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Treasury acts to counter ransomware

The Department of the Treasury on Tuesday announced a set of actions focused on disrupting criminal networks and virtual currency exchanges responsible for laundering ransoms, encouraging improved cyber security across the private sector, and increasing incident and ransomware payment reporting to U.S. government agencies, including both Treasury and law enforcement.

Tuesday's actions included OFAC's designation of SUEX OTC, S.R.O. (SUEX), a virtual currency exchange, for its part in facilitating financial transactions for ransomware actors. The designation was made under the authority of Executive Order 13694, for providing material support to the threat posed by criminal ransomware actors. As a result of yesterday’s designation, all property and interests in property of the designated target that are subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. Additionally, any entities 50% or more owned by one or more designated persons are also blocked. In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action.

For identification information for Suex OTC, S.R.O., see the September 21, 2021, BankersOnline OFAC Update.

OFAC also released an Updated Advisory on Potential Sanctions Risks for Facilitating Ransomware Payments. The Advisory emphasizes that the U.S. government continues to strongly discourage the payment of cyber ransom or extortion demands and recognizes the importance of cyber hygiene in preventing or mitigating such attacks. OFAC has also updated the Advisory to emphasize the importance of improving cybersecurity practices and reporting to, and cooperating with, appropriate U.S. government agencies in the event of a ransomware attack. Such reporting, as the Advisory notes, is essential for U.S. government agencies, including law enforcement, to understand and counter ransomware attacks and malicious cyber actors.


Webinar: Money Laundering from Environmental Crime

The FATF has announced it will conduct a webinar on Money Laundering from Environmental Crime on September 30, 2021 from 1:00–2:00 p.m. CEST [7:00–8:00 a.m. EDT]. An international panel will discuss important aspects of the FATF Report on the topic, including how to identify red-flag information to help detect and trace the illicit finances of criminals engaged in environmental crimes. Participants will also debate how to overcome challenges, such as the lack of governmental or institutional prioritization, limited awareness and data, de-risking, and limited domestic and international co-ordination. Online registration is open.


First Regulation Crowdfunding case filed by SEC

The SEC yesterday filed a complaint charging three individuals and one issuer with conducting a fraudulent scheme to sell nearly $2 million of unregistered securities through two crowdfunding offerings. The SEC also charged the registered funding portal and its CEO, who placed the offerings on the portal’s platform.

According to the SEC's complaint, Robert Shumake, with his associates Nicole Birch and Willard Jackson, conducted fraudulent and unregistered crowdfunding offerings through two cannabis and hemp companies, Transatlantic Real Estate LLC and 420 Real Estate LLC. Shumake, with assistance from Birch and Jackson, allegedly hid his involvement in the offerings from the public out of concern that his prior criminal conviction could deter prospective investors.

The complaint alleges that Shumake and Birch raised $1,020,100 from retail investors through Transatlantic Real Estate, and Shumake and Jackson raised $888,180 through 420 Real Estate. Shumake, Birch, and Jackson allegedly diverted investor funds for personal use rather than using the funds for the purposes disclosed to investors.

TruCrowd Inc., a registered funding portal, and its CEO, Vincent Petrescu, allegedly hosted the Transatlantic Real Estate and 420 Real Estate offerings on TruCrowd's platform. Petrescu allegedly failed to address red flags including Shumake's criminal history and involvement in the crowdfunding offerings, and otherwise failed to reduce the risk of fraud to investors.

The SEC's Office of Investor Education and Advocacy has issued an investor bulletin on crowdfunding and investor alerts on the red flags of investment fraud. Additional information is available at


OCC enforcement order against MUFG Union Bank

On Monday, the OCC announced it had issued a cease and desist order against MUFG Union Bank, N.A., after finding unsafe or unsound practices regarding technology and operational risk management and noncompliance with the Interagency Guidelines Establishing Information Security Standards contained in Appendix B to 12 CFR Part 30.

The order requires the bank to improve longstanding technology and operational risk governance, technology risk assessments, internal controls, and staffing deficiencies to address the unsafe or unsound practices.


