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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:

11/13/2020

FDIC amends branch application requirements

The FDIC has published [85 FR 72551] a final rule to amend its application requirements for the establishment and relocation of branches and offices so that such applications no longer require statements regarding the compliance of such proposals with the National Historic Preservation Act of 1966 and the National Environmental Policy Act of 1969. The final rule amends the FDIC's regulations to remove those requirements embedded in its branch application procedures, and rescinds related FDIC statements of policy, consistent with branch application procedures for national banks and insured state member banks supervised by the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System.

The amendments become effective December 14, 2020.

11/13/2020

Debt Collector pays $500,000 for reporting violations

The CFPB has announced a settlement with Afni, Inc.to address its violations in providing information to consumer reporting agencies. Afni is a non-bank Illinois-based debt collector that specializes in collecting debt on behalf of telecommunications companies and furnishes information to consumer reporting agencies about consumers’ credit. The consent order requires Afni to take certain steps to prevent future violations and imposes a $500,000 civil money penalty.

Details of Afni's violations and a link to the Bureau's consent order can be found in BankersOnline's penalty page, "Afni, Inc. pays $500K for FCRA violations."

11/13/2020

Bureau reports on accuracy of payment info received by CRAs

The Bureau has released its quarterly consumer trends report regarding the prevalence of actual payment information in consumer credit reporting. Key findings of the report include

  • Across the three most common installment loan types (auto loans, student loans, and mortgages), shares of credit accounts with actual payment amount information furnished have generally trended upward, and by March 2020, contained actual payment information in more than 90 percent of credit accounts.
  • Shares of revolving and credit card accounts with actual payment information furnished significantly declined over the same time period. The share of credit card accounts containing actual payment data peaked in the fourth quarter of 2013 at 88 percent and has since declined by more than half to 40 percent. Compared to actual payment, other data variables in a consumer’s consumer report, such as balance amount and credit limit, are consistently furnished across loan types.
  • Furnishing actual payment information appears to be an either/or proposition for credit card issuers. Issuers either furnish actual payment information for nearly all accounts or not at all
  • In 2013, up to 70 percent of the largest credit card issuers furnished actual payment data for nearly all accounts. As of 2020, only about half of issuers with recent payments furnish these data.

11/13/2020

Enterprises extend purchase of loans in forbearance

The Federal Housing Finance Agency has approved an extension of the current temporary policy that allows for the purchase of certain single-family mortgages in forbearance that meet specific eligibility criteria as set by Fannie Mae and Freddie Mac (the Enterprises). The policy is extended for loans originated through December 31, 2020.

11/12/2020

OFAC sanctions suppliers for Iranian military firm

OFAC has designated a network of six companies and four individuals that facilitated the procurement of sensitive goods, including U.S.-origin electronic components, for Iran Communication Industries (ICI), an Iranian military firm designated by the United States in 2008 and by the European Union in 2010 for being owned or controlled by Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), the overall manager and coordinator of Iran’s ballistic missile program.

This action was taken in accordance with Executive Order 13382, an authority aimed at freezing the assets of proliferators of weapons of mass destruction and their supporters. Concurrent with Treasury’s designations, the U.S. Attorney’s Office for the District of Columbia is filing charges by criminal complaint against two of the entities (DES International Co. and Soltech Industry Co., Ltd.) and one of the individuals (Chin Hua Huang) designated today.

Identification information for the designated individuals and entities can be found in BankersOnline's OFAC Update.

11/12/2020

Fed services fees for 2021

The Federal Reserve Board has issued a press release announcing the fee schedules that will be effective January 4, 2021, for payment services provided by the Federal Reserve Banks to depository institutions.

The Reserve Banks will maintain the current schedule of prices for payment services provided to depository institutions (priced services) in 2021, with the exception of a modification to the Check Services participation fee, which will increase on average 2.7 percent. Fees will remain unchanged for the Reserve Banks' FedACH Service, National Settlement Service, Fedwire Funds Service, Fedwire Securities Service, and FedLine Solutions. The 2021 fee schedule for each of the priced services is available on the Federal Reserve Banks' financial services website at FRBservices.org.

