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12/16/2019

FDIC proposes to update Section 19 regs

The FDIC has published [84 FR 68353] a proposal to revise the existing regulations requiring persons convicted of certain criminal offenses to obtain prior written consent before participating in the conduct of the affairs of any depository institution to incorporate the FDIC's existing Statement of Policy, and to amend the regulations setting forth the FDIC's procedures and standards applicable to an application to obtain the FDIC's prior written consent.

The proposed incorporation of the Statement of Policy into the FDIC's regulations would provide for greater transparency as to its application, provide greater certainty as to the FDIC's application process and help both insured depository institutions and affected individuals to understand its impact and to potentially seek relief from its provisions. Comments on the proposal will be accepted for 60 days, through February 14, 2020.

12/13/2019

FDIC proposes to modernize brokered deposit regs

The FDIC has issued a notice of proposed rulemaking that would modernize its brokered deposit regulations. The proposal would, among other things, modernize the regulatory framework to remove regulatory disincentives to offering deposit accounts to customers through different channels.

The proposal would—

  • establish a new framework for analyzing whether deposits placed through deposit placement arrangements qualify as brokered deposits. These include arrangements between insured depository institutions (IDIs) and third parties, such as financial technology companies, for a variety of business purposes, including access to deposits, as well as IDIs' increasing reliance on new technologies to engage and interact with their customers.
  • revise the "facilitation" prong of the deposit broker definition so that it applies to any person that engages in specified activities, and provide that a wholly owned operating subsidiary be eligible for the "IDI exception" to the "deposit broker" definition under certain circumstances.
  • amend the "primary purpose" exception to apply when the primary purpose of an agent's or nominee's business relationship with its customers in the placement of funds with IDIs. The availability of the primary purpose exception would be clarified for third parties that place deposits through brokerage sweep accounts, under certain conditions, and to third parties whose primary purpose is enabling customers to make payments, under certain conditions.
  • establish an application process for any third party that wishes to use the primary purpose exception, and would require ongoing reporting.
  • continue to consider an agent's placement of brokered CDs as deposit brokering, and such deposits would continue to be reported as brokered

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

12/13/2019

Annual adjustment to Reg I asset-size threshold

The Federal Reserve Board has announced a final rule making the annual adjustment to the asset-size threshold in Regulation I that determines the dividend rate paid to banks that are members of the Federal Reserve System. The updated total consolidated asset threshold is $10.715 billion through December 31, 2020. The change will be effective 30 days after publication in the Federal Register.

12/13/2019

Ortega son sanctioned for money laundering and corruption

Treasury has announced that OFAC has designated Rafael Antonio Ortega Murillo, son of Nicaraguan President Daniel Ortega, and two companies he owns or controls and uses to finance and launder money for the Ortega regime. OFAC also designated Distribuidor Nicaraguense de Petroleo S.A., a company owned or controlled by Rafael Antonio Ortega Murillo as well as by Nicaraguan Vice President and First Lady Rosario Maria Murillo De Ortega, and two other companies owned or controlled by Rafael Ortega.

For identification information on Rafael Ortega and the three companies designated, see BankersOnline's OFAC Update.

12/13/2019

NCUA Board actions

The NCUA board has announced its approval of two measures at its meeting on December 12:

  • The operating, capital, and National Credit Union Share Insurance Fund budgets for 2020 and 2021
  • A two-year delay of the effective date of the agency's risk-based capital rule

12/13/2019

FDIC and OCC proposal to modernize CRA

The FDIC and the OCC have announced a proposal to modernize the agencies’ regulations under the Community Reinvestment Act (CRA) that have not been substantively updated for nearly 25 years. The proposed rules are intended to increase bank activity in low- and moderate-income communities where there is significant need for credit, more responsible lending, greater access to banking services, and improvements to critical infrastructure. The proposals will clarify what qualifies for credit under the CRA, enabling banks and their partners to better implement reinvestment and other activities that can benefit communities. The agencies will also create an additional definition of “assessment areas” tied to where deposits are located—ensuring that banks provide loans and other services to low- and moderate-income persons in those areas.

