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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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11/22/2019

CFPB compares large and small mortgage servicers

The CFPB has released a report examining the differences between large and small mortgage servicers. The report explores the role servicers of different sizes play in the mortgage market where size is defined by the number of loans serviced. Because of differences in the resources, capabilities, customer base, and business models of financial institutions of varying sizes, the impact of consumer finance regulations can vary as well. Key findings in the report include:

  • 74 percent of borrowers with mortgages at small servicers said having a branch or office nearby was important in how they chose their mortgage lender, compared to 44 percent at large servicers;
  • delinquency rates on loans at servicers of all sizes increased substantially starting in 2008, but peak delinquency rates were much lower for small servicers than for large and mid-sized servicers; and
  • smaller servicers have a greater share of mortgages in non-metro or completely rural counties.

11/22/2019

OCC releases enforcement actions

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

  • A former Managing Director and Chief Administrative Officer of Oversight and Controls at JPMorgan Chase Bank, N.A., was ordered to pay a $35,000 civil money penalty for retaining non-public OCC information on her departure from that bank and illegally sharing that information with employees in her subsequent employment with another bank.
  • A former Executive Director of the Global Regulatory Relations Group of MS Services Group, Inc., and Morgan Stanley & Co. LLC, and an institution-affiliated part of Morgan Stanley Private Bank, N.A. and Morgan Stanley Bank, N.A., was ordered to pay a $7,500 civil money penalty for retaining, on her departure from Morgan Stanley in 2017, confidential Morgan Stanley documents, at least 18 of which contained non-public OCC information regarding one or both of the banks, and after being employed by another financial institution, using the documents containing non-public OCC information, leaving them unsecured in her office, thereby disclosing them.
  • A former teller at Wells Fargo Bank, N.A. was issued a consent prohibition order based on the Comptroller's finding that she processed nine unauthorized over-the-counter cash withdrawals totaling $22,000 from the checking account of a bank customer and disbursed the cash to an individual she knew was not an authorized user of the account, receiving $500 in return for her actions.

11/22/2019

Spending bill signed

The president signed an interim government spending bill yesterday, just avoiding a government shutdown. Once again, Congress "kicked the can down the road," extending spending authorizations -- included for the National Flood Insurance Program -- only through December 20, 2019.

11/22/2019

Venezuela Sanctions Regulations amended

OFAC has announced it has amended the Venezuela Sanctions Regulations to incorporate additional Executive Orders, add a general license authorizing U.S. Government activities, and add an interpretive provision. The amendments became effective this morning with their publication [84 FR 64415] in the Federal Register.

11/22/2019

MLA site scheduled for maintenance

The MLA website has posted a notice that it will be unavailable during planned system maintenance beginning at 6 p.m. EST on Tuesday, December 17, 2019, to "12 a.m." EST on Wednesday, November 18, which we have interpreted to mean the "downtime" will run for about six hours, until midnight.

11/22/2019

NCUA Board approves two measures

The National Credit Union Administration Board has announced its unanimous approval of two items on the agenda for its November 21 open meeting:

  • A final interpretive ruling and policy statement to expand career opportunities for individuals convicted of certain minor offenses.
  • A proposed rule raising the threshold for requiring a residential real estate appraisal from $250,000 to $400,000.

11/22/2019

$1.8M in refund checks sent to defrauded consumers

The Federal Trade Commission has announced it is mailing 79,771 refund checks totaling over $1.8 million to consumers who signed up for “risk-free” trial offers for skin care products, but were enrolled in negative option programs with recurring monthly charges. A Complaint filed by the FTC in June 2015, charged seven individuals and 15 companies with selling Auravie, Dellure, LéOR Skincare, and Miracle Face Kit branded skincare products through deceptive “risk-free trials.” According to the FTC, the defendants convinced consumers to provide their credit card information, purportedly to pay nominal shipping fees, but instead used it to impose unauthorized monthly charges for unordered products.

11/21/2019

Fed announces annual reserves exemption amount

The Federal Reserve Board has announced the annual indexing of the reserve requirement exemption amount and the low reserve tranche. These amounts are used in the calculation of reserve requirements for depository institutions. The Board also announced the annual indexing of nonexempt deposit cutoff and the reduced reporting limit.

For net transaction accounts in 2020, the first $16.9 million, up from $16.3 million in 2019, will be exempt from reserve requirements. A 3 percent reserve ratio will be assessed on net transaction accounts over $16.9 million up to and including $127.5 million, up from $124.2 million in 2019. A 10 percent reserve ratio will be assessed on net transaction accounts in excess of $127.5 million.

