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11/25/2020

HUD launches Recovery House Program

HUD Secretary Carson has announced the publication of the Notice for HUD’s pilot Recovery Housing Program (RHP). The program was authorized by the SUPPORT Act to provide stable, temporary housing to individuals in recovery from a substance use disorder.

RHP is funding 25 grantees, 24 states and the District of Columbia, whose age-adjusted rate of drug overdose deaths was above the national overdose mortality rate. The RHP Notice provides state grantees the flexibility to carry out activities directly or pass funds through to local governments in rural and urban areas throughout the state. Therefore, grantees can streamline the use of RHP funds, particularly by nonprofits and other subrecipients that currently administer residential programs for persons in recovery from a substance use disorder.

11/25/2020

JPMorgan Chase Bank pays $250M for lax controls

The OCC has announced it has issued a Consent Order to JPMorgan Chase Bank, National Association (Columbus, Ohio) to pay a $250 million civil money penalty, based on the bank's failure to maintain internal controls and internal audit over its fiduciary business.

For additional information and a link to the Consent Order, see "OCC hits JPMorgan Chase with $250M CMP" in the BankersOnline Penalty pages.

11/25/2020

FHFA announces conforming loan limits

The Federal Housing Finance Agency has announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2021. In most of the U.S., the 2021 maximum conforming loan limit (CLL) for one-unit properties will be $548,250, an increase from $510,400 in 2020.

For areas in which 115 percent of the local median home value exceeds the baseline CLL, the maximum loan limit will be higher than the baseline loan limit. The Housing and Economic Recovery Act establishes the maximum loan limit in those areas as a multiple of the area median home value, while setting a “ceiling" on that limit of 150 percent of the baseline loan limit. Median home values generally increased in high-cost areas in 2020, driving up the maximum loan limits in many areas. The new ceiling loan limit for one-unit properties in most high-cost areas will be $822,375 — or 150 percent of $548,250.

Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $822,375 for one-unit properties.

As a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum CLL will be higher in 2021 in all but 18 counties or county equivalents in the U.S.

11/25/2020

House prices climbing

The Federal Housing Finance Agency (FHFA) has announced U.S. house prices rose 3.1 percent in the third quarter of 2020, up 7.8 percent from the third quarter of 2019—the fastest year-over-year rate of appreciation since 2006. FHFA's seasonally adjusted monthly index for September was up 1.7 percent from August.

11/25/2020

Navy FCU settles OD fees class action suit for $16M

The CreditUnionTimes reports the Navy Federal Credit Union will settle a class action suit for $16 million that will reimburse an estimated 700,000 current and former members who were charged fees for overdrafts.

An Alexandria, Virginia, U.S. District Court judge has issued a preliminary approval for the settlement in Lambert v. Navy Federal Credit Union, with final approval expected in March.

The suit was brought by Ruby Lambert in January 2019 after she was charged a second $29 NSF fee when a $96 check on her account was presented a second time after it was bounced to her insurance company. Although Lambert acknowledged that Navy Federal was allowed to charge her a single NSF fee, she argued in court documents that the credit union breached terms of member account agreements when it charged her a second NSF fee for the same insurance check payment.

Lambert's suit was dismissed in August 2019 because Navy Federal's account agreement gave the CU a contractual right to charge an NSF fee each time an NSF check is presented. Lambert appealed to the U.S. District Court for the Eastern District of Virginia. Navy Federal and Lambert's lawyers agreed to settle the suit.

The $16 million cash fund will pay for $5.2 million in attorney fees, a $5,000 “service award” for Lambert, and millions in NSF fee reimbursements for an estimated 700,000 current and former Navy Federal members who were assessed a second or third NSF fee for a single payment transaction that was rejected because of insufficient funds in their accounts from January 28, 2014, to October 27, 2020. Navy Federal will separately pay all settlement administration costs.

11/25/2020

OCC issues proposed CRA General Performance Standards

The OCC is inviting comment on a notice of proposed rulemaking regarding the Community Reinvestment Act’s (CRA) general performance standards. The OCC published a final rule in June 2020 to strengthen and modernize the agency’s regulations under the CRA to encourage banks to engage in more activities to serve the needs of their communities, particularly low- and moderate-income and other historically underserved communities.

The proposal released yesterday provides the OCC’s proposed approach to determine the CRA evaluation measure benchmarks, retail lending distribution test thresholds, and community development minimums under the general performance standards set forth in the 2020 final rule. The proposal also explains how the OCC would assess significant declines in CRA activities levels in connection with performance context following the initial establishment of the benchmarks, minimums, and thresholds. Finally, the proposed rule would make clarifying and technical amendments to the 2020 final rule.