Comptroller Otting and FDIC Chairman McWilliams issued statements regarding the publication of the joint notice of proposed rulemaking to modernize the Community Reinvestment Act (CRA) regulations. Comments on the proposal will be accepted for 60 days following Federal Register publication.

12/13/2019

Update on status of Payday Lending Rule

The U.S. District Court for the Western District of Texas (Austin Division) has again continued its stays of the litigation of pending case Community Financial Services Association of America, Ltd. et al v. Consumer Financial Protection Bureau et al and of the August 19, 2019, compliance date of the Bureau's Payday Lending Rule, and ordered that the parties file a Joint Status Report about proceedings related to the Rule and litigation no later than April 24, 2020.

12/12/2019

Fed issued three outstanding CRA evals in November

Our review of the CRA evaluations made public by the Federal Reserve Board in November reveals that, of the 21 evaluations issued that month, 18 received a Satisfactory rating, and these three institutions' evaluations were rated Outstanding (links are to their evaluation reports):

12/12/2019

McWilliams on Brokered Deposits rule

In her keynote address at the Brookings Institution yesterday, FDIC Chairman Jelena McWilliams spoke on "Brokered Deposits in the FinTech Age." After discussing the history of the general prohibition on brokered deposits at banks with lower capital ratios, which was a reaction to the failures in 1982 of Pacific Coast Bank and Penn Square Bank, McWilliams discussed a revised rule with a new framework for brokered deposits that the FDIC Board is scheduled to vote on today.

12/12/2019

OFAC designates weapons network and Mahan Air agents

Treasury has announced that OFAC has designated an Iranian shipping network involved in smuggling lethal aid from Iran to Yemen on behalf of the Islamic Revolutionary Guards Corps-Qods Force (IRGC-QF). OFAC also designated three Mahan Air general sales agents—Gatewick LLC, Jahan Destination Travel and Tourism LLC, and Gomei Air Services Co., Ltd—based in the United Arab Emirates and Hong Kong. Mahan Air was designated in 2011 for providing financial, material, or technological support for or to the IRGC-QF. See BankersOnline's OFAC Update for identification details.

12/12/2019

HUD awards $200M for tribal housing

HUD has announced nearly $200 million in grant awards to 52 Native American Tribes and Tribally Designated Housing Entities for new housing construction, housing rehabilitation, and critical infrastructure projects. HUD announced the grants during the 2019 National American Indian Housing Council Legal Symposium in Las Vegas. The grants will be awarded through HUD's Indian Housing Block Grant program to help construct approximately 1,200 new housing units for low-income families living on Indian reservations or in other Indian areas, and spur economic opportunities in distressed communities to help our neediest families. Additionally, tribal partners are maximizing this investment by leveraging an estimated $90 million dollars in additional resources.

12/12/2019

Operators of debt collection scheme banned

The Federal Trade Commission has announced that, under the terms of a settlement agreement with the Commission, the operators of a scheme that conned consumers into paying non-existent debts will be permanently banned from the debt collection business and from misleading consumers about debt. A complaint filed by the FTC against Global Asset Financial Services Group, LLC alleges that the operators of the company falsely claimed to be attorneys or affiliated with attorneys to pressure consumers into making payments on debts they did not owe, and threatened to take legal action against consumers if they did not pay. In addition to being banned from debt collection, debt brokering activities, and misleading consumers, the defendants also will be banned from misrepresenting to consumers whether they are attorneys.

12/12/2019

FDIC schedules 'listening session' webinar

FDIC FIL-80-2019, issued yesterday, announces a webinar to solicit feedback regarding its supervisory appeals and dispute resolution processes for FDIC-supervised financial institutions. The session will offer an opportunity for bankers and other interested parties to provide input and recommendations regarding these processes. Participants will also be asked to provide suggestions regarding the role of the Office of the Ombudsman in assisting in resolving disagreements. Participants will be requested to provide suggestions on information that the agency could publish on these topics.

