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OCC announces enforcement actions

The OCC has released a list of enforcement actions recently taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations.

  • A civil money penalty of $50,000 was imposed on Michael S. Fontaine, former chief operational risk officer of U.S. Bank, N.A., Cincinatti, Ohio. This penalty is in addition to the previously reported $450,000 penalty imposed by FinCEN. The Comptroller found that Fontaine failed to take action to address inadequate staffing in the bank's BSA/AML program, allowing them to remain deficient for at least five years; and allowing the bank to implement alert suppression techniques to maintain suspicious activity alert volumes at a level commensurate with those inadequate staffing levels.
  • A formal agreement with Mutual Savings Bank, Hartsville South Carolina, to address concerns relating to board and management oversight, credit oversight and administration, internal controls, internal audit, and liquidity risk management.
  • Removal/prohibition orders were issued to:
    • a former teller at Bank of America, N.A., Charlotte, North Carolina (misappropriation of funds for her own use);
    • a former employee of Bank of America, N. A., Charlotte, North Carolina (misappropriation of at least $29,500 from bank customers for his own use);
    • a former service manager of Wells Fargo Bank, N.A. Sioux Falls, South Dakota (misappropriation of approximately $9,000 from her teller drawer); and
    • a former regional banking private banker at Wells Fargo Bank, N.A., Sioux Falls, South Dakota, who opened an account on behalf of a customer without authorization or knowledge of the customer and designated himself as sole owner and signer for the account. He collected funds as charitable contributions, deposited the funds into the account, and made repeated unauthorized transfers to his personal account.


Joint statement on CRA and COVID-19

The Federal Reserve Board, the FDIC, and the Office of the Comptroller of the Currency (the agencies) have issued a Joint Statement on CRA Consideration for Activities in Response to COVID-19. The agencies recognize the potential for the Coronavirus Disease (COVID-19) to adversely affect the customers and operations of financial institutions. The agencies encourage financial institutions to work with affected customers and communities, particularly those that are low- and moderate-income. The agencies will provide favorable consideration under the Community Reinvestment Act of certain retail banking services, retail lending activities, and community development activities related to this national emergency.

The FDIC's FIL-19-2020 reports that the statement will be effective through the six-month period after the national emergency declaration is lifted, unless extended by the agencies.



FDIC FIL-18-2020, issued yesterday, announced the FDIC understands that financial institutions and consumers may have questions about the potential impact of COVID-19. In response, the FDIC is providing two sets of frequently asked questions (FAQs), one for financial institutions and one for consumers. The FAQs address a variety of issues that may arise as financial institutions work with customers and communities affected by COVID-19. The FDIC recognizes that such efforts can be accomplished in a manner that is consistent with safe and sound banking practices, compliant with applicable laws (including consumer protection laws), and in the public interest. The FDIC will continue to add FAQs to the initial list, as needed, to address additional questions and issues that arise.


FDIC State Profiles

The Fourth Quarter 2019 FDIC State Profiles have been posted. They contain a quarterly summary of banking and economic conditions in each state.


FDIC demands California gold trader halt misleading ads

The FDIC reported yesterday it has demanded that a California-based precious metals trader immediately stop and correct its misleading advertising that falsely claims consumers' FDIC-insured deposits are at risk of forfeiture. The FDIC asserts that Monetary Gold of Woodland Hills, California, is engaging in a marketing campaign to sell gold products by falsely indicating that consumer insured bank deposits can be legally seized by banks.

The FDIC is separately calling upon to stop publishing these misleading ads and to issue a correction to its readers following its publication of "Walls Street's Worst Nightmare." In this sponsored ad for, Monetary Gold falsely asserts that Federal law permits banks to "take its depositors' funds (i.e. your checking, savings, CDs, IRA and 401(k) accounts) and use those funds when necessary to keep itself, the bank, afloat." The FDIC says these assertions are false. Federal law is clear that in the unlikely event of a bank failure, customers' insured deposits would be fully protected up to the $250,000 limit.