Comments on the proposal will be accepted for 60 days following publication in the Federal Register.

11/24/2020

OCC updates Activities and Operations rules

The Office of the Comptroller of the Currency has announced a final rule that updates the agency's rules for national bank and federal savings association activities and operations, with amendments affecting 12 CFR parts 4, 5, 7, 145, and 160. The rule, which takes effect April 1, 2021, is part of the OCC’s continuous effort to modernize its rules and remove unnecessary requirements to relieve banks of unnecessary burdens, encourage economic opportunity, and promote the safe, sound, and fair operation of the federal banking system. The final rule changes 12 CFR part 7 to update or eliminate outdated regulatory requirements that no longer reflect the modern financial system and to clarify and codify recent OCC interpretations. The Rule includes changes:

  • incorporating and streamlining interpretations addressing permissible derivatives activities for national banks;
  • codifying interpretations to permit national banks and federal savings associations to engage in certain tax equity finance transactions;
  • codifying interpretations regarding national bank membership in payment systems and clarifying that federal savings associations are subject to the same requirements as national banks;
  • expanding the ability of national banks and federal savings associations to choose corporate governance provisions under state law;
  • clarifying the extent to which national banks may adopt anti-takeover provisions permissible under state corporate governance law;
  • clarifying when national bank participation in a financial literacy program on the premises of, or a facility used by, a school or other organization would not be a branch;
  • codifying interpretations of the National Bank Act relating to capital stock issuances and repurchases; and
  • applying rules relating to finder activities, indemnification, equity kickers, postal services, independent undertakings, and hours and closings to federal savings associations.

11/24/2020

CFPB updates 2021 HMDA FIG

The Bureau has made an update to the HMDA Filing Instructions Guide (FIG) for data collected in 2021 (for submission in 2022). Edits Q656 and Q657 in Table 8 (Macro Quality Edits for Loan/Application Register) have been reclassified and moved to Table 7 (Quality Edits for Loan/Application Register).

11/24/2020

HUD proposes to allow private flood insurance on FHA-insured loans

HUD has published [85 FR 74630] a proposed rule that would amend Federal Housing Administration (FHA) regulations to allow mortgagors the option to purchase private flood insurance on FHA-insured mortgages for properties located in Special Flood Hazard Areas (SFHAs), in satisfaction of the mandatory purchase requirement of the Flood Disaster Protection Act of 1973 (the FDPA), and in harmony with private flood insurance requirements under the Biggert-Waters Act.. Comments on the proposal are due by January 22, 2021.

11/24/2020

Reserve Banks' quarterly financials

The Federal Reserve Board has posted the third quarter 2020 combined financial reports summarizing the financial position and results of operations of the Reserve Banks. The combined information includes the accounts and results of operations of each of the 12 Reserve Banks and some consolidated variable interest entities. All financial information included in the quarterly financial reports is unaudited.

11/24/2020

New OCC Licensing Manual booklet issued

OCC Bulletin 2020-102, issued yesterday, announced the new “Mutual to Stock Conversions” booklet of the Comptroller’s Licensing Manual. The new booklet incorporates provisions of the revised regulation (12 CFR 192) that became effective August 13, 2020. The new booklet:

  • provides an overview of policy considerations and decision criteria that the OCC considers when reviewing applications by federal savings associations to convert from a mutual to stock form of ownership under 12 CFR 192.
  • describes various types of mutual to stock conversions including standard conversions, merger conversions, conversion mergers, and voluntary supervisory conversions.
  • describes the applications process, including the prefiling process, filing and review of the application, the decision, and the post-consummation phase of the mutual to stock conversion.
  • outlines requirements and procedures federal savings associations should follow when filing an application to convert from mutual to stock form of ownership.
  • lists references and links to informational resources and sample forms and documents that prospective filers may find helpful during the filing and conversion process.

11/24/2020

Final IRS regs on like-kind exchanges of real property

Treasury and the IRS yesterday issued final regulations relating to section 1031 like-kind exchanges. These final regulations address the definition of real property (RP) under section 1031 and also provide a rule addressing the receipt of personal property that is incidental to real property received in a like-kind exchange.

11/23/2020

FDIC proposes temporary rule to temper CECL transition effect

FDIC FIL-107-2020, issued November 20, 2020, announces an FDIC proposed rulemaking that would address the temporary deposit insurance assessment effects resulting from certain optional regulatory capital transition provisions relating to the implementation of the current expected credit losses (CECL) methodology. The proposal would remove the double counting of a specified portion of the CECL transitional amount or the modified CECL transitional amount, as applicable, in the calculation of certain financial measures that are used to determine assessment rates for large and highly complex insured depository institutions (IDIs).