The new low reserve tranche and reserve requirement exemption amount will apply to the 14-day reserve maintenance period that begins January 16, 2020. For depository institutions that report deposit data weekly, this maintenance period aligns with the 14-day computation period that begins Tuesday, December 17, 2019. For depository institutions that report deposit data quarterly, this maintenance period aligns with the seven-day computation period that begins Tuesday, December 17, 2019.

Related to the annual indexing of reserve requirements is the Fed's update of its Reserve Maintenance Manual, which provides information regarding reserve calculations and account maintenance for depository institutions that file the Federal Reserve (FR) 2900 form (Report of Transaction Accounts, Other Deposits and Vault Cash) with the Federal Reserve, either weekly or quarterly. The November 2019 edition of the manual is now available.

  • [Editor's Note: The table appearing in the Board's Federal Register submission document is missing the row with the reserve requirement for net transaction accounts in excess of $127.5 million. We have contacted the Federal Reserve Board staff to call the omission to their attention. We determined that the reserve amount on the missing line should be $3,318,000 plus 10% of the amount over $127.5 million.]

11/21/2019

CFPB to assess TRID rule

The CFPB has announced it is requesting public comment on an assessment it will conduct on the TRID Rule.

As part of its assessment, the Bureau stated it intends to address the TRID Rule’s effectiveness in meeting the purposes and objectives of Title X of the Dodd-Frank Act, the specific goals of the rule, and other relevant factors. Section 1022(d) of the Dodd-Frank Act requires the Bureau to publish a report of its assessment within five years after the effective date of the rule being assessed (the TRID Rule became effective on October 3, 2015).

The public is invited to comment on the feasibility and effectiveness of the assessment plan, recommendations to improve the assessment plan, and recommendations for modifying, expanding, or eliminating the TRID Rule, among other questions. The comment period opened upon publication of the notice in the Federal Register on November 22 and will close on January 21, 2020.

Updated to reflect date of and link to Federal Register publication.

11/21/2019

OCC changes OREO amendments date

The OCC has published [84 FR 64193] an amendment of its October 22, 2019, rule amending the agency's OREO-related regulations to change the effective date from December 1, 2019, to January 1, 2020.

11/21/2019

FOMC minutes released

The Federal Reserve Board and the Federal Open Market Committee have released the minutes of the FOMC meeting held on October 29–30, 2019, and of the conference call held on October 4, 2019.

11/21/2019

SEC to host securities market conference

The Securities and Exchange Commission has announced that it will host a conference on December 4 entitled “The State of Our Securities Markets” at its headquarters in Washington, D.C. The event will be open to the public, with pre-registration available. The conference will bring together current and former government officials and experts from different areas of the private sector to explore and discuss the ever-changing economic, risk and market environment and what those changes mean for the structure and function of the securities markets.

Areas of focus at the conference will include global macroeconomic trends—and their impacts on our capital markets; changes to the global equity and credit markets—including how today’s markets differ from those of the early 2000s; and market concentration and fragmentation within certain areas of the securities markets, including relevant causes and potential risks and effects.

11/20/2019

Florida man charged with $50M+ in financial fraud

The Department of Justice has unsealed an indictment charging David John Ridling of Vero Beach, Florida, with ten counts of wire fraud, four counts of bank fraud, nine counts of money laundering, and two counts of aggravated identity theft. If convicted, Ridling faces a maximum penalty of 20 years in federal prison for each wire fraud count, 30 years in federal prison for each bank fraud count, 10 years in federal prison for each money laundering count, and a mandatory penalty of 2 years’ imprisonment for the aggravated identity theft counts.

11/20/2019

SEC targets Ponzi scheme

The Securities and Exchange Commission has announced it has obtained a temporary restraining order (TRO) and asset freeze against two individuals and two companies they control in connection with an alleged $6 million Ponzi scheme that defrauded at least 55 investors, many of whom are senior citizens or small business owners. According to the complaint filed by the SEC, Neil Burkholz of Boca Raton, Florida, and Frank Bianco, of Pembroke Pines, Florida, through their companies Palm Financial Management LLC and Shore Management Systems LLC, solicited investors by falsely representing that their proprietary options trading strategies were highly profitable. In reality, as alleged in the complaint, the defendants invested less than half of investor funds and those investments resulted in near-total losses.