The webinar is scheduled for 1:00 p.m. to 2:30 p.m. EST on Thursday, December&nps;19, using Cisco WebEx conferencing software. A Fact Sheet supplies additional details.

12/12/2019

FOMC statement and economic projections released

The Federal Reserve Board has released the Federal Open Market Committee Statement and the economic projections from the December 10–11 FOMC meeting.

Information received since the FOMC met in October indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending has been rising at a strong pace, business fixed investment and exports remain weak. On a 12‑month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed. The Committee decided to maintain the target range for the federal funds rate at 1‑1/2 to 1-3/4 percent. The table and charts released on Wednesday summarize the economic projections and the target federal funds rate projections made by Federal Open Market Committee participants for the December meeting.

12/12/2019

U.S and EU meeting in D.C

The Department of Homeland Security has announced that the U.S.-EU Ministerial Meeting on Justice and Home Affairs took place yesterday in Washington, D.C. The U.S. was represented by Attorney General William Barr and Acting Secretary of Homeland Security Chad Wolf. The Ministerial - which is held twice a year - aims to oversee transatlantic cooperation in the area of Justice and Home affairs and address common security threats. As the EU begins a new political cycle, the United States and the EU reaffirmed their strong commitment to foster the Transatlantic Partnership and pursue their dialogue on Justice and Home Affairs, building on the existing operational cooperation and best-practice exchanges on matters of common interest.

12/11/2019

Retirees distribution deadline reminder

The Internal Revenue Service reminds retirees born before July 1, 1949, that they usually must take distributions from their retirement plans by December 31. The payments, called required minimum distributions (RMDs), are normally made by the end of the year. Those who turned 70½ in 2019 are allowed to wait until April 1, 2020, to take their first RMDs. The special April 1 deadline only applies to the RMD for the first year. For all subsequent years, the RMD must be made by December 31. For example, a taxpayer who turned 70½ in 2018 and received the first RMD on April 1, 2019, must receive a second RMD by December 31, 2019. The required distribution rules apply to:

  • Owners of traditional Individual Retirement Arrangements (IRAs)
  • Owners of traditional Simplified Employee Pension (SEP) IRAs
  • Owners of Savings Incentive Match Plans for Employees (SIMPLE) IRAs
  • Participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans

12/11/2019

OFAC adds two new Venezuela-related FAQs

OFAC has published two new Venezuela-related FAQs asking about filing lawsuits against a person designated or blocked under the Venezuela sanctions program and selling shares of a Government of Venezuela entity held under a writ of attachment.

12/11/2019

OFAC targets indviduals for human rights abuses

Yesterday, on International Human Rights Day, OFAC took action against 18 individuals located in Burma, Pakistan, Libya, Slovakia, Democratic Republic of the Congo, and South Sudan for their roles in serious human rights abuse. Additionally, six entities were designated for being owned or controlled by one of the designated individuals. OFAC designated these individuals and entities under E.O. 13818 and the Global Magnitsky Human Rights Accountability Act, which target perpetrators of serious human rights abuse and corruption.

As a result of yesterday’s action, all property and interests in property of the designated individuals, and of any entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other designated persons, that are in the United States or in the possession or control of U.S. persons, are blocked and must be reported to OFAC. Unless authorized by a general or specific license issued by OFAC or otherwise exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.

The names and identifying information for the individuals and entities targeted in OFAC's action can be found in this BankersOnline OFAC Update.

12/11/2019

FDIC updates Compliance Examination Manual

The FDIC has updated its Consumer Compliance Examination Manual to add new section X-6.1 on Disclosure Requirements for Sweep Accounts, to include examination procedures for FDIC Part 360.8(e), which requires consumer disclosures for sweep account transactions to inform whether the swept funds are deposits.