Bureau sues software company

The CFPB yesterday announced it had filed a lawsuit in federal district court accusing a California-based software company and its owner of providing assistance to illegal credit-repair businesses. The CFPB alleges that Credit Repair Cloud and CEO Daniel Rosen have violated the FTC's Telemarketing Sales Rule (TSR) and the Consumer Financial Protection Act of 2010 (CFPA) by providing substantial assistance or support to credit-repair businesses that use telemarketing and charge unlawful advance fees to consumers. The CFPB’s lawsuit seeks relief for harmed consumers from the defendants, disgorgement of their unjust gains, an injunction to stop their illegal conduct, and civil penalties.

Credit Repair Cloud is a California-based corporation founded by Rosen. According to the CFPB, since 2013, Credit Repair Cloud has sold software and other tools to help others start and operate credit-repair businesses. A credit-repair business provides consumers with goods or services that purport to remove derogatory information from credit reports or otherwise improve a person's credit history, credit record, or credit rating. Such companies that use telemarketing are covered by the TSR, and may not request or receive fees from a consumer until the company has provided that consumer with a credit report that shows the promised results and that was issued more than six months after such results were achieved.

The CFPB’s complaint alleges that Rosen and Credit Repair Cloud are providing substantial assistance to credit-repair companies that use telemarketing to reach consumers and charge unlawful advance fees under the TSR. Specifically, the CFPB alleges that Rosen and Credit Repair Cloud have encouraged the credit-repair businesses that use their services – including trainings, materials, and software -- to charge unlawful advance fees and Rosen and Credit Repair Cloud knew or consciously avoided knowing that these customers were charging advance fees in violation of the TSR.


Expanded tax benefits for charitable donations explained

The IRS has issued an explanation of how expanded tax benefits can help both individuals and businesses give to charity before the end of this year.

The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted last December, provides several provisions to help individuals and businesses who give to charity. The new law generally extends through the end of 2021 four temporary tax changes originally enacted by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The changes include:

  • Deduction for individuals who don't itemize; cash donations up to $600 qualify
  • 100% limit on eligible cash contributions made by itemizers in 2021
  • Corporate limit increased to 25% of taxable income
  • Increased limits on amounts deductible by businesses for certain donated food inventory


    South Carolina credit union liquidated

    The NCUA has announced it has liquidated Community Owned Federal Credit Union [also known as C O Federal Credit Union] in Charleston, South Carolina, after determining the credit union was insolvent and had no prospect for restoring viable operations. C O Federal Credit Union served 711 members and had deposits of approximately $2.8 million, according to its most recent Call Report. Chartered in 1966, the credit union served members of The Citizen Committee of Charleston County, South Carolina and members of the International Longshoreman's Association — Local #1422 in Charleston, South Carolina.

    C O FCU is the third federally insured credit union liquidation in 2021.


    FinCEN SAR guidance regarding child exploitation

    FinCEN has issued Notice FIN-2021-NTC3 to call attention to an increase in online child sexual exploitation (OCSE). The Notice provides financial institutions with specific suspicious activity report (SAR) filing instructions, and highlights some financial trends related to OCSE.

    The Notice requests the use of specific terms and definitions when describing suspicious activity involving OCSE.


    New Ethiopian-related Executive Order and OFAC activity

    President Biden has signed Executive Order 14046, “Imposing Sanctions on Certain Persons with Respect to the Humanitarian and Human Rights Crisis in Ethiopia.” The E.O. declares a national emergency with respect to the crisis and provides the Secretary of the Treasury, in consultation with the Secretary of State, with authorities to impose a range of targeted sanctions on persons determined, among other things, to be responsible for or complicit in actions or policies that expand or extend the ongoing crisis or obstruct a ceasefire or peace process in northern Ethiopia or commit serious human rights abuse.

    Concurrent with the issuance of the new E.O., Treasury issued three general licenses, which authorize official activities of certain international organizations and other international entities, certain transactions in support of nongovernmental organizations’ (NGOs) activities, and certain transactions related to the exportation or reexportation of agricultural commodities, food, medicine, and medical items. Treasury also issued a series of six FAQs to provide additional clarity and guidance regarding the non-application of OFAC’s 50 Percent Rule to the property and interests in property of persons blocked pursuant to this E.O., as well as additional information on the activities authorized by the new Ethiopia General Licenses.

    The Department of the Treasury also announced that OFAC has designated members of a network of Lebanon- and Kuwait-based financial conduits that fund Hizballah. OFAC also designated members of an international network of financial facilitators and front companies that operate in support of Hizballah and Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).

