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How to add predictive analytics into your risk program. Risk reports are often limited to historical insights and issues and do not provide guidance and insights into the future of the organization. Adding predictive analytics can allow your organization to detect emerging risks and create mitigation plans. This can be achieved by combining internal and external key risk indicators (KRIs) and key performance indicators (KPIs) with regulatory intelligence. This ensures that risk reports can detect more issues and highlight areas of concern. Click here to learn more.


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11/12/2019

Fed issued 5 outstanding CRA evals in October

Our monthly review of the Federal Reserve Board's released CRA evaluations revealed that the Board made public 17 evaluations of member banks in October, 12 of which were given a "satisfactory" rating. Congratulations to these five banks, whose evaluations were rated "outstanding":

Our curiosity got the best of us, and we are sharing what we learned about Happy, a town in the Panhandle of Texas near Amarillo. The town's name comes from Happy Draw, a nearby stream of water discovered and reportedly named by thirsty cowboys. The town's official slogan is "The Town Without a Frown." Its population as of the 2010 census was 687. As for the bank, at the end of 2018, Happy State Bank reported total assets in excess of $3.4 billion, 35 locations, two loan production offices, and 99 ATMs.

11/08/2019

Proposed changes to life expectancy and distribution tables

This morning, the Internal Revenue Service has published [84 FR 60812] proposed regulations providing guidance relating to the life expectancy and distribution period tables that are used to calculate required minimum distributions from qualified retirement plans, individual retirement accounts and annuities, and certain other tax-favored employer-provided retirement arrangements. These regulations affect participants, beneficiaries, and plan administrators of these qualified retirement plans and other tax-favored employer-provided retirement arrangements, as well as owners, beneficiaries, trustees and custodians of individual retirement accounts and annuities. The Federal Register document also provides a notice of a public hearing on the proposed regulations.

The revised life expectancy tables in the proposal reflect longer life expectancies than the tables in the existing regulations, and would reduce required minimum distributions, allowing participants to retain larger amounts in their retirement plans to account for the possibility they may live longer.

Comments on the proposal will be accepted through January 7, 2020.

11/08/2019

Nicaraguan officials designated

The Treasury Department has reported that OFAC has designated three Nicaraguan government officials, Ramon Antonio Avellan Medal, Lumberto Ignacio Campbell Hooker, and Roberto Jose Lopez Gomez, who have had a role in directing entities engaged in human rights abuses, election fraud, and corruption in that country. Amadou Kouffa from Mali linked to JAMA'AT NUSRAT AL-ISLAM WAL-MUSLIMIN was also designated as a global terrorist. For identifying information on these four individuals, see BankersOnline's OFAC Update.

11/08/2019

NMLS system maintenance scheduled

The NMLS has posted a notice that, due to scheduled system maintenance, NMLS will be unavailable to process test enrollments, schedule test appointments or post test results from 9 p.m. Friday, November 8 through noon Sunday, November 10. During this time, users will not be able to create test enrollments, schedule test appointments or post test results. This is only relevant to individuals who are required to complete testing for licensing as mortgage loan originators. Mortgage loan originators who must be registered (but not licensed) are not affected.

11/08/2019

Consumer credit increases

The Federal Reserve has released September 2019 G.19 Consumer Credit data. Consumer credit increased at a seasonally adjusted annual rate of 5 percent during the third quarter. Revolving credit increased at an annual rate of 2-1/4 percent, while nonrevolving credit increased at an annual rate of 6 percent. In September, consumer credit increased at an annual rate of 2-3/4 percent.

11/08/2019

Greenfield named Deputy Comptroller for Operational Risk

The OCC has announced Kevin Greenfield will become the agency’s Deputy Comptroller for Operational Risk. He will oversee development of policy and examination procedures addressing operational risk, bank information technology, cybersecurity, critical infrastructure resilience, payments systems, and corporate and risk governance. Greenfield previously served as the OCC’s Director for Bank Information Technology for the Operational Risk Division.