12/11/2019

NMLS renewal period ends soon

The NMLS has posted a reminder that the annual renewal period for registered mortgage loan originators (MLOs) (organizations and individuals) ends December 31. Failure to renew an institution's registration may impact its MLOs’ ability to engage in mortgage loan origination activity, just as failures of individual MLOs to complete their renewal process will prevent them from legally acting in that role after year-end. For complete information, visit the Renew-Reactivate page of the NMLS Federal Registry Resource Center.

12/11/2019

Blanco addresses enforcement conference

Kenneth A. Blanco, Director of the Financial Crimes Enforcement Network (FinCEN), spoke at the American Bankers Association/American Bar Association (ABA/ABA) Financial Crimes Enforcement Conference on December 10, 2019. He addressed how FinCEN uses BSA data, particularly as it relates to filings involving convertible virtual currency; the status of FinCEN’s BSA Value Project; the importance of beneficial ownership information; FinCEN’s ongoing federal banking agency working group efforts; and some significant organizational changes within FinCEN.

In his discussion of beneficial ownership information, Blanco said that there is more work to be done in that arena, and that collecting beneficial ownership information at the corporate formation stage is the next criitical step. He said that FinCEN is committed to working with key stakeholders, including Congress, to find effective, sensible solutions to address this serious and growing gap in our national security.

12/11/2019

CFPB Quarterly Consumer Credit Trends report

The Bureau has released its ninth quarterly consumer credit trends report. This edition of the report is a retrospective on the removal of tax liens and civil judgments from credit reports that began July 2017. The report looks at the National Consumer Assistance Plan's public records provision’s effects on the relationship between credit scores and consumers’ credit performance for consumers that had a civil judgment or tax lien removed from their credit report and those that did not. Key findings include:

  • Since the February 2018 quarterly report, the nationwide consumer reporting agencies (NCRAs) have taken further steps to remove public records. Almost half of tax liens survived the July 2017 removals, but by April 2018, none remained. Bankruptcies are now the only type of public record on NCRA credit reports.
  • Consumers with public records tended to have lower scores than those without. In June 2017 (before the NCAP’s changes took effect), half of consumers with judgments or liens had Deep Subprime scores (below 580).
  • Consumers with judgments or liens had a much higher overall delinquency rate than those without, but this difference is smaller when looking at consumers in the same credit score group.
  • Looking within credit score categories, the difference in delinquency rates between consumers with judgments or liens and those without stays largely constant across time periods. This evidence suggests that the public records provision of the NCAP did not have a large effect on the relationship between credit scores and consumers’ credit performance.

12/11/2019

University of Phoenix pays $191M to settle charges

The Federal Trade Commission has announced the University of Phoenix and its parent company, Apollo Education Group, will settle for a record $191 million to resolve FTC charges that they used deceptive advertisements that falsely touted their relationships and job opportunities with companies such as AT&T, Yahoo!, Microsoft, Twitter, and The American Red Cross. Under the settlement, the university will pay $50 million in cash and cancel $141 million in debts owed to the school by students who were harmed by the deceptive ads. A complaint filed by the Commission alleged that the university and Apollo relied heavily on advertising to attract students, including specific ads that targeted military and Hispanic consumers. The companies’ ads featured employers such as Microsoft, Twitter, Adobe, and Yahoo!, giving the false impression that the university worked with those companies to create job opportunities for its students and tailor its curriculum for such jobs.

12/10/2019

Paul A. Volcker, former Fed chairman, 92

Paul A. Volcker, chairman of the Federal Reserve Board from 1979 to 1987, and head of President Obama's Economic Recovery Advisory Board from 2009 to 2011, died Sunday, at the age of 92. Volcker is widely credited with having ended the high levels of inflation seen in the United States during the 1970s and early 1980s.