    For links to the Ethiopia-related Executive Order and the related General Licenses and FAQs, and identification information on the designated Hizballah supporters, see BankersOnline's OFAC Update.

    UPDATE 9/21/2021: This story has been updated to include the Executive Order number and a link to its publication in the Federal Register.


    Business customers demand faster payments

    The Federal Reserve's FedPayments Improvement group reports on a Federal Reserve survey of more than 2,000 businesses that revealed that three of every four businesses now consider it important to offer faster payments, and nine in ten businesses expect to be able to make and receive faster payments within three years – including instant payments, a type of faster payment that credits the payee’s deposit account within seconds of payment initiation.

    The survey found that not only were a majority of businesses already using some form of faster payments, but that most expect to be using instant payment options by 2023 or sooner, which coincides with the Federal Reserve’s timeline for the new FedNow Service rollout.


    Missouri apartment owners charged with discrimination

    HUD has announced it has charged Daniel J. Felder and Andrea Williams, as co-guardians and conservators of the Felder Peter King Estate of Ward Protectee, the Estate, and Eric Felder, the owners and property manager of duplex and triplex apartments in St. Charles, Missouri, with housing discrimination for allegedly refusing to rent an apartment to a prospective tenant because he has two children.


    Former IT manager charged in $8M insider scheme

    The Securities and Exchange Commission has announced insider trading charges against Dayakar R. Mallu, of Orlando, Florida, who generated gains and avoided losses totaling over $8 million by trading in the securities of his former employer, Mylan N.V., ahead of four public announcements between October 3, 2017, and July 29, 2019.

    The SEC’s complaint alleges that Mallu received material nonpublic information about Mylan's unannounced earnings, drug approvals by the U.S. Food and Drug Administration, and impending merger with a division of Pfizer Inc. from his friend, a Mylan insider. The complaint alleges that Mallu traded on that information, and shared a portion of his trading profits with the Mylan insider by making cash payments in India.


    HUD vacant note sale

    HUD has announced it will conduct a competitive bid HUD-held vacant note sale (HVLS 2022-1) on November 10, 2021. The sale will include approximately 1,730 reverse mortgage notes secured by properties where the borrower is deceased and not survived by a non-borrowing spouse. Consistent with the Biden-Harris Administration’s September 1, 2021, announcement that more HUD-owned properties should be returned to future owner-occupancy, HUD will offer up to 50 percent of the notes in the multi-loan pools for bids first by eligible non-profit organizations and units of state and local government. Previous sales prioritized approximately 10 percent of the mortgage notes for this purpose.


    Application period for $180M+ in HUD COVID-19 funding

    HUD has announced it is expanding the application period from four to six months for owners of multifamily properties participating in assisted housing programs to apply for more than $180 million in supplemental operating funds to support expenses for protecting residents and staff from COVID-19. Funds can be used to cover expenses incurred between April 1, 2021, and October 31, 2021.


    SBA awards $5.4M in competition prizes

    The SBA has announced 84 winners for the Growth Accelerator Fund Competition (GAFC) and eight winners for the Small Business Innovation Research (SBIR) Catalyst competition, a new component aimed at spurring investment in underrepresented communities within the innovation economy at scale, receiving a combined total of $5.4 million in awards.


    OCC lists enforcement actions

    The OCC has released a list of recent enforcement actions against OCC-regulated institutions and individuals affiliated with such institutions.

    Included were previously announced civil money penalties against Cadence Bank, N.A. (Atlanta, GA) and Wells Fargo Bank, N.A. (Sioux Falls, SD). Also included were:

    • a $40,500 civil money penalty order against Washington Federal Bank, N.A. (Seattle, WA) for a pattern or practice of violations of the Flood Disaster Protection Act
    • a Formal Agreement with Anna-Jonesboro National Bank (Anna, IL)
    • a Removal/Prohibition order against Tracy Rethwisch, a former customer service representative for American National Bank of Minnesota (Baxter, MN), after an OCC finding that she misappropriated approximately $14,450 in cash from her teller drawer.


