Top Story Operations Related

The NCUA has announced that the Wisconsin Office of Credit Unions has served an order of liquidation on CTK Credit Union of Milwaukee (CTK) and immediately appointed the National Credit Union Administration as liquidating agent. The decision to liquidate CTK and discontinue operations was made after determining the credit union was insolvent and had no prospect for restoring viable operations. CTK, the first federally insured credit union liquidated in 2016, was a federally insured, state-chartered credit union that served 397 members and had assets of $163,197, according to CTK's most recent Call Report. Chartered in 2004, CTK served congregants of Christ the King Baptist Church of Milwaukee.

The U.S. Department of Justice announced on Friday, February 5, that the Department, the Department of Housing and Urban Development, the Consumer Financial Protection Bureau and the attorneys general of 49 states and the District of Columbia reached a $470 million agreement with HSBC Bank USA NA and its affiliates (collectively, HSBC) to address mortgage origination, servicing and foreclosure abuses.

In conjunction with that agreement, the Board of Governors of the Federal Reserve System announced its assessment of a $131 million penalty against HSBC North America Holdings, Inc., and HSBC Finance Corporation for deficiencies in residential mortgage loan servicing and foreclosure processing. The Board may remit (cancel) up to the full amount of this penalty to the extent HSBC satisfies the Department of Justice settlement or by providing funding for nonprofit housing counseling organizations. If HSBC does not satisfy the full $131 million penalty amount within two years, the remaining amount must be paid to the U.S. Department of Treasury.

See our Penalty Page entry for additional details.

The February issue of FedFocus features an article on how a bank used FedLine Advantage to streamline its wire processing. Other articles discuss the one-year anniversary of Strategies for Improving the U.S. Payment System, the Fed's spring conference schedule, and the role of the 12 Federal Reserve Bank presidents.

The OCC has released the 2016 schedule of workshops for directors of national community banks and federal savings associations. The examiner-led workshops provide practical training and guidance to support the safe and sound operation of community-based financial institutions. This year, the series includes a new session on Operational Risk.

The NCUA has announced that the Superintendent of the Ohio Division of Financial Institutions has placed Cory Methodist Church Credit Union, of Cleveland, Ohio, into NCUA conservatorship. The institution is a federally insured, state-chartered credit union with a low-income designation that has 710 members and assets of $1.6 million. An FAQ for members of the CU has been posted.

The SEC has announced that E.S. Financial Services (which is now named Brickell Global Markets), a Miami-based brokerage firm, has consented to an order to pay a $1 million penalty to settle charges that it violated anti-money laundering rules by allowing foreign entities to buy and sell securities without verifying the identities of the non-U.S. citizens who beneficially owned them. For additional information, see our Penalties Page entry.

OFAC has announced a Zimbabwe general license removal along with multiple deletions and updates of existing designations to its SDN List. See our OFAC Update for further information.

In coordination with its Wednesday field hearing in Louisville, Kentucky, the CFPB has announced steps the agency is taking to improve checking account access because of Bureau concerns that consumers are being sidelined by the lack of account options and by inaccurate information used to screen potential customers. The Bureau:

• sent letters to the 25 largest retail banks encouraging them to make available and widely market lower-risk deposit accounts that help consumers avoid overdrafting.
• issued a bulletin warning banks and credit unions that failure to meet accuracy obligations when they report negative account histories to credit reporting companies could result in Bureau action. The bulletin was also published today [81 FR 5992] in the Federal Register.
• provided consumers with guidance to help navigate the deposit account system
  • Selecting a lower-risk account
  • Managing your checking account
  • Being denied a checking account

The NCUA has announced that online registration is open for its free webinar on how to use the CUSO Registry (see earlier story). The webinar will begin at 2:30 p.m. ET on February 11.

The Federal Reserve System has announced that a report has been issued on the progress made with its initiative to enhance payment system speed, efficiency, and security. The initiative, which was announced in January 2015, has resulted in the creation of two task forces comprising more than 500 industry participants devoted to bringing about faster and more secure payments in the United States. The task forces have compiled 36 criteria that describe desired attributes of a faster payment system and can be used to assess the effectiveness of potential solutions.