Facilitators of Iran petroleum sales targeted

A Treasury press release reports that OFAC has targeted five United Arab Emirates (UAE)-based companies that facilitate the Iranian regime’s petroleum and petrochemical sales. In 2019, these five companies collectively purchased hundreds of thousands of metric tons of petroleum products from the National Iranian Oil Company (NIOC). For identification information, see BankersOnline's OFAC Update.


OFAC actions on Wednesday

On Wednesday, March 18, OFAC designated four individuals and nine entities under its Counter terrorism and Iran-related sanctions programs.

See BankersOnline's OFAC Update for the names and identifying information for the designated individuals and entities.


HUD to provide COVID-19 mortgage relief for 60 days

HUD Secretary Carson has authorized the Federal Housing Administration to implement an immediate foreclosure and eviction moratorium for single family homeowners with FHA-insured mortgages for the next 60 days. These moratoriums are part of the continued effort by the administration to address impacts to the financial well-being of America’s individuals, families, and businesses caused by Coronavirus (COVID-19). CFPB Director Kraninger issued a statement supporting the action.


Fiscal Service updates rule on government in ACH

The Treasury Department's Fiscal Service has published at 85 FR 15715 in today's Federal Register amendments to its regulation at 31 CFR Part 210, "Federal Government Participation in the Automated Clearing House." The amendments address changes that Nacha has made to the NACHA Operating Rules since the publication of the 2016 NACHA Operating Rules & Guidelines book, including amendments set forth in the 2017, 2018, and 2019 NACHA Operating Rules & Guidelines books with an effective date on or before June 30, 2021. The Fiscal Service's amendments will be effective April 20, 2020.


Mortgage performance improves slightly

The OCC has reported a slight improvement in first-lien mortgage performance since the last quarter of calendar year 2019.

The OCC Mortgage Metrics Report, Fourth Quarter 2019 showed 96.5 percent of mortgages included in the report were current and performing at the end of the quarter, compared to 95.8 percent a year earlier. The report also showed that servicers initiated 22,248 new foreclosures during the fourth quarter of 2019­, a 3.5 percent increase from the previous quarter and a 24.6 percent decrease from a year prior. Servicers completed 13,147 mortgage modifications in the fourth quarter of 2019, and 78.2 percent of the modifications reduced borrowers’ monthly payments.


Tax payments deferred due to COVID-19

Treasury and the IRS have issued guidance allowing all individual and other non-corporate tax filers to defer up to $1 million of federal income tax (including self-employment tax) payments due on April 15, 2020, until July 15, 2020, without penalties or interest. The guidance also allows corporate taxpayers a similar deferment of up to $10 million of federal income tax payments. This guidance does not change the April 15 filing deadline, and does not affect state tax obligations.


Warning on scams using FDIC name

In light of recent developments related to the coronavirus, the Federal Deposit Insurance Corporation (FDIC) has reminded Americans that FDIC-insured banks remain the safest place to keep their money. The FDIC is also warning consumers of recent scams where imposters are pretending to be agency representatives to perpetrate fraudulent scheme. During these unprecedented times consumers may receive false information regarding the security of their deposits or their ability to access cash. The FDIC does not send unsolicited correspondence asking for money or sensitive personal information. The agency will never contact people asking for personal details, such as bank account information, credit and debit card numbers, Social Security numbers, or passwords.


FDIC approves two new industrial banks

The FDIC has announced its approval of deposit insurance applications for two de novo industrial banks.

  • One of the applications was submitted by Square, Inc., San Francisco, California. The bank, Square Financial Services, Inc., will originate commercial loans to merchants that process card transactions through Square, Inc.'s payments system. Square Financial Services, Inc. will operate from a main office located in the Salt Lake City, Utah. Square, Inc., was formed in 2009 as a payment services provider to enable businesses to accept card payments. The platform has been expanded to include point-of-sale payments, financing, and other services.
  • The other application was from Nelnet, Inc., Lincoln, Nebraska. Nelnet Bank will originate and service private student loans and other consumer loans. As an internet-only bank, Nelnet Bank will operate from a main office located in the Salt Lake City, Utah, area.