    FDIC announces fund for mission-driven banks

    The FDIC has announced the launch of a new Mission-Driven Bank Fund, a capital investment vehicle being developed by the FDIC to support insured Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs). As anchor investors, Microsoft and Truist Financial Corporation will lead the investment fund. In addition, Discovery, Inc. will join as a founding investor in the Fund bringing the combined initial commitment to $120 million, with additional investments expected.


    School District charged by SEC

    The SEC has charged a San Diego County school district, Sweetwater Union High School District, and its former Chief Financial Officer, Karen Michel, with misleading investors who purchased $28 million in municipal bonds.

    According to the SEC's complaint against Michel and its order against Sweetwater, in April 2018, Sweetwater and Michel provided investors with misleading budget projections that indicated the district could cover its costs and would end the fiscal year with a general fund balance of approximately $19.5 million, when in reality the district was engaged in significant deficit spending and on track to a negative $7.2 million ending fund balance. The order finds that Michel managed the bond offering for the district and was aware of reports showing that the projections were untenable and contradicted by known actual expenses. Nevertheless, as stated in the order, Sweetwater and Michel included the projections in the April 2018 bonds' offering documents and also provided them to a credit rating agency that rated the district, while omitting that the projections were contradicted by internal reports and did not account for actual expenses. Additionally, the complaint alleges that Michel signed multiple certifications falsely attesting to the accuracy and completeness of the information included in the offering documents.


    Guidance to assist banks in Pennsylvania

    The FDIC has issued FIL-67-2021 with guidance to help financial institutions and facilitate recovery in areas of Pennsylvania affected by Hurricane Ida.


    OFAC targets drug traffickers and al-Qa'ida network

    The Treasury Department has announced that OFAC has identified Zulma Maria Musso Torres as a significant foreign narcotics trafficker pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). Musso Torres (a.k.a. “La Patrona” or “La Señora”) is the leader of an international drug trafficking organization primarily based in Santa Marta, Magdalena, Colombia.

    Musso Torres is assisted by her two sons, Washington Antunez Musso and Juan Carlos Reales Britto, and her husband, Luis Antonio Bermudez Mejia, who were also designated for providing material support to the narcotics trafficking activities of Musso Torres.

    Also designated yesterday were two Colombian entities, Exclusive Import Export S.A.S. and Poligono Santa Marta S.A.S., that are owned, controlled, or directed by, or act for or on behalf of, Antunez Musso and Reales Britto.

    Treasury also reported that OFAC yesterday imposed sanctions against five al-Qa’ida supporters operating in Turkey who provided a range of financial and travel facilitation services to al-Qa’ida.

    For identification information on all of the individuals and entities OFAC designated yesterday, see the September 16, 2021, BankersOnline OFAC Update.


    Hsu lists OCC priorities

    In a presentation yesterday at the Exchequer Club, Acting Comptroller of the Currency Michael J. Hsu discussed the agency’s priorities regarding the importance of safeguarding trust in the banking system and of guarding against complacency. He stated “These two imperatives anchor my priorities and inform all that I do. They derive from my experiences around the financial crisis of 2008. The trauma of that event continues to cast a long shadow, especially on the people who depend every day on the banking system to work safely and fairly for them. Trust and vigilance can help us deal with the past, while also guiding us going forward.”

    Hsu also discussed his four key priorities for the OCC: (1) reducing inequality, (2) adapting to digitalization, (3) acting on climate change, and (4) guarding against complacency.


    NCUA MDI mentoring grant round to reopen

    Federally insured credit unions with both the minority depository institution and low-income designations are eligible to apply for the National Credit Union Administration’s MDI mentoring grants between October 11 and October 29. This grant round will provide approximately $100,000 to low-income credit unions with the MDI designation to support mentoring relationships that allow larger, experienced credit unions the opportunity to provide guidance to other MDIs.


    FTC opens rulemaking petition process

    The Federal Trade Commission has announced it voted yesterday to make significant changes to enhance public participation the agency’s rulemaking, to increase public participation and accountability around the work of the FTC.

    The Commission approved a series of changes to the FTC’s Rules of Practice designed to make it easier for members of the public to petition the agency for new rules or changes to existing rules that are administered by the Commission. The changes were described as a key part of the work of opening the FTC’s regulatory processes to public input and scrutiny. This is a departure from the previous practice, under which the Commission had no obligation to respond to or otherwise address petitions for agency action.

