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Banker's Toolbox solidifies its position as the premier solution for fast-growing financial institutions with the release of BAM+ 4.0 upgrade.
Banker's Toolbox continues to lead the BSA/AML and Fraud prevention marketplace with the release of BAM+ 4.0. This solution provides increased detection with more versatility, transparency and control. BAM+ 4.0 also boasts a new customer due diligence platform, Due Diligence Manager, which will keep institutions compliant with the impending beneficial ownership mandates. (Read full press release here.)

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Treasury adds North Korea-related targets to sanctions lists

On Friday, February 23, OFAC announced the largest group of North Korea-related sanctions targets to date, aimed at disrupting North Korean shipping and trading companies and vessels to further isolate the regime and advance the U.S. maximum pressure campaign. Today’s action targets one individual, 27 entities, and 28 vessels located, registered, or flagged in North Korea, China, Singapore, Taiwan, Hong Kong, Marshall Islands, Tanzania, Panama, and Comoros. Treasury, along with the U.S. Department of State and U.S. Coast Guard, also issued an advisory alerting the public to the significant sanctions risks to those continuing to enable shipments of goods to and from North Korea. For identification of the added sanctions targets and information on the Advisory, see our OFAC Update.

As a result of Friday’s action, any property or interests in property of the designated persons in the possession or control of U.S. persons or within the United States must be blocked, and U.S. persons are prohibited from dealing with any of the designated parties.


FDIC releases January enforcement orders

The FDIC has released a list of orders of twelve administrative enforcement actions taken against banks and individuals in January, including four Section 19 orders; three removal and prohibition orders; two civil money penalties; and three terminations of consent orders.

The two civil money penalties were assessed for flood insurance violations against banks in Michigan ($14,000) and Wisconsin ($5,000). The removal and prohibition orders were issued to individuals formerly affiliated with banks in Honolulu, Hawaii; Altamont, Kansas and Elizabeth, New Jersey.


Foreclosure relief for 2017 disaster victims expanded

The Federal Housing Administration has announced expanded mortgage relief for FHA-insured homeowners who live or work in areas impacted by Hurricanes Harvey, Irma and Maria as well as California wildfires and subsequent flooding and mudslides. The FHA is introducing a new "Disaster Standalone Partial Claim" option to help struggling borrowers to resume their pre-disaster mortgage payments without payment shock. This new option covers up to 12 months of missed mortgage payments via an interest-free second loan on the mortgage, payable only when the borrower sells the home or refinances the mortgage.


FEMA suspending CA and MS communities

The Federal Emergency Management Agency has published a final rule [83 FR 8011] suspending, as of March 6, 2018, specified communities in California and Mississippi from the National Flood Insurance Program for failure to comply with the floodplain management requirements of the program. Three communities in DeSoto County, Mississippi, and the City of Coachella in Riverside County, California, are listed in the Federal Register notice.


New savings resource from NCUA

The NCUA has announced a new infographic, “Empowering Youth to Save,” is being released in conjunction with America Saves Week and Military Saves Week, which run from February 26 to March 3. The infographic is a resource for young people to get valuable information about starting good personal finance habits and building long-term wealth.


FTC files complaints against schemes targeting seniors

The FTC has announced it has taken legal action against two deceptive schemes that targeted or affected senior citizens with phony sweepstakes offers and bogus computer technical support services that tricked consumers out of tens of millions of dollars. One scheme sent tens of millions of personalized mailers falsely indicating that the recipient had won or was likely to win a substantial cash prize, as much as $2 million, in exchange for a fee ranging from $9 to $139.99; the other worked with telemarketers to trick older Americans into buying bogus technical support services. Specifically, the defendants set up business accounts for the telemarketers, collected and deposited consumer payments, and provided a gloss of legitimacy to the scheme.


