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On Wednesday, January 31, 2024, the Department of the Treasury announced three OFAC actions.

• Sanctioning of Iranian IRGC-QF and Hizballah Financial Network: OFAC sanctioned three entities — Mira Ihracat Ithalat Petrol, Yara Offshore SAL, and Hydro Company for Drilling Equipment Rental — and one individual — Ibrahim Talal al-Uwayr — located in Lebanon and Türkiye for providing critical financial support to an Iranian Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Hizballah financial network.
• Sanctioning of three entities — Alkhaleej Bank Co Ltd., Zadna International Co for Development Ltd., and Al-Fakher Advanced Works Co. Ltd. — for their role in undermining the peace, security, and stability of Sudan.
• Designation of two entities closely associated with Burma’s military regime — the Shwe Byain Phyu Group of Companies and Myanma Five Star Line Company Limited — and four cronies — Tin Latt Min, Theint Win Htet, Win Paing Kyaw, and Thein Win Zaw,

For identification information on the entities and individuals designated in the three OFAC actions, see BankersOnline's January 31, 2023, OFAC Update.

Yesterday, the Treasury Department reported that OFAC designated two cybersecurity experts — Mu’min Al-Mawji Mahmud Salim and Sarah Jamal Muhammad Al-Sayyid — affiliated with the Islamic State of Iraq and Syria (ISIS) for providing ISIS leadership and supporters with cybersecurity training, enabling their use of virtual currency, and supporting the terrorist group’s recruitment. Additionally, OFAC designated Faruk Guzel, an ISIS financial facilitator involved in transferring funds to ISIS-affiliated individuals in Syria.

For identification information on the three designated individuals, see BankersOnline's January 30, 2024, OFAC Update.

On January 29, the Office of the Comptroller of the Currency requested comment on a proposed rulemaking that would update the OCC’s rules under 12 C.F.R. § 5.33 for business combinations involving national banks and federal savings associations. The proposal also includes a policy statement to clarify the OCC’s review of applications under the Bank Merger Act (BMA).

The proposed rulemaking is part of the OCC’s effort to enhance transparency around its process of reviewing transactions under the BMA. It would also serve to provide additional guidance to stakeholders around the OCC’s review of applications. The proposed policy statement specifically would discuss:

• General principles for the OCC’s review of applications under the BMA, including indicators for applications likely consistent with approval and applications that raise supervisory or regulatory concerns
• The OCC’s consideration of the financial stability; managerial and financial resources and future prospects; and convenience and needs statutory factors under the BMA
• The OCC’s decision process for extending the public comment period or holding a public meeting

A comment period of 60 days will open when the notice of proposed rulemaking is published.

• Overview of the proposed rulemaking
• Related OCC Bulletin 2024-4
• UPDATE 2/13/2024: Published at 89 FR 10010 on 2/13/2024, with a comment period ending 4/15/2024.
• UPDATE 4/10/2024: The OCC has extended until June 15, 2024, the comment period on this proposal.

On January 29, 2024, FinCEN announced it had issued a finding and notice of proposed rulemaking that identifies Al-Huda Bank, an Iraqi bank that serves as a conduit for terrorist financing, as a foreign financial institution of primary money laundering concern. Along with its finding, FinCEN proposed imposing a special measure that would sever the bank from the U.S. financial system by prohibiting domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank.

UPDATED: Comments on the notice of proposed rulemaking will be accepted for 30 days (through March 1, 2024) following its January 31, 2024. publication at 89 FR 6074 in the Federal Register.

In a coordinated action, OFAC designated Hamad al-Moussawi, owner and chairman of Al-Huda Bank, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF. His identifying information can be found in this BankersOnline OFAC Update.

FinCEN has published [89 FR 5995] in the January 30, 2024, Federal Register a Notice and Request for Comments on the proposed information collection associated with requests made to FinCEN, by certain persons, for beneficial ownership information, consistent with the requirements of the Beneficial Ownership Information Access and Safeguards final rule.

Included in the notice are FinCEN's estimates of the burden to state, local and tribal law enforcement agencies, and for financial institutions. An appendix to the Notice and Request for Comments summarizes the proposed data fields to be submitted by authorized recipients. Financial institutions would submit the reporting company name, TIN type, and TIN, and a check mark agreeing to a system-provided certification of compliance statement.

Comments will be accepted through April 1, 2024.

Note: This proposal does not in any way change the current rule in 31 C.F.R. § 1010.230 requiring financial institutions to obtain certification of beneficial ownership information from its customers. Amendments to that rule are not expected until at least the end of 2024.

The Treasury Department has reported the OFAC and the United Kingdom have taken joint action against a network of individuals that targeted Iranian dissidents and opposition activists for assassination at the direction of the Iranian regime. The network is led by Iranian narcotics trafficker Naji Ibrahim Sharifi-Zindashti (Zindashti) and operates at the behest of Iran’s Ministry of Intelligence and Security (MOIS). Treasury reports that Zindashti’s network has carried out numerous acts of transnational repression including assassinations and kidnappings across multiple jurisdictions in an attempt to silence the Iranian regime’s perceived critics. The network has also plotted operations in the United States.

For identification information on the targeted individuals, see this BankersOnline's OFAC Update.

The Treasury Department reported yesterday that OFAC has imposed sanctions on key officials of the forces of Ansarallah, commonly known as the Houthis, for their support of acts of terrorism targeting commercial shipping. Yesterday’s action targets four individuals who have supported the Houthis’ recent attacks against commercial vessels in the Red Sea and Gulf of Aden, including holding civilian crews hostage. Concurrent with OFAC’s designations, the United Kingdom also imposed sanctions on these key figures of Houthi forces.

For the names and identification information of the four individuals, see yesterday's BankersOnline OFAC Update.

Federal Reserve Financial Services has announced