The proposal would affect only those institutions with $10 billion or more in total assets. In order to implement these adjustments, the proposal would require large and highly complex IDIs that elect a CECL transition provision to report one additional, temporary item on the Consolidated Reports of Condition and Income (Call Report).

Comments on the proposed rule will be accepted for 30 days after publication in the Federal Register.

11/23/2020

Temporary reporting relief for community banks

The Federal Reserve Board, FDIC, and OCC have announced an interim final rule that provides temporary relief for certain community banking organizations related to certain regulations and reporting requirements as a result, in large part, of their growth in size from the coronavirus response.

Community banking organizations are subject to different rules and requirements based on their risk profile and asset size. Due to participating in federal coronavirus response programs—such as the Paycheck Protection Program—and other lending that supports the U.S. economy, many community banking organizations have experienced rapid and unexpected increases in their sizes, which are generally expected to be temporary. The temporary increase in size could subject community banking organizations to new regulations or reporting requirements. Community banking organizations with under $10 billion in assets may have fewer resources available to prepare and comply with previously unanticipated regulatory requirements, especially during a time of economic disruption.

With regard to the requirements covered by the interim final rule, community banking organizations that have crossed a relevant threshold generally will have until 2022 to either reduce their size, or prepare for new regulatory and reporting standards. The rule applies to community banking organizations and financial institutions with less than $10 billion in total assets as of December 31, 2019. The rule will be effective immediately upon publication in the Federal Register. Comments on the interim final rule will be accepted for 60 days following publication.

11/23/2020

OCC proposes Fair Access to Financial Services Rule

The OCC has issued a proposed rule that would ensure fair access to banking services provided by national banks, federal savings associations, and federal branches and agencies of foreign bank organizations.The proposal would codify more than a decade of OCC guidance stating that banks should provide access to services, capital, and credit based on the risk assessment of individual customers, rather than broad-based decisions affecting whole categories or classes of customers.

The proposal would apply to the largest banks in the country that may exert significant pricing power or influence over sectors of the national economy and would require a covered bank to ensure it makes its products and services available to all customers in the community it serves, based on consideration of quantitative, impartial, risk-based standards established by the bank. Under the proposal, a covered bank’s decision to deny services based on an objective assessment of the person’s creditworthiness, ability to pay, or other quantitative, impartial, risk-based reasons would not violate the bank’s obligation to provide fair access. However, under the proposal, the bank may not deny a customer service to disadvantage, limit, or prevent the customer from entering or competing in a market or business segment, or to benefit another person or business activity.

A bank would be presumed not to meet the definition of a bank covered by the proposed rule if it has less than $100 billion in total assets.

Comments on the proposal will be accepted through January 4, 2021.

11/23/2020

CFPB sues debt settlement company and owners

The CFPB has filed a lawsuit against FDATR, Inc., and its owners, Dean Tucci and Kenneth Wayne Halverson. The Bureau alleges that FDATR, Tucci, and Halverson violated the Telemarketing Sales Rule (TSR) by engaging in deceptive and abusive telemarketing acts or practices and the Consumer Financial Protection Act of 2010 (CFPA) through deceptive acts or practices.

FDATR was a corporation headquartered in Wood Dale, Illinois, that promised to provide student-loan debt-relief and credit-repair services to consumers nationwide. Tucci and Halverson both owned and managed FDATR, which was involuntarily dissolved in September 2020. The Bureau’s complaint, filed in the United States District Court for the Northern District of Illinois, seeks injunctions against FDATR, Tucci, and Halverson, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties.

  • CFPB press release
  • 11/23/2020

    CFPB settles deceptive sales practice case

    The Bureau has announced it has issued a consent order against U.S. Equity Advantage, Inc. (“USEA”), a nonbank located in Orlando, Florida, and its owner, Robert M. Steenbergh. The Bureau found that the company’s disclosures and advertisements of its auto loan payment program contained misleading statements in violation of the Consumer Financial Protection Act of 2010’s prohibition against deceptive acts or practices.

    The consent order imposes a judgment against them requiring them to pay $9,300,000 in consumer redress and contains requirements to prevent future violations. The ordered redress amount was suspended upon payment of $900,000 and a $1 civil money penalty to the Bureau. The suspension of the full payment for redress, as well as the $1 civil penalty, is based on USEA’s and Steenbergh’s demonstrated inability to pay more based on sworn financial statements.