12/10/2019

OCC on key risks for federal banking system

The OCC's National Risk Committee has issued its Semiannual Risk Perspective for Fall 2019, which indicates operational, credit, and interest rate risks are among the key themes for the federal banking system. Report highlights include:

  • Operational risk is elevated as banks adapt to a changing and increasingly complex operating environment. Key drivers elevating operational risk include the need to adapt and evolve current technology systems for ongoing cybersecurity threats.
  • Credit risk has accumulated in many portfolios. Banks should prepare for a cyclical change while credit performance remains strong. Preparation includes maintaining robust credit control functions, particularly credit review, problem loan identification and workout, collections, and collateral management.
  • Recent volatility in market rates has led to increasing levels of interest rate risk. The complexity of asset/liability management is exacerbated by the recent yield curve inversions.
  • The London InterBank Offered Rate (Libor) will likely cease to be an active index by the end of 2021. Accordingly, the OCC is increasing regulatory oversight of this area to evaluate bank awareness and preparedness.
  • Banks face strategic risks from non-depository financial institutions, use of innovative and evolving technology, and progressive data analysis capabilities.

12/10/2019

FDIC State Profiles - 3rd Quarter 2019

The FDIC has issued the Third Quarter 2019 FDIC State Profiles, a quarterly summary of banking and economic conditions in each state, Puerto Rico and the U.S. Virgin Islands.

12/10/2019

Schemers who targeted new businesses fined

The Federal Trade Commission has announced the operators of a scheme that targeted new businesses across the country with bogus threats of government fines will pay $1.2 million and be banned from sending unsolicited direct mail under a settlement with the Commission and the State of Florida. The defendants’ mailers directed businesses to pay $84 for labor law posters and threatened that, “Failure to comply with posting regulations can lead to fines of up to $17,000.” Such posters are available for free from government agencies. The settlement imposes judgments totaling more than $8 million, which are suspended due to the defendants’ inability to pay. They will instead pay $1.2 million that will be returned to businesses that lost money to the scheme.

12/10/2019

COPPA Rule comment period extended

The Federal Trade Commission is extending the deadline to submit comments on the agency’s review of the Children’s Online Privacy Protection Act Rule (COPPA Rule) until December 11, 2019. The federal government’s Regulations.gov portal is temporarily inaccessible. The FTC is giving commenters additional time to submit comments, as well as an alternative mechanism to file them. Those unable to submit comments via Regulations.gov can submit them via email with the subject line “COPPA comment” to secretary@ftc.gov. All comments, whether filed through Regulations.gov or sent by email, must be submitted by11:59 p.m. ET on December 11, 2019.

12/10/2019

ADR broker-dealer to pay $3.9M

The Securities and Exchange Commission has announced that broker-dealer Jefferies LLC will pay nearly $4 million to settle charges of improper handling of "pre-released" American Depositary Receipts, which are U.S. securities that represent foreign shares of a foreign company, and require a corresponding number of foreign shares to be held in custody at a depositary bank. The SEC’s order finds that Jefferies improperly borrowed pre-released ADRs from other brokers when Jefferies should have known that those brokers did not own the foreign shares needed to support those ADRs. The order also asserts that Jefferies failed to reasonably supervise its securities lending desk personnel concerning borrowing pre-released ADRs from these brokers.

Without admitting or denying the SEC’s findings, Jefferies agreed to disgorge more than $2.2 million in ill-gotten gains and pay over $468,000 in prejudgment interest and a $1.25 million penalty for total monetary relief of $3.918 million.

12/10/2019

Insurers settle with OFAC over CACR violations

OFAC has announced two separate agreements with insurers to settle their respective potential civil liability for apparent violations of the Cuban Assets Control Regulations. In each case, OFAC determined that the insurer made a voluntary self-disclosure of the apparent violations, and that the apparent violations constituted a non-egregious case.

