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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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OFAC makes Magnitsky Act designations

Yesterday, OFAC designated five individuals and one entity under the Sergei Magnitsky Rule of Law Accountability Act of 2012 (the Magnitsky Act). In addition, the U.S. Department of State issued its annual submission to Congress on the U.S. Government’s actions to implement the Magnitsky Act.

Any property or interests in property of those designated within or that come within U.S. jurisdiction are blocked, and transactions by U.S. persons involving the designated persons are generally prohibited. Yesterday’s action brings the total number of individuals or entities designated by OFAC pursuant to the Magnitsky Act to 55. For identity information on yesterday's designees, see BankersOnline's OFAC Update.


Five banks fined $1.2B in Forex decisions

In two settlement decisions, the European Commission has fined five banks for taking part in two cartels in the Spot Foreign Exchange market for 11 currencies—Euro; British Pound; Japanese Yen; Swiss Franc; U.S., Canadian, New Zealand and Australian Dollars; and Danish, Swedish and Norwegian crowns. The first decision (so-called “Forex - Three Way Banana Split” cartel) imposes a total fine of €811,197,000 ($908.5 million) on Barclays, The Royal Bank of Scotland (RBS), Citigroup and JPMorgan. The second decision (so-called “Forex- Essex Express” cartel) imposes a total fine of €257,682,000 ($288.6 million) on Barclays, RBS and MUFG Bank (formerly Bank of Tokyo-Mitsubishi). UBS is an addressee of both decisions, but was not fined as it revealed the existence of the cartels to the Commission.


May FATF Business Bulletin

The Financial Action Task Force has posted its May Business Bulletin, with a brief update on recent FATF outcomes of interest to the private sector.

The 2019 Private Sector Consultative Forum was held May 6–7 at the United Nations Office on Drugs and Crime Headquarters in Vienna. The meeting was chaired by FATF President Marshall Billingslea from the United States. Over 300 private sector representatives, including from the financial sector, civil society, and FATF members and observers, participated in this year’s Private Sector Consultative Forum. Over the two days of the Forum, participants held constructive discussions on the issues of the importance of AML/CFT in the context of combating corruption, and latest trends/priorities of AML/CFT in the public and private sectors.


CFPB plans for RFA reg reviews

Yesterday, the Consumer Financial Protection Bureau (CFPB) published a notice on how it plans to periodically review regulations under the Regulatory Flexibility Act (RFA) and to request public input. Additionally, the Bureau published a notice requesting public input as part of its first RFA review examining the 2009 Overdraft Rule.

Section 610 of the RFA requires that agencies review certain rules within 10 years of their publication, and consider the rules’ effect on small businesses. The purpose of the review is to minimize any significant economic impact of the rules upon a substantial number of small entities, consistent with the stated objectives of applicable statutes. At the conclusion of each review, the Bureau will determine whether the rule should be continued without change, or should be amended or rescinded. The RFA requires each agency to consider specific factors, including:

  • The continued need for the rule;
  • The nature of public complaints or comments on the rule;
  • The complexity of the rule;
  • The extent to which the rule overlaps, duplicates, or conflicts with federal, state, or other rules; and
  • The time since the rule was evaluated or the degree to which technology, economic conditions, or other factors have changed the relevant market.

The public will have 61 days to comment on the CFPB’s plan after publication in the Federal Register.

The CFPB is also announcing the launch of its first such review, which is of the Overdraft Rule, which was issued by the Federal Reserve Board in 2009 to limit the ability of financial institutions to assess overdraft fees for paying automated teller machine (ATM) and one-time debit card transactions that overdraw consumers' accounts. The rule amended Regulation E. Yesterday's notice seeks comment on the economic impact of the Overdraft Rule on small entities. The public will have 47 days to comment after publication of the notice in the Federal Register.

UPDATE: Both proposals were published in the Federal Register on 5/15/2019. Comments on the plan for review of rules will be due by 7/15/2019. Comments on the RFA review of the Overdraft Rule will be due by 7/1/2019.


Fed Reserve supervision and regulation report

The Federal Reserve Board has posted its May 2019 Supervision and Regulation Report, which summarizes banking conditions and the Federal Reserve’s supervisory and regulatory activities. The report demonstrates the continued health and soundness of the banking industry. Figures in the report show that industry profitability ratios remain high, driven in part by the industry’s net interest margin reaching a six-year high.

The report also outlined 2019 supervisory priorities for firms in different Fed supervisory portfolios. Regional and community banks will see the Fed focus on credit concentrations in CRE and construction, cybersecurity and AML/BSA compliance. Regional banks will also see a focus on underwriting practices, M&A risks and internal audit. Community banks will experience Fed emphasis on ag lending and liquidity risk.


New Venezuelan sanctions

OFAC has determined that persons operating in the defense and security sector of the Venezuelan economy may be subject to sanctions. In addition, OFAC has designated two companies that operate in the oil sector of the Venezuelan economy and identified two vessels that transported oil from Venezuela to Cuba as blocked property owned by the two companies. The actions were taken pursuant to Executive Order 13850.

The Treasury Department's press release includes an incorrect link for identification details. For the correct identification details on the companies and vessels, see BankersOnline's OFAC Update.


CFPB shares practices for Child Savings Account programs

The Bureau has posted an article discussing the promising practices and lessons learned for Child Savings Account programs which offer participants opportunities to save for post-secondary education in dedicated accounts. The article cites four briefs illustrating how CSA programs have been designed to engage parents, children, and caregivers to increase enrollment and completion of post-secondary education:


FinCEN virtual currencies guidance and advisory

FinCEN has issued guidance document FIN-2019-G001, Application of FinCEN’s Regulation to Certain Business Models Involving Convertible Virtual Currencies (CVCs). The guidance is in response to questions raised by financial institutions, law enforcement, and regulators concerning the regulatory treatment of multiple variations of businesses dealing in CVCs.

FinCEN also issued an Advisory on Illicit Activity Involving Convertible Virtual Currency (FIN-2019-A002), to assist financial institutions in identifying and reporting suspicious activity related to criminal exploitation of CVCs for money laundering, sanctions evasion, and other illicit financing purposes. The advisory highlights prominent typologies, associated “red flags,” and identifies information that would be most valuable to law enforcement if contained in suspicious activity reports.


Fed proposes changes to service hours

The Federal Reserve yesterday requested comment on potential modifications to the Federal Reserve Banks' National Settlement Service (NSS) and Fedwire® Funds Service to support enhancements to the same-day automated clearinghouse (ACH) service. The Board also requested comment on corresponding changes to the Federal Reserve Policy on Payment System Risk related to a new posting time for transactions and an increased daylight overdraft fee.

In September 2018, NACHA's voting members approved amendments to NACHA's Operating Rules and Guidelines to establish a third same-day ACH processing and settlement window that would include a submission deadline of 4:45 p.m. ET and settlement at 6:00 p.m. ET. The later same-day ACH window would allow more institutions to use same-day ACH services during a greater portion of their business day and may promote greater adoption of same-day ACH and availability of the service to originators and end-users. The NACHA rules changes require adjustments to Federal Reserve services to provide for later NSS and Fedwire Funds Service activity.

UPDATE: Published in the 5/16/19 Federal Register, with a 60-day comment period ending 7/15/19.


New Iranian sanctions and FAQs issued

A new Executive Order has been issued by President Trump imposing sanctions with respect to the iron, steel, aluminum, and copper sectors of Iran. In connection with the issuance of the E.O., OFAC has published related FAQs.


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