FHFA suspends foreclosures and evictions

The Federal Housing Finance Agency reported Wednesday that, to help borrowers who are at risk of losing their home, the agency has directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for at least 60 days due to the coronavirus national emergency. The foreclosure and eviction suspension applies to homeowners with a Fannie Mae- or Freddie Mac-backed single-family mortgage.

Earlier this month, FHFA announced that the Enterprises would provide payment forbearance to borrowers impacted by the coronavirus. Forbearance allows for a mortgage payment to be suspended for up to 12 months due to hardship caused by the coronavirus.


Fed adds Money Market Fund Liquidity Facility

The Federal Reserve Board announced late Wednesday evening it has broadened its program of support for the flow of credit to households and businesses by taking steps to enhance the liquidity and functioning of crucial money markets. Through the establishment of a Money Market Mutual Fund Liquidity Facility, or MMLF, the Federal Reserve Bank of Boston will make loans available to eligible financial institutions secured by high-quality assets purchased by the financial institution from money market mutual funds. The MMLF will assist money market funds in meeting demands for redemptions by households and other investors, enhancing overall market functioning and credit provision to the broader economy.

A term sheet was released with the Board's announcement.

To ensure that financial institutions will be able to effectively use the MMLF, the Board, the FDIC and the OCC this morning they have issued an interim final rule to modify the agencies' capital rules so that financial institutions receive credit for the low risk of their MMLF activities, reflecting the fact that institutions would be taking no credit or market risk in association with such activities. The change, effective immediately, only applies to activities with the MMLF. There will be a 45-day comment period following publication in the Federal Register.


OFAC actions on March 17

On Tuesday, OFAC added one individual to its Specially Designated Nationals List under Syria-related Executive Order 13894, and removed a number of listings from that list, four of which were also removed from OFAC's Foreign Sanctions Evaders List. The individuals and entities affected are identified in BankersOnline's OFAC Update..


New Primary Dealer Credit Facility from Fed

The Federal Reserve Board announced yesterday that, to support the credit needs of American households and businesses, the Fed will establish a Primary Dealer Credit Facility, or PDCF. The facility will allow primary dealers of the New York Fed to support smooth market functioning and facilitate the availability of credit to businesses and households. The PDCF will offer overnight and term funding with maturities up to 90 days and will be available on March 20, 2020. It will be in place for at least six months and may be extended as conditions warrant. Credit extended to primary dealers under this facility may be collateralized by a broad range of investment grade debt securities, including commercial paper and municipal bonds, and a broad range of equity securities. The interest rate charged will be the primary credit rate, or discount rate, at the Federal Reserve Bank of New York.


Comments requested on Industrial Bank proposed rule

The FDIC is seeking comment on a proposed rule that would require certain conditions and commitments for approval or non-objection to certain filings involving an industrial bank or industrial loan company (ILC) whose parent company is not subject to consolidated supervision by the Federal Reserve Board. The proposed rule would apply to deposit insurance, change in bank control, and merger filings that involve industrial banks.

The proposal would require a covered parent company to enter into written agreements with the FDIC and the industrial bank to: address the company's relationship with the industrial bank; require capital and liquidity support from the parent to the industrial bank; and establish appropriate recordkeeping and reporting requirements. The proposed rule would codify the FDIC's current supervisory processes and policies with respect to covered industrial banks and ensure the safe and sound operation of these institutions as well as provide the necessary transparency regarding the FDIC's supervisory practices.

A Fact Sheet and statements from Chairman McWilliams and Board Member Gruenberg were also posted. Comments will be accepted for 60 days following Federal Register publication.


Regulator actions to support household lending

The Fed, FDIC, and OCC have issued a joint press release announcing the following two actions to support the U.S. economy and allow banks to continue lending to households and businesses:

  • A statement encouraging banks to use their resources to support households and businesses; and
  • A technical change to phase in gradually, as intended, the automatic distribution restrictions if a firm's capital levels decline.

