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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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OFAC sanctions Venezuelan officials

On Monday, The Treasury Department announced that OFAC has designated four current or former Venezuelan government officials pursuant to Executive Order 13692, as part of Treasury’s ongoing efforts to highlight the economic mismanagement and endemic corruption that have been the defining features of the Maduro regime. The Venezuelan government’s actions have rendered Venezuela’s currency essentially worthless through hyperinflation, made food and medicine rare commodities through price controls, and triggered a humanitarian crisis that the Venezuelan government refuses to alleviate by changing policy or accepting international assistance.

Treasury also announced that the president signed a new Executive Order prohibiting U.S. persons and others subject to U.S. jurisdiction from engaging in all transactions related to, provision of financing for, and other dealings in any digital currency, digital coin, or digital token that was issued by, for, or on behalf of the Government of Venezuela after January 9, 2018.

As a result of today’s actions, all assets of the designated current or former officials of the Government of Venezuela that are subject to U.S. jurisdiction are frozen, and U.S. persons are generally prohibited from dealing with them. For their identity information and a link to the new Executive Order and new FAQs, see our OFAC Update.


New study of payment types lifecycles

The Secure Payments Task Force has announced its publication of Payment Lifecycles and Security Profiles, educational materials regarding the lifecycles, security characteristics and relevant laws and regs for most common payments. The materials were developed through the collaborative efforts of 200+ task force participants with diverse payments background and security expertise. Payment Lifecycles and Security Profiles provide perspectives related to:

  • The lifecycles of the most common payment types, covering enrollment, transaction flow and reconciliation
  • Security methods, identity management controls and sensitive data occurring at each step in the payment lifecycle
  • Relevant laws and regulations, and other references, as well as challenges and improvement opportunities related to each payment type

Consumers and organizations have a variety of options for making and receiving payments, and while these payment types share the ultimate goal of transferring funds from payer to payee, the path those funds travel can vary. Payment Lifecycles and Security Profiles can help financial institutions better understand the lifecycle of various payment types and potential improvement opportunities to help strengthen their payment security practices.


Court voids two key TCPA provisions

The U.S. Court of Appeals for the District of Columbia Circuit on Friday overturned two controversial portions of the FCC's 2015 Telephone Consumer Protect Act Order. Ruling in ACA International, et al. v. Federal Communications Commission and United States of America, the court reviewed four issues:

  • which devices constitute an automatic dialing system (ATDS or autodialer)
  • whether a call to a reassigned phone number violates the TCPA
  • whether the FCC's approach to revocation of a consumer's authorization to call was too broad
  • whether the FCC's exemption for certain healthcare-related calls was proper

Two of these provisions—the definition of an automatic dialing system and the provision on calls to reassigned numbers—were of particular concern to bankers, who argued that they stood in the way of their ability to send time-critical, non-marketing messages to customers, including alerts of suspicious activity, data security breach warnings, etc., using cell phone calls or text messages. And on those provisions, banks see relief in the court's ruling.

The court set aside the FCC's definition of an ATDS because of its “unchallenged assumption that a call made with a device having the capacity to function as an autodialer can violate the statute even if autodialer features are not used to make the call.” The court found that the Commission's interpretation that all smartphones qualify as autodialers is unreasonably and impermissibly expansive.

On the question of reassigned (or "ported") numbers and consent, the FCC's 2015 order provided a one-call "safe harbor" from liability. The court set aside the FCC’s treatment of reassigned numbers in its entirety, finding it could not, without consequence, void the one-call safe harbor, but leave in place the FCC’s interpretation that the “called party” refers to the current subscriber, and not the intended recipient.

The FCC order provisions relating to revocation of consent and exemptions for certain healthcare-related calls were allowed to stand.


FATF issues AML/Terrorist financing report and business bulletin

The Financial Action Task Force (FATF) has issued a report to G20 finance ministers and central bank governors regarding its recent and ongoing work to fight money laundering and terrorist financing. It also released a FATF Business Bulletin that provides a brief update on outcomes from the February 2018 FATF plenary meeting that are relevant for the private sector.