    11/23/2020

    FDIC sets reserve ratio for 2021

    The FDIC has published a notice [85 FR 74719] that the "Board of Directors of the Federal Deposit Insurance Corporation designates that the Designated Reserve Ratio for the Deposit Insurance Fund shall remain at 2 percent for 2021."

    11/20/2020

    OCC enforcement orders

    The OCC has released a list of enforcement actions against national banks, federal savings associations and individuals now or formerly affiliated with such institutions.

    • First Abu Dhabi Banks USA N.V. was assessed a $5 million civil money penalty for BSA/AML compliance program deficiencies and violations. An earlier consent order against the bank was terminated.
    • A former director and the former senior compliance and BSA officer of a New Jersey bank were assessed penalties totaling $39,000 (and the compliance/BSA officer was issued a prohibition order) for their involvement in the bank's seriously deficient BSA/AML compliance program while the bank's management was soliciting high-risk businesses as customers.
    • A former senior vice president of a Sallisaw, Oklahoma, bank was issued a default order with an order of prohibition, a cease and desist order requiring restitution of $2.3 million, and civil money penalty of $250,000. The order indicates it has been appealed to a federal court.
    • The former VP of commercial lending and chief lending officer of a Charleroi, Pennsylvania, bank has been issued a consent order to cease and desist and to pay a $12,000 civil money penalty, for inappropriately approving large overdrafts and waiving overdraft fees; and failing to ensure that the bank's credit underwriting process properly assessed the borrower's ability to repay.

    11/20/2020

    Fed assessment fees modified

    The Federal Reserve Board has announced it has issued a final rule modifying the annual assessment fees for its supervision and regulation of large financial companies, as required by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The final rule is nearly identical to the proposal issued in November 2019. The final rule raises the threshold at which fees are assessed for bank holding companies and savings and loan holding companies from $50 billion to $100 billion in total consolidated assets. Additionally, it adjusts the amount charged to certain bank holding companies and savings and loan holding companies following changes from the Board related to the EGRRCPA.

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

    11/20/2020

    Fed and Oklahoma holding company in written agreement

    The Board of Governors of the Federal Reserve System has announced the execution of a written agreement between the Federal Reserve Bank of Kansas City and a Vinita, Oklahoma, bank holding company.

    11/20/2020

    BSA due diligence for charities and non-profits clarified

    The Federal Banking Agencies and FinCEN have issued a joint fact sheet to provide clarity to banks and credit unions on how to apply a risk-based approach to charities and other non-profit organizations. The fact sheet highlights the importance of ensuring that legitimate charities have access to financial services and can transmit funds through legitimate and transparent channels, especially during the current COVID-19 pandemic. It also reminds banks to apply a risk-based approach to customer due diligence requirements when developing the risk profiles of charities and other non-profit customers, and reaffirms that the application of a risk-based approach is consistent with existing customer due diligence and other Bank Secrecy Act/Anti-Money Laundering compliance requirements.

    11/20/2020

    Entities exporting forced North Korean labor sanctioned

    Treasury has announced that OFAC has imposed sanctions on two entities involved in the exportation of forced labor from North Korea. Mokran LLC, a Russian construction company, and Korea Cholsan General Trading Corporation, a North Korean company operating in Russia, were targeted for having engaged in, facilitated, or been responsible for the exportation of forced labor from North Korea, including exportation to generate revenue for the Government of North Korea or Workers’ Party of Korea. In addition, current SDN listings for Korea Rungrado General Trading Corporation, Korea General Corporation for External Construction, and Yanbian Silverstar Network Technology Co., Ltd were updated.

    For further identification information on these entities and on updated listing on an individual previously sanctioned under Syria-related regulations, see BankersOnline's OFAC Update.

    11/20/2020

    FDIC updates RMS Manual

    The FDIC has issued a November 2020 update to its Risk Management Manual of Examination Policies (RMS Manual). The November updates were made to section 3.2 (Loans) of the Manual, and include revised instructions for assessing environmental risk programs; updated residential appraisal thresholds; including effective dates for lease accounting; instructions on assessing bank-to-bank credit; assessing payday lending programs; Current Expected Credit Loss (CECL) updates; and other minor technical edits.

    With the issuance of the November updates, the FDIC has moved to inactive status FIL-14-2005 (Payday Lending Programs Revised Examination Guidance), and FIL-52-2015 (FDIC Clarifying its Approach to Banks Offering Products and Services, such as Deposit Accounts and Extensions of Credit, to Non-Bank Payday Lenders). Also, the Guidelines for an Environmental Risk Program are being removed from the FDIC Statements of Policy section of the FDIC Law, Regulations, and Related Acts webpage. The two FILs and the Guidelines document are addressed in the RMS Manual.

