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The Labor Department announced yesterday that it has issued a final rule that expands overtime pay protections by increasing the salary thresholds required to exempt a salaried bona fide executive, administrative or professional employee from federal overtime pay requirements.

Effective July 1, 2024, the salary threshold will increase to the equivalent of an annual salary of $43,888 and increase to $58,656 on Jan. 1, 2025. The July 1 increase updates the present annual salary threshold of $35,568 based on the methodology used by the prior administration in the 2019 overtime rule update. On January 1, 2025, the rule’s new methodology takes effect, resulting in the additional increase. In addition, the rule will adjust the threshold for highly compensated employees. Starting July 1, 2027, salary thresholds will update every three years, by applying up-to-date wage data to determine new salary levels.

The U.S. Department of Labor has announced it has finalized its Retirement Security Rule to protect the millions of workers who are saving for retirement diligently and rely on advice from trusted professionals on how to invest their savings. This final rule will achieve this by updating the definition of an investment advice fiduciary under the Employee Retirement Income Security Act and the Internal Revenue Code.

The final rule and related amended prohibited transaction exemptions require trusted investment advice providers to give prudent, loyal, honest advice free from overcharges. These fiduciaries must adhere to high standards of care and loyalty when they recommend investments and avoid recommendations that favor the investment advice providers’ interests — financial or otherwise — at the retirement savers’ expense. Under the final rule and amended exemptions, financial institutions overseeing investment advice providers must have policies and procedures to manage conflicts of interest and ensure providers follow these guidelines.

The updated definition of an investment advice fiduciary, which takes effect on September. 23, 2024, applies when trusted financial services providers give compensated investment advice to retirement plan participants, individual retirement account owners and plan officials responsible for administering plans and managing their assets.

On Tuesday, a Treasury Department news release reported that OFAC has sanctioned two companies and four individuals involved in malicious cyber activity on behalf of the Iranian Islamic Revolutionary Guard Corps Cyber Electronic Command (IRGC-CEC). These actors targeted more than a dozen U.S. companies and government entities through cyber operations, including spear phishing and malware attacks. In conjunction with today’s action, the U.S. Department of Justice and the Federal Bureau of Investigation unsealed an indictment against the four individuals for their roles in cyber activity targeting U.S. entities.

Treasury also reported that OFAC had sanctioned two leaders of al-Qa’ida-aligned terrorist group Jama’at Nusrat al-Islam wal-Muslimin (JNIM) for hostage-taking of U.S. persons in West Africa. The Department of State concurrently announced its designation of seven JNIM leaders.

For names and identification information of the designated parties, see the April 23, 2024, BankersOnline OFAC Update.

Yesterday was Earth Day. FinCEN issued a reminder to financial institutions to remain vigilant in identifying and reporting suspicious activity related to environmental crimes. Environmental crimes frequently involve transnational criminal activity related to several of FinCEN’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) National Priorities, including corruption, fraud, human trafficking, and drug trafficking.

FinCEN has previously published resources to help stakeholders identify and combat environmental crimes and associated illicit financial activity. FinCEN’s December 2021 Financial Threat Analysis contains information on wildlife trafficking threat patterns and trend information identified in Bank Secrecy Act (BSA) data. FinCEN’s Notice FIN-2021-NTC4 provides financial institutions with specific Suspicious Activity Report (SAR) filing instructions and highlights illicit financial activity related to several types of environmental crimes such as wildlife trafficking and illegal logging, fishing, or mining. SAR filings, along with effective implementation of BSA compliance requirements, are crucial to identifying and stopping environmental crimes and related money laundering.

On Friday, the Treasury Department reported that OFAC has imposed sanctions on two entities — Mount Hebron Fund and Shlom Asiraich — for their roles in establishing fundraising campaigns on behalf of Yinon Levi and David Chai Chasdai, two violent extremists who were sanctioned on February 1, 2024, in connection with violence in the West Bank.

Concurrently, the Department of State designated Ben Zion Gopstein, the founder and leader of Lehava, an organization whose members have engaged in destabilizing violence affecting the West Bank.

For identification information on the designated parties, see BankersOnline’s April 19, 2024, OFAC Update.

The OCC has published the spring 2024 edition of the Interest Rate Risk Statistics Report. The report presents interest rate risk data gathered during examinations of OCC-supervised midsize and community banks and federal savings associations. The report provides statistics on interest rate risk exposures and risk limits for different midsize and community bank populations, including

• all OCC-supervised midsize and community banks with reported data
• banks by asset size
• banks by charter type
• minority depository institutions

The publication is intended as a resource for the industry, examiners, and the public.