NCUA opens first CDFI qualification round

The NCUA has announced federally insured, low-income credit unions interested in becoming certified community development financial institutions may be eligible to use the regulator’s streamlined application process which runs from March 19 to April 6, 2018. Low-income credit unions can submit data on loan originations to the NCUA's Office of Credit Union Resources and Expansion, which will analyze each credit union's products and services and other indicators to determine its likelihood for certification. If the credit union is qualified to use the streamlined process, the NCUA will provide an application form and the data necessary to complete it. The credit union then completes the application and submits it to the CDFI Fund, which makes the final determination on the certification.


Treasury adjusts CMPs for inflation

The Department of the Treasury has published a final rule at 83 FR 11876 in today's Federal Register to adjust its civil monetary penalties ("CMPs") for inflation as mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. This rule adjusts CMPs within the jurisdiction of certain components (Terrorism Risk Program, OFAC, FinCEN) of the Department to the maximum amount required by the Act.


OCC issues list of enforcement actions

The OCC has released a list of new enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. The list includes one Order to Cease and Desist, one Order for a Civil Money Penalty against an individual, one Notice of Charges for Prohibition and Assessment of a Civil Money Penalty, and several terminations of earlier enforcement orders.

The individual civil money penalty of $20,000 was assessed against a current or former director of Merchants Bank of California, N.A., of Carson, California, who "caused, brought about, or participated in" the bank's violations of consent orders issued in 2010 and 2014 against the bank, and violations of 12 CFR §21.21 (Procedures for monitoring Bank Secrecy Act compliance). The OCC also found that the individual "failed to take necessary actions to ensure that the Bank corrected the deficiencies resulting in those violations. [See 2/28/2017 Top Story, California bank gets BSA/AML penalty.]

The Notice of Charges was issued to the former Chairman, CEO and controlling stockholder of The National Republic Bank of Chicago, Chicago, Illinois. The bank failed in 2014, and the FDIC estimated the loss to the Deposit Insurance Fund was more that $111 million. The respondent has 20 days from the date of service of the Notice to agree to the proposed orders of prohibition and $1 million civil money penalty, or request a hearing on the charges before an Administrative Law Judge.


Labor Department Fiduciary Rule vacated

A majority of a three-member panel of the U.S. Court of Appeals for the Fifth Circuit has vacated the Department of Labor's Fiduciary Rule in an opinion filed March 15, 2018 in the matter of Chamber of Commerce of the United States of America et al v. Unites States Department of Labor et al. Three business groups had filed suits challenging the Fiduciary Rule finalized by the Department in April 2016.

The Fiduciary Rule is a collection of seven different rules the reinterpret the term "investment advice fiduciary" and redefine exemptions to provisions concerning fiduciaries that appears in the Employee Retirement Income Security Act of 1974 (ERISA). The stated purpose of the new rules is to regulate in an entirely new way hundreds of thousands of financial service providers and insurance companies in the trillion dollar markets for ERISA plans and individual retirement accounts (IRAs). The business groups’ challenge proceeds on multiple grounds, including (a) the Rule’s inconsistency with the governing statutes, (b) DOL’s overreaching to regulate services and providers beyond its authority, (c) DOL’s imposition of legally unauthorized contract terms to enforce the new regulations, (d) First Amendment violations, and (e) the Rule’s arbitrary and capricious treatment of variable and fixed indexed annuities.

Although the district court rejected each of those challenges, the appeals court panel found merit in several of them, and ordered that the Rule be vacated entirely. Whether the Department of Labor will appeal the decision has not be determined.


NCUA to request comments on proposed bylaws changes

The NCUA Board held its third open meeting of 2018 at the agency’s headquarters on Thursday, and unanimously approved two items:

  • An advance notice of proposed rulemaking seeking stakeholder comments on ways to streamline, clarify, and improve the standard federal credit union bylaws.
  • A proposal to adopt suspension and debarment procedures to establish an administrative process protecting the federal government’s interest in only doing business with presently responsible contractors.


Chicago credit union conserved

The NCUA has placed Beverly Bus Garage Federal Credit Union, in Chicago, Illinois, into conservatorship. Members should experience no interruption in services at the credit union’s office at 11049 S. Fairfield Avenue, Chicago. An FAQ was posted by the NCUA for members who have questions regarding the conservatorship. The NCUA's action was due to unsafe and unsound practices at the credit union. While continuing normal member services, the NCUA will work to resolve issues affecting the credit union’s operations.


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