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08/02/2021

Reminder to update EIN information

The IRS has issued a press release urging entities with Employer Identification Numbers (EINs) to update their applications if there has been a change in the responsible party or contact information. IRS regulations require EIN holders to update responsible party information within 60 days of any change by filing Form 8822-B, Change of Address or Responsible Party - Business. It is critical that the IRS have accurate information in cases of identity theft or other fraud issues related to EINs or business accounts.

The data around the "responsible parties" for business-type entities is often outdated or incorrect, meaning that the IRS does not have accurate records of whom to contact for identity theft issues. This means a time-consuming process to identify the point of contact so the IRS can inquire about a suspicious filing. As a result, the IRS intends to step up its awareness efforts aimed at businesses, partnerships, trusts and estates, charities and other entities that are EIN holders.

Starting in August, the IRS will begin sending letters to approximately 100,000 EIN holders where it appears the responsible party is outdated. All EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (Social Security number, Individual Taxpayer Identification Number or EIN) of the true principal officer, general partner, grantor, owner or trustor. The IRS defines the responsible party as the individual or entity who "controls, manages, or directs the applicant entity and the disposition of its funds and assets."

08/02/2021

Treasury meets with Bank Policy Institute CEOs

The Treasury Department has published a readout of Deputy Secretary of the Treasury Wally Adeyemo's July 30, 2021, meeting with three CEOs from the Bank Policy Institute (BPI) Board of Directors to discuss issues related to economic inclusion.

Adeyemo emphasized the pivotal role the banking industry plays in ensuring the successful implementation of Treasury programs. He highlighted the expanded Child Tax Credit as an area where public-private partnership is key to delivering critical tax relief to working families, because the majority of eligible families receive the benefit via direct deposit and checks. Adeyemo and BPI CEOs also promoted continued investment in underserved communities through partnerships with Community Development Financial Institutions and minority depository institutions and direct investment, including investing in technology infrastructure and providing advisory services for these critical institutions.

Also discussed was the need for banks to continue working to improve access to low-cost accounts through Bank On and utilize financial literacy education programs as a way to build economic inclusion and foster an equitable economic recovery. Adeyemo highlighted the need to expand access to financial services for unbanked and underbanked populations and discussed with the BPI CEOs additional options to provide low-cost services to populations in need, especially through digital tools.

08/02/2021

OFAC sanctions Cuban police force and leaders

On Friday, OFAC sanctioned two Cuban individuals and one Cuban entity under the authority of Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world. Friday’s sanctions expand upon Treasury’s July 22, 2021 designations by sanctioning additional persons in connection with actions to suppress peaceful, pro-democratic protests in Cuba that began on July 11. The targets of Friday’s designations are OSCAR CALLEJAS VALCARCE, EDDY SIERRA ARIAS, and the POLICIA NACIONAL REVOLUCIONARIA (PNR) of the Cuban Ministry of the Interior.

Identification information on Callejas, Sierra, and the PNR can be found in the July 30, 2021, BankersOnline OFAC Update.

07/29/2021

IRS to send 1.5 million more refunds

The IRS has announced that another 1.5 million taxpayers will receive refunds averaging more than $1,600 as it continues to adjust unemployment compensation from previously filed income tax returns.

The American Rescue Plan Act of 2021, which became law in March, excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000. Since May, the IRS has issued over 8.7 million unemployment compensation refunds totaling over $10 billion. The IRS will continue reviewing and adjusting tax returns in this category this summer.

Payments by direct deposit in this fourth round of refunds began yesterday (July 28) and refunds by paper check will begin tomorrow (July 30).

07/29/2021

OFAC sanctions Syrian regime prisons, officials and armed group

On Wednesday, The Treasury Department announced that OFAC had sanctioned eight Syrian prisons run by the Assad regime’s intelligence apparatus that have been sites of human rights abuses against political prisoners and other detainees. OFAC also designated five senior security officials of regime entities that control these detention facilities.