    The RMS Manual can be downloaded as ZIP files.

    11/19/2020

    Final Capital Rule for Fannie and Freddie

    The Federal Housing Finance Agency (FHFA) has announced it has approved a final rule that establishes a new regulatory capital framework for Fannie Mae and Freddie Mac (the Enterprises).

    The final rule fulfills Congress's Housing and Economic Recovery Act of 2008 mandate that FHFA establish risk-based capital requirements for the Enterprises. The rule is intended to ensure the safety and soundness of the Enterprises by increasing the quantity and quality of the Enterprises' regulatory capital and reducing the pro-cyclicality of the aggregate capital requirements. A Fact Sheet on the rule was also released.

    The rule will become effective 60 days after publication in the Federal Register.

    11/19/2020

    No change for small loan HPML appraisal exemption

    The Consumer Financial Protection Bureau, Federal Reserve Board, and Office of the Comptroller of the Currency today announced that the threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans in section 34.203(b)(2) (OCC), section 226.43(b)(2) (Board) and section 1026.35(c)(2)(ii) (Bureau) during 2021 will remain unchanged at $27,200.

    The BankersOnline page for Bureau Regulation Z section 1026.35 has been updated.

    11/19/2020

    Unchanged thresholds for Regs M and Z

    The Consumer Financial Protection Bureau and the Board of Governors of the Federal Reserve System have announced that the dollar thresholds for exemptions from coverage in section 1013.2(e) of Regulation M (Consumer Leasing), section 226.3(b) of the Board's Regulation Z (Truth in Lending), and section 1026.3(b) of the Bureau's Regulation Z (Truth in Lending) will remain unchanged at $58,300 for calendar year 2021.

    The BankersOnline pages for sections 1013.2 and 1026.3 of Bureau regulations M and Z have been updated.

    11/19/2020

    FDIC: Banking with Apps

    The FDIC's November 2020 issue of FDIC Consumer News features "Banking With Apps: Where your mobile device meets banking," an article on the increasingly blurred lines between banks and non-banks, with an overview of the differences between deposit accounts offered by banks and financial products offered by non-bank companies, as well as tips for consumers considering using “fintech” for their banking needs.

    11/19/2020

    OFAC targets broad Iran patronage network

    On Wednesday, the Treasury Department announced that OFAC had acted against a key patronage network for the Supreme Leader of Iran, the Islamic Revolution Mostazafan Foundation (Bonyad Mostazafan, or the Foundation), an immense conglomerate of some 160 holdings in key sectors of Iran’s economy, including finance, energy, construction, and mining.

    OFAC also designated Iran’s Minister of Intelligence and Security, Mahmoud Alavi, pursuant to human rights authorities.

    See BankersOnline's OFAC Update for identity information on the nine individuals, 49 entities, and one vessel added to OFAC's SDN List, along with four previous designations updated, in yesterday's OFAC action.

    11/19/2020

    Treasury clarifies expense deductibility related to PPP loans

    Treasury and the IRS have released guidance clarifying the tax treatment of expenses where a Paycheck Protection Program (PPP) loan has not been forgiven by the end of the year the loan was received. Since businesses are not taxed on the proceeds of a forgiven PPP loan, the expenses are not deductible. This results in neither a tax benefit nor tax harm since the taxpayer has not paid anything out of pocket.

    If a business reasonably believes that a PPP loan will be forgiven in the future, expenses related to the loan are not deductible, whether the business has filed for forgiveness or not. Therefore, businesses are encouraged to file for forgiveness as soon as possible. In the case where a PPP loan was expected to be forgiven, and it is not, businesses will be able to deduct those expenses.

    11/19/2020

    Mobile banking app operators sued by FTC

    The Federal Trade Commission has filed a complaint alleging that Beam Financial Inc. and its founder and CEO Yinan Du, also known as Aaron Du, the operators of a mobile banking app, promised users of their free mobile banking app that they could make transfers out of their accounts and would receive their requested funds within three to five business days. Instead, some users waited weeks or even months to receive their money despite repeated complaints to Beam, while others said they never received their money, according to the complaint. In addition to making it difficult for consumers to access their funds, Beam also failed to give users the high interest rates the company promised, the Commission alleges. Beam repeatedly claimed that users would receive “the industry’s best possible rate” of at least 0.2 percent or 1.0 percent, according to the complaint. In fact, many new users received a much lower interest rate of 0.04 percent and stopped earning any interest after requesting that Beam return their funds.

    11/18/2020

    New Venezuela-related general license issued

    OFAC has issued Venezuela-related General License 8G, "Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities."