12/10/2019

Treasury targets corruption and support networks

On Monday, December 9, International Anti-Corruption Day, the U.S. Department of the Treasury’s Office of Foreign Assets Control targeted corrupt actors and their networks across numerous countries in Europe, Asia, and Latin America. Monday’s action, pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act, targeted perpetrators of serious human rights abuse and corruption. Two corrupt Venezuelan officials were also designated, pursuant to Venezuela E.O. 13692, in light of their senior leadership roles in the Maduro regime.

The names and identifying information for the individuals and entities targeted in OFAC's action and an update of a previous Global Magnitsky designee can be found in BankersOnline's OFAC Update.

12/10/2019

CFPB consumer tips on store credit cards

The Bureau has posted tips for consumers who are offered or receive a retail store credit card to protect themselves against fraud.

12/09/2019

OFAC sanctions Iran-backed Iraqi militia leaders

The U.S. Department of the Treasury’s Office of Foreign Assets Control has designated three leaders of Iran-backed militias in Iraq that opened fire on peaceful protests, killing dozens of innocent civilians. OFAC designated Qais al-Khazali, Laith al-Khazali, and Husayn Falih ‘Aziz al-Lami under the Global Magnitsky sanction program for their involvement in serious human rights abuse in Iraq. Additionally, OFAC designated Iraqi millionaire businessman Khamis Farhan al-Khanjar al-Issawi for bribing government officials and engaging in corruption at the expense of the Iraqi people. Identification information on the four designated individuals can be found in BankersOnline's OFAC Update.

12/09/2019

Consumer credit increases

The Federal Reserve Board has released Consumer Credit G.19 data indicating that in October 2019 consumer credit increased at a seasonally adjusted annual rate of 5-1/2 percent. Revolving credit increased at an annual rate of 8-3/4 percent, while nonrevolving credit increased at an annual rate of 4-1/4 percent.

12/09/2019

IRS interest rates unchanged

The Internal Revenue Service has announced that its interest rates will not be changed for the calendar quarter beginning January 1, 2020. The rates will be:

  • 5% for overpayments (4% in the case of a corporation);
  • 2.5% for the portion of a corporate overpayment exceeding $10,000;
  • 5% for underpayments; and
  • 7% for large corporate underpayments.

12/09/2019

NCUA releases Q3 CU performance data

The NCUA has announced that data on the financial performance of federally insured credit unions for the quarter ending September 30, 2019, are now available from the agency. Beginning with the third-quarter data report, the NCUA has added a new feature: a spreadsheet listing all federally insured credit unions active as of September 30, including key metrics. The NCUA's Quarterly Data Summary Reports include an overview of the quarterly Call Report data as well as tables showing the recent history of major credit union performance indicators.

12/06/2019

FTC and Ohio act to halt credit card scheme

A federal court in El Paso, at the request of the FTC and the State of Ohio, has halted he operations of Voice over Internet Protocol (VoIP) service provider Globex Telecom Inc., which allegedly played a key role in robocalling consumers to promote a credit card interest reduction scheme that bilked consumers out of millions of dollars. A temporary restraining order was issued by the court against Globex and its Canadian counterpart, 9506276 Canada, Inc., that appoints a temporary receiver and freezes the defendants’ assets. Globex allegedly provided Educare Centre Services, a company that the FTC and Ohio sued in July 2019, with the means to make calls to U.S. consumers, including illegal robocalls, to market Educare’s phony credit card interest rate reduction services.

12/06/2019

Treasury and Justice target cybercriminals

Russian nationals charged with banking cybercrimes

The U.S. Department of Justice has joined with the U.S. Department of State and the United Kingdom’s National Crime Agency in charging two Russian nationals, Maksim Y. Yakubets and Igor Turashev, with a vast and long-running cybercrime spree that stole from thousands of individuals and organizations in the United States and abroad. They are charged with an effort that infected tens of thousands of computers with a malicious code called Bugat. Once installed, the computer code, also known as Dridex or Cridex, allowed the criminals to steal banking credentials and funnel money directly out of victims’ bank accounts. Their names and those of their associates have been added to the SDN List.