The technical rule will be effective upon publication. Issued as an interim final rule, it will have a 45-day comment period. UPDATE: Published at 85 FR 15909 on 3/20/20, with a comment period ending 5/4/20.


Fed issues Regulatory Capital/Stress Test Rules

The Federal Reserve Board has published [85 FR 15576] a final rule that simplifies the Board's capital framework while preserving strong capital requirements for large firms. The final rule would integrate the Board's regulatory capital rule (capital rule) with the Comprehensive Capital Analysis and Review (CCAR), as implemented through the Board's capital plan rule (capital plan rule). The final rule makes amendments to the capital rule, capital plan rule, stress test rules, and Stress Testing Policy Statement. Under the final rule, the Board will use the results of its supervisory stress test to establish the size of a firm's stress capital buffer requirement, which replaces the static 2.5 percent of risk-weighted assets component of a firm's capital conservation buffer requirement.

The rule, which amends Regulations Q, Y and YY, becomes effective May 18, 2020.


Fed to create Commercial Paper Funding Facility

The Federal Reserve Board has announced that it will establish a Commercial Paper Funding Facility (CPFF) to support the flow of credit to households and businesses. Commercial paper markets directly finance a wide range of economic activity, supplying credit and funding for auto loans and mortgages as well as liquidity to meet the operational needs of a range of companies.

Treasury Secretary Mnuchin released a statement in support of the facility. He said the CPFF will support the smooth functioning of the financial markets and that Treasury will provide $10 billion of capital to the CPFF from the Exchange Stabilization Fund.


FDIC announces adaptive response to COVID-19

The FDIC has announced steps it is taking to ensure the health and safety of its workforce and the continuity of its operations:

  • Consistent with recent guidance from the Office of Management and Budget, and out of concern for the health of staff that would have been required to participate live, the FDIC has decided to proceed with its previously announced open Board of Directors meeting on Tuesday, March 17, on a notational basis. Vote results and any board member statements will be released to the public following the votes.
  • All FDIC employees in all FDIC facilities are now engaged in mandatory telework through at least March 30.
  • Supervisory and other FDIC activities at financial institutions will be conducted off-site for two weeks starting Monday, March 16. Any on-site activities that are necessary will be conducted with minimal on-site teams.
  • The voluntary early retirement and separation programs announced earlier this month have been suspended at this time.
  • Externally, the FDIC has released statements for financial institutions encouraging banks to work with impacted borrowers and to utilize liquidity measures available to them through the Federal Reserve Banks.


Additions to instructions for March Call Report

OCC Bulletin 2020-16, issued yesterday, announces that the OCC, Fed, and FDIC have issued supplemental instructions to the Consolidated Reports of Condition and Income (Call Report) in response to comments received on the proposed Interagency Policy Statement on Allowances for Credit Losses. The supplemental instructions pertain to nonaccrual treatment of purchased credit-deteriorated (PCD) assets for the March 31, 2020, Call Report for banks that have adopted the Financial Accounting Standards Board’s Accounting Standards Update 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13), and have PCD assets.

  • If certain criteria are met, the agencies will give banks the option to not report PCD assets in nonaccrual status on an interim basis.
  • The agencies plan to propose changes to the Call Report instructions to revise the nonaccrual treatment for PCD assets through the Paperwork Reduction Act process, which will include a request for comment.


OCC names chief operating officer

The OCC has announced Brian P. Brooks will become its next chief operating officer and first deputy comptroller, effective April 1, 2020. Mr. Brooks joins the OCC from Coinbase, Inc., where he has served as chief legal officer since September 2018. He previously served as executive vice president, general counsel, and corporate secretary of Fannie Mae. Mr. Brooks also served as a member of the senior executive team of OneWest Bank, N.A., from 2011 to 2014. Prior to joining OneWest, he served as managing partner of the Washington, D.C., office of O'Melveny & Myers LLP.