    OFAC also designated two individuals as Specially Designated Global Terrorists. See this BankersOnline OFAC Update for identity information.

    11/18/2020

    President to nominate Brooks to be Comptroller

    Yesterday, President Trump announced his intent to nominate Brian P. Brooks to be Comptroller of the Currency for a term of five years. Brooks has been Acting Comptroller since May. He previously served as chief legal officer of Coinbase Global, Inc., a digital asset exchange and custodian. Earlier in his career, he served as executive vice president and general counsel of Fannie Mae; vice chairman of OneWest Bank, N.A.; and managing partner of the Washington, D.C., office of the global law firm O’Melveny & Myers LLP. Mr. Brooks also served on the boards of directors of Fannie Mae and Avant, Inc., and was an advisor to several financial technology startups.

    • Statement by Acting Comptroller of the Currency Brian P. Brooks following the White House announcement.

    11/18/2020

    2021 multifamily loan caps for Fannie and Freddie

    The Federal Housing Finance Agency (FHFA) has announced that the 2021 multifamily loan purchase caps for Fannie Mae and Freddie Mac (the Enterprises) will be $70 billion for each Enterprise. At least 50 percent of the Enterprises multifamily loans are required to be used for affordable housing. Additionally, for the first time, affordable housing manufactured housing communities (MHC) must either be resident/government/nonprofit-owned or must have tenant pad lease protections to be counted as mission-driven, affordable housing.

    FHFA also requires at least 20 percent of the Enterprises’ multifamily business be affordable to residents at 60 percent of areas median income (AMI) or below. to ensure that the Enterprises' multifamily businesses have a strong and growing commitment to affordable housing finance, particularly for residents and communities that are most difficult to serve.

    11/18/2020

    New foster youth housing funding announced

    HUD Secretary Carson yesterday announced $1.9 million for 235 former foster youth in the most recent round of grants for HUD's Foster Youth to Independence (FYI) Initiative. Forty-three public housing authorities in 24 states will receive this funding to continue HUD's efforts to assist young adults transitioning out of foster care.

    To be eligible for FYI funding, public housing authorities must:

    • Administer a housing choice voucher (HCV) program;
    • Enter into a partnership agreement with a public child welfare agency (PCWA);
    • Accept young people referred by their partnering PCWA; and
    • Determine that the referred youth are eligible for HCV assistance.

    11/18/2020

    HUD releases $86M+ in targeted coronavirus relief

    HUD has announced $86.85 million is available to public housing agencies in the form of Mainstream funding vouchers to assist non-elderly populations impacted by COVID-19. Mainstream vouchers are administered using the same rules as other housing choice vouchers but targeted to serve a special population to ensure that residents of low income housing, including those with unique circumstances, receive necessary funding to protect their health and safety against COVID-19.

    11/18/2020

    September Treasury International Capital data

    Yesterday, the Treasury International Capital (TIC) data for September 2020 was released. The sum total in September of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC outflow of $79.9 billion. Of this, net foreign private outflows were $40.3 billion, and net foreign official outflows were $39.6 billion.

    Foreign residents increased their holdings of long-term U.S. securities in September; net purchases were $78.2 billion. Net purchases by private foreign investors were $58.6 billion, while net purchases by foreign official institutions were $19.6 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $30.7 billion. Foreign residents decreased their holdings of U.S. Treasury bills by $30.3 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $57.2 billion. Banks’ own net dollar-denominated liabilities to foreign residents decreased by $90.1 billion.

    11/18/2020

    Stimulus check deadline nears

    The IRS has issued a reminder that anyone who doesn't normally file a tax return has until 3 p.m. EST this Saturday, November 21, to register with the IRS for an Economic Impact Payment (EIP). The only way remaining to get a payment in 2020 is to register using the Non-Filers: Enter Info Here tool on IRS.gov before the deadline.

    When people file their 2020 taxes next year and they weren't eligible for an Economic Impact Payment this year, they may be eligible for the Recovery Rebate Credit. The Recovery Rebate Credit is figured like the Economic Impact Payment, except the amounts are based on tax year 2020, instead of tax year 2019 or tax year 2018, information. The eligibility criteria are the same, and the maximum credit is $1,200, or $2,400 if married filing jointly, plus $500 for each qualifying child. This means anyone who received the full Economic Impact Payment amount during 2020 for both themselves and their qualifying children cannot get the credit.

    11/18/2020

    New SEC rules allow electronic signatures and digital filing

    The Securities and Exchange Commission has voted to adopt rules and rule amendments that will provide additional flexibility in connection with documents filed with the Commission by permitting the use of electronic signatures in authentication documents, and facilitate electronic service and filing in the Commission's administrative proceedings. These new rules and amendments are part of a series of initiatives designed to modernize and strengthen the agency's operations. .