11/12/2020

Bureau reviewing payday lending disclosures

The CFPB has published a notice and request for comment [85 FR 71886] on an information collection plan titled "Generic Information Plan for the Development and Testing of Disclosures and Related Materials" to test Payday Loan disclosures. The results of this testing (estimated to conclude September 2021) may be used, along with other Bureau considerations, to inform the decision-making process around whether to move forward with a rulemaking related to payday loan disclosures.

11/12/2020

NCUA amends corporate CU regulation

The NCUA has published [85 FR 71817] a final rule amending its corporate credit union regulation (12 CFR part 704). The final rule updates, clarifies, and simplifies several provisions of the NCUA's corporate credit union regulation, including:

  • permitting a corporate credit union to make a minimal investment in a credit union service organization (CUSO) without the CUSO being classified as a corporate CUSO under the NCUA's rules;
  • expanding the categories of senior staff positions at member credit unions eligible to serve on a corporate credit union's board; and
  • amending the minimum experience and independence requirement for a corporate credit union's enterprise risk management expert.

The amendments will be effective December 14, 2020.

11/12/2020

IRS updates life expectancy and RMD tables

The IRS has published [85 FR 72472] in today's Federal Register a final regulation to update its life expectancy and distribution period tables used for determining required minimum distributions from qualified retirement plans, individual retirement accounts and annuities, and certain other tax-favored employer-provided retirement arrangements.

Although the final regulations are effective upon publication, they apply to distribution calendar years beginning on or after January 1, 2022.

11/10/2020

G.19 Consumer Credit data

The Federal Reserve has posted its September 2020 G.19 Consumer Credit data. Consumer credit increased at a seasonally adjusted annual rate of 2-1/4 percent during the third quarter. Revolving credit decreased at an annual rate of 2-1/2 percent, while nonrevolving credit increased at an annual rate of 4 percent. In September, revolving credit increased at an annual rate of 4-3/4 percent, while nonrevolving credit increased at an annual rate of 4-3/4 percent.

11/10/2020

FinCEN advisory on FATF jurisdiction list

FinCEN has issued FIN-2020-A009, an "Advisory on the Financial Action Task Force-Identified Jurisdictions with Anti-Money Laundering, Combating the Financing of Terrorism, and Proliferation Deficiencies."

  • Iran and North Korea continue to be listed by FATF as "high-risk" jurisdictions.
  • Iceland and Mongolia have been removed from FATF's "Jurisdictions under Increased Monitoring" statement
  • Remaining on the "Increased Monitoring" list are Albania, The Bahamas, Barbados, Botswana, Burma (Myanmar), Cambodia, Ghana, Jamaica, Mauritius, Nicaragua, Pakistan, Panama, Syria, Uganda, Yemen, and Zimbabwe (some countries did not report their actions on its reforms because of the COVID-18 pandemic, and the list may not reflect their current status).

Financial institutions filing SARs with a connection to the advisory should include the key term "October 2020 FATF FIN-2020-A009” in SAR field 2 (Filing Institution Note to FinCEN) and the narrative.

11/10/2020

Sanctions imposed on petroleum network, Syrian officials and entities

Treasury has announced the OFAC has taken action against Syrian military officials, members of the Syrian Parliament, Government of Syria entities, and Syrian and Lebanese persons attempting to revive Syria’s deteriorating petroleum industry. Seven individuals and ten entities were designated.

Treasury's press release said the State Department also took action against two Syrian persons in accordance with Section 2 of Executive Order 13894, “Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Syria.”

More information on the individuals and entities targeted in these actions, see BankersOnline's November 9, 2020, OFAC Update.

11/10/2020

Fed posts October SLOOS results

The Federal Reserve Board has released the October 2020 Senior Loan Officer Opinion Survey (SLOOS) on Bank Lending Practices, which addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the third quarter of 2020.

Loans to businesses: Respondents indicated that, on balance, they tightened their standards and terms on commercial and industrial loans to firms of all sizes. Banks reported weaker demand for C&I loans from firms of all sizes. Meanwhile, banks tightened standards and reported weaker demand across all three major commercial real estate loan categories—construction and land development loans, nonfarm nonresidential loans, and multifamily loans—over the third quarter of 2020.