Discount rate decreases

The Federal Reserve Board has approved action on Sunday by the Board of Directors of the Federal Reserve Bank of Kansas City and actions on Monday by the Boards of Directors of the Federal Reserve Banks of Boston, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Dallas, and San Francisco, decreasing the discount rate (the primary credit rate) at the Banks from 1-3/4 percent to 1/4 percent, effective immediately.


January TIC released

Treasury has released Treasury International Capital (TIC) data for January 2020. The next release, which will report on data for February 2020, is scheduled for April 15, 2020.

The sum total in January of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $122.9 billion. Of this, net foreign private inflows were $94.1 billion, and net foreign official inflows were $28.7 billion. Foreign residents increased their holdings of long-term U.S. securities in January; net purchases were $28.0 billion. Net purchases by private foreign investors were $26.4 billion, while net purchases by foreign official institutions were $1.6 billion. U.S. residents increased their holdings of long-term foreign securities, with net purchases of $7.1 billion.


Fed revises internal appeals and ombudsman policies

The Board of Governors of the Federal Reserve System has published [85 FR 15175] a final policy revising its internal appeals process for institutions wishing to appeal an adverse material supervisory determination and its policy regarding the Ombudsman for the Federal Reserve System. The final appeals process will apply to all material supervisory determination appeals initiated after the effective date, which is April 1, 2020.


FinCEN urges communication of concerns related to COVID-19

FinCEN has released a notice encouraging financial institutions to communicate COVID-19-related concerns and to stay alert to related illicit activity, similar to fraudulent transactions that occur in the wake of natural disasters. FinCEN is monitoring public reports and BSA reports of suspect behavior connected to COVID-19, and has noted some emerging trends:

  • Imposter Scams – Bad actors attempt to solicit donations, steal personal information, or distribute malware by impersonating government agencies (e.g., Centers for Disease Control and Prevention), international organizations (e.g., World Health Organization), or healthcare organizations.
  • Investment Scams – The SEC urged investors to be wary of COVID-19-related investment scams, such as promotions that falsely claim that the products or services of publicly traded companies can prevent, detect, or cure coronavirus.
  • Product Scams – The FTC and FDA have issued public statements and warning letters to companies selling unapproved or misbranded products that make false health claims pertaining to COVID-19. Additionally, FinCEN has received reports regarding fraudulent marketing of COVID-19-related supplies, such as certain facemasks.
  • Insider Trading – FinCEN has received reports regarding suspected COVID-19-related insider trading.

FinCEN reminded institutions of its Advisory, FIN-2017-A007, "Advisory to Financial Institutions Regarding Disaster-Related Fraud" (October 31, 2017), for descriptions of other relevant typologies, such as benefits fraud, charities fraud, and cyber-related fraud.

For suspected suspicious transactions linked to COVID-19, along with checking the appropriate suspicious activity report-template (SAR-template) box(es) for certain typologies, FinCEN also encourages financial institutions to enter “COVID19” in Field 2 of the SAR template.


Bureau updates HMDA FAQs

The CFPB has published a response to a frequently asked HMDA question: If a natural person applicant submits a mail, internet, or telephone application under Regulation C but does not provide race, ethnicity, or sex information, what should the financial institution report regarding whether this information was collected on the basis of visual observation or surname? It's question 7 in the "Ethnicity, Race, and Sex" group on the Bureau's HMDA FAQs.

The Bureau's answer?—If the financial institution doesn't have an opportunity to collect this information during an in-person meeting in the application process, the financial institution may report either that the information was not collected on the basis of visual observation (code 2) or that the requirement to report this data field is not applicable (code 3). For consistency of data across all reporters, the CFPB suggests (but doesn't require) that code 2 be used.


Agencies encourage use of Fed's discount window

The Federal Reserve Board, FDIC and OCC issued a joint press release Monday, with a statement encouraging banks to use the Federal Reserve's discount window so that they can continue supporting households and businesses.


Russian CD scammer charged

The Securities and Exchange Commission has announced charges against Denis Georgiyevich Sotnikov and entities he controlled for allegedly participating in a fraudulent scheme to lure U.S. investors into buying fictitious certificates of deposit promoted through internet advertising and “spoofed” websites that mimic the actual sites of legitimate financial institutions.