    Among the changes are:

    • More clarity for those seeking to file petitions related to rulemaking with regard to information that is required with submissions, as well as guidance on the data that can be helpful to the Commission in evaluation petitions.
    • A new requirement that the Commission publish all petitions for rulemaking that it receives in the Federal Register and solicit public comment about those petitions.
    • A new requirement that the Commission provide petitioners with a specific point of contact in the agency, and that the Commission provide a response to petitioners on its decision to either act on or deny the petition.

    In addition to formal rulemaking, the new changes will also apply to requests by certain parties for special exemption from FTC rules, as well as petitions related to industry guidance issued by the Commission.


    SBA final rule on borrower appeals of PPP loan review

    The Small Business Administration is publishing a final rule at 86 FR 51589 in today's Federal Register on "Borrower Appeals of Final Small Business Administration Loan Review Decisions under the Paycheck Protection Program." This final rule adopts with changes portions of the previously issued interim final rule published at 85 FR 52883 in the Federal Register on August 27, 2020, on "Appeals of SBA Loan Review Decisions Under the Paycheck Protection Program."

    This final rule provides procedures for appeals of certain final SBA loan review decisions under the Paycheck Protection Program. It is retroactively effective from September 14, 2021.


    Second Quarter credit union data report

    The NCUA has released the Second Quarter 2021 Quarterly U.S Map Review, which indicates federally insured credit unions experienced strong asset and share-and-deposit growth over the year ending in the second quarter of 2021. Nationally, median asset growth over that period was 10.8 percent, compared to 10.0 percent in the year ending in the second quarter of 2020. The median growth in shares and deposits was 12.2 percent, compared to 11.1 percent a year ago. The median growth rate of loans outstanding was 1.9 percent, compared to 0.2 percent over the year ending in the second quarter of 2020.

    During the first half of 2021, 81 percent of federally insured credit unions had positive net income, compared to 80 percent during the first half of 2020. Nationally, the median annualized return on average assets was 46 basis points in the first half of 2021, compared to 39 basis points in the first half of 2020.


    August 2021 G.17 Industrial Production data released

    The Federal Reserve has released August 2021 G.17 Industrial Production and Capacity Utilization data. Industrial production increased 0.4 percent in August after moving up 0.8 percent in July. Late-month shutdowns related to Hurricane Ida held down the gain in industrial production by an estimated 0.3 percentage point. Although the hurricane forced plant closures for petrochemicals, plastic resins, and petroleum refining, overall manufacturing output rose 0.2 percent. Mining production fell 0.6 percent, reflecting hurricane-induced disruptions to oil and gas extraction in the Gulf of Mexico. The output of utilities increased 3.3 percent, as unseasonably warm temperatures boosted demand for air conditioning.

    At 101.6 percent of its 2017 average, total industrial production in August was 5.9 percent above its year-earlier level and 0.3 percent above its pre-pandemic (February 2020) level. Capacity utilization for the industrial sector rose 0.2 percentage point in August to 76.4 percent, a rate that is 3.2 percentage points below its long-run (1972–2020) average.

    • PDF of G.17 report


    $51M for housing counseling agencies

    The HUD Office of Housing Counseling has announced it is making $51 million in grants available through a Notice of Funding Opportunity to support HUD-approved housing counseling agencies and intermediary organizations across the country. These comprehensive housing counseling grants will help hundreds of housing counseling agencies maintain and expand their services. The funding will also assist those homeowners and renters who continue to struggle financially as a result of the COVID-19 pandemic, particularly individuals and families of color who have been disproportionately affected by the pandemic.


    Some requirements for Enterprises' PSPAs suspended

    The Treasury Department and the Federal Housing Finance Agency have announced they have agreed to suspend certain requirements that were added on January 14, 2021, to the Preferred Stock Purchase Agreements (PSPAs) between Treasury and each of the Enterprises (Fannie Mae and Freddie Mac). FHFA will continue to measure, manage, and monitor the financial and operational risks of the Enterprises to ensure that they operate in a safe and sound manner and consistent with the public interest. During the suspension, FHFA will review the suspended requirements and consult with Treasury on any recommended revisions. These suspensions do not affect the Enterprises’ ability to build or retain capital.


