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03/04/2021

Bureau proposes delay of compliance date for General QM rule

The CFPB has released a notice of proposed rulemaking to delay the mandatory compliance date of the General Qualified Mortgage (QM) final rule from July 1, 2021, to October 1, 2022. The CFPB is proposing to extend the compliance date to ensure homeowners struggling with the financial impacts of the COVID-19 pandemic have the options they need.

The Bureau's press release states that extending the mandatory compliance date of the General QM final rule would allow lenders more time to offer QM loans based on the homeowners’ debt-to-income (DTI) ratio, and not solely based on a pricing cut-off. Extending the compliance date of the General QM final rule would also give lenders more time to use the GSE Patch, which provides QM status to loans that are eligible for sale to Fannie Mae or Freddie Mac. If the NPRM is finalized as proposed, the old, DTI-based General QM definition; the new, price-based General QM definition; and the GSE Patch (unless the GSEs exit conservatorship prior to October 1, 2022) would all remain available as long as the lender received the consumer’s application prior to October 1, 2022.

Comments on the NPRM must be received on or before April 5, 2021.

03/04/2021

CFPB sues third-party payment processor

The Consumer Financial Protection Bureau announced on Wednesday it has filed a lawsuit against BrightSpeed Solutions Inc. and its founder and former chief executive officer, Kevin Howard, for knowingly processing payments for companies engaged in internet-based technical-support fraud. Chicago-based BrightSpeed was a privately owned, third-party payment processor founded and operated by Howard in 2015. It wound down business operations in March 2019.

In its complaint, the Bureau alleges that, between 2016 and 2018, Howard and BrightSpeed knowingly processed payments for client companies that purported to offer technical-support services and products over the internet, but instead tricked consumers, often older Americans, into purchasing expensive and unnecessary antivirus software or services. The CFPB alleges that Howard’s and BrightSpeed’s actions were unfair practices in violation of the Consumer Financial Protection Act of 2010 and deceptive telemarketing practices in violation of the Telemarketing Sales Rule. The complaint seeks injunctions against BrightSpeed and Howard, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties.

BrightSpeed and Howard processed remotely created check payments for more than 100 client companies totaling more than $71 million. The CFPB alleges that many of BrightSpeed’s client companies purported to provide antivirus software and technical-support services to consumers, but instead scammed them into purchasing unnecessary and expensive computer software and services for amounts sometimes as high as $2,000. BrightSpeed’s clients sold their products and services through telemarketing and received payment through remotely created checks. The CFPB alleges that BrightSpeed and Howard continued to process the scammers’ remotely created check payments for months and, in some cases, years. BrightSpeed and Howard did so despite being aware of nearly 1,000 consumer complaints, several inquiries from police departments around the country, and return rates averaging more than 20%.

03/04/2021

OFAC targets drug cartel facilitator

The Treasury Department has announced that OFAC has designated Mexican national Juan Manuel Abouzaid El Bayeh as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). OFAC designated Abouzaid El Bayeh for his high-level role in facilitating drug shipments and money laundering for the Cartel de Jalisco Nueva Generacion (CJNG), a violent Mexican drug trafficking organization that is responsible for trafficking a significant proportion of the fentanyl and other deadly drugs that enter the United States. Identification information on Abouzaid El Bayeh can be found in yesterday's BankersOnline OFAC Update.

Since June 2000, more than 2,200 entities and individuals have been sanctioned pursuant to the Kingpin Act for their role in international narcotics trafficking. Penalties for violations of the Kingpin Act range from civil penalties of up to $1,503,470 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines of up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.

03/03/2021

OFAC sanctions Yemeni militants and Russian officials

The Treasury Department announced yesterday that OFAC has sanctioned two key militants of the Iranian-backed Ansarallah, sometimes referred to as the Houthis, whose actions have prolonged Yemen’s civil war and exacerbated the country’s humanitarian crisis. Treasury said that Mansur Al-Sa’adi and Ahmad ‘Ali Ahsan al-Hamzi are responsible for orchestrating attacks by Houthi forces impacting Yemeni civilians, bordering nations, and commercial vessels in international waters. Those actions, which were done to advance the Iranian regime’s destabilizing agenda, have fueled the Yemeni conflict, displacing more than one million people and pushing Yemen to the brink of famine.