OFAC also sanctioned Syrian armed group Ahrar al-Sharqiya, which operates in northern Syria, and two of the group's leaders, for abuses against civilians.

For identification information on the designated individuals and entities, see our BankersOnline OFAC Update for July 28, 2021.

07/27/2021

Call Report revisions proposed

FDIC FIL-53-2021, issued yesterday, reports that the FDIC, FRB, and OCC are requesting comment on a proposal to revise and extend the Consolidated Reports of Condition and Income (Call Reports). The proposed changes would clarify instructions for reporting of deferred tax assets (DTAs) consistent with a proposed rule on tax allocation agreements (see FIL-29-2021) and a new item related to the final rule on the standardized approach for counterparty credit risk (see FIL-74-2019).

Comments must be submitted on or before September 20, 2021. The proposed changes would be effective with the December 31, 2021, Call Report.

07/26/2021

Weather damage relief for areas of Michigan

FDIC FIL-52-2021, issued Friday, announced steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Michigan affected by severe storms, flooding, and tornadoes June 25–26, 2021. The FDIC is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe weather. Banks that extend repayment terms, restructure existing loans, or ease terms for new loans in a manner consistent with sound banking practices can contribute to the health of the local community and serve the long-term interests of the lending institution. Banks may receive favorable Community Reinvestment Act consideration for community development loans, investments, and services in support of disaster recovery.

07/26/2021

Payoneer settles with OFAC

OFAC has announced a settlement with Payoneer Inc., a publicly traded New York-based online money transmitter and provider of prepaid access. Payoneer agreed to remit $1,400,301.40 to settle its potential civil liability for 2,260 apparent violations of multiple sanctions programs. Payoneer processed payments for parties located in the Crimea region of Ukraine, Iran, Sudan, and Syria, and also processed payments on behalf of sanctioned persons on OFAC’s List of Specially Designated Nationals and Blocked Persons (“SDN List”).

According to OFAC's Enforcement Release, Payoneer’s sanctions compliance program deficiencies at the relevant times—including with respect to screening, testing, auditing, and transaction review procedures—enabled persons in these jurisdictions and regions and on the SDN List to engage in approximately $802,117.36 worth of transactions. The settlement amount reflects OFAC’s determination that 2,241 of Payoneer’s apparent violations were not voluntarily self-disclosed, 19 were voluntarily self-disclosed, and all transactions were non-egregious.

07/26/2021

Nacha opt-in program for returning bogus unemployment benefits

Nacha has created an Opt-In Program to better facilitate the return and recovery of potentially fraudulent unemployment benefits originally paid by ACH credits. The program is designed to help improve the recovery of funds that may have been disbursed to inappropriate parties. The Opt-In Program is beginning with two participating Originating Depository Financial Institutions (ODFIs), participating on behalf of eight states: Florida, Idaho, Kansas, Minnesota, Montana, Nebraska, Utah and Wisconsin. Receiving Depository Financial Institutions (RDFIs) do not need to opt in to return funds to the participating states.

  • An RDFI can return a partial or full amount to a state unemployment agency via a "Program Return."
  • Program Returns are treated as an ODFI Request for Return under the Nacha Rules, in which the ODFI indemnifies the RDFI for the return of funds.
  • A Program Return may be sent via a new, forward CCD Credit Entry, using a data format specified by the opt-in rules. Such a CCD credit can be for the full amount or for a partial amount of the original ACH credit.
  • An RDFI may also send the full amount of the original ACH credit via an R06 return if the participating ODFI has indicated acceptance.
  • Program Returns, in accordance with program rules, may be sent for two years after the settlement date of the original ACH credit.

For additional information and program documents, visit Nacha's Unemployment Benefits Return Opt-In Program webpage.

07/23/2021

NCUA to propose simplified capital adequacy measure

The National Credit Union Administration Board has approved a proposed rule that would create a simplified measure of capital adequacy for complex credit unions, and a request for information on the use of digital assets and related technologies by federally insured credit unions.

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