Lack of public records info has minimal effect on credit scores

The CFPB has posted an article on the agency's release of its latest quarterly consumer credit trends report, which focuses on last year's removal of most civic public records from consumer credit reports. The July 1, 2017, removal of civic public records that don't meet stricter standards for accuracy resulted from a settlement between the three nationwide consumer reporting agencies and 30 state attorneys general. One of the findings in the report—about 4 percent of consumers with civil judgments or tax liens on their credit record in June (only 0.24 percent of consumers overall) experienced a large enough increase in their credit score as the result of the settlement to move into a higher credit score band, meaning, for example, that their credit score moved from being subprime to near prime or from near prime to prime.


Loans and leases charge-off and delinquency rates

The Federal Reserve has released the February 21, 2018, report of charge-off and delinquency rates on loans and leases at the 100 largest commercial banks.


Bureau releases 2018 HMDA Getting it Right Guide

The Bureau has sent out an email blast announcing that the 2018 edition of the Guide To HMDA Reporting: Getting It Right! [327-page PDF] is now available on the FFIEC HMDA website. This first full rewrite of the "GIR" since 2013, covers HMDA submissions on 2018 actions, due March 1, 2019. It was developed by the FFIEC agencies, and is essentially a compilation of revised Regulation C and Commentary and other HMDA resources that are also available individually. The new GIR does not replace the Bureau's FIG (Filing Instructions Guide). which remains the definitive source for information regarding the filing requirements.


Treasury reports to president on liquidation authority

The Treasury Department has released a report regarding its review and recommendations on the Orderly Liquidation Authority (OLA). The report responds to the Presidential Memorandum directing Treasury to propose recommendations to align OLA with the Trump administration's Core Principles for Financial Regulation and determine whether the Bankruptcy Code should be reformed to better enable resolution of financial companies. Treasury recommends a new Chapter 14 of the Bankruptcy Code for distressed financial companies. Treasury recommends significant reforms to make bankruptcy a more effective option for financial companies. The Chapter 14 framework would preserve the key advantage of the existing bankruptcy process, while adding procedural features tailored to the unique challenges posed by large, interconnected financial companies. These enhancements to the Bankruptcy Code would make the likelihood of having to use OLA even more remote.

For large, complex financial companies, Treasury recommends retaining OLA, with a number of reforms, for use under extreme circumstances.


Quarles on U.S. economy after financial crisis

The Federal Reserve Board has released remarks by Vice Chairman for Supervision Randal K. Quarles at the "10 Years after the Global Financial Crisis: How Has the World Economy Changed and Where Will It Go?" 26th International Financial Symposium sponsored by the Institute for International Monetary Affairs, Tokyo, Japan. Quarles provided an overview of the U.S. economy since the advent of the crisis, focusing on more recent developments with some historical context.

In his closing remarks, Quarles said, "The Federal Reserve and our colleagues at other agencies have now spent the better part of the past decade building out and standing up the post-crisis regulatory regime. At this point, we have completed the bulk of the work of post-crisis regulation. As such, now is an eminently natural and expected time to step back and assess those efforts. It is our responsibility to ensure that they are working as intended, and--given the breadth and complexity of this new body of regulation--it is inevitable that we will be able to improve them, especially with the benefit of experience and hindsight."


NMLS reactivation period ends soon

The NMLS has posted a reminder that the license and registration reactivation period for mortgage lending institutions and mortgage loan originators began on January 1 and ends February 28 at midnight ET. The reminder includes instructions for reactivation.


January FOMC minutes

The Federal Reserve Board and the Federal Open Market Committee (FOMC) have released the minutes of the Committee meeting held on January 30-31, 2018.


OCC to hold workshops in Minneapolis

The OCC will host two workshops at the Crowne Plaza Minneapolis Northstar Downtown, Minneapolis, Minnesota, March 27-28, for directors of national community banks and federal savings associations supervised by the regulator.

  • The Credit Risk workshop on March 27 focuses on credit risk within the loan portfolio, such as identifying trends and recognizing problems. The workshop also covers the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change.
  • The Operational Risk workshop on March 28 focuses on the key components of operational risk—people, processes, and systems. The workshop also covers governance, third-party risk, vendor management, and cybersecurity.