    SIPPRA grant for Denver announced

    The Treasury Department has announced that it has offered the City and County of Denver, Colorado a Social Impact Partnership to Pay for Results Act (SIPPRA) Project grant in the amount of $5,512,000 and a SIPPRA Independent Evaluator grant in the amount of $826,800 for its Housing to Health (H2H) program, a permanent supportive housing program designed to reduce homelessness and increase housing stability. Once the grants are accepted by Denver through its legislative and executive process, Denver will be the second entity awarded funding under the SIPPRA program. Denver expects to present the offered SIPPRA grants to the City Council in early October.


    App Annie and founder to pay $10M for deceptive practices

    The Securities and Exchange Commission has announced that App Annie Inc., a leading alternative data provider for the mobile app industry, and its co-founder and former CEO and chairman Bertrand Schmitt have agreed to settle securities fraud charges for engaging in deceptive practices and making material misrepresentations about how App Annie's alternative data was derived. App Annie and Schmitt have agreed to pay more than $10 million to settle the matter, which is the SEC's first enforcement action charging an alternative data provider with securities fraud.

    The SEC order finds that App Annie and Schmitt violated the anti-fraud provisions of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Without admitting or denying the findings, App Annie and Schmitt consented to the entry of a cease-and-desist order under which App Annie is ordered to pay a penalty of $10 million, Schmitt is ordered to pay a penalty of $300,000, and Schmitt is prohibited from serving as an officer or director of a public company for three years.


    Additional emergency rental assistance funds released

    Treasury has announced it will make the remaining more than $13 billion in funding under the second wave of Emergency Rental Assistance (ERA2) available to the high-performing state and local government grantees.


    Expanding minority small business capital access

    The FDIC and OCC will host a webinar on September 16, 2021, from 10:00 a.m. to 11:30 a.m. EDT, intended to bring awareness to the specific credit and technical assistance needs of minority small business owners. Presenters will also discuss strategies on how traditional financial institutions can help meet the credit needs of this market directly and through mission-driven intermediaries. The event will include relevant updates from the bank regulatory agencies. Online registration is required.


    FDIC webinar on consumer complaint management

    The FDIC has posted FIL-66-2021 announcing its offering of a 90-minute webinar for FDIC-supervised institutions on October 5, 2021, to provide information and answer questions relating to consumer complaints management. The presentation will include a review of the most recent complaint data and will provide information to help banks with complaint management. It will also provide information on how the FDIC facilitates the resolution of complaints and how this information is used in supervision. Online registration for the webinar is required.


    OCC alert on counterfeit cashier's checks

    The OCC has issued Alert 2021-4 concerning counterfeit cashier’s checks bearing the name of Queensborough National Bank & Trust Company, Louisville, Georgia, which are being presented for payment nationwide in connection with various internet scams involving mystery shopping opportunities and lottery winnings. There are at least two known variations of counterfeit items in circulation, which resemble the bank's authentic item.

    Details of the alert can be seen in BankersOnline's Counterfeit Cashier's Check Alert.


    Comptroller's Handbook booklet updated

    The Office of the Comptroller of the Currency has issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The revised booklet:

    • replaces "An Examiner's Guide to Problem Bank Identification, Rehabilitation, and Resolution," dated January 2001.
    • incorporates OCC Bulletin 2018-33, "Prompt Corrective Action: Guidelines and Rescissions."
    • includes information regarding timely identification and rehabilitation of problem banks and advanced supervision, enforcement, and resolution when conditions warrant.
    • includes a comprehensive discussion of the OCC's authority under 12 CFR 6, "Prompt Corrective Action."
    • complements other booklets of the Comptroller's Handbook and topical OCC and interagency issuances.


    Refund checks sent to victims of abusive debt collector

    The Federal Trade Commission has announced that it is sending checks to 603 people who paid money they did not owe to a debt collector that used deceptive and abusive collection methods.

    In 2018, the FTC and State of New York alleged that Campbell Capital, LLC and its owner Robert Heidenreich, along with a number of other related companies, collected payments on debts from consumers that exceeded the amounts they allegedly owed. The defendants in the case were able to collect these funds by allegedly using tactics such as threatening that consumers would be arrested or served with legal papers at work if they did not make payments immediately. In some cases, according to the suit filed by the FTC and New York, the collectors pretended to be sheriff’s office employees or process servers when making such threats in phone calls with consumers.