    11/17/2020

    FTC 2020 Annual Financial Report

    The Federal Trade Commission has issued its Fiscal Year 2020 Agency Financial Report, which describes the agency’s strong fiscal management and key program performance during the past year. The report highlights the Commission’s accomplishments in furtherance of its missions to protect consumers and promote competition, and reaffirms the agency’s commitment to responsible stewardship of resources and sound financial operations.

    11/17/2020

    FHFA Performance and Accountability Report

    The Federal Housing Finance Agency has released its annual Performance and Accountability Report, which details FHFA's activities as regulator of the Federal Home Loan Bank System and as regulator and conservator of Fannie Mae and Freddie Mac during fiscal year 2020.

    For the twelfth consecutive year, FHFA received an unmodified audit opinion on its FY 2020 financial statements from the U.S. Government Accountability Office. Included in the unmodified opinion, GAO noted no material weaknesses or significant deficiencies in FHFA's internal controls. GAO also found no instances of reportable noncompliance with the applicable laws and regulations it tested.

    The Report also identified key management challenges and priorities the FHFA it must address going forward. It listed—

    • Finalizing FHFA's Capital Rule and issuing a proposed rule on Capital Planning
    • Transitioning away from LIBOR
    • Responsibly ending the conservatorships of the Enterprises
    • Developing resolution-related rulemaking to be prepared if one of its regulated entities should fail
    • Finalizing and publishing the Enterprise Liquidity Rule

    11/17/2020

    IRS 2020 Criminal Investigation Report released

    The IRS has released its Criminal Investigation Division's Annual Report, highlighting the agency's successes and criminal enforcement actions taken in fiscal year 2020, the majority of which occurred during the COVID-19 pandemic. A key achievement was the identification of over $10 billion in tax fraud and other financial crimes. The 2020 report is interactive, summarizes a wide variety of investigative activity during the year and features examples of cases from each field office on a wide range of financial crimes. The federal fiscal year begins October 1 and ends on September 30.

    11/17/2020

    OCC updates licensing requirements

    The OCC has released a final rule updating and clarifying licensing policies and procedures. The final rule makes various changes to the OCC’s Rules, Policies, and Procedures for Corporate Activities, (12 CFR part 5), including eliminating unnecessary requirements consistent with safe, sound, and fair operation of the federal banking system. It is part of the OCC’s continual effort to modernize its rules and reduce unnecessary regulatory burden.

    The rule makes the following changes, among others:

    • Makes the definition of “well managed” consistent for all filing types.
    • Eliminates the filing requirement for FSAs that adopt without change the OCC’s model or optional bylaws.
    • Adds numerous provisions to 12 CFR 5.33 permitting national banks and FSAs to elect to follow the procedures applicable to state banks or state savings associations, respectively, for certain business combinations.
    • For operating subsidiaries:
      • Permits an eligible operating subsidiary of a qualifying national bank or FSA to engage in an activity that is substantively the same as a previously approved bank or FSA activity, respectively, by filing a notice with the OCC (national banks) or an application through expedited review (FSAs).
      • Removes the annual national bank operating subsidiary reporting requirement.
    • For non-controlling investments by a national bank and pass-through investments by an FSA:
      • With prior OCC approval, permits investments in enterprises that have not agreed to OCC supervision.
      • Provides an expedited review procedure for these investments under certain conditions.
      • Expands the investments eligible for notice.
      • Permits investments without a filing in enterprises conducting activities limited to those previously reported by the national bank or FSA in a previous non-controlling investment or pass-through investment filing.
    • Provides procedures for granting and revoking citizenship and residency waivers for national bank directors.
    • Permits national banks to request approval for a reduction in capital over more than four quarters.
    • Changes the definition of “troubled condition” for purposes of changes in directors and senior executive officers to align with OCC supervisory practices. The updated definition specifies that an enforcement action (a cease-and-desist order, consent order, or formal written agreement) must require the national bank or FSA to improve its financial condition for it to be considered in “troubled condition” solely as a result of the enforcement action.

    Conforming changes to 12 CFR parts 3 and 7 are also made. The final rule is effective January 1, 2021, except for a change to paragraph 5.20(e)(2) relating to the OCC's taking into account a proposed insured national bank's or FSA's description of how it will meet its CRA objectives, which will be effective on publication of the final rule.