According to the SEC’s complaint, the scheme involved purchasing internet ads that targeted investors who were searching for CDs with high rates. The ads allegedly included links to phony websites that falsely claimed that the firms offering the CDs were members of FINRA and the FDIC, and that deposits were FDIC-insured. When investors called the phone numbers on the websites, an “account executive” impersonating a real registered representative directed investors to wire funds to so-called “clearing” partners. These alleged clearing partners were entities used by Sotnikov to launder and misappropriate investor funds. Since November 2014, the alleged scheme involved spoofing the websites of at least 24 actual financial firms or using at least 8 fictitious entities, resulting in over $26 million in known investor losses—with many of those losses from older investors who used their retirement savings.


OCC and FDIC urge banks to meet customer needs during crisis

OCC Bulletin 2020-15 and FDIC FIL-17-2020 urge OCC- and FDIC-supervised institutions to meet the financial services needs of their customers adversely affected by COVID-19-related issues.


Mnuchin on coronavirus response legislation

The following statement regarding coronavirus legislation was issued by Treasury Secretary Mnuchin: “This bill will provide significant relief to small businesses that cannot afford the employee costs associated with coronavirus. The bill provides a dollar-for-dollar reimbursement for coronavirus related sick leave costs. To protect businesses concerned about cash flow, the Treasury will use its regulatory authority to advance funds to employers in a number of ways. Employers will be able to use cash deposited with the IRS to pay sick leave wages. Additionally, for businesses that would not have sufficient taxes to draw from, Treasury will use its regulatory authority to make advances to small businesses to cover such costs.”


Fed Services preparations for COVID-19

Federal Reserve Financial Services reports it is committed to maintaining a high level of preparedness to meet the needs of financial institutions for a range of scenarios, including those relevant to the recent public health emergency caused by the coronavirus (COVID-19). It reports its services are fully operational and it does not anticipate any business disruptions. Customers should continue to follow their normal procedures for contacting the Federal Reserve Banks.


IRS offers warning to guard financial info

The Internal Revenue Service has issued a reminder for taxpayers to remain vigilant concerning their personal information by securing computers and mobile phones. Proper cybersecurity protection and scam recognition can reduce the threat of identity theft inside and outside the tax system. The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. People should be alert to scammers posing as IRS personnel to steal personal information.


Fed acts in rare Sunday meetings to lower rates and support credit

The Federal Reserve Board has released a Federal Open Market Committee Statement following an extraordinary Sunday meeting, to announce the Committee's decision to lower the target range for the federal funds rate to 0 to 1/4 percent. The Committee "expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. This action will help support economic activity, strong labor market conditions, and inflation returning to the Committee's symmetric 2 percent objective."

The announcement also said that to "support the smooth functioning of markets for Treasury securities and agency mortgage-backed securities that are central to the flow of credit to households and businesses, over coming months the Committee will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion. The Committee will also reinvest all principal payments from the Federal Reserve's holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Open Market Desk has recently expanded its overnight and term repurchase agreement operations. The Committee will continue to closely monitor market conditions and is prepared to adjust its plans as appropriate."

The implementation note issued with the Fed's announcement reports the the Board of Governors voted unanimously to set the interest rate paid on required and excess reserves at 0.10 percent effective March 16, and to approve a 1-1/2 percentage point decease in the primary credit rate at Federal Reserve Banks to 0.25 percent, also effective March 16. Banks will be able to borrow from the Fed's discount window for periods up to 90 days.

In addition, in a press release concerning the Federal Reserve's actions to support the flow of credit to households and businesses, the Board of Governors announced that, beginning with next reserve maintenance period on March 26, reserve requirements will be eliminated for thousands of depository institutions to help support lending to households and businesses.

UPDATE: The Board published amendments to Regulation A [85 FR 16526] and Regulation D [85 FR 16526—Interest on reserves] and [a href="">85 FR 16525—lowering reserve ratios on transaction accounts] on March 24, 2020.