Treasury also announced that OFAC joined the U.S. Departments of State and Commerce in imposing sanctions in response to Russia’s poisoning and subsequent imprisonment of Russian opposition figure Aleksey Navalny. Specifically, OFAC designated seven Russian government officials: Federal Security Service (FSB) Director Aleksandr Bortnikov, Chief of the Presidential Policy Directorate Andrei Yarin, First Deputy Chief of Staff of the Presidential Executive Office Sergei Kiriyenko, Deputy Minister of Defense Aleksey Krivoruchko, Deputy Minister of Defense Pavel Popov, Federal Penitentiary Service (FSIN) director Alexander Kalashnikov, and Prosecutor General Igor Krasnov pursuant to Executive Order 13661 for serving as officials of the Russian government. OFAC also designated Bortnikov pursuant to E.O. 13382 for acting or purporting to act for or on behalf of, directly or indirectly, the Federal Security Service (FSB).

Identify information for those designated by these two OFAC actions can be found in yesterday's BankersOnline OFAC Update.

03/03/2021

OCC issues three Outstanding CRA ratings

The OCC has released a list of 13 Community Reinvestment Act performance evaluations that were made public in February. Nine of the evaluations listed were rated satisfactory and one was rated needs to improve. Our congratulations to these three banks whose evaluations received outstanding ratings:

03/03/2021

Fed bans former bankers for taking customer funds

The Federal Reserve Board has announced it has issued consent orders of prohibition to:

  • a former teller at Gateway Bank, Rison, Arkansas, having found that over two years starting in 2018, she misappropriated $49,485 from a bank customer's account for her personal benefit, causing the bank to suffer a loss of that amount (she resigned and has separately begun a repayment program to reimburse the bank).
  • a former teller coordinator at Suntrust Bank, Atlanta, Georgia, having found that he misappropriated funds from a bank customer's account for his personal benefit (he disclosed his conduct to the bank and paid restitution in full).

03/02/2021

Over 11M families are behind on housing payments

The CFPB has issued a new report regarding its first analysis of the impacts of the COVID-19 pandemic on housing. The good news is that actions taken by both the public and private sector have, so far, prevented many families from losing their homes during the height of the public health crisis. However, as legal protections expire in the months ahead, over 11 million families — nearly 10 percent of U.S. households — are at risk of eviction and foreclosure. Over two million families are behind at least three months on mortgage payments, while 8.8 million are behind on rent. Homeowners alone are estimated to owe almost $90 billion in missed payments. The last time this many families were behind on their mortgages was during the Great Recession.

03/02/2021

Whistleblowers awarded over $500,000

The Securities and Exchange Commission has announced an award of over $500,000 to two whistleblowers whose tips revealed an ongoing fraud and resulted in multiple SEC actions and a related action from another government agency. Both whistleblowers provided substantial, ongoing assistance that conserved the agencies’ time and resources.

Approximately $753 million has been awarded to 140 individuals since the SEC issued 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 Commission by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide the Commission with original, timely, and credible information that leads to a successful enforcement action. Awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.

03/02/2021

IRS employer guidance on 2020 Employee Retention Credit

The IRS has issued Notice 2021-20 with guidance for employers claiming the employee retention credit under the CARES Act, as modified by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act), for calendar quarters in 2020. The employee retention credit can be claimed by employers who paid qualified wages after March 12, 2020, and before January 1, 2021, and who experienced a full or partial suspension of their operations or a significant decline in gross receipts. The credit is equal to 50 percent of qualified wages paid, including qualified health plan expenses, for up to $10,000 per employee in 2020. The maximum credit available for each employee is $5,000 in 2020.

The Notice also provides answers to questions such as:

  • Who are eligible employers?
  • What constitutes full or partial suspension of trade or business operations?
  • What is a significant decline in gross receipts?
  • How much is the maximum amount of an eligible employer's employee retention credit?
  • What are qualified wages?
  • How does an eligible employer claim the employee retention credit?
  • How does an eligible employer substantiate the claim for the credit?