    11/16/2020

    Former Wells CEO and chairman charged by SEC

    The SEC has charged former Wells Fargo & Company CEO and Chairman John G. Stumpf and former head of Wells Fargo’s Community Bank Carrie L. Tolstedt for their roles in allegedly misleading investors about the success of the Community Bank, Wells Fargo’s core business. The SEC’s filings include settled charges against Stumpf, who agreed to pay a $2.5 million penalty, and a litigated action alleging Tolstedt committed fraud.

    According to the SEC’s complaint against Tolstedt, from mid-2014 through mid-2016, Tolstedt publicly described and endorsed Wells Fargo’s “cross-sell metric” as a means of measuring Wells Fargo’s financial success despite the fact that this metric was inflated by accounts and services that were unused, unneeded, or unauthorized. The complaint further alleges that Tolstedt signed misleading sub-certifications as to the accuracy of Wells Fargo’s public disclosures when she knew or was reckless in not knowing that statements in those disclosures regarding Wells Fargo’s cross-sell metric were materially false and misleading.

    An SEC order against Stumpf finds that in 2015 and 2016 he signed and certified statements filed with the Commission, which he should have known were misleading, regarding both Wells Fargo’s Community Bank cross-sell strategy and its reported metric. According to the order, Stumpf failed to ensure the accuracy of his certifications after being put on notice that Wells Fargo was misleading the public about the cross-sell metric.

    11/16/2020

    COVID-19-related loan flexibilities extended

    The Federal Housing Finance Agency has announced that Fannie Mae and Freddie Mac (the Enterprises) will extend several loan origination flexibilities through December 31, 2020. The changes are to ensure continued support for borrowers during the COVID-19 national emergency. The flexibilities were set to expire on November 30, 2020.

    Extended flexibilities include:

    • Alternative appraisals on purchase and rate term refinance loans:
    • Alternative methods for documenting income and verifying employment before loan closing; and
    • Expanding the use of powers of attorney to assist with loan closings

    11/16/2020

    Virginia man sentenced for PPP fraud

    The Justice Department has announced the sentencing of a man from Virginia for defrauding the Paycheck Protection Program (PPP). Court documents indicate that Tarik Jaafar, of Ashburn, Virginia, conspired with his wife, Monika Magdalena Jaworska, to create four shell companies. These companies conducted no legitimate business and existed solely as a means to execute the scheme to defraud. From April 13 to May 6, Jaafar and Jaworska applied for 18 separate PPP loans in the names of the four shell companies valued at approximately $6.6 million, falsely claiming, among other things, that the businesses had employees and they needed the loans to pay their employees’ salaries. Jaafar and Jaworska fraudulently induced banks to distribute approximately $1.4 million in loans which they intended to use for their personal benefit.

    On June 20, Jaafar and Jaworska were arrested at John F. Kennedy International Airport as they attempted to flee to Poland. The majority of the funds were recovered by the banks and by law enforcement. On August 25, Jaafar pleaded guilty to conspiracy to defraud the United States.

    11/16/2020

    Reduced SBA 504 loan debenture rates

    The SBA has announced the updated interest rates for the Certified Development Companies 504 Loan Program. The program now allows for 10, 20, and 25-year interest rates at 2.231 percent, 2.364 percent, and 2.399 percent, respectively. Small businesses can now apply for a 504 loan at these low-interest rates.

    11/16/2020

    Classic FICO validated for Fannie and Freddie

    The Federal Housing Finance Agency has announced the validation and approval of the Classic FICO credit score model for use by Fannie Mae and Freddie Mac (the Enterprises). The validation and approval of Classic FICO by the Enterprises allows them to continue supporting the mortgage market while assessing more modern credit score models that were submitted in response to the 2020 Joint Enterprise Credit Score Solicitation.

    Enterprise announcements:

    11/16/2020

    FDIC guidance to facilitate recovery on Puerto Rico

    The FDIC has issued FIL-105-2020, offering guidance to FDIC-supervised financial institutions on steps intended to provide regulatory relief and to facilitate recovery in areas of Puerto Rico affected by severe storms and flooding.

    11/16/2020

    CFPB and Colorado AG to hold joint virtual office hours

    The CFPB has announced it will hold joint, virtual office hours on December 2, 2020, as part of the American Consumer Financial Innovation Network (ACFIN). Joint office hours provide innovators with the opportunity to discuss issues such as financial technology, innovative products or services, and other matters related to financial innovation with officials from the CFPB and state partners. CFPB Director Kathleen L. Kraninger and Colorado Attorney General Philip Weiser will participate in this event.

    Innovators interested in participating in a meeting during the joint, virtual office hours should request the meeting and describe the topic(s) they would like to discuss during their session. Requests must be received by November 23, 2020. A confirmation for the specific meeting time will then be provided to the requester.

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