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

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FHFA adjusts cap for community financial institutions

The Federal Housing Finance Agency (FHFA) has published a Federal Register notice adjusting the cap on average total assets that is used in determining whether a Federal Home Loan Bank member qualifies as a “community financial institution” (CFI) to $1,173,000,000, based on the annual percentage increase in the Consumer Price Index for all urban consumers (CPI-U), as published by the Department of Labor (DOL). These changes took effect on January 1, 2018.

The Federal Home Loan Bank Act confers upon insured depository institutions that meet the statutory definition of a CFI certain advantages over non-CFI insured depository institutions in qualifying for Bank membership, and in the purposes for which they may receive long-term advances and the collateral they may pledge to secure advances.


FSOC annual report

The Financial Stability Oversight Council (FSOC) has announced the publication of its 2017 annual report. The report describes significant financial market and regulatory developments, potential emerging threats to U.S. financial stability, recommendations to promote financial stability, and the activities of the FSOC. The report was developed collaboratively by the members of the FSOC and their agencies and respective staff and was approved unanimously by voting members of the FSOC. The report notes that the U.S. financial regulatory system should promote economic growth by preventing financial crises and also minimizing regulations that increase costs without commensurate benefits.

Additional recommendations in the annual report include:

  • The FSOC supports the creation of a private sector council of senior executives to collaborate with regulators and focus on the ways that cyber incidents could impact businesses.
  • Financial regulators should ensure that financial institutions have sufficient capital and liquidity to reduce their vulnerability to economic and financial shocks. Additionally, regulators should continue to monitor and assess the impact of rules on financial institutions and markets.
  • Regulators should continue to evaluate whether existing rules and standards for central counterparties and their clearing members are sufficiently robust to mitigate potential threats to financial stability.
  • The Securities and Exchange Commission should monitor and assess the effectiveness of money market mutual fund reforms that were implemented last year.
  • Regulators and market participants should complete work on alternative reference rates, and take appropriate steps to mitigate disruptions associated with the transition to a new reference rate.
  • Regulators and market participants should continue work to improve the coverage, quality, and accessibility of financial data, as well as data sharing between and among relevant agencies.


Fed ends actions against loan servicers, penalizing five

The Federal Reserve Board on Friday announced the termination of enforcement actions related to residential mortgage loan servicing and foreclosure processing issued in 2011 and 2012 against 10 banking organizations. The Board also announced civil money penalties totaling $35.1 million against five of these 10 organizations that had not yet been fined for their mortgage servicing deficiencies related to those enforcement actions. With the penalties announced today, the Board has now assessed penalties totaling approximately $1.1 billion against all Federal Reserve supervised firms under mortgage servicing enforcement actions.

The 10 banking organizations are: Ally Financial Inc.; Bank of America Corporation; CIT Group, Inc. (as successor to IMB HoldCo LLC); The Goldman Sachs Group, Inc.; HSBC North America Holdings, Inc.; JPMorgan Chase & Co.; Morgan Stanley; The PNC Financial Services Group, Inc.; SunTrust Banks, Inc.; and U.S. Bancorp. The termination of the actions was based on evidence of sustainable improvements in the firms' oversight and mortgage servicing practices.

The civil money penalties announced today are: $14 million against Goldman Sachs; $8 million against Morgan Stanley; $5.2 million against CIT (as successor to IMB); $4.4 million against U.S. Bancorp; and $3.5 million against PNC.

Also on Friday, the Board announced the termination by the Board and other federal financial regulatory agencies of joint enforcement actions issued in 2011 against Lender Processing Services, Inc. (LPS), which was succeeded by ServiceLink Holdings, LLC, and against MERSCORP Holdings, Inc., formerly known as MERSCORP, Inc. (MERS). These enforcement actions addressed deficiencies in the foreclosure-related services LPS and MERS each provided to entities regulated by the agencies. The termination of the actions was based on evidence of sustainable improvements in the foreclosure-related practices of LPS and MERS.


Goldmann Sachs Bank USA pays Flood Act penalty

The Federal Reserve Board has announced it has issued to Goldmann Sachs Bank USA, of New York, an order to pay a $90,000 civil money penalty for a pattern or practice of violations of the National Flood Insurance Act. See our Penalty Page for more information.


CFPB updates CMP caps

The Consumer Financial Protection Bureau has published in the January 12, 2017, Federal Register a final rule adjusting for inflation the maximum amount of each civil penalty within the Bureau’s jurisdiction. These adjustments are required by the Inflation Adjustment Act. The inflation adjustments mandated by the Inflation Adjustment Act serve to maintain the deterrent effect of civil penalties and to promote compliance with the law. The rule is effective January 15, 2017.

As examples of the inflation adjustments, the $50 per violation statutory civil money penalty for failure to provide an annual escrow statement under RESPA will be increased to $92, with an annual cap, originally $100,000, increased to $184,767. Intentional failures to provide the statement can result in penalties up to $185 per violation with no annual cap, an increase from the statutory amount of $100. The statutory maximum penalty of $10,000 per day for a first violation of the appraisal independence requirements under the Truth in Lending Act will be increased to $11,279.


Supervisory Insights focus on credit MIS

The FDIC has issued the Winter 2017 issue of Supervisory Insights, which includes articles on credit Management Information Systems (MIS) and recent results from the FDIC's Credit and Consumer Products/Services Survey. The survey results show that about one in ten banks may be considered to be at "high" credit risk, down from about 42 percent in 2010, when banks were in the middle of a backlog of classified loans. However, almost 70 percent of banks had either a credit or funding concentration.

The article on credit MIS emphasized the need for incorporating forward-looking risk indicators, rather than relying on delinquencies and charge-offs, which tend to be lagging indicators.


Board rule increases CMP maximums

The Federal Reserve Board has published a final rule [83 FR 1182] adjusting the amount of each civil money penalty maximum provided by law within its jurisdiction to account for inflation, as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The adjustments apply to penalties assessed on or after January 10, 2018, for violations occurring on or after November 2, 2015. For example, the statutory $2,000 maximum penalty per violation for violations of requirements to require certain violations of the National Flood Insurance Act, which had increased to $2,056 in January of last year, has now been set at $2,133 per violation. A table of the maximum CMP amounts is found in § 263.65 of the Board's Rules of Practice for Hearings, at 12 CFR Part 263.


Fed releases minutes of discount rate meetings

The Federal Reserve Bpard has released the minutes of its discount rate meetings from December 4 and 13, 2017.


Consumer credit growth

The Federal Reserve has issued November 2017 G.19 consumer credit data, which indicate that consumer credit increased at a seasonally adjusted annual rate of 8-3/4 percent. Revolving credit increased at an annual rate of 13-1/4 percent, while nonrevolving credit increased at an annual rate of 7-1/4 percent.


CFPB posts report on college card agreements

The CFPB has posted its 2017 annual College credit card agreements report to Congress. The Credit Card Accountability, Responsibility and Disclosure Act (“CARD Act”) requires the Bureau to submit to Congress, and to make available to the public, an annual report that lists information submitted to the Bureau concerning agreements between credit card issuers and institutions of higher education or certain organizations affiliated with such institutions. Affiliated organizations include fraternities, sororities, alumni associations, or foundations affiliated with or related to an institution of higher education.


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