDIC) for deposit insurance, and Figure Technologies, Inc. will apply for approval from the Board of Governors of the Federal Reserve System to become a bank holding company under Section 3 of the Bank Holding Company Act.

    While the OCC maintains that it has the authority to charter an uninsured institution, including one that takes deposits, Figure Technologies’ decision to amend the application and seek a full service charter rendered the lawsuit moot.


    Fed reports estimated net income for 2021

    The Federal Reserve Board on Friday announced preliminary financial information indicating that the Reserve Banks had estimated net income of $107.8 billion during 2021, of which $107.4 billion was remitted to the U.S. Treasury as required under the Federal Reserve Act.

    The Federal Reserve Act requires the Reserve Banks to remit excess earnings to the U.S. Treasury after providing for operating expenses, payment of dividends, and the amount necessary to maintain surplus.


    CFPB alert on discrimination involving religion

    The CFPB has posted a Bureau Blog article, "It's illegal to penalize borrowers for being religious," concerning recent findings that some lenders had violated fair lending law by inquiring about small business applicants' religious affiliation and by consider an applicant's affiliation in the credit decision.

    For religious institutions applying for small business loans, lenders utilized questionnaires which contained explicit inquiries about the applicant’s religious affiliation. CFPB examiners determined that lenders also denied credit to applicants identified as a religious institution because the applicants did not respond to the questionnaire.

    In response to these findings, lenders updated the questionnaires to ensure compliance with fair lending laws. In addition, lenders also identified affected applicants and provided an offer for each identified applicant to reapply for a small business loan.

    The article also expressed concern about how financial institutions might be making use of artificial intelligence and other algorithmic decision tools, and how a lender might use third-party data to analyze geolocation data to power their credit decision tools. If the algorithm leads to an applicant getting penalized for attending religious services on a regular basis, this could lead to sanctions under fair lending laws for engaging in such "robo-discrimination."


    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.


    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.


    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.


    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.


    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.


    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:


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