11/20/2019

FDIC proposes two new rules

The FDIC’s Board of Directors has proposed two new rules:

  • Withdrawal and reenactment of 12 CFR part 303 subpart L (Applications Under Section 19 of the Federal Deposit Insurance Act) and amendment of 12 CFR part 308, subpart M (Procedures and Standards Applicable to Applications Pursuant to Section 19 of the FDIA) to formalize a longstanding agency policy related to individuals seeking to work in the banking industry with minor criminal offenses. The FDIC released a Fact Sheet on the proposal.
  • Amendments to 12 CFR part 331 (Federal Interest Rate Authority) to clarify the Federal law governing interest rates state banks may charge their customers by addressing marketplace uncertainty in the wake of a 2015 court ruling that called into question the enforceability of interest rate terms following the sale or assignment of a loan originated by a national bank to a third-party non-bank. A Fact Sheet on this proposal was also released.

Comments on both proposed rules will be accepted for 60 days following publication in the Federal Register.

Press releases:

11/20/2019

Final rule on treatment of HVCRE

The Federal Reserve, FDIC, and OCC have finalized a rule to modify the treatment of high volatility commercial real estate (HVCRE) exposures as required by the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final rule clarifies certain terms contained in the HVCRE exposure definition, generally consistent with their usage in the Call Report instructions. The rule also clarifies the treatment of credit facilities that finance one- to four-family residential properties and the development of land, which is substantially similar to the proposal issued in July. Additionally, in response to comments on that proposal, the final rule provides banking organizations with the option to maintain their current capital treatment for acquisition, development, or construction loans originated between January 1, 2015, and the effective date of the final rule, April 1, 2020.

The rule affects OCC regulations at 12 CFR part 3, Federal Reserve Regulation Q (12 CFR part 217) and FDIC regulations at 12 CFR part 324.

11/20/2019

Regulators finalize changes to supplementary leverage ratio

The federal bank regulatory agencies (Fed, FDIC, and OCC) have finalized changes to a capital requirement for banking organizations predominantly engaged in custodial activities, as required by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The final rule is unchanged from the proposal issued for public comment in April 2019. It will be effective April 1, 2020.

Based on current data, only The Bank of New York Mellon Corporation, Northern Trust Corporation, and State Street Corporation, together with their depository institution subsidiaries, would be affected by the rule.

11/20/2019

FHFA to re-propose Enterprise Capital Rule

The Federal Housing Finance Agency has announced plans to re-propose the entire regulation on capital requirements for Fannie Mae and Freddie Mac sometime in 2020. FHFA Director Mark Calabria stated, "The 2018 Capital Rule was proposed before FHFA began the process of retaining capital at the Enterprises as a first step toward ending [their] conservatorships. In fairness to all interested parties, the comments submitted during the previous rulemaking were submitted under a different set of assumptions about the future of the Enterprises. During the process of the rulemaking, important issues were identified that will be addressed in the re-proposal."

11/20/2019

BB&T and SunTrust to become Truist Bank

The Federal Reserve Board and the FDIC have approved the application by BB&T Corporation of Winston-Salem, North Carolina, to merge with SunTrust Banks, Inc. of Atlanta, Georgia. The approval is conditioned on several actions, including that BB&T must divest 30 branches and more than $2.4 billion in deposits to mitigate the competitive effects of the merger.

The resulting bank will operate under BB&T's charter and will be called Truist Bank. Truist Bank will be headquartered in Charlotte, North Carolina.

11/20/2019

Final rule on calculation of counterparty risk

A final rule updating how certain banking organizations are required to measure counterparty credit risk for derivative contracts under their regulatory capital rules has been jointly announced by the Federal Reserve, FDIC, and OCC. The final rule implements the "standardized approach for measuring counterparty credit risk," also known as SA-CCR and will replace the "current exposure methodology" for large, internationally active banking organizations, while other, smaller banking organizations may voluntarily adopt SA-CCR.

The rule, which will affect OCC regulations at 12 CFR parts 3 and 32, Federal Reserve Regulation Q (12 CFR part 217), and FDIC regulations at 12 CFR part 324, will be effective April 1, 2020, with a mandatory compliance date of January 1, 2022, for advanced approaches banking organizations.