Loans to households: Banks tightened standards across all categories of residential real estate loans and across all three consumer loan categories—credit card loans, auto loans, and other consumer loans—over the third quarter of 2020 on net. Banks reported stronger demand for credit card loans, auto loans, and most categories of RRE loans.

Banks also responded to a set of special questions inquiring about their forbearance policies. For all loan categories, a majority of banks reported that less than 5 percent of loans were in forbearance in the third quarter. Payment deferral was the most widely cited form of forbearance for CRE, RRE, and consumer loans, while covenant relief was the most cited form of forbearance for C&I loans. For most categories, a borrower’s degree of financial hardship was the factor most widely cited as important in determining banks’ willingness to approve forbearance requests or the terms of forbearance.

11/10/2020

OCC: COVID-19 effects on federal banking system

The OCC has posted its Semiannual Risk Perspective for Fall 2020, reporting the key issues facing the federal banking system and the effects of the COVID-19 pandemic on the federal banking industry.

Although banks are still in strong financial condition, profitability is stressed due to low interest rates and increasing levels of problem loans. The OCC reported credit, strategic, operational, and compliance risks, among the key risk themes in the report:

  • Credit risk is increasing as the economic downturn impacts customer ability to service debts.
  • Strategic risk is an emerging issue due to the historically low rate environment, potential credit stress and their effect on bank profitability.
  • Operational risk is elevated as financial institutions respond to altered work environments and an evolving and complex operating environment. Cybersecurity threats contribute as a key driver of the heightened operational risk environment.
  • Compliance risk is elevated due to a combination of altered work environments, and the requirement to quickly implement federal, state, and proprietary programs designed to support businesses and consumers.

The report also highlights emerging trends in payment products and services as a special topic in emerging risks.

11/09/2020

Agencies on LIBOR transition

The OCC, Federal Reserve Board, and FDIC have announced they have issued an interagency Statement on Reference Rates for Loans reiterating that the agencies do not endorse a specific replacement rate for the London InterBank Offered Rate (LIBOR), which is expected to cease after 2021. Banks may use any reference rate for loans that the banks determine to be appropriate for their funding models and customer needs. Banks should include language in lending contracts that provides for using a robust fallback rate if the initial reference rate is discontinued. The statement emphasizes that—

  • all banks should have risk management processes in place, commensurate with the size and complexity of their exposures, to identify and mitigate their LIBOR transition risks. For more information, refer to the FFIEC "joint Statement on Managing the LIBOR Transition."
  • examiners will not criticize banks solely for using a reference rate, including a credit-sensitive rate, other than the secured overnight financing rate (SOFR), for loans.

The agencies encourage banks to determine appropriate reference rates for lending activities and begin transitioning loans away from LIBOR without delay. They also encourage banks to accelerate outreach to lending customers to ensure that they are aware of, and prepared for, the transition from LIBOR. Finally, the agencies encourage banks to consider any technical changes that might be required for internal systems to accommodate new reference rates or fallback rates.

11/09/2020

Federal Reserve supervision and regulation report

The Federal Reserve Board has published its latest supervision and regulation report, which summarizes banking conditions and information about the Federal Reserve's bank regulatory and supervisory activities. The current edition includes detailed information on the strength of the banking system in light of the economic and financial stresses from the COVID-19 containment measures. Additionally, it describes current areas of supervisory focus from the Federal Reserve as well as how banks and bank supervisors have adapted to a largely remote working environment.

The Board also announced that it is updating the list of firms supervised by its Large Institution Supervision Coordinating Committee (LISCC) Program, which was established in 2010 to supervise the largest and most complex firms.

11/09/2020

Treasury targets corrupt Lebanese official

The Department of the Treasury has announced that OFAC has sanction Gibran Bassil the president of the Free Patriotic Movement political party and member of the Lebanese parliament for his role in corruption. For detailed identification information on Bassil, see BankersOnline's November 6, 2020, OFAC Update

11/06/2020

FinCEN renews GTOs

The Financial Crimes Enforcement Network (FinCEN) has announced the renewal of its Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used in all-cash purchases of residential real estate. The renewed GTOs are identical to the May 2020 GTOs. The purchase amount threshold remains $300,000 for each covered metropolitan area. The terms of this Order are effective beginning November 6, 2020 and ending on May 4, 2021.

The new GTOs cover certain counties within these major U.S. metropolitan areas: Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle.