11/08/2019

NCUA diversity self-assessment for CUs

A letter to credit unions has been issued by the NCUA encouraging them to use its Voluntary Credit Union Diversity Self-Assessment as a tool for evaluating their diversity programs and practices and for determining how promoting greater diversity can lead to a stronger internal culture and better service. The Self-Assessment is available year-round, but the cutoff date for submitting this year’s information to the NCUA is January 15, 2020.

11/08/2019

Nevada company sued by FTC

The Federal Trade Commission has sued a Nevada data storage services company over allegations that it misled consumers about its participation in the EU-U.S. Privacy Shield framework and failed to adhere to the program’s requirements before allowing its certification to lapse. The Complaint filed by the FTC alleges that, between January 2017 and October 2018, RagingWire Data Centers, Inc. claimed in its online privacy policy that the company participated in the Privacy Shield framework and complied with the program’s requirements, even though it had allowed its certification to lapse in January 2018. The Department of Commerce warned Raging Wire twice to either remove the claims or take steps to recertify its participation in the Privacy Shield program. The company, however, failed to recertify until it was contacted by the FTC in October 2018.

11/07/2019

Federal Reserve adjusts rates in Regs A and D

The Federal Reserve Board has published in this morning's Federal Register amendments to Regulation A and Regulation D to reduce, respectively, the rate for primary credit at each Federal Reserve Bank, and the rate paid on required reserves and excess reserves. The changes to both regulations are effective today, and affect rates charged or paid beginning October 31, 2019.

11/07/2019

HomeStreet Bank pays $1.35 million for RESPA violations

The FDIC has announced a settlement with HomeStreet Bank, Seattle, Washington, for violations of the Real Estate Settlement Procedures Act (RESPA). HomeStreet stipulated to the issuance of a civil money penalty order to pay $1,350,000.

The FDIC determined that HomeStreet Bank entered into co-marketing arrangements in which the bank and real estate brokers agreed to market their services together using online platforms. The FDIC also determined that the bank entered into desk rental agreements under which the bank rented space in the offices of real estate brokers and home builders. These arrangements and agreements resulted in the payment of fees by the bank to real estate brokers and home builders for their referrals of mortgage loan business, in violation of RESPA.

While co-marketing arrangements and desk rental agreements are permissible where the fees paid bear a reasonable relationship to the fair market value of marketing or rental costs, such arrangements and agreements violate RESPA when the amounts paid exceed fair market value and the excess is for referrals of mortgage business.

11/07/2019

IRS tax year 2020 annual inflation adjustments

The IRS has announced the tax year 2020 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes

11/07/2019

Retirement plan contribution limits increase

The Internal Revenue Service has announced that the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased from $19,000 to $19,500. The catch-up contribution limit for employees aged 50 and over who participate in these plans is increased from $6,000 to $6,500.The limitation regarding SIMPLE retirement accounts for 2020 is increased to $13,500, up from $13,000 for 2019. The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the Saver's Credit all increased for 2020. Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or his or her spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor his or her spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.)

11/06/2019

AT&T pays $60M to settle FTC allegations

AT&T Mobility, LLC will pay $60 million to settle litigation with the Federal Trade Commission over allegations that the wireless provider misled millions of its smartphone customers by charging them for “unlimited” data plans while reducing their data speeds. In a complaint filed in 2014, the FTC alleged that AT&T failed to adequately disclose to its unlimited data plan customers that, if they reach a certain amount of data use in a given billing cycle, AT&T would reduce—or “throttle”—their data speeds to the point that many common mobile phone applications, such as web browsing and video streaming, became difficult or nearly impossible to use.

11/06/2019

Regulators propose revisions to Call Report

The Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Office of the Comptroller of the Currency, under the auspices of the Federal Financial Institutions Examination Council (FFIEC), published proposed regulatory reporting changes in the Federal Register for public comment on October 4. The proposed changes apply to all three versions of the Call Report (FFIEC 031, FFIEC 041, and FFIEC 051) and to the Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101).

The proposed changes to the Call Report and the FFIEC 101 report, as described more fully in the Federal Register notice would implement various changes to the agencies' capital rule that the agencies have finalized or are considering finalizing. The proposed capital-related reporting changes would take effect the same quarters as the effective dates of the various currently final or potentially final capital rules.