11/20/2019

Fed Board issues consent prohibition order

The Federal Reserve Board has issued an Order of Prohibition Upon Consent against Thang Nguyen, a former banking associate at the Richardson, Texas, branch of East West Bank, Pasadena, California. The Board found that Nguyen misappropriated $101,000 from a bank customer's account for his personal benefit. The Order noted that Nguyen had separately agreed to pay full restitution to the bank for its losses resulting from Nguyen's conduct.

11/19/2019

OFAC designates ISIS support networks

On Monday, OFAC designated two Turkey-based Islamic State of Iraq and Syria (ISIS) procurement agents and four ISIS-linked companies operating in Syria, Turkey, and across the Persian Gulf and Europe for providing critical financial and logistical support to ISIS. Additionally, Treasury is acting against an Afghanistan-based organization, Nejaat Social Welfare Organization, for using false charitable pretenses as a cover to facilitate the transfer of funds and support the activities of the terrorist group’s branch in Afghanistan, ISIS – Khorasan (ISIS-K). Treasury also took action against two senior officials affiliated with this organization.

These targets have been designated pursuant to Executive Order 13224, which targets terrorists and those who have materially assisted, sponsored, or supported terrorists. Identity information for the five entities and four individuals designated on Monday can be found in BankersOnline's OFAC Update.

11/19/2019

Quarterly Federal Reserve financial reports

The Federal Reserve Board has released its unaudited combined quarterly financial report and report on balance sheet developments for the third quarter of 2019.

The quarterly reports present summary financial information on the combined financial position and results of operations of the Reserve Banks. The combined information includes the accounts and results of operations of each of the 12 Reserve Banks and a consolidated variable interest entity. All financial information included in the quarterly financial reports is unaudited

11/19/2019

State updates Cuba Restricted List

The Department of State has published an update [84 FR 63953] to its List of Restricted Entities and Subentities Associated with Cuba (the Cuba Restricted List) with which direct financial transactions are generally prohibited under the Cuban Assets Control Regulations (CACR). The updated list is effective November 19, 2019.

11/19/2019

Treasury releases September TIC data

Treasury has released the Treasury International Capital (TIC) data for September 2019. The sum total in September of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC outflow of $37.6 billion. Of this, net foreign private inflows were $10.6 billion, and net foreign official outflows were $48.2 billion. Foreign residents increased their holdings of long-term U.S. securities in September; net purchases were $15.4 billion. Net purchases by private foreign investors were $54.1 billion, while net sales by foreign official institutions were $38.7 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $34.0 billion.

11/19/2019

NMLS maintenance release scheduled

The NMLS has posted a notice that Maintenance Release 2019.11 is scheduled for November 24. The release contains system enhancements for Temporary Authority to Operate, which can be reviewed in the NMLS 2019.11 release notes.

11/19/2019

FHFA extends comment period on pooling practices

The FHFA has announced an extension of the comment deadline from December 19, 2019, to January 21, 2020, for input on potential changes to Fannie Mae and Freddie Mac Uniform Mortgage-Backed Security (UMBS) pooling practices. FHFA previously announced that it was seeking input on the Enterprises' pooling practices for the formulation of “To-Be-Announced" (TBA)-eligible 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. Input should be submitted electronically.

11/19/2019

OCC proposes 'Valid When Made' rule

The OCC announced yesterday it is soliciting comments on a proposed rule to clarify that when a national bank or savings association sells, assigns, or otherwise transfers a loan, interest permissible prior to the transfer continues to be permissible following the transfer. The proposal will address confusion about the effect of a transfer on a loan’s valid interest rate, including confusion resulting from a recent decision from the U.S. Court of Appeals for the Second Circuit (Madden v. Midland Funding, LLC).
The proposed rule would apply to all national banks and state and federal savings associations. Comments will be accepted for 60 days after publication in the Federal Register. The FDIC is also issuing a proposal that would address this issue.
UPDATE: Published at [84 FR 64229] on 11/21/2019, with a 61-day comment period ending 1/21/2020.

11/18/2019

CFPB clarifies loan originator temporary status rules

The Bureau has issued an interpretive rule clarifying screening and training requirements for state-licensed mortgage companies that employ loan originators with temporary authority. The interpretive rule clarifies that the employer is not required to conduct the screening and ensure the training of loan originators with temporary authority. The state will perform the screening and training as part of its review of the individual’s application for a state loan originator license. The rule will be effective on November 24, 2019.

11/18/2019

November 2019 Financial Stability Report

The Federal Reserve Board has published its November 2019 Financial Stability Report, which summarizes the Board’s framework for assessing the resilience of the U.S. financial system and presents the Board’s current assessment.