03/02/2021

FDIC releases January enforcement actions

On Friday, the FDIC released a list of its enforcement actions taken in the month of January 2021. Among other actions on the list, there were two civil money penalties and two removal/prohibition orders.

  • Mountain Valley Bank, Dunlap, Tennessee, received an order to pay a $4,000 civil money penalty for violations of flood insurance requirements.
  • A former loan relationship manager with Blue Hills Bank, Boston, Massachusetts (now merged with Rockland Trust Company, Rockland, Massachusetts) received a removal/prohibition order and an assessment of a $50,000 civil money penalty for unsafe or unsound banking acts and practices and breaching his fiduciary duty to the bank. He was also charged with and plead guilty to violating 18 U.S.C. § 1005 (participation in loan with intent to defraud a financial institution).
  • A former loan officer with First Southern State Bank, Stevenson, Alabama, was issued a removal/prohibition order for fraudulently originating 17 loans to 8 of his loan customers under false pretenses, and creating fictitious collateral for the loans, causing the bank to suffer financial loss, while he received financial gain.

03/02/2021

FEMA schedules community suspensions from flood program

FEMA has published [86 FR 12117] in the March 2, 2021, Federal Register a notice that communities in Florida, Minnesota, Missouri and Ohio have been scheduled for suspension from the National Flood Insurance Program on March 9, 2021, for noncompliance with the floodplain management requirements of the program. The communities listed are:

  • Florida: Port St. Joe and unincorporated areas of Gulf County
  • Minnesota: Plummer and unincorporated areas of Red Lake County
  • Missouri: Unincorporated areas of St. Charles County
  • Ohio: Amherst, Avon Lake, Defiance, Lorain, Sheffield, Sheffield Lake, Vermilion, and unincorporated areas of Lorain County

If FEMA receives before March 9 the required documentation that a listed community has adopted the floodplain management requirements, the community will not be suspended.

03/01/2021

FDIC posts 2nd and 3rd quarter CRA exam schedules

The FDIC has posted CRA examination schedules for the second and third quarters of 2021.

03/01/2021

NCUA bans former credit union official

The National Credit Union Administration issued one prohibition notice in February, banning an individual from participating in the affairs of any federally insured financial institution. The prohibited individual is a former member of the supervisory committee for Municipal Credit Union in New York, New York, who had been sentenced in July 2020 on a charge of embezzlement in connection with his role at the credit union.

03/01/2021

IRS reminder to businesses to file Form 8300

The IRS has issued a reminder to businesses of their responsibility to file Form 8300, Report of Cash Payments Over $10,000 and encourages e-filing to help them file accurate, complete forms. Although many cash transactions are legitimate, information reported on Form 8300 can help stop those who evade taxes, profit from drug trading, engage in terrorist financing and conduct other criminal activities. The government can often trace money from these illegal activities through payments reported on complete, accurate forms.

To help businesses prepare and file reports, the IRS created a video on How to Complete Form 8300 – Part I, Part II. The short video points out sections of Form 8300 in which the IRS commonly finds mistakes and explains how to accurately complete those sections.

03/01/2021

NMLS Ombudsman meeting April 1

​The NMLS Ombudsman Meeting will be held virtually on Thursday, April 1, from 2:00 p.m. to 4:00 p.m. ET. Registration is open. The deadline to submit topics by emailing ombudsman@nmls.org is the close of business on Friday, March 5.

03/01/2021

U.S. sanctions former Saudi official and Rapid Intervention Force

OFAC has sanctioned Ahmad Hassan Mohammed al Asiri, Saudi Arabia’s former Deputy Head of General Intelligence Presidency, and Saudi Arabia’s Rapid Intervention Force in connection with the 2018 murder of journalist Jamal Khashoggi. The designations were made pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world. Identity information can be found in BankersOnline's OFAC Update.

03/01/2021

HUD Indian housing grants

HUD has announced its award of more than $652 million in Indian Housing Block Grants for eligible Native American Tribes and Tribally Designated Housing Entities to carry out affordable housing activities in tribal communities.

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