FinCEN's GTOs do not require banks to take any action. We report on them because they may affect a bank's customers.

11/06/2020

FOMC statement issued

The Federal Reserve Board has voted unanimously to maintain the interest rate paid on required and excess reserve balances at 0.10 percent, effective November 6, 2020. As part of its policy decision, the Federal Open Market Committee (FOMC) voted to authorize and direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive:

  • Undertake open market operations as necessary to maintain the federal funds rate in a target range of 0 to 1/4 percent.
  • Increase the System Open Market Account holdings of Treasury securities and agency mortgage-backed securities (MBS) at the current pace. Increase holdings of Treasury securities and agency MBS by additional amounts and purchase agency commercial mortgage-backed securities (CMBS) as needed to sustain smooth functioning of markets for these securities
  • Conduct term and overnight repurchase agreement operations to support effective policy implementation and the smooth functioning of short-term U.S. dollar funding markets.
  • Conduct overnight reverse repurchase agreement operations at an offering rate of 0.00 percent and with a per-counterparty limit of $30 billion per day; the per-counterparty limit can be temporarily increased at the discretion of the Chair.
  • Roll over at auction all principal payments from the Federal Reserve's holdings of Treasury securities and reinvest all principal payments from the Federal Reserve's holdings of agency debt and agency MBS in agency MBS.
  • Allow modest deviations from stated amounts for purchases and reinvestments, if needed for operational reasons.
  • Engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions.

The Board also voted unanimously to approve the maintain the primary credit rate at the existing level of 0.25 percent.

11/06/2020

OCC Director’s Toolkit updated

The OCC has announced the update of its Director’s Toolkit to help bank directors for national banks and federal savings associations fulfill their corporate governance responsibilities. The Toolkit is a helpful guide for bank directors on strategic issues, risk management, and compliance responsibilities. The updated toolkit includes a revised Director's Book: Role of Directors for National Banks and Federal Savings Associations and adds a new publication, the Director’s Reference Guide to Board Reports and Information.

11/06/2020

Driver Loan, LLC and CEO subjects of Bureau suit

The CFPB has announced it has filed a lawsuit against Driver Loan, LLC, and its Chief Executive Officer, Angelo Jose Sarjeant, for allegedly engaging in deceptive acts or practices in taking deposits from and offering credit to consumers.

Driver Loan, based in Doral, Florida, offers short-term, high-interest loans to consumers funded by deposits made by other consumers. The Bureau alleges that Driver Loan and Sarjeant violated the Consumer Financial Protection Act of 2010 (CFPA) by misrepresenting the risks associated with the deposit product it offered to consumers and by misrepresenting the annual percentage rate (APR) for extensions of credit it offered to other consumers. The Bureau’s complaint alleges that since 2017, Driver Loan purports to have offered short-term, high-interest personal loans totaling over $30 million, typically to drivers who work with ride-share companies. The loans range from $100 to $500 each and are repayable in 15 daily installments. The Bureau alleges that Driver Loan deceptively markets its loans as having an APR of 440% when the actual APRs are about 975%.

11/06/2020

CFPB issues no-action letter to BofA

The CFPB announced yesterday it has granted a no-action letter (NAL) to Bank of America, N.A. regarding certain small-dollar credit products. The NAL provides increased regulatory certainty that the Bureau will not bring a supervisory or enforcement action against a company for providing a product or service under certain facts and circumstances. Bank of America’s NAL application is based on the NAL Template issued by the Bureau on May 22, 2020 in response to an application from the Bank Policy Institute. The Bureau approved the NAL Template to further competition in the small-dollar lending space, which fosters access to credit while including important protections for consumers who seek small-dollar loan products.

11/06/2020

Bureau files complaint against student loan debt relief companies

The CFPB yesterday filed a complaint against Performance SLC, LLC (PSLC), a California debt-relief business focused on federal student loan debt; Performance Settlement, LLC (PSettlement), a California debt-settlement company; and Daniel Crenshaw, the owner and CEO of the two companies.