Comments on the proposal are due by December 3, 2019.

11/06/2019

FDIC CRA evaluations

The FDIC has released a list of Community Reinvestment Act (CRA) performance Evaluations that became public in November. Of the 82 institutions listed, 76 were rated satisfactory. Congratulations to these six institutions, which were rated outstanding (links are to their evaluation reports):

11/06/2019

Five more Venezuelan officials identified by OFAC

Treasury has announced that OFAC has identified and added to the SDN List five current officials of the Government of Venezuela pursuant to Executive Order 13884, which blocks the property and interests in property of the Government of Venezuela and those who have acted or purported to have acted on its behalf and associated with the government’s rampant violence against peaceful opposition protesters, and those who continue to benefit from the corrupt former regime. Identification information for these five officials can be found in BankersOnline's OFAC Update.

OFAC also issued amended Venezuela-related General License 34A and new Venezuela-related General License 35, issued new and amended FAQs, and revoked Syrian-related General Licenses 2 and 3.

11/06/2019

Connecticut housing authority pays $1.5M to settle discrimination claims

HUD has announced that, on November 4, the U.S. Department of Justice negotiated a settlement with the Housing Authority of the City of Bridgeport (HACB), doing business as Park City Communities in Connecticut, settling allegations that HACB discriminated against persons with disabilities by failing to provide accessible units and ignoring their requests for reasonable accommodations. HACB owns and manages more than 2,600 units of public housing and administers more than 2,800 vouchers under HUD’s Section 8 Housing Choice Voucher Program. Under the terms of the agreement, HACB will establish a $1.5 million compensation fund that will be used to make payments to individuals who were harmed by HACB’s alleged discrimination and increase its housing stock to include units for people with disabilities. The proposed consent decree must still be approved by the U.S. District Court for the District of Connecticut.

11/05/2019

Appointees of Iranian leader designated

OFAC has announced the designation of Iran’s Armed Forces General Staff and nine individuals who are appointees of, or have acted for or on behalf of, Ali Khamenei, the Iranian regime’s unelected Supreme Leader, whose office is responsible for advancing Iran’s radical agenda. The names of a Venezuelan corporation and crude oil tanker were deleted.

For identification information on the additions to and removals from the SDN List, see BankersOnline's OFAC Update.

11/05/2019

FHFA asks for input on Fannie and Freddie pooling

The Federal Housing Finance Agency (FHFA) has issued a Request for Input about Fannie Mae’s and Freddie Mac’s (the Enterprises’) pooling practices for the formation of To-Be-Announced-eligible Uniform Mortgage-Backed Securities (UMBS). FHFA is also seeking public input about other policies and practices that might affect UMBS fungibility, including the Enterprises’ oversight of UMBS prepayment speeds and alignment.

11/05/2019

Calabria calls for reform of mortgage finance system

In prepared remarks issued at yesterday’s Structured Finance Association Residential Mortgage Finance Symposium in New York City, FHFA Director Dr. Mark A. Calabria called for the reform of the mortgage finance system. He stated, “Today’s mortgage finance system poses significant risk not only to taxpayers, but also to borrowers, renters, homeowners, and our entire financial system. Yet, since 2008, mortgage finance reform has received much discussion but very little action.” He discussed the new Strategic Plan and Scorecard released in September by the Treasury and HUD which has the following objectives:

  • Focus on their mission of fostering competitive, liquid, efficient, and resilient national housing finance markets.
  • Operate in a safe and sound manner appropriate for entities in conservatorship.
  • Prepare for their eventual exits from the conservatorships.

Calabria noted the new Strategic Plan and Scorecard are also focused on preparing for the transition from LIBOR to alternative reference rates.

11/05/2019

Small business access to capital discussed in Federal Reserve series

The November 4, 2019, issue of the Federal Reserve Board's Consumer & Community Context covers the topic of small businesses' access to capital, and includes articles on experiences of small business owners when searching for financing online, disparities in small business credit approval by race and ethnicity, and small businesses' access to financial services in low- and moderate-income communities.