    OFAC posts SDN List updates

    OFAC has issued an SDN List Update providing revised identification information for two entities subject to OFAC's Non-Proliferation [NPWMD] and Russian Harmful Foreign Activities [RUSSIA-EO14024] sanctions programs. For details on the updated information, see BankersOnline's September 13, 2021, OFAC Update.


    OCC to hold public hearing on former Wells Fargo executives

    A public hearing before an Administrative Law Judge will be held by the OCC beginning today, September 13, 2021, in Sioux Falls, South Dakota, to litigate enforcement actions, against Claudia Russ Anderson, former Community Bank Group Risk Officer, David Julian, former Chief Auditor, and Paul McLinko, former Executive Audit Director, of Wells Fargo Bank, N.A., Sioux Falls, South Dakota. This hearing represents the culmination of the OCC’s longstanding efforts to hold these individuals accountable for material failures in risk management and for consumer harm.

    The OCC is seeking an order of prohibition that would bar Ms. Russ Anderson from further participation in the conduct of the affairs of any insured depository institution. The OCC is seeking personal cease and desist orders against Mr. Julian and Mr. McLinko that would require them to take certain affirmative actions or refrain from certain conduct in any future involvement in the banking industry.

    As indicated in the notice of charges, the OCC is also seeking civil money penalties against each individual in amounts ”consistent with the law and evidence presented during the proceedings.”

    Access to the hearing will be available online or by phone via Zoom. Further information is available HERE on the OCC's website.


    FDIC launches 2nd Annual Academic Challenge

    The FDIC has announced the launch of its Second Annual Academic Challenge, a competition among teams of university and college students to address questions concerning the U.S. banking sector. The topic for this year’s challenge is “The Impacts of COVID-19 on the Banking Sector.”


    HMDA Filing Instructions Guides

    The FFIEC has posted the Filing Instructions Guide (FIG) for data collected in 2022 and the Supplemental Guide for Quarterly Filers for 2022.

    Links to current and historical FIGs and Supplemental Guides for HMDA filing are listed at


    Community bank partnerships with fintech companies

    The Federal Reserve Board has published a paper describing the landscape of partnerships between community banks and fintech companies. The paper captures insights gathered from extensive outreach with community banks, fintechs, and other stakeholders. The outreach involved discussions focused on the strategic and tactical decisions that support effective partnerships. Board Governor Bowman, said "This paper will be a valuable resource for community banks seeking to leverage the benefits of new technologies through partnerships with fintechs. As the paper underscores, it is vital that a community bank's strategic goals align with the fintech provider and that the bank develop a culture committed to ongoing innovation."


    San Antonio software company settles with OFAC

    OFAC has announced an $189,483 settlement with NewTek, Inc., a company headquartered in San Antonio, Texas, that develops and supplies live production and 3D animation hardware and software systems. The agreement settles NewTek’s potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR) that occurred between December 2013 and May 2018 when NewTek indirectly exported goods, technology, and services from the United States to Iran through third-country distributors.

    OFAC determined that NewTek voluntarily self-disclosed the apparent violations and that the apparent violations constitute a non-egregious case.


    COVID EIDL program enhanced

    SBA Administrator Isabella Casillas Guzman announced major enhancements to the COVID Economic Injury Disaster Loan (EIDL) program, a federal disaster relief loan designed to better serve and support small business communities still reeling from the pandemic, especially hard-hit sectors such as restaurants, gyms, and hotels. The SBA is ready to receive new applications immediately from small businesses looking to take advantage of these new policy changes. Key changes include:

    • Increasing the COVID EIDL cap: The SBA will lift the COVID EIDL cap from $500,000 to $2 million. Loan funds can be used for any normal operating expenses and working capital, including payroll, purchasing equipment, and paying debt.
    • Implementation of a deferred payment period: The SBA will ensure small business owners will not have to begin COVID EIDL repayment until two years after loan origination so that they can get through the pandemic without having to worry about making ends meet.
    • Establishment of a 30-day exclusivity window: To ensure Main Street businesses have additional time to access these funds, the SBA will implement a 30-day exclusivity window of approving and disbursing funds for loans of $500,000 or less. Approval and disbursement of loans over $500,000 will begin after the 30-day period.
    • Expansion of eligible use of funds: COVID EIDL funds will now be eligible to prepay commercial debt and make payments on federal business debt.
    • Simplification of affiliation requirements: To ease the COVID EIDL application process for small businesses, the SBA has established more simplified affiliation requirements to model those of the Restaurant Revitalization Fund.