11/18/2019

NCUA Board meeting agenda

The NCUA has posted the agenda for its 10:00 a.m. EST November 21, 2019, Board meeting. The matters to be discussed include the quarterly report of the Share Insurance Fund, guidance on prohibitions imposed by statute, and Part 722 (Real Estate Appraisals) of NCUA Rules and Regulations.

11/18/2019

GA apartment owners settle HUD racial harassment claim

The Department of Housing and Urban Development has announced it has reached an $80,000 Conciliation/Voluntary Compliance Agreement with Oglethorpe Square Apartments, LP, of Savannah, Georgia, and Gene B. Glick Company, Inc., of Indianapolis, Indiana. The agreement settles allegations that the owners and management agent for the Woods of Savannah apartment complex subjected African-American tenants at the property to repeated instances of racial harassment by white tenants, which included verbal attacks and physical assaults.

11/15/2019

HUD settles with CA housing providers

HUD has announced it has reached a Conciliation/Voluntary Compliance Agreement with housing providers in San Diego, Sacramento and Oceanside, California, settling allegations that they violated the Fair Housing Act and other laws when they refused to install grab bars in the showers of elderly tenants with disabilities and subsequently retaliated against them for making the requests. The providers include Mission Cove Seniors Housing Associates, L.P, Carolyn Compass Rose, LLC, Community Housing Works, Inc. of San Diego, ConAm Management Corporation of Sacramento, and the city of Oceanside, California.

11/15/2019

Volcker Rule amendment published

In October, the federal bank regulatory agencies and others approved amendments to the Volcker Rule ("Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships With, Hedge Funds and Private Equity Funds”). Those amendments were published [84 FR 61974] yesterday in the Federal Register with an effective date of January 1, 2020, and a compliance date for financial institutions of January 1, 2021.

11/15/2019

FHA 2019 Annual Report sent to Congress

FHA has submitted its 2019 Annual Report to Congress on the economic condition of the agency’s Mutual Mortgage Insurance Fund (MMI Fund). FHA reports that at the end of fiscal year 2019, The FHA MMI Fund Capital Ratio for FY 2019 was 4.84 percent, the highest level since FY 2007. Highlights include:

  • Congress has set a mandatory minimum Capital Ratio of 2 percent for the MMI Fund. The Capital Ratio for FY 2019 was 4.84 percent, the highest level since FY 2007. The Capital Ratio is one indicator of the Fund’s financial health and includes both FHA-insured single family forward and reverse mortgage portfolios.
  • As detailed in the annual report, FHA had insurance-in-force on single family mortgages valued at almost $1.3 trillion at the end of this fiscal year.
  • The performance of the forward book of business posted a stand-alone capital ratio of 5.44 percent. The MMI Capital (formerly referred to as economic net worth) of the forward book of business also improved year-to-year by over 42 percent with a value of over $66.6 billion.

11/15/2019

FFIEC IT exam handbook revised

The Federal Financial Institutions Examination Council (FFIEC) has revised the "Business Continuity Management" booklet, one of a series of booklets that make up the FFIEC Information Technology Examination Handbook (IT Handbook). The revised "Business Continuity Management" booklet provides information for examiners to assess the adequacy of a bank’s risk management related to the availability of critical financial products and services. The revised booklet replaces the "Business Continuity Planning" booklet issued in February 2015 and rescinds OCC Bulletin 2015-9, "FFIEC Information Technology Examination Handbook: Strengthening the Resilience of Outsourced Technology Services, New Appendix for Business Continuity Planning Booklet."

11/15/2019

FDIC releases reports on growth of nonbank lending

The FDIC has released and published in the FDIC Quarterly a multi-part analysis of changes in the U.S. banking system since the 1950s, especially changes occurring since the financial crisis in 2008. These analyses address the shift in some lending from banks to nonbanks, how corporate borrowing has moved between banks and capital markets, and the migration of some home mortgage origination and servicing from banks to nonbanks. The featured articles include:

11/15/2019

IRS updates guidance for deductible expenses

The Internal Revenue Service has issued Revenue Procedure 2019-46, guidance for taxpayers with certain deductible expenses to reflect changes resulting from the Tax Cuts and Jobs Act (TCJA).

