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Banker's Toolbox, Inc., leaders in compliance solutions for financial institutions, announced the acquisition of Georgia-based MainStreet Technologies (MST). MST is an industry leader in the loan risk management space. This acquisition adds to a strong and growing portfolio of compliance-related solutions and will continue to enhance the value Banker's Toolbox brings to both their customers and the industry. (Read full press release here.)

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OCC enforcement actions announced

The OCC has released a list of enforcement actions taken in June against OCC-supervised institutions and individuals affiliated with them. Among those actions were:

  • an Order for Removal and Prohibition, to Cease and Desist, and to pay a Civil Money Penalty in the amount of $27,500 issued to McKinley Dailey, a former loan officer of First Southern National Bank, Lancaster, Kentucky, who made “side loans” in his name and the name of an associate and transferred the proceeds to customers with the understanding the they would repay him, causing a loss to the bank. The order to cease and desist included an order that Dailey also pay restitution of the $26,385.97 loss to the bank.
  • a Formal Agreement with The First National Bank of Tahoka, Tohoka, Kentucky
  • a Prompt Corrective Action directive issued to City National Bank of New Jersey, Newark, New Jersey


Fed posts 2018 debit card fee data

The FRB has posted the following highlights on 2018 debit card interchange fees:

  • The average interchange fee per covered transaction was slightly lower in 2018 for transactions processed over dual-message networks than for those processed over single-message networks: $0.22 and $0.24, respectively.
  • By contrast, the average interchange fee per exempt transaction was considerably higher in 2018 for transactions processed over dual-message networks than for those processed over single-message networks: $0.54 and $0.25, respectively.
  • Since Regulation II took effect on October 1, 2011, neither the average interchange fee per covered transaction nor the average interchange fee per exempt transaction have changed significantly.
  • By contrast, the average interchange fee per exempt transaction increased slightly for dual-message networks in 2018 compared to previous years, while the average interchange fee per exempt transactions remained largely unchanged from 2017 to 2018 for single-message networks after declining in previous years.
  • Exempt transactions constituted 37.2 percent of total volume and 36.0 percent of total value for debit card transactions in 2018, with the proportions slightly higher for transactions processed over dual-message networks than for those processed over single-message networks. These proportions have changed little since Regulation II took effect.
  • The vast majority of prepaid card transactions were exempt from the interchange fee standard in 2018: 92.9 percent by volume and 94.1 percent by value. Overall, prepaid card transactions constituted 6.3 percent of total volume and 5.8 percent of total value for debit card transactions in 2018.


Members of global Iranian nuclear enrichment network designated

OFAC has announced it has designated a network of seven front companies and five agents involved in the procurement of sensitive materials for sanctioned elements of Iran’s nuclear program. The individuals and entities targeted are based in Iran, China, and Belgium and have acted as a procurement network for Iran’s Centrifuge Technology Company (TESA), which plays a crucial role in Iran’s uranium enrichment nuclear program through the production of centrifuges used in facilities belonging to the Atomic Energy Organization of Iran (AEOI). The targeted companies and agents are identified in BankersOnline's OFAC Update.


Treasury targets four under Global Magnitsky Act

The Treasury Department has announced that OFAC has designated two Iraqi military members, Rayan al-Kildani and Waad Qado, and two former Iraqi governors, Nawfal Hammadi al-Sultan and Ahmed al-Jubouri under 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. Many of the corruption- and abuse-related actions committed by these sanctioned individuals occurred in areas where persecuted religious communities are struggling to recover from the horrors inflicted on them by ISIS. For identity information on the four designees, see BankersOnline's OFAC Update.


NCUA approves rules changes and proposal

The National Credit Union Administration Board has announced it has approved three items on its recent meeting agenda:


HDHP/HSA chronic condition benefits expanded

The Treasury Department has announced the expansion of the preventive care benefits that may be provided by high deductible health plans (HDHPs) for a range of chronic conditions. The expanded list of preventive care benefits provided by an HDHP covers medical care services and prescription drugs for certain chronic conditions. Because individuals covered by an HDHP generally may establish and deduct contributions to a health savings account (HSA), they will be able to pay for services and treatment using untaxed funds in their HSAs.


Business email compromise attempts hit $301M a month

FinCEN has issued a report warning that manufacturing and construction firms are top targets for business email compromise attacks. The number of suspicious activity reports describing business email compromise (BEC) incidents reported monthly has grown rapidly, averaging nearly 500 per month in 2016, and above 1,100 per month in 2018. The total value of attempted BEC thefts, as reported in SARs, climbed to an average of $301 million per month in 2018 from only $110 million per month in 2016. For portions of this report, FinCEN analyzed randomly selected, statistically representative samples of SAR narratives on BEC incidents filed in 2017 and 2018 to assess BEC trends and methods.

FinCEN has established an exchange forum that focuses on BEC scams and issued an updated advisory [FIN-2019-A005] on email compromise fraud schemes that target vulnerable business processes.


FDIC amendments to simplify coverage determinations

The FDIC Board has approved amendments to two rules to simplify the process for making insurance determinations in the event a bank is placed into receivership.

Part 370 of the FDIC's Rules and Regulations, "Recordkeeping for Timely Deposit Insurance Determination," has been amended to address a number of issues. Most notably, it will now allow for an optional one-year extension of the rule's original compliance deadline of April 1, 2020. Other changes are more technical and are intended to address issues that became apparent as the FDIC staff worked with institutions to comply with Part 370 since it was first adopted in November 2016. The rule is currently applicable to the 32 FDIC-insured institutions that have more than two million deposit accounts and establishes recordkeeping requirements to facilitate rapid payment of insured deposits to customers if one of those institutions were to fail. The amendments to Part 370 will be effective October 1, 2019.

The FDIC also amended Part 330 of its Rules and Regulations, "Deposit Insurance Coverage," to expand the types of evidence it would consider when determining whether joint accounts qualify for increased deposit insurance coverage. This change affects all insured depository institutions regardless of size. The FDIC will continue to look to signature cards when determining deposit insurance coverage on joint accounts but may now also rely on other information contained in a bank's deposit account records that establishes co-ownership of a joint account, such as evidence that the institution has issued a mechanism for accessing the account to each co-owner or evidence of usage of the account by each co-owner.. This change does not expand or contract deposit insurance coverage for joint accounts and does not place any increased burden on depositors or FDIC-insured institutions. The amendment to § 330.9 of Part 330, which has been posted to BankersOnline's Regulations pages, will be effective 30 days after publication in the Federal Register. UPDATE: The amendments to Part 330 have been scheduled for publication on 7/22/2019, and they will be effective 8/21/2019.


Al-Qa'ida in Mali targeted

The Treasury Department announced Tuesday that OFAC, in concert with the Department of State, took action targeting Jama’at Nusrat al-Islam wal-Muslimin (JNIM), a previously designated west African terrorist group, by designating a JNIM leader as a Specially Designated Global Terrorist (SDGT) under Executive Order 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. OFAC designated Bah Ag Moussa for acting for or on behalf of JNIM. OFAC also designated Bah Ag Moussa for acting for or on behalf of JNIM leader Iyad ag Ghali, designated in 2013. The Department of State also designated Ali Maychou as an SDGT. For identity information, see BankersOnline's OFAC Update.


Second quarter Call Report materials

FDIC FIL-40-2019, issued on behalf of the FDIC, OCC, and Fed, provides information on the Consolidated Reports of Condition and Income (Call Report) for June 30, 2019. The Call Report does not include any new or revised data items this quarter. Most institutions must file their Call Reports by July 30, 2019.


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