The Bureau alleges that PSLC and Crenshaw charged illegal advance fees in violation of the Telemarketing Sales Rule (TSR) to student loan borrowers seeking to obtain loan consolidation, loan forgiveness, or income-driven repayment plans for their federal student loans, and that PSLC failed to make required disclosures to certain consumers in violation of the TSR. The Bureau also alleges that PSettlement and Crenshaw used deceptive tactics in violation of the Consumer Financial Protection Act (CFPA) in order to induce consumers to sign up for PSettlement’s services. The complaint seeks redress to consumers, injunctive relief, and the imposition of civil money penalties against the defendants.

11/05/2020

FDIC: Terminated receiverships

The Federal Deposit Insurance Corporation has published {85 FR 70620] a notice of termination of its receiverships, effective November 1, 2020, of Towne Bank of Arizona (Mesa, AZ), New Liberty Bank (Plymouth, MI), and Satilla Community Bank (St. Marys, GA).

11/05/2020

Treasury Department quarterly refunding statement

The Treasury Department has announced it is offering $122 billion of Treasury securities to refund approximately $60.9 billion of privately-held Treasury notes maturing on November 15, 2020. This issuance will raise new cash of approximately $61.1 billion. The securities are:

  • A 3-year note in the amount of $54 billion, maturing November 15, 2023;
  • A 10-year note in the amount of $41 billion, maturing November 15, 2030; and
  • A 30-year bond in the amount of $27 billion, maturing November 15, 2050.

The 3-year note will be auctioned on a yield basis at 1:00 p.m. ET on Monday, November 9, 2020. The 10-year note will be auctioned on a yield basis at 1:00 p.m. ET on Tuesday, November 10, 2020. The 30-year bond will be auctioned on a yield basis at 1:00 p.m. ET on Thursday, November 12, 2020. All of these auctions will settle on Monday, November 16, 2020.

11/05/2020

COVID text scam warning from IRS

The IRS, state tax agencies, and the tax industry yesterday warned of a new text scam created by thieves that trick people into disclosing bank account information under the guise of receiving the $1,200 Economic Impact Payment. "Criminals are relentlessly using COVID-19 and Economic Impact Payments as cover to try to trick taxpayers out of their money or identities," said IRS Commissioner Chuck Rettig. "This scam is a new twist on those we've been seeing much of this year. We urge people to remain alert to these types of scams."

The scam text message states: "You have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment into your account. Continue here to accept this payment …" The text includes a link to a fake phishing web address. People who receive this text scam should take a screen shot of the text message that they received and then include the screenshot in an email to phishing@irs.gov with the following information:

  • Date/Time/Timezone that they received the text message
  • The number that appeared on their Caller ID
  • The number that received the text message

People who believe they are eligible for the Economic Impact ("Stimulus") Payment should go directly to IRS.gov. People who do not have a filing requirement but who are eligible for EIP can use a non-filers tool on IRS.gov until November 21 to claim their payment.

11/05/2020

Servicemembers consumer protection webinar

The NCUA and the CFPB will co-host a webinar on financial literacy and consumer financial protections for servicemembers. The November 18 “Financial Readiness Resources and Information for Servicemembers, Veterans, and their Families" webinar is scheduled to begin at 2 p.m. ET and run approximately 45 minutes. Participants will be able to log into the webinar and view it on their computers or mobile devices using the registration link. Registration is now open.

The NCUA’s Office of Consumer Financial Protection will share financial literacy resources for servicemembers and their families on MyCreditUnion.gov, and provide a brief overview of servicemember consumer financial protection laws and regulations. The CFPB’s Office of Servicemember Affairs will highlight their interactive learning tools and resources for servicemembers and their families.

11/05/2020

Refunds for victims of cryptocurrencies referral schemes

The Federal Trade Commission has announced it is sending PayPal payments totaling more than $470,000 to people who lost money to deceptive chain referral schemes involving cryptocurrencies. Promoters of Bitcoin Funding Team and My7Network falsely promised that participants could earn large amounts of money by paying cryptocurrency such as Bitcoin or Litecoin to enroll in the schemes. However, Bitcoin Funding Team and My7Network were chain referral schemes that depended on the recruitment of new people to make money. In fact, most participants failed to recoup their initial investments. The FTC will send 7,964 refunds through PayPal beginning on November 5, 2020. The average refund is approximately $59. Recipients who receive a refund via PayPal will have 30 days to accept the payment.