Evil Corp sanctioned for infecting bank computers

OFAC has announced action taken against Evil Corp, the Russia-based cybercriminal organization responsible for the development and distribution of the Dridex malware. The Dridex malware is a multifunctional malware package that is designed to automate the theft of confidential information, to include online banking credentials from infected computers.

Evil Corp has used the Dridex malware to infect computers and harvest login credentials from hundreds of banks and financial institutions in over 40 countries, causing more than $100 million in theft. OFAC's action targets 17 individuals and seven entities to include Evil Corp, its core cyber operators, multiple businesses associated with a group member, and financial facilitators utilized by the group. Identification information on the designated individuals and entities can be found in BankersOnline's OFAC Update.

FinCEN and the CISA (U.S. Cybersecurity and Infrastructure Security Agency) issued a Report on Dridex Malware that provides an overview of the malware, related activity, and a list of previously unreported indicators of compromise derived from information reported to FinCEN by private sector financial institutions. Because actors using Dridex malware and its derivatives continue to target the financial services sector, including financial institutions and customers, the techniques, tactics, and procedures contained in this report warrant renewed attention. Treasury and CISA encourage network security specialists to incorporate these indicators into existing Dridex-related network defense capabilities and planning.

12/06/2019

Mnuchin discusses FSOC report with House Financial Services Committee

Treasury Secretary Mnuchin presented the Financial Stability Oversight Council (FSOC) 2019 annual report and other priorities of the Treasury Department to members of the House Committee on Financial Services yesterday. He noted that, since the publication of the Council’s last annual report in December 2018, the U.S. economy has continued to perform extremely well. Economic growth in the United States far exceeds that of U.S. G7 trading partners, and unemployment rates are near a 50-year low, including unemployment levels at or near all-time lows for African Americans, Hispanic Americans, Asian Americans, and women. Wages are rising faster for hardworking families; corporate and consumer delinquency and default rates are low; and financial conditions remain stable. He also stated, “The report also provides a strong message to market participants about the need to prepare for the transition away from LIBOR as a reference rate. Failure to prepare adequately could cause significant disruptions across financial markets and to borrowers, given the widespread use of LIBOR in financial instruments.”

12/06/2019

Fed joins Faster Payments Council as founding sponsor

The Federal Reserve System announced yesterday it has joined the U.S. Faster Payments Council as a founding sponsor. The FPC and its members seek to facilitate faster payments in the United States, enabling Americans to securely pay anyone, anywhere, at any time with near-immediate funds availability. Its priorities include faster payments education and fraud mitigation.

12/06/2019

OCC lists 10 Outstanding CRA evals

The OCC yesterday released a list of Community Reinvestment Act (CRA) performance evaluations that became public in November. Of the 22 evaluations listed, 12 are rated "Satisfactory" and these ten are rated "Outstanding" (links are to their evaluations):

12/05/2019

FinCEN report on increase in fraud against elders

A report has been released by FinCEN indicating that elders face an increased threat to their financial security by both domestic and foreign actors. Elder financial exploitation Suspicious Activity Report filings increased dramatically over the six-year study period, from about 2,000 filings per month in 2013 to a peak of nearly 7,500 filings per month in August 2019. The yearly dollar amount of suspicious activity reported for elder financial exploitation also rose.

FinCEN Director Kenneth A. Blanco said the SARs filed by financial institutions are used to protect the country and its people from harm and provide unique and valuable information on crime and other threats happening in the U.S. and around the world impacting families and communities. He said, "These SARs are also important to filer banks and MSBs because they show trends and patterns in criminal activity. Every financial institution wants to protect its customers, and SAR reporting helps them do that. Awareness of these reporting trends and potential exploitation methods can also help consumers protect themselves."

