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Free Webinar: The State of Sanctions
Thursday, June 8th - 1:00 PM CT

The sanctions landscape is evolving - exposing institutions to greater sanctions risks, operational and oversight challenges, and obligations to comply with sanctions administered by OFAC and other agencies. OFAC expert, Tim White, will address these issues and what you need to be aware of moving forward. (Register here.)

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25 Credit Unions pay call report late-filing penalties

The NCUA has announced that 25 federally insured credit unions subject to civil monetary penalties for filing late Call Reports in the fourth quarter of 2016 have consented to penalties totaling $10,365. Individual penalties ranged from $151 to $2,509. The Federal Credit Union Act requires NCUA to send any funds received through civil monetary penalties to the U.S. Treasury.


FDIC insured institutions earned $44B in first quarter

The FDIC has released its First Quarter 2017 Quarterly Banking Profile, which reports commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported aggregate net income of $44 billion in the first quarter of 2017, up $5 billion (12.7 percent) from a year earlier. The increase in earnings was mainly attributable to an $8.8 billion (7.8 percent) increase in net interest income and a $2.1 billion (3.4 percent) increase in noninterest income. A statement from Chairman Gruenberg was also released.


Counterfeit cashier’s checks of Texas bank

The OCC has issued an alert concerning at least eight variations of counterfeit cashier’s checks using the correct routing number of Legend Bank, NA, Bowie, Texas, that are being presented for payment nationwide in connection with a variety of online scams. See our Alerts & Counterfeits page for details.


Major Mexican heroin trafficking organization targeted by OFAC

OFAC has announced it has identified Mexican national Jose Luis Ruelas Torres and the Ruelas Torres Drug Trafficking Organization (Ruelas Torres DTO) as Significant Foreign Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). Jose Luis Ruelas Torres is the leader of the Ruelas Torres DTO, a family-based, independent opium and heroin production and distribution organization that smuggles multi-kilogram heroin quantities into the United States. OFAC is also designating ten key Ruelas Torres DTO associates as Specially Designated Narcotics Traffickers pursuant to the Kingpin Act for their role in the organization. For identification information see our OFAC Update.

As a result of this action, all assets of those designated that are based in the United States or that are in the control of U.S. persons are frozen, and U.S. persons are generally prohibited from engaging in transactions with them. Penalties for violations of the Kingpin Act range from civil penalties of up to $1,437,153 million per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines of up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines pursuant to the Title 18 of the United States Code for criminal violations of the Kingpin Act.


Gruenberg on connecting unbanked to mainstream financial services

In remarks at the Bank On 2017 conference in Washington, D.C., FDIC Chairman Gruenberg discussed the results of the FDIC's biennial National Survey of Unbanked and Underbanked Households. He noted that the most recent survey, published in October 2016, revealed that 7 percent of households were unbanked, lacking any account relationship at an insured institution. The survey also showed that an additional one-in-five (or 19.9 percent of) households were underbanked, defined as households in which a member had a bank account, but nevertheless turned to alternative financial services providers during the year to address one or more needs for transactional services such as check cashing or credit. Altogether, the survey reported that some 90 million Americans, or nearly 27 percent of households, are unbanked or underbanked. Gruenberg concluded, “Economic inclusion goes to the heart of the FDIC's mission of maintaining the public's confidence in the banking system. By working together to promote access to safe accounts and integrate financial services into important local initiatives, we expand opportunities for people to save, invest, meet basic financial goals, and more fully participate in our economy.”


OCC updates policies regarding violations

The OCC has issued Bulletin 2017-18 with an update of policies and procedures regarding violations of laws and regulations to become effective July 1, 2017. The updates are reflected in the “Bank Supervision Process,” “Community Bank Supervision,” “Federal Branches and Agencies,” and “Large Bank Supervision” booklets and other sections of the Comptroller’s Handbook and internal guidance. Among the changes will be a consistent format for communicating violations that includes legal citations and descriptions of the violation, a summary of relevant statutory or regulatory requirements, facts supporting the violation and root cause(s), corrective action(s) required, and the commitments of the bank's board and management to corrective action.


Labor's Fiduciary Rule effective June 9

The Department of Labor has issued Guidance FAQs on a phased-in implementation of its Fiduciary Conflict of Interest Rule and related exemptions beginning at midnight Friday, June 9, 2017, with certain provisions in the exemptions delayed to January 1, 2018. As a result, on June 9, investment advice providers to retirement savers will become fiduciaries, and the "impartial conduct standards" will become requirements of the exemptions. The Department will continue to examine the Fiduciary Rule in compliance with the president's February 3, 2017, memorandum.


Fed releases Reg II small issuer exemption lists

The Federal Reserve Board has published two lists of institutions intended to help payment card networks and others determine which card issuers qualify for the statutory exemption from the interchange fee standards in Regulation II (12 CFR Part 235). Section 920 of the Electronic Fund Transfer Act (added by the Dodd-Frank Act) required the Federal Reserve to establish interchange fee limits for debit card transactions. It exempts any debit card issuer that, together with its affiliates, has assets of less than $10 billion. The lists have been generated from the set of institutions in existence on December 31, 2016, according to the available data. The lists -- one of exempt institutions and the other of non-exempt institutions -- are available in three different formats.


Former Barclays trader fined and banned

The Federal Reserve Board has announced it has finalized administrative proceedings against Christopher Ashton, a former institution-affiliated party of Barclays Bank PLC, London, England, ordering that he pay a civil money penalty of $1.2 million and be permanently banned from employment in the banking industry. The enforcement proceedings against Ashton follow the Board's May 2015 enforcement actions against Barclays for unsafe and unsound practices related to its compliance and control failures concerning its practices in the FX markets. The Board at that time required Barclays to pay $342 million in penalties.


OCC announces enforcement actions

The Office of the Comptroller of the Currency has released enforcement actions taken in April 2017 against national banks, federal savings associations, and individuals currently and formerly affiliated with such institutions. .This month's list included the previously announced $15 million civil money penalty levied against U.S. Bank, N.A.. Also included was an $87,500 civil money penalty against a Texas bank for a pattern and practice of flood insurance regulation violations.

There was also an order that a former mortgage loan originator at a Chicago, Illinois, bank make restitution of $3,710, pay a penalty of $10,000, and accept a ban from employment or other involvement in the banking industry. Finally, a former Vice President and Financial Consultant of a Reno, Nevada, bank was banned from the industry for engaging in a check kiting scheme which at one time left his account at the bank overdrawn by $57,000 (which he covered before resigning from the bank).


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