Protecting oneself financially from coronavirus impact

The CFPB has posted a blog article, "Protect yourself financially from the impact of the coronavirus," providing links to information on government action to respond to the coronavirus, and on staying safe during the crisis. The article also provides information on steps to take when—

  • having trouble paying bills or meeting other financial obligations;
  • experiencing a loss of income; or
  • being targeted by a scammer.


SBA amends loan program rules

The Small Business Administration has published a final rule [85 FR 14772] amending its business loan program regulations (13 CFR parts 120 and 134) to implement the Small Business 7(a) Lending Oversight Reform Act of 2018 and make other amendments that will strengthen SBA's lender oversight and ensure the integrity of the business loan programs. The key amendments in this rule codify SBA's informal enforcement actions, new civil monetary penalties and certain appeal rights for 7(a) Lenders, clarify certain enforcement actions for Microloan Intermediaries, and adopt statutory changes to the credit elsewhere test. The rule also makes other technical amendments, updates, and conforming changes including clarifying oversight and enforcement related definitions.

The amendments will become effective April 15, 2020.


Homeless programs receive $118M from HUD

HUD Secretary Carson announced on Friday over $118 million in grants to support local homeless assistance programs across the country. The HUD Continuum of Care grants will provide critically needed support to approximately 630 local programs on the front lines, serving individuals and families experiencing homelessness.


CFPB Market Snapshot

The Bureau has released a new Market Snapshot that explores first-time homeownership. For households attempting to transition from renting to owning, shifts in the housing and mortgage markets can play a large role in whether they can afford to buy a home. The report investigates the prevalence and ease of first-time homeownership today by comparing current and historical market trends.


Regulators statement following Tennessee tornadoes

The OCC, Federal Reserve, FDIC, NCUA and the Tennessee Department of Financial Institutions have issued a joint press release stating they recognize the serious impact of tornadoes in Tennessee on the customers and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision. The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities. A complete list of affected disaster areas can be found at

The release offers information on:

  • Lending
  • Use of temporary facilities
  • Publishing requirements relating to branch closings, relocations and temporary facilities
  • Regulatory reporting requirements
  • Community Reinvestment Act consideration for financial institutions' actions
  • Investments

The FDIC has also issued FIL-16-2020 with steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Tennessee affected by severe storms, tornadoes, straight-line winds and flooding.


OCC revises Deposit-Related Credit booklet

OCC Bulletin 2020-14, issued yesterday, announces a full revision of the "Deposit Related Credit" booklet of the Comptroller's Handbook, which is prepared for use by OCC examiners in connection with the examination and supervision of national banks, federal savings associations, and federal branches and agencies of foreign banking organizations.

Version 3.0 of the booklet replaces the booklet of the same title and rescinds OCC Bulletin 2018-28, “Deposit-Related Credit: Updated Comptroller’s Handbook Booklet,” which transmitted version 2.1 of the booklet in September 2018. The newest version:

  • reflects relevant OCC issuances published since this booklet was last issued
  • reflects changes to laws and regulations that occurred since this booklet was last issued
  • clarifies applicability of references to covered savings associations
  • includes clarifying edits regarding supervisory guidance, sound risk management practices, or legal language
  • revises certain content for general clarity


Another Russian oil broker targeted

OFAC has announced the designation of TNK Trading International S.A. (TTI) for operating in the oil sector of the Venezuelan economy.

TTI, incorporated in Switzerland, is a subsidiary of Russian state-controlled Rosneft Oil Company. Following the February 18, 2020, Treasury designation of Rosneft Trading S.A. (RTSA), cargoes of Venezuelan oil allocated to RTSA were changed to TTI in order to evade U.S. sanctions.

Identification information can be found in BankersOnline's OFAC Update.


Info on state agency contacts re COVID-19

The NMLS has posted a listing of state agency contacts pages with links to any state agency guidance or communications relating to operations during the Coronavirus/COVID-19 emergency.