The fee for each workshop is $99 and each session is limited to the first 35 registrants.


SEC charges bitcoin exchange and operator with fraud

The Securities and Exchange Commission has filed a complaint charging a former bitcoin-denominated platform and its operator with operating an unregistered securities exchange and defrauding users of that exchange. The SEC also charged the operator with making false and misleading statements in connection with an unregistered offering of securities.


Bureau issues fifth RFI in 'call for evidence'

The CFPB has announced the fifth in its series of requests for information (RFIs) as part of Acting Director Mulvaney's call for evidence to ensure the Bureau is fulfilling its proper and appropriate functions to best protect consumers. This RFI relates to the CFPB's external engagements, including but not limited to field hearings, town halls, roundtables, and meetings of its Advisory Board and Councils.

The Bureau has scheduled the publication of the RFI for Monday, February 26, with a 92-day comment period ending on May 29. There are seven additional RFIs planned for release in the coming weeks.


Agencies publish swap entities proposal

The Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Farm Credit Administration, and the Federal Housing Finance Agency have published their previously announced notice of proposed rulemaking and request for comment [83 FR 7413] that would amend the minimum margin requirements for registered swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants for which one of the Agencies is the prudential regulator. Comments on the proposal will be accepted through April 23, 2018.


OFAC adds entity to terrorist list

The Treasury Department announced yesterday the counter terrorism designation of an entity and the addition of its name and aliases to the SDN List. See our OFAC Update for identification details.


Public housing gets $35M from HUD

HUD has announced the award of $34.9 million to public housing authorities, public housing resident associations, Native American tribes, and non-profit organizations to hire or retain service coordinators to help residents find jobs, educational opportunities, and achieve economic and housing independence. The funding, provided through HUD’s Resident Opportunities and Self Sufficiency – Service Coordinators Program (ROSS-SC) helps grantees hire or retain "service coordinators" who work directly with residents to assess their needs and connect them with education, job training and placement programs, and/or computer and financial literacy services available in their community to promote self-sufficiency.


New residential construction activity increases

HUD and the Census Bureau have jointly announced January 2018 statistics on new residential construction activity.

  • Building Permits: Privately owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,396,000, which is 7.4 percent above both the revised December rate and the January 2017 rate of 1,300,000. Single-family authorizations in January were at a rate of 866,000, 1.7 percent below the revised December figure of 881,000. Authorizations of units in buildings with five units or more were at a rate of 479,000 in January.
  • Housing Starts: Privately owned housing starts in January were at a seasonally adjusted annual rate of 1,326,000, 9.7 percent above the revised December estimate of 1,209,000 and 7.3 percent above the January 2017 rate of 1,236,000. Single-family housing starts in January were at a rate of 877,000, 3.7 percent above the revised December figure of 846,000. The January rate for units in buildings with five units or more was 431,000.
  • Housing Completions: Privately owned housing completions in January were at a seasonally adjusted annual rate of 1,166,000, 1.9 percent below the revised December estimate of 1,188,000, but 7.7 percent above the January 2017 rate of 1,083,000. Single-family housing completions in January were at a rate of 850,000, 2.2 percent above the revised December rate of 832,000. The January rate for units in buildings with five units or more was 305,000.


OCC releases monthly list of enforcement actions

The OCC has released its monthly list of enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with such institutions. This month's list included previously publicized civil money penalty orders against Rabobank, NA and U.S. Bank, NA, and a $5,000 civil money penalty assessed on a former market president of an Enid, Oklahoma, bank for misuse of customers' nonpublic personal information and making false statements to OCC examiners. Also included were prohibition orders issued to a former teller at an Omaha, Nebraska, bank for misappropriating funds from her cash drawer and a former senior vice president of a Sallisaw, Oklahoma, bank for embezzling approximately $620,000 from accounts of bank customers.