    Eligible small businesses, nonprofits, and agricultural businesses in all U.S. states and territories can apply. More information on eligibility and application requirements is available at The last day that applications may be received is December 31, 2021. All applicants should file their applications as soon as possible.


    2020 Terrorist Assets Report

    The Office of Foreign Assets Control (OFAC) has released the Calendar Year 2020 Twenty-ninth Annual report to Congress on assets in the United States relating to terrorist countries and organizations engaged in international terrorism.


    Wells Fargo pays $250M for loss mitigation deficiencies

    The OCC has announced it has assessed a $250 million civil money penalty against Wells Fargo Bank, N.A, of Sioux Falls, S.D., and issued an Order to Cease and Desist based on the bank’s unsafe or unsound practices related to deficiencies in its home lending loss mitigation program and violations of the OCC's 2018 Compliance Consent Order. The OCC's action puts limits on the bank’s future activities until existing problems in mortgage servicing are adequately addressed.

    The cease and desist order requires the bank to take broad and comprehensive corrective actions to improve the execution, risk management, and oversight of the bank’s loss mitigation program. The order restricts the bank, while the order is effective, from acquiring certain third-party residential mortgage servicing and requires the bank to ensure that borrowers are not transferred out of the bank’s loan servicing portfolio until remediation is provided, except as required by an investor pursuant to a contractual right.

    For further details see the BankersOnline Penalty page.


    Vendors selected for FDIC RPP pilot

    The FDIC has chosen four companies—Novantas, Inc., Palantir Technologies Inc., PeerIQ, and S&P Global Market Intelligence, LLC —to propose a pilot consisting of testing new reporting and analytical tools with a small group of FDIC-supervised institutions on a voluntary basis. This is the next phase of an ongoing Rapid Phased Prototyping Competition (RPP). The RPP is designed to accelerate the adoption of modern technological tools to help financial institutions draw inferences from their data, and to improve structure, portability, and processing of data that may support more efficient operations and reporting.


    Guidance for financial institutions affected by Hurricane Ida

    FDIC FIL-63-2021 announces steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of New Jersey and New York affected by remnants of Hurricane Ida.


    Fed fines and bans former BNP Paribas banker

    The Federal Reserve Board has issued a consent prohibition and civil money penalty order against Bhushan Bhangale, a former data management and data quality professional at BNP Paribas New York Branch, and a former institution-affiliated party of BNP Paribas USA, Inc., New York, New York, and of BNP Paribas RCC Inc., Jersey City, New Jersey.

    The Board found that Bhangale received at least $100,000 in kickbacks in exchange for hiring contingent workers from certain information technology sourcing companies for work on projects at the bank, in violation of the bank's written policies.

    The Board's order prohibits Bhangale from participating in any manner in the affairs of any insured depository institution or any bank holding company or subsidiary, and directs that he pay a civil money penalty of $100,000.


    Changes to FTC FCRA Rules approved

    The Federal Trade Commission yesterday reported it has approved final revisions that would bring five rules that implement parts of the Fair Credit Reporting Act (FCRA) in line with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

    In separate notices, which will be published in the Federal Register shortly, the FTC approved largely technical changes that would clarify that five FCRA rules enforced by the FTC apply only to motor vehicle dealers. The Dodd-Frank Act, enacted in 2010, transferred rulemaking authority related to parts of the FCRA to the Consumer Financial Protection Bureau, narrowing the FTC’s FCRA rulemaking authority. The final revisions do not make substantive changes to the rules.


    CU net income, insured shares and deposits rise

    The National Credit Union Administration (NCUA) has reported federally insured credit unions reported net income growth of $11.9 billion in the second quarter of 2021, or 126.8 percent, over the same period one year ago. The increase in net income largely resulted from strong growth in other operating income and a decline in the provisioning for loan, lease, and credit loss expenses. Insured shares and deposits rose $196 billion, or 14.2 percent, to $1.58 trillion when compared to the second quarter of 2020.


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