The guidance updates the rules for using the optional standard mileage rates in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. It also provides rules for substantiating the amount of an employee's ordinary and necessary travel expenses reimbursed by an employer using the optional standard mileage rates. Taxpayers are not required to use a method described in this revenue procedure and may instead substantiate actual allowable expenses provided they maintain adequate records.

The TCJA suspended the miscellaneous itemized deduction for most employees with unreimbursed business expenses, including the costs of operating an automobile for business purposes. However, self-employed individuals and certain employees, such as Armed Forces reservists, qualifying state or local government officials, educators and performing artists, may continue to deduct unreimbursed business expenses during the suspension.

The TCJA also suspended the deduction for moving expenses. However, this suspension does not apply to a member of the Armed Forces on active duty who moves pursuant to a military order and incident to a permanent change of station.

11/14/2019

CFPB financial well-being report

Yesterday, the CFPB issued a report with state-by-state comparisons of financial well-being scores. The scores are based on Bureau analysis of the Financial Industry Regulatory Authority Foundation’s 2018 National Financial Capability Study. The report shows that the average financial well-being scores for all adults (ages 18 and older) in the United States ranged from a low of 50 in Mississippi to a high of 54 in California, the District of Columbia and Hawaii. For the United States, the average financial well-being score was 52.

The report also examines financial well-being by age groups and how those scores vary by state. The average financial well-being score for younger and middle age adults (ages 18 to 61) in the United States was 49 in 2018. During this same period, the financial well-being score for older adults (ages 62 and older) was 62.

11/14/2019

McWilliams at Tokyo international finance seminar

FDIC Chairman McWilliams delivered the keynote remarks at the 30th Special Seminar on International Finance in Tokyo, Japan, yesterday. Her presentation focused on:

  • the goal of resolution planning
  • resolution planning for the largest, most complex banking institutions
  • resolution readiness for larger firms
  • updates to the FDIC's approach to supervision and resolution readiness
  • central counterparties (CCPs)
  • cyber threats
  • international coordination

11/14/2019

Powell on economic outlook

In testimony before the Joint Economic Committee of Congress, Federal Reserve Board Chair Jerome Powell discussed the outlook for the economy and monetary policy. He noted the U.S. economy is now in the 11th year of the current expansion, and the baseline outlook remains favorable. Gross domestic product increased at an annual pace of 1.9 percent in the third quarter of this year after rising at around a 2.5 percent rate last year and in the first half of this year, and the unemployment rate was 3.6 percent in October—near a half-century low. Regarding monetary policy, he observed that, over the past year, weakness in global growth, trade developments, and muted inflation pressures have prompted the Federal Open Market Committee to adjust its assessment of the appropriate path of interest rates. Since July, the Committee has lowered the target range for the federal funds rate by 3/4 percentage point. These policy adjustments put the current target range at 1-1/2 to 1‑3/4 percent.

11/14/2019

FFIEC advisory on FATF-identified jurisdictions with AML/CFT deficiencies

FinCEN has issued Advisory FIN-2019-A007 on "Financial Action Task Force-Identified Jurisdictions with AML/CFT Deficiencies and Relevant Actions by the United States Government."

FinCEN has outlined in the Advisory the countermeasures against the AML/CFT deficiencies of the Democratic Peoples Republic of Korea (North Korea) and Iran, and listed the FATF-identified jurisdictions with strategic AML/CFT deficiencies. If a SAR is filed on suspicious activity connected to any of the jurisdictions or activities highlighted in Advisory FIN-2019-A007, the key term "October 2019 FATF FIN-2019-A007" should be included.

11/13/2019

FTC order stops student loan debt scheme

The Federal Trade Commission reports that a temporary restraining order obtained by the Commission halted an operation that bilked consumers out of millions of dollars by pretending to be affiliated with the U.S. Department of Education and falsely promising student loan debt relief. A complaint filed by the FTC against Arete Financial Group and several related companies alleged that the defendants used radio and television ads, as well as online ads and telemarketing calls in which they pretended to be affiliated with the Department of Education, to promise to enroll consumers in student loan forgiveness, consolidation, and repayment programs to reduce or eliminate their monthly payments and principal balances.

11/13/2019

Tech company to implement data security program

InfoTrax Xystems, L.C., a Utah-based technology company, has agreed to implement a comprehensive data security program to settle Federal Trade Commission allegations that the company failed to put in place reasonable security safeguards. A complaint filed by the FTC alleged that the failure to put in place reasonable, low-cost, and readily available security protections to safeguard the personal information it maintained on behalf of its clients allowed a hacker to access the personal information of a million consumers.