OFAC sanctions actions

Treasury announced yesterday that OFAC had designated four Mexican businesses pursuant to the Foreign Narcotics Kingpin Designation Act because of their links to the Cartel de Jalisco Nueva Generacion (CJNG) and the Los Cuinis Drug Trafficking Organization (Los Cuinis), two closely allied Mexican drug trafficking organizations. CJNG and Los Cuinis funnel fentanyl and other deadly drugs into the United States, fueling drug addiction. Yesterday’s action was the result of OFAC’s ongoing collaboration with the Drug Enforcement Administration (DEA), which executed Project Python, a nationwide operation to disrupt CJNG through a series of coordinated arrests, seizures, and indictments.

Treasury also announced OFAC's designation of Anselem Sanyatwe and Owen Ncube for their involvement in human rights abuses, including directing an attack on peaceful demonstrators and political opponents in Zimbabwe. OFAC concurrently removed sanctions on Ray Kaukonde, Shuvai Ben Mahofa, Sithokozile Mathuthu, and Naison Ndlovu, all of whom were previously designated pursuant to Treasury’s Zimbabwe sanctions authorities.

For identification information on all of these OFAC actions, see BankersOnline's OFAC Update..


FDIC extends comment period

The FDIC has announced it has extended the comment period on its request for information on modernizing the agency's signage and advertising requirements (see our 2/20/2020 Top Story), scheduled to end March 19, through April 20, 2020.


FHFA strengthens Duty to Serve eval criteria

The Federal Housing Finance Agency announced yesterday it is strengthening the evaluation criteria of the Duty to Serve (DTS) Underserved Markets program through updated Evaluation Guidance for Fannie Mae and Freddie Mac (the Enterprises). The updated guidance will ensure the Enterprises' DTS programs have a significant impact in underserved communities.

The revised guidance—which takes effect with the 2021-2023 plan cycle—establishes four new ratings to describe the GSEs’ performance, replacing the previous five-tiered ratings framework. It also establishes higher scoring expectations and increases the threshold for determining compliance from 70% to 80%. In addition, the revisions require a minimum concept score of 30 for each objective, rather than the previous requirement that the concept scores of all objectives average a 30, in order for a proposed plan to receive a non-objection from FHFA.


Florida investment advisor assets frozen

On March 6, the Securities and Exchange Commission obtained an asset freeze and other emergency relief against Florida-based investment adviser Kinetic Investment Group LLC and its managing member, Michael Scott Williams, in connection with an alleged fraudulent, unregistered securities offering that raised approximately $39 million from at least 30 investors located mostly in Florida and Puerto Rico. According to the SEC’s complaint, filed in the U.S. District Court for the Middle District of Florida, Kinetic Group and Williams fraudulently raised millions of dollars by making material misrepresentations to investors whom they solicited to invest in Kinetic Funds I LLC, a purported hedge fund that they managed. The defendants allegedly represented, among other things, that Kinetic Funds’ largest sub-fund invested solely in U.S.-listed financial products and that at least 90% of its portfolio was hedged using listed options. The SEC alleges, however, that Williams actually invested a significant part of the sub-fund’s assets in a private start-up company owned by Williams. The complaint further alleges Williams misappropriated at least $6.3 million through undisclosed loans to himself and his entities.


FHFA Director Calabria statement on coronavirus

FHFA Director Calabria issued a statement yesterday on the coronavirus:

  • “To meet the needs of borrowers who may be impacted by the coronavirus, last week Fannie Mae and Freddie Mac (“the Enterprises”) reminded mortgage servicers that hardship forbearance is an option for borrowers who are unable to make their monthly mortgage payment. For borrowers that may be experiencing a hardship, I encourage you to reach out to your servicer. The Enterprises and the Federal Home Loan Banks continue to provide support to the secondary mortgage market, and the UMBS [Uniform Mortgage Backed Securities] market continues to operate at its normal level.”


President’s Working Group on Financial Markets

The Treasury Department reported yesterday that Secretary Mnuchin convened a call of the President’s Working Group on Financial Markets to discuss recent market conditions and activity. The group shared updates on the resilience of the markets and the economic impact of COVID-19.


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