11/05/2020

FDIC CRA ratings released

The FDIC has posted a list of 72 banks recently evaluated for compliance with the Community Reinvestment Act. The list covers evaluation ratings that the FDIC assigned to institutions in August 2020. Sixty-six banks received a Satisfactory rating, and we congratulate the following six banks, which were rated Outstanding:

11/04/2020

Agenda for FTC Franchise Rule virtual workshop

The Federal Trade Commission has released the agenda for the Franchise Rule virtual workshop on November 10. The workshop will explore a number of issues related to the Franchise Rule, and the comments received in response to the FTC’s request for comment about the Rule last year. The Rule is designed to ensure that consumers who are considering buying a franchise have key information they need to weigh the risks and benefits of that potential investment.

The workshop will take place online from 1:00 – 4:30 p.m. ET. A link to view the event will be posted on the event page prior to the start of the event. Registration is not required. It will be webcast live on the FTC’s website and live tweeted from the FTC’s Twitter page (@FTC) using the hashtag #FranchiseRuleFTC.

11/04/2020

SEC SBCFAC agenda released

The Securities and Exchange Commission has released the agenda for the Monday, November 9, 2020, meeting of its Small Business Capital Formation Advisory Committee (SBCFAC), which will be hosted via video conference.

The Committee will discuss the Commission’s recent proposal to create a limited, conditional exemption from broker registration requirements for “finders” who assist companies with raising capital in private markets from accredited investors. During the meeting, the Committee will also continue its discussions on how small businesses are coping with the COVID-19 pandemic and share observations from their areas of the marketplace. The meeting will run from 10 a.m. – 2:30 p.m. ET and will be webcast live on SEC.gov The webcast will be archived on the Committee webpage for later viewing.

11/03/2020

FTC and Nigerian enforcement agencies update MOU

The Federal Trade Commission has announced the signing of an updated memorandum of understanding with two Nigerian enforcement agencies to reaffirm the agencies’ capacity and willingness to work together, as well as the intention to share information and to assist one another in consumer protection investigations. The MOU establishes a joint implementation committee to develop joint training programs and workshops and provide assistance regarding specific investigations. It also affirms the participants’ ongoing support for econsumer.gov, a joint project of agencies from 40 countries for reporting international scams online. The MOU is a framework for voluntary cooperation that does not change existing laws in either country.

11/03/2020

OFAC advisory on risks in dealing in costly artwork

OFAC has issued an "Advisory and Guidance on Potential Sanctions Risks Arising from Dealings in High-Value Artwork," to highlight sanctions risks arising from dealings in high-value artwork associated with persons blocked pursuant to OFAC’s authorities, including persons on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List). Such transactions may play a role in blocked persons accessing the U.S. market and financial system in violation of OFAC regulations.

The advisory describes characteristics of the market for high-value artwork that pose sanctions risks; emphasizes to art galleries, museums, private art collectors, auction companies, agents, brokers, and other participants in the art market the importance of maintaining a risk-based compliance program to mitigate such risks; and highlights that what is commonly described as the "Berman Amendment" to the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) does not categorically exempt all dealings in artwork from OFAC regulation and enforcement.

11/03/2020

October 2020 foreign exchange rates

The Federal Reserve System has posted G.5 Monthly Exchange Rates data for October 2020.

11/03/2020

OCC CRA evaluations released

The OCC has released a list of Community Reinvestment Act (CRA) performance evaluations that became public in October (links are to the evaluation reports):

Of the 22 evaluations listed, 16 were rated satisfactory. We congratulate the six banks whose evaluations were rated outstanding:

11/03/2020

IRS relief for COVID-19-impacted taxpayers

The IRS has announced a number of changes designed to help struggling taxpayers impacted by COVID-19 more easily settle their tax debts with the IRS. The revised COVID-related collection procedures will be helpful to taxpayers, especially those who have a record of filing their returns and paying their taxes on time. Among the highlights of the Taxpayer Relief Initiative:

  • Taxpayers who qualify for a short-term payment plan option may now have up to 180 days to resolve their tax liabilities instead of 120 days.
  • The IRS is offering flexibility for some taxpayers who are temporarily unable to meet the payment terms of an accepted Offer in Compromise.
  • The IRS will automatically add certain new tax balances to existing Installment Agreements, for individual and out of business taxpayers. This taxpayer-friendly approach will occur instead of defaulting the agreement, which can complicate matters for those trying to pay their taxes.
  • To reduce burden, certain qualified individual taxpayers who owe less than $250,000 may set up Installment Agreements without providing a financial statement or substantiation if their monthly payment proposal is sufficient.
  • Some individual taxpayers who only owe for the 2019 tax year and who owe less than $250,000 may qualify to set up an Installment Agreement without a notice of federal tax lien filed by the IRS.
  • Qualified taxpayers with existing Direct Debit Installment Agreements may now be able to use the Online Payment Agreement system to propose lower monthly payment amounts and change their payment due dates.

    11/03/2020

    NCUA fair lending and consumer compliance webinar announced

    The NCUA has announced it will host a webinar on November 17, 2020, on a range of fair lending and consumer compliance topics. Registration for the “Fair Lending and Consumer Compliance Regulatory Update” webinar is open. The session is scheduled to begin at 3 p.m. Eastern Time and last approximately 60 minutes. The webinar will be closed-captioned and archived online approximately three weeks following the live event.

    11/03/2020

    SMART payment plan deception ends in CFPB settlement

    The CFPB has issued a consent order against SMART Payment Plan, LLC (Austin, Texas), after finding that the company's disclosures of its loan accelerator program were misleading and in violation of the Consumer Financial Protection Act's prohibition against deceptive acts or practices. SMART operates a loan payment accelerator program for auto loans called the SMART Plan that deducts payments from consumers’ bank accounts every two weeks and then forwards these payments every month to the consumers’ lenders. The consent order imposes a judgment against SMART requiring it to pay $7,500,000 in consumer redress and requirements to prevent future violations.

    SMART provided consumers individualized “benefits summaries” that purported to state a specific amount of interest savings or other money savings consumers would get by enrolling in the SMART Plan, but SMART’s fees would ordinarily exceed the savings. SMART’s disclosures thus created the misleading impression that consumers would save money using its product.

    The ordered consumer redress has been suspended upon SMART's payment of $1,500,000 by December 31, and a $1 civil money penalty to the Bureau (based on SMART'S inability to pay more based on sworn financial statements.

    For additional information and a link to the Bureau's consent order, see "SMART Payment Plan LLC settles with Bureau over misleading statements" in the BankersOnline Penalty pages.

    11/02/2020

    2019 foreign securities holdings survey

    The findings from the annual survey of U.S. portfolio holdings of foreign securities at year-end 2019 were released Friday by the Treasury Department. The survey measured the value of U.S. portfolio holdings of foreign securities at year-end 2019 as approximately $13.1 trillion, with $9.5 trillion held in foreign equity, $3.1 trillion held in foreign long-term debt securities (original term-to-maturity in excess of one year), and $0.5 trillion held in foreign short-term debt securities. The previous such survey, conducted as of year-end 2018, measured U.S. holdings of approximately $11.3 trillion, with $7.9 trillion held in foreign equity, $2.9 trillion held in foreign long-term debt securities, and $0.5 trillion held in foreign short-term debt securities. The increase in 2019 was mainly in equity U.S. portfolio holdings of foreign securities by country at the end of 2019 were the largest for the Cayman Islands ($2.00 trillion), followed by the United Kingdom ($1.52 trillion), Japan ($1.15 trillion), and Canada ($1.10 trillion) These four countries attracted 44 percent of total U.S. portfolio investment, versus 45 percent the previous year.

    11/02/2020

    NMLS annual renewal period has begun

    ​The annual renewal period for mortgage loan originators' registrations for 2021 began yesterday, November 1, 2020, and ends Tuesday, December 31, 2020. The NMLS Call Center operates Monday through Friday 9:00 a.m. to 9:00 p.m. ET. For complete information, see the NMLS Annual Renewal Information page.