Gruenberg discusses resolution of SIFIs

In remarks at the Wharton School University of Pennsylvania, FDIC Chairman Gruenberg addressed the issue of the resolution of systemically important financial institutions (SIFIs). He discussed building a framework for systemic resolution, the evolution of the living will process, the April 2016 filing of firms plans, and the progress made. Gruenberg summarized, “the living wills process has proven enormously helpful to firms and regulators. It has facilitated significant structural and operational improvements within firms to improve their resolvability. The process has been institutionalized and integrated into both the firms’ business-as-usual planning and operations and the regulators’ supervisory and resolution-planning processes. The progress made resulted from an evolving and highly cooperative process over several years.” He concluded, "Options and tools now exist that provide a path far better than existed in 2008 to help ensure that a systemic firm can fail, that shareholders, creditors, and management of the firm bear the consequences of their decisions, and that financial stability can be preserved during times of stress without taxpayer bailouts. It is critical that this important work continue.“


Fed proposes to fine and bar former head of Barclays NY FX

The Federal Reserve Board has issued a Notice of Intent seeking to permanently bar Peter Little, the former head of the foreign exchange (FX) spot desk at Barclays Bank PLC in New York, from employment in the banking industry, and to impose a $487,500 fine on him. Little is alleged to have engaged in unsafe and unsound practices by using electronic chat rooms to coordinate with traders at competitor banks to influence FX pricing benchmarks and by engaging in manipulative trading. Little is also alleged to have failed to adequately supervise subordinate traders at Barclays who coordinated with and disclosed confidential information to competitors on Little's behalf. Little has 20 days to file an answer to the Notice stating whether he will appear at a hearing to contest the allegations in the Notice.


U.S. Bank and parent hit with penalties for BSA/AML deficiencies

Coordinated releases from FinCEN, the OCC, the Federal Reserve and the U.S. Attorney's Office for the Southern District of New York yesterday announced consent orders for civil money penalties, a forfeiture and a two-year deferred prosecution agreement with U.S. Bank, National Association, Cincinnati, Ohio, and its parent, U.S. Bancorp, Minneapolis, Minnesota, for pervasive failures of their enterprise-wide BSA/AML compliance program. The bank will pay $598 million in penalties and forfeitures, and U.S. Bancorp has paid $15 million. Details of the announcements can be found in these BOL Penalty Pages entries:


FDIC finalizes rule removing credit ratings from int'l banking regs

The FDIC has issued FIL-9-2018 to announce the FDIC Board's adoption of a final rule amending the FDIC's international banking regulations related to permissible investment activities and the pledging of assets. The final rule removes references to external credit ratings and replaces them with appropriate standards of creditworthiness. The changes in the FDIC Rules and Regulations Part 347, Subparts A and B, are required to conform with Section 939A of the Dodd-Frank Act. The Rule applies to insured state nonmember banks that operate foreign branches and insured U.S. branches of foreign banks.


Industrial production and capacity utilization decline

G.17 Industrial Production and Capacity Utilization data for January 2018 have been released by the Federal Reserve Board. Industrial production edged down 0.1 percent in January following four consecutive monthly increases. Manufacturing production was unchanged in January. Mining output fell 1.0 percent, with all of its major component industries recording declines, while the index for utilities moved up 0.6 percent. At 107.2 percent of its 2012 average, total industrial production was 3.7 percent higher in January than it was a year earlier. Capacity utilization for the industrial sector fell 0.2 percentage point in January to 77.5 percent, a rate that is 2.3 percentage points below its long-run (1972–2017) average.


NCUA approves $736M share insurance distribution

The NCUA Board held its second open meeting of 2018 at the agency’s headquarters on February 15 and unanimously approved two items:

  • A Share Insurance distribution of $736 million to eligible federally insured credit unions in the third quarter of 2018.
  • A final rule amending the agency’s share insurance requirements rule to provide greater fairness, predictability, and transparency and add a temporary provision to govern share insurance equity distributions related to the Corporate System Resolution Program.


FTC mails $2.9M to victims of payday loan scheme

The Federal Trade Commission is mailing 72,836 checks totaling more than $2.9 million to people who lost money to an alleged scheme that trapped them into payday loans they never authorized or whose terms were deceptive. According to the Commission, CWB Services, LLC and related defendants used consumer information from online lead generators and data brokers to create fake payday loan agreements. After depositing money into people’s accounts without their permission, they withdrew recurring “finance” charges every two weeks without applying any of the payments to the supposed loan. In some instances, consumers applied for payday loans, but the defendants charged them more than they said they would. Under settlements with the FTC, the defendants are banned from the consumer lending business. The average refund amount is $40.61. Recipients should deposit or cash their checks within 60 days.


Treasury targets Colombians under Kingpin Act

The U.S. Department of the Treasury's Office of Foreign Assets Control announced yesterday that it has designated longtime Colombian criminal Javier Garcia Rojas (alias "Maracuya") and two other Colombian nationals as Specially Designated Narcotics Traffickers under the Foreign Narcotics Kingpin Designation Act (Kingpin Act) for their links to previously designated narcotics traffickers Jose Bayron Piedrahita Ceballos and the Colombian criminal group La Oficina de Envigado (La Oficina). OFAC also designated four Colombian companies owned, controlled, or directed by the individuals designated yesterday. As a result of that action, U.S. persons are generally prohibited from engaging in transactions or otherwise dealing with these individuals and companies, and any assets they may have under U.S. jurisdiction are blocked. For identification information of the designated individuals and entities, see our OFAC Update.

"Since June 2000, more than 2,000 individuals and entities have been named pursuant to the Kingpin Act for their role in international narcotics trafficking. Penalties for violations of the Kingpin Act range from civil penalties of up to $1,437,153 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act."


CFPB requests feedback on supervision processes

The CFPB has released the fourth in a series of Requests for Information (RFIs) as part of Acting Director Mick Mulvaney's call for evidence to ensure the Bureau is "fulfilling its proper and appropriate functions" to best protect consumers. The latest RFI is about the Bureau's supervision processes. It is scheduled for publication on Tuesday, February 20, and will be open for comment for 90 days, through May 21, 2018.
Update: Published 2/20/18 at 83 FR 7166


Refinance volume up in Q4 2017

The Federal Housing Finance Agency reported yesterday that Fannie Mae and Freddie Mac completed more than 446,295 refinances in the fourth quarter of 2017, up from 362,934 in the same quarter of 2016. HARP refinances accounted for 6,309 of those transactions, according to the agency's Refinance Report.


FSOC annual report released

The Financial Stability Oversight Council has posted its Annual Report to Congress. The FSOC was established by the Dodd-Frank Act, and is charged with three primary purposes:

  1. To identify risks to the financial stability of the United States that could arise from the material financial distress or failure, or ongoing activities, of large, interconnected bank holding companies or nonbank financial companies, or that could arise outside the financial services marketplace.
  2. To promote market discipline, by eliminating expectations on the part of shareholders, creditors, and counterparties of such companies that the U.S. government will shield them from losses in the event of failure.
  3. To respond to emerging threats to the stability of the U.S. financial system.


FTC regulatory review schedule

The Federal Trade Commission has announced a revised regulatory review schedule for 2018. The Commission plans to initiate reviews of four of its rules or guides this year; among them are the FTC Identity Theft (Red Flag) Rules found in 16 CFR Part 681.

Update: The Commission's Notice of Intent to Request Public Comments was published 2/20/2018 at 83 FR 7120<.a>.


West Virginia bank pays for flood violations

The Federal Reserve Board has announced an enforcement action against a West Virginia bank, which the Board ordered to pay $14,000 for violations of the National Flood Insurance Act.


FINCEN proposes to bar Latvian bank from U.S. financial sector

FinCEN has named ABLV Bank of Latvia an institution of primary money laundering concern, and has issued a finding and proposed rule seeking to prohibit the opening of a correspondent account in the United States for, or on behalf of, ABLV Bank. FinCEN's action was taken under Section 311 of the USA PATRIOT Act. Written comments on FinCEN's proposed rule will be accepted for 60 days following Federal Register publication.
Update: Scheduled for publication on 2/16/2018, with comment period ending 4/17/2018.


Treasury proposes repeal of 298 outdated tax rules

The Treasury Department has announced a proposal to repeal 298 tax rules that are unnecessary, duplicative or obsolete. The proposal, to be published tomorrow, would repeal provisions of IRS regulations in three categories:

  • those interpreting provisions of the Internal Revenue Code that have been repealed;
  • those interpreting provisions of the Code that have been significantly revised and the existing regulations don't account for those revisions; and
  • those that are no longer applicable.

Comments on the proposal and requests for a public hearing are due by May 14, 2018.
Update: Corrected publication date to February 15, 2018 (83 FR 6806)


Former Alabama banker issued order of prohibition

A former employee of Compass Bank, Birmingham, Alabama, and of BBVA Compass Investment Solutions has been issued a consent order of prohibition by the Federal Reserve Board, having pled guilty to one count of bank embezzlement and having agreed to make restitution to the bank in the amount of $206,970.63 as part of his plea agreement. The former employee stipulated in that agreement that he had embezzled money from customers of the bank, resulting in a loss to the bank of between $150,000 and $200,000.


HUD settles discrimination claims with California housing authorities

HUD has announced a Conciliation/Voluntary Compliance Agreement with the Housing Authority of the County of Contra Costa and the Vallejo Housing Authority, both located in California, resolving allegations that they violated the Fair Housing Act, Section 504 of the Rehabilitation Act of 1973, and the Americans with Disabilities Act when they allegedly denied a request by a resident with disabilities to extend her search time to find suitable housing that would accept her housing choice voucher.


FTC mails checks to debt relief scheme victims

The FTC has announced it is mailing 5,745 checks totaling more than $480,000 to people who lost money to a debt relief scheme that misled its customers and charged illegal upfront fees. United Debt Collectors exaggerated how much money people would save using its services. Its direct mail ads looked like official documents from a bank or attorney, and claimed that typical customers would have their credit card debt cut in half and become debt-free within 36 months. Under a settlement with the FTC, the court banned the defendants from making misrepresentations about debt relief and other financial products or services, and making unsubstantiated claims about any products or services. The average refund amount is $84.27.


CFPB posts tax refund tips

The CFPB has posted an article with consumer tips for understanding refund advance loans and checks.


$41.24B 2019 budget proposed for HUD

The Trump Administration yesterday announced the proposed Fiscal Year 2019 budget for the U.S. Department of Housing and Urban Development (HUD), a $41.24 billion spending plan that continues or expands support for vulnerable populations including those experiencing homelessness, the elderly and persons living with disabilities. HUD reports that the 2019 budget represents a commitment to fiscal restraint, with a modest one percent increase in discretionary funding over last year's request.


Deutsche Bank to repay $3.7M to customers

The Securities and Exchange Commission has issued an order instituting an enforcement action against Deutsche Bank Securities Inc., which has agreed to repay more than $3.7 million to customers, including $1.48 million that was ordered as disgorgement. The SEC’s investigation found that traders and salespeople made false and misleading statements while negotiating sales of commercial mortgage-backed securities (CMBS). According to the SEC’s order, customers overpaid for CMBS because they were misled about the prices at which Deutsche Bank had originally purchased them. Deutsche Bank will also pay a $750,000 civil money penalty to the U.S. Treasury.


New OFAC Venezuela-related FAQs

OFAC has published two new Venezuela-related frequently asked questions. The FAQs provide additional guidance on the debt-related prohibitions in Executive Order 13808, including the meaning of “new debt” for the purposes of the Executive Order and the receipt of certain late payments from the Government of Venezuela, including Petroleos de Venezuela, S.A.


Bureau creates romance scam placemat

The CFPB has created a new romance scam protection placemat to help older adults who might fall under the spell of a scam artist. The placemat is part of a series of consumer education placemats that meal service providers deliver to homebound seniors and senior meal sites.


Modified CFPB strategic plan released

The Bureau has released its modified five-year Strategic Plan that establishes its mission, strategic goals, and strategic objectives. The plan draws directly from the Dodd-Frank Act and refocuses the Bureau’s mission on regulating consumer financial products or services under existing federal consumer financial laws, enforcing those laws judiciously, and educating and empowering consumers to make better informed financial decisions. Among changes from the prior Strategic Plan, the Bureau will now focus on equally protecting the legal rights of all, including those regulated by the Bureau, and will engage in rulemaking where appropriate to address unwarranted regulatory burdens and to implement federal consumer financial law and will operate more efficiently, effectively, and transparently.


FinCEN advisory on updated FATF list

The Financial Crimes Enforcement Network (FinCEN) today issued advisory FIN-2008-A001 to financial institutions regarding the Financial Action Task Force's updated list of jurisdictions with strategic anti-money laundering/counter-terrorist financing deficiencies. These changes may affect U.S. financial institutions' obligations and risk-based approaches regarding relevant jurisdictions.


Brazilian jailed in $20M ML pyramid scheme

Homeland Security Investigations Boston and the U.S. Attorney for Massachusetts have announced the sentencing of a Brazilian national on charges in a $20 million dollar money-laundering international pyramid scheme based in the Boston area. Cleber Rene Rizerio Rocha, 28, was sentenced to 33 months in prison and one year of supervised release. He pleaded guilty in October to one count of conspiring to commit money laundering and one count of money laundering.


Treasury targets ISIS facilitators

The U.S. Department of the Treasury announced on Friday that OFAC acted to target ISIS’s global facilitation network by designating three individuals and three entities as Specially Designated Global Terrorists under Executive Order 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. As a result of Friday’s designations, all property and interests in property of these persons subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. Identifying information on the designated individuals and entities can be found in our OFAC Update.


FinCEN finalizes new SAR

FinCEN has issued a notice to e-filers that announces an update to the Suspicious Activity Report (SAR) filing format, to be live in June 2018. The announcement says that the revisions adhere to the changes listed in FinCEN's February 2, 2017, Federal Register notice. Beginning with the new SAR filings, batch submissions will have to be made in an XML-based file, rather than the current ASCII fixed-length delimited file format. Other notable changes:

  • A new text field to alert FinCEN that a SAR is being filed in response to a current GTO, advisory or other activity
  • A new "Cyber Event" suspicious activity type category
  • New or modified subtype selections associate with Structuring, Fraud, Gaming activities, Money laundering, Identification/Documentation, Other suspicious activities, Securities/Futures/Options, and Mortgage fraud.
  • New text fields with the IP Address field to record the date and/or timestamp of the first instance of the reported IP address
  • New category of fields to record up to 99 cyber events associated with the suspicious activity
  • New product type selections
  • New subtype selections for securities and futures institutions

Discrete filers will start using the new online e-filing form in June 2018. Batch filers may start sending XML-format files with the revised fields beginning in June, but must complete their changeover to XML within 6 months of the yet-to-be-announced June "go-live" date. ASCII batch files will be accepted until January 1, 2019.


Fed issues notice of intent to prohibit

The Federal Reserve Board has issued a Notice of Intent to Prohibit Jacob H. Goldstein, former president and CEO of NBRS Financial, Rising Sun, Maryland (a former state member bank merged with assistance into Howard Bank, Ellicott City, Maryland). The Notice of Intent alleges that Goldstein, who also served as chief lending officer for the bank, received the benefit of loans to third parties without disclosing to the bank's board that he benefited from those loans, which violated Regulation O, breached his fiduciary responsibilities to the bank, and caused the bank to operate in an unsafe and unsound manner.

The Notice of Intent gives Goldstein 20 days to file an answer and notifies him of his right to an administrative hearing to issue recommendations to the Board of Governors concerning its intent to prohibit Goldstein from further involvement with any financial institution.


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