11/13/2019

Update on Fannie and Freddie credit risk transfer programs

The Federal Housing Finance Agency (FHFA) has issued its semi-annual Credit Risk Transfer Progress Report describing the status and volume of credit risk transfer transactions through the second quarter of 2019. The report provides a comprehensive picture of how the Enterprises transfer a substantial portion of credit risk to the private sector through a variety of transactions in both the single-family and multifamily markets.

11/13/2019

FDIC Board agenda released

The FDIC Board's agenda for its 10:00 a.m. EST, November 19, 2019, meeting has been released. The summary agenda includes memoranda and resolutions regarding:

  • Regulatory Capital Rule: Revisions to the Supplementary Leverage Ratio to Exclude Certain Central Bank Deposits of Banking Organizations Predominantly Engaged in Custody, Safekeeping and Asset Servicing Activities.
  • Regulatory Capital Treatment for High Volatility Commercial Real Estate (“HVCRE”) Exposures.
  • Final Rule Removing Transferred OTS Regulation, Part 390 Subpart M – Deposits.
  • Notice of Final Rulemaking Re: The Use and Remittance of Certain Assessment Credits.
  • Establishment of the FDIC Advisory Committee of State Regulators.

The Board's discussion agenda includes memoranda and resolutions regarding:

  • Regulatory Capital Rule: Standardized Approach for Calculating the Exposure Amount of Derivative Contracts.
  • Notice of Proposed Rulemaking on Conversion of the Statement of Policy for Section 19 of the Federal Deposit Insurance Act to a Regulation.
  • Notice of Proposed Rulemaking on Federal Interest Rate Authority.

11/13/2019

Speech: Decline of global long-term interest rates

At the High-Level Conference on Global Risk, Uncertainty, and Volatility co-sponsored by the Bank for International Settlements, the Board of Governors of the Federal Reserve System, and the Swiss National Bank, Federal Reserve Vice Chair Clarida discussed the decline in long-term interest rates and the role of monetary policy. He noted that from the late 1980s, when 10-year nominal Treasury yields in the United States and sovereign rates in many other major advanced economies were around 10 percent, global bond yields in the advanced economies have trended lower to levels below 2 percent today. He noted the economy is constantly evolving, bringing with it new opportunities and challenges. One of these challenges is how best to conduct monetary policy in the new world of low equilibrium interest rates.

11/12/2019

FinCEN GTOs reissued

FinCEN has announced the renewal of its Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used in all-cash purchases of residential real estate. The renewed GTOs will be identical to the May 2019 GTOs with one modification: the new GTOs will not require reporting for purchases made by legal entities that are U.S. publicly-traded companies. Real estate purchases by such entities are identifiable through other business filings.

The terms of this Order are effective beginning November 12, 2019 and ending on May 9, 2020. It applies to purchases made without a bank loan or other similar form of external financing and paid for, at least in part, using currency or a cashier's, certified, traveler's, personal or business check, a money order in any form, a funds transfer, or virtual currency. Covered transactions are those involving residential real property in the:

  • Texas counties of Bexar, Tarrant, or Dallas;
  • Florida counties of Miami-Dade, Broward, or Palm Beach;
  • Boroughs of Brooklyn, Queens, Bronx, Staten Island, or Manhattan in New York City, New York;
  • California counties of San Diego, Los Angeles, San Francisco, San Mateo, or Santa Clara;
  • City and County of Honolulu in Hawaii;
  • Nevada county of Clark;
  • Washington county of King;
  • Massachusetts counties of Suffolk, or Middlesex; or
  • Illinois county of Cook

11/12/2019

Fed proposes changes to assessments rule

The Federal Reserve Board has published [84 FR 60944] a notice of proposed rulemaking inviting public comment on a proposal to amend the Board's assessment rule (Regulation TT -- 12 CFR part 246) to address amendments made by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The proposed amendments to Regulation TT raise the minimum threshold for being considered an assessed company from $50 billion to $100 billion in total consolidated assets for bank holding companies and savings and loan holding companies and adjust the amount charged to assessed companies with total consolidated assets between $100 billion and $250 billion to reflect changes in supervisory and regulatory responsibilities resulting from EGRRCPA.

Comments must be received on or before January 9, 2020.

UPDATE: the Board published a correction of the due date for comments at 84 FR 63820 on 1/19/2019.

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":

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