11/05/2019

October SLOOS

The October 2019 Senior Loan Officer Opinion Survey (SLOOS) on Bank Lending Practices addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally corresponds to the third quarter of 2019. Regarding loans to businesses, respondents indicated that, on balance, they left their standards on commercial and industrial (C&I) loans basically unchanged, while demand for C&I loans weakened. Banks also reportedly tightened standards on commercial real estate (CRE) loans, while demand for most categories of CRE loans changed little on balance. For loans to households, banks reportedly left their standards basically unchanged on most categories of residential real estate (RRE) loans, while demand strengthened for most categories of such loans. Meanwhile, banks reported tightening their standards on credit card loans, while demand for most consumer loan categories strengthened.

11/05/2019

FATF Business Bulletin November 2019

The Financial Action Task Force (FATF) has posted its November 2019 Business Bulletin, which lists the following strategic initiatives of the organization:

  • Money laundering risk from “stable coins” and other emerging assets
  • Understanding digital identity
  • New work on combating the laundering of proceeds of illegal wildlife trade

The mutual evaluations of Russia and Turkey plus the follow-up assessment of Norway and Spain were also reported.

11/05/2019

Illinois bank reports phony checks

The OCC has issued an alert concerning counterfeit official checks and fictitious cashier's checks purporting to be issued by the First Federal Savings Bank, Ottawa, Illinois. For details on the phony checks being presented to the bank for payment, see BankersOnline's Alerts & Counterfeits entry.

11/05/2019

FEMA to suspend Montana communities

FEMA has published a notice in today's Federal Register identifying Montana communities to be suspended on November 15 from the National Flood Insurance Program for noncompliance with the floodplain management requirements of the program. The communities scheduled for suspension are the City of Roundup and unincorporated areas of Rosebud County.

11/04/2019

New Jersey bank closed and purchased

The OCC has appointed the FDIC as receiver for City National Bank of New Jersey, Newark, New Jersey, a national bank. The bank had branch offices in Newark and New York City. As of September 30, 2019, the bank had approximately $120 million in total assets.

The FDIC announced that it entered into a purchase and assumption agreement with Industrial Bank in Washington, D.C., to assume all of the deposits of City National. City National is the fourth FDIC-insured institution to fail this year.

11/04/2019

OCC CRA evaluations

The OCC has released a list of Community Reinvestment Act (CRA) performance evaluations that became public in October. Of the 37 institutions listed, 28 were rated satisfactory, one was rated need to improve, and these eight bank were rated outstanding (links are to their evaluation reports):

11/04/2019

NMLS annual review period underway

The NMLS Annual Renewal Period began on November 1 and ends on December 31. According to federal regulations, both institutions and most individual mortgage loan originators (MLOs) must be renewed through NMLS annually. If the renewal process is not completed prior to December 31st, the MLO is placed in an “Inactive” registration status both on NMLS and NMLS Consumer Access. Inactive registrations must be reactivated in order to have an “active” registration status. NMLS requires a $30 processing fee for each MLO seeking to renew or reactivate a registration. MLOs who are submitted for renewal but did not complete renewal attestation prior to December 31 need to be reactivated, incurring an additional $30 processing fee at the time of reactivation.

11/04/2019

GE pays $2.7M for violations of Cuban Control Regs

The General Electric Company of Boston, Massachusetts, on behalf of three current and former GE subsidiaries, Getsco Technical Services Inc., Bentley Nevada, and GE Betz, has agreed to pay $2,718,581 to settle its potential civil liability for 289 alleged violations of the Cuban Assets Control Regulations. Between December 2010 and February 2014, the GE Companies appear to have violated the CACR on 289 occasions by accepting payment from The Cobalt Refinery Company for goods and services provided to a Canadian customer of GE.

11/04/2019

OFAC extends General Licenses

OFAC has extended the expiration dates of two general licenses related to GAZ Group by issuing Ukraine-related General License No. 13M, "Authorizing Certain Transactions Necessary to Divest or Transfer Debt, Equity, or Other Holdings in Certain Blocked Persons," and Ukraine-related General License No. 15G, "Authorizing Certain Activities Necessary to Maintenance or Wind Down of Operations or Existing Contracts with GAZ Group, and Certain Automotive Safety and Environmental Activities."

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