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01/17/2024

FDIC updates Consumer Compliance Examination Manual

The January 2024 update of the FDIC's Consumer Compliance Examination Manual affects two chapters of the Manual:

  • Fair Lending Scope and Conclusions Memo (IV-3.1) was updated with technical and formatting changes related to the FDIC's shift from SOURCE to FOCUS.
  • Expedited Funds Availability Act (VI-1.1) was updated with technical changes related to regulatory dollar-amount thresholds.

Editorial note: The $5,000 amount in the bullet list in the left column of page VI-1.6 was missed in the update. It should be $5,525. The update itself should have been made about four years ago when Regulation CC was updated. There is another threshold inflation adjustment that should be announced this year with an effective date of July 1, 2025.

01/16/2024

U.S. targets commodity shipments financing terrorists

On Friday, the Treasury Department reported that OFAC designated two companies in Hong Kong and the United Arab Emirates for shipping Iranian commodities on behalf of the network of Iran-based, Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)-backed Houthi financial facilitator Sa’id al-Jamal. OFAC also identified four vessels as blocked property in which these companies have an interest. The revenue from the commodity sales supports the Houthis and their continued attacks against international shipping in the Red Sea and the Gulf of Aden.

For the names and identification information of the designated entities and vessels, see the January 12, 2024, BankersOnline OFAC Update.

01/16/2024

FinCEN updates FAQs on Beneficial Ownership info

FinCEN has updated its FAQs on Beneficial Ownership Information Reporting. New or updated information dated January 12, 2024, can be found in these sections:

  • C (Reporting Company)
  • D (Beneficial Owner)
  • E (Company Applicant)
  • F (Reporting Requirements)
  • L (Reporting Company Exemptions)
  • M (FinCEN Identifier)

01/10/2024

FinCEN analysis of ID-related suspicious activity

Yesterday, FinCEN released a Financial Trend Analysis (FTA), Identity-Related Suspicious Activity: 2021 Threads and Trends, on information in BSA Reports filed in 2021. FinCEN’s analysis found that approximately 1.6 million reports (42% of the reports filed that year) related to identity—indicating $212 billion in suspicious activity.

The report, which is part of what FinCEN has previously referred to as its Identity Project, explores how bad actors exploit identity-related processes involved in processing transactions as well as opening and accessing accounts. FinCEN identified over 14 typologies commonly indicated in identity-related BSA reports. The most frequently reported were fraud, false records, identity theft, third-party money laundering, and circumvention of verification standards. These top five typologies accounted for 88% of identity-related BSA reports and 74% of the total identity-related suspicious activity amount reported during calendar year 2021.

Trends found in the BSA reporting include:

  • Although identity-related suspicious activity impacted all types of financial institutions, depository institutions filed the most identity-related BSA reports, around 54% of all identity-related filings.
  • While most financial institutions in the identity-related BSA dataset reported impersonation as their top identity exploitation, money services businesses most often reported circumvention of verification.
  • The report found that compromised credentials have a disproportionate financial impact as compared to other types of identity exploitation.

FinCEN’s FTAs highlight the value of information filed by financial institutions in accordance with the BSA. Additional reports on a variety of topics are located on FinCEN’s website.

01/09/2024

Yellen remarks at FinCEN

On Monday, Secretary of the Treasury Janet L. Yellen offered remarks on the current status of the Beneficial Ownership Information Reporting initiative. She noted that in just the first week of reporting, over 100,000 filings have been made. She said, "We’re also making reporting as easy as possible for the small businesses at the heart of the American economy so that the benefits for small businesses, and for all of us, will far outweigh what should be a relatively straightforward effort to comply. The reporting process is simple, quick, and free. A small business shouldn’t need a certified public accountant or lawyer. To help companies understand the requirements, we’re hard at work getting the word out. We’re coordinating with federal and state government offices and partnering with the Small Business Administration to hold virtual and in-person events. We’ve published guidance in multiple languages, including specifically for small businesses. We have a Contact Center that is live and taking questions."

On other topics, Secretary Yellen said, "In line with the U.S. Strategy on Countering Corruption, we are ... pursuing increased transparency in our real estate and investment adviser sectors. We aim to issue a notice of proposed rulemaking early this year that will be an important step toward bringing greater transparency to residential real estate transactions, and we are considering next steps to address risks associated with commercial real estate."

01/09/2024

CFPB announces civil penalty inflation adjustments

The Consumer Financial Protection Bureau has announced its adoption of a final rule to adjust for inflation the maximum amount of each civil penalty within the CFPB’s jurisdiction. The adjustments are required by the Federal Civil Penalties Inflation Adjustment Act of 1990 (Inflation Adjustment Act), as amended.

The changes are effective January 15, 2024. The inflation multiplier used this year was 1.03241. The Bureau's notice has been published at 89 FR 1787 in the January 11, 2023, Federal Register.

01/02/2024

NCUA issued one prohibition notice in December

The National Credit Union Administration has announced it issued an Notice of Prohibition to Andrea Alice Nedow, a former teller/member service representative at Traverse Catholic Federal Credit Union, Traverse City, Michigan, after a finding that she made unauthorized withdrawals from member accounts. She was later prosecuted for embezzlement by local law enforcement, and, on January 24, 2023, she pleaded guilty to two charges of embezzlement.

01/02/2024

FinCEN opens BOI registry

FinCEN yesterday announced it has begun to accept Beneficial Ownership Information reports. Existing reporting companies have until January 1, 2025, to register. Reporting companies newly created or registered in 2024 have 90 days after receiving actual or public notice that their company's creation or registration is effective.

01/02/2024

FDIC November enforcement actions

The FDIC has released a list of enforcement actions it took in November 2023.

  • Horicon Bank, Horicon, Wisconsin, was assessed a $23,000 civil money penalty for engaging in a pattern or practice of violations of the Flood Disaster Protect Act and FDIC regulations.
  • Removal and Prohibition Orders were issued against:
    • Sheree Leanne Carter, formerly a teller at Rockland Trust Company, Rockland, Massachusetts, after the FDIC found, and Carter neither admitted nor denied that over a span of 16 years she stole funds from the bank by taking cash from her teller drawer and cash intended for the bank's ATMs. manipulated the bank's systems and records to create fictitious transactions before audits and to cancel those transactions after the audits were completed, to avoid detection and conceal her embezzlement for personal gain of approximately $430,000.
    • Lladira Hernandez, formerly a client success representative at Central Valley Community Bank, Fresco, California, after the FDIC determined, and Hernandez neither admitted nor denied that, between May and August 2022, she initiated unauthorized ACH debits from four separate customers; and also fraudulently created an online banking profile for a customer, linked her own accounts to it and, after
      resigning from the bank, initiated unauthorized transfers.
    • William J. Burnell, formerly the chief credit officer of NBC Bank, New Orleans, Louisiana, after the FDIC determined, and he neither admitted nor denied, that during 2015 and 2016 he approved loans to borrowers that he knew were not creditworthy. An earlier Order for Assessment of a Civil Money Penalty against him was terminated.
  • Cease and Desist Consent Orders were issued to Peoples Bank, Munster, Indiana; Commenity Servicing, LLC, Columbus, Ohio; First Fed Bank, Port Angeles, Washington; Liberty Bank, Inc., Salt Lake City, Utah, and; Brighton Bank, Brighton, Tennessee.

12/29/2023

Network financing Houthi attacks on shipping sanctioned

OFAC has designated one individual and three entities responsible for facilitating the flow of Iranian financial assistance to Houthi forces and their destabilizing activities. Among those designated are the head of the Currency Exchangers Association in Sana’a, and three exchange houses in Yemen and Türkiye. These persons have facilitated the transfer of millions of dollars to the Houthis at the direction of U.S.-designated Sa’id al-Jamal, who is affiliated with Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).

For the names and identification information of the designated parties, see the December 28, 2023, BankersOnline OFAC Update.

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