    11/02/2020

    Fed adjusts Main Street Lending Program terms

    The Federal Reserve Board has adjusted the terms of the Main Street Lending Program in two ways to better target support to smaller businesses that employ millions of workers and are facing continued revenue shortfalls due to the pandemic. the minimum loan size for three Main Street facilities available to for-profit and non-profit borrowers has been reduced from $250,000 to $100,000 and the fees have been adjusted to encourage the provision of these smaller loans. The Board and Department of the Treasury also issued a new frequently asked question clarifying that Paycheck Protection Program loans of up to $2 million may be excluded for purposes of determining the maximum loan size under the Main Street Lending Program, if certain requirements are met, which should also help smaller businesses access Main Street loans.

    Current loan term sheets:

    11/02/2020

    Interagency large bank operational resilience paper

    The Federal Reserve Board, FDIC, and OCC have announced their release of a paper, "Sound Practices to Strengthen Operational Resilience," designed to help large banks increase operational resilience. Examples of risks to operational resilience include cyberattacks, natural disasters, and pandemics.

    The paper outlines practices to increase operational resilience that are drawn from existing regulations, guidance, statements, and common industry standards. The practices are grounded in effective governance and risk management techniques, consider third-party risks, and include resilient information systems. The paper does not revise the agencies' existing rules or guidance.

    The practices are for domestic banks with more than $250 billion in total consolidated assets or banks with more than $100 billion in total assets and other risk characteristics. An Explanatory Note was also posted.

    11/02/2020

    NCUA issues prohibition notice

    A prohibition notice has been issued by the National Credit Administration to a former employee of Members Exchange Credit Union in Ridgeland, Mississippi, who had been sentenced on a charge of embezzlement.

    11/02/2020

    FDIC September enforcement orders

    The FDIC has issued a list of enforcement orders issued in September, 2020.

    • Banks in Sauk City ($18,500) and Berlin ($15,375), Wisconsin, paid civil money penalties for flood insurance violations
    • The former president of Enloe State Bank, Cooper, Texas (now in receivership) was issued a prohibition order, after an FDIC finding that she originated a significant number of fictitious loans from which she benefited and that led to the bank's financial losses.
    • A former branch manager for First Community Bank, Batesville, Arkansas, was issued a prohibition order after an FDIC finding that she had made unauthorized and fraudulent withdrawals from bank customers' certificate of deposit accounts, from which she received financial gain or other benefit.
    • A former commercial lender for Synovus Bank, Columbus, Georgia, was issued a prohibition order for misappropriation of funds through the creation of a fictitious line of credit, and unauthorized draws from a customer's line of credit and from another customer's account.

    11/02/2020

    Bureau issues FDCPA rule

    The CFPB has issued a final rule [653-page PDF] to restate and clarify prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt. The rule focuses on debt collection communications and gives consumers more control over how often and through what means debt collectors can communicate with them regarding their debts. The rule also clarifies how the protections of the Fair Debt Collection Practices Act apply to newer communication technologies, such as email and text messages.

    The rule—

    • establishes a presumption on the number of calls debt collectors may place to reach consumers on a weekly basis. A debt collector is presumed to violate federal law if the debt collector places telephone calls to a particular person in connection with the collection of a particular debt more than seven times within seven consecutive days or within seven consecutive days of having had a telephone conversation about the debt.
    • clarifies how consumers may set limits on debt collection communications to reflect their preferences and the limits on communicating with third parties about a consumer’s debt
    • requires debt collectors who communicate electronically to offer the consumer a reasonable and simple method to opt out of such communications at a specific email address or telephone number
    • provides that consumers may, if the debt collector communicates through a medium of electronic communications, use that medium of electronic communications to place a cease communication request or notify the debt collector that they refuse to pay the debt
    • clarifies that the FDCPA’s general prohibition on harassing, oppressive, or abusive conduct applies to telephone calls as well as other communication media, such as email and text messages
    • provides examples demonstrating how the prohibition restricts emails and text messages
    • generally restates the FDCPA’s prohibitions regarding false, deceptive, or misleading representations or means and unfair or unconscionable means

    The final rule does contain provisions on disputes, and record retention, among other topics. It does not include a proposed safe harbor for debt collectors against claims that an attorney falsely represented the attorney’s involvement in the preparation of a litigation submission. The Bureau intends to issue a second debt collection final rule focused on consumer disclosures and collection of time-barred debts in December 2020.

    The rule, which is a complete revision and restatement of Bureau Regulation F (12 CFR Part 1006), will become effective one year after it is published in the Federal Register.

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