The FDIC has published at 89 FR 29222 in today's Federal Register the proposed Statement of Policy on Bank Merger Transactions that it announced last month. Comments are due by June 19, 2024.

FinCEN has updated its Beneficial Ownership Information FAQs to include new questions and updated information about reporting companies, beneficial ownership through trusts, and access to beneficial ownership information, among other topics. New and updated FAQs carry an April 18, 2024, date.

The Treasury Department yesterday announced that, in response to Iran's April 13 attack on Israel, OFAC has targeted 16 individuals and two entities enabling Iran’s UAV production, including engine types that power Iran’s Shahed variant UAVs, which were used in the April 13 attack. OFAC also designated five companies in multiple jurisdictions providing component materials for steel production to Iran’s Khuzestan Steel Company (KSC), one of Iran’s largest steel producers, or purchasing KSC’s finished steel products.

OFAC also sanctioned three subsidiaries of Iranian automaker Bahman Group, which have continued to materially support the IRGC and other entities designated pursuant to counterterrorism authorities, including Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL). Bahman Group itself was concurrently designated for owning these entities.

For the names and identification information of the designated parties, see the April 18, 2024, BankersOnline OFAC Update.

The OCC has released a list of recent enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with them. Actions taken against national banks and federal savings associations include:

• A Formal Agreement with First FS & LA of Lorain (Lorain, Ohio) for unsafe or unsound practices, including those related to the failure of the board of directors and bank management to develop and implement an appropriate strategic plan; appropriately manage and control liquidity and interest rate risks; implement effective Bank Secrecy Act (“BSA”) /Anti-Money Laundering internal controls; and appoint a BSA Officer with the requisite skills and expertise to oversee the BSA program, and the bank’s violation of law, rule, or regulation, including a violation relating to conducting ongoing customer due diligence.
• A Cease and Desist Order against Heritage Bank, N.A. (Spicer, Minnesota), for unsafe or unsound practices, including those related to capital adequacy, capital and strategic planning, credit review, ongoing monitoring of the credit portfolio, liquidity and liquidity management practices, and the allowance methodology.
• A Formal Agreement with Minnstar Bank, N.A. (Lake Crystal, Minnesota), for unsafe or unsound practices, including those related to concentrations of credit, credit underwriting and administration, appraisals, allowance for credit losses, strategic planning, incentive compensation, capital planning, and liquidity risk management, and violations of law, rule, or regulation, including those relating to loans to executive officers, lending limits, and appraisals.

Actions against institution-affiliated parties included:

• An Order of Prohibition and for payment of a $40,000 civil money penalty (CMP) against Norman Desembrana, former operations senior manager at the Philadelphia, Pennsylvania, lockbox facility of Wells Fargo Bank, N.A., Sioux Falls, South Dakota, for concealing a significant backlog of unprocessed customer checks.
• An Order of Prohibition and for payment of a $300,000 CMP against Gary Judd, former chairman and CEO, Sterling Bank and Trust, FSB, Southfield, Michigan, for failing to appropriately oversee the bank’s operation of its Advantage Loan Program or supervise bank insiders involved in the implementation of the Advantage Loan Program.
• An Order of Prohibition and for payment of a $400,000 CMP against Scott Seligman, an institution-affiliated party of Sterling Bank and Trust, FSB, Southfield, Michigan, for participating in the operation of the Advantage Loan Program, contributing to a poor compliance culture at the bank, and pressuring bank employees to quickly underwrite Advantage Loan Program loans.
• An Order of Prohibition against Jackie M. Snider, former AVP at a Sulphur, Oklahoma, branch of Vision Bank, N.A., Ada, Oklahoma, for misappropriating at least $95,430 via the diversion of funds from customers’ accounts and taking efforts to conceal such misappropriation.
• An Order of Prohibition against John Edmonds, former VP at JPMorgan Chase Bank N.A., Columbus, Ohio, based on his conviction for commodities fraud and conspiracy to commit wire fraud, commodities fraud, commodities price manipulation, and spoofing.
• An Order of Prohibition against Christian Trunz, former executive director at JPMorgan Chase Bank N.A., Columbus, Ohio, based on his conviction for spoofing and conspiracy to commit spoofing.