12/05/2019

HUD awards $10M to non-profit housing organizations

HUD has announced it has awarded $10 million in grants to four non-profit housing organizations, which will create at least 538 affordable homes for low-income families and individuals:

  • Habitat for Humanity International
  • Housing Assistance Council
  • Community Frameworks
  • Tierra Del Sol Housing Corporation

12/05/2019

FDIC lists CRA eval ratings

The FDIC has issued a list of 71 state nonmember banks to which the FDIC assigned Community Reinvestment Act evaluation ratings in September 2019. A bank in Connecticut received a "Needs to Improve" rating. The other 70 banks received "Satisfactory" ratings.

12/05/2019

Condition of the U.S. banking system

Comptroller Otting and FDIC Chairman McWilliams have submitted written statements to the House Committee on Financial Services on the condition of the U.S. banking system and progress made to achieve the agencies' regulatory priorities.

12/04/2019

Treasury targets Venezuelan oil shipments to Cuba

The Treasury Department announced Tuesday that OFAC has identified six vessels as blocked property of Petroleos de Venezuela, S.A. (PdVSA) under the authority of Executive Order 13884, which blocks the property and interests in property of the Government of Venezuela. Additionally, OFAC identified the vessel Esperanza as blocked property of Caroil Transport Marine Ltd., which was designated on September 24, 2019, for operating in the oil sector of the Venezuelan economy. The Esperanza was previously listed as the Nedas on the SDN List, which was identified as blocked property on April 12, 2019. For further identification information on the seven vessels, see BankersOnline's OFAC Update.

12/04/2019

Bureau proposes Remittance Rule changes

The CFPB announced Tuesday it has issued a Notice of Proposed Rulemaking relating to the Remittance Rule (subpart B of Regulation E). The proposal—

  • would allow certain banks and credit unions to continue to provide estimates under certain conditions where it could be economically infeasible for these institutions to provide exact disclosures.
  • would increase the safe harbor threshold that determines whether a company makes remittance transfers in the normal course of its business and is subject to the Rule to 500 or fewer transfers annually in the current and prior calendar years. The Bureau said this would reduce the burden on over 400 banks and almost 250 credit unions that send a relatively small number of remittances—less than 0.06 percent of all remittances.
  • requests comment on a permanent exception in the Rule permitting providers to use estimates for transfers to certain countries and the process for adding countries to the safe harbor countries list maintained by the Bureau.

Comments on the proposal will be accepted for 45 days following its publication in the Federal Register.
UPDATE: Published at 84 FR 67132 on 12/6/2019, with comment period ending 1/21/2020.

12/04/2019

Major disaster support continued by HUD

HUD has announced the allocation of over $2.3 billion to support the long-term disaster recovery process in hard-hit areas in fifteen states, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, American Samoa and the Commonwealth of the Northern Mariana Islands through its Community Development Block Grant-Disaster Recovery (CDBG-DR) program.

12/04/2019

RFI on FDIC approaches to cost-benefit analysis

The FDIC has published [84 FR 65808, 11/29/2019] a Request for Information (RF!) seeking comment on approaches it uses, or is considering using, to analyze the effects of its regulatory actions. The RFI is part of FDIC's ongoing effort to strengthen the quality of its regulatory cost-benefit analyses. Comments are due by January 28, 2020.

12/04/2019

Statement on use of alternative data in credit underwriting

Five Federal financial regulatory agencies—the Fed, the CFPB, the FDIC, the OCC and the NCUA— have issued an "Interagency Statement on the Use of Alternative Data in Credit Underwriting" by banks, credit unions, and non-bank financial firms.

The statement notes the benefits that using alternative data may provide to consumers, such as expanding access to credit and enabling consumers to obtain additional products and more favorable pricing and terms. The statement explains that a well-designed compliance management program provides for a thorough analysis of relevant consumer protection laws and regulations to ensure firms understand the opportunities, risks, and compliance requirements before using alternative data.

Alternative data includes information not typically found in consumers’ credit reports or customarily provided by consumers when applying for credit. Alternative data include cash flow data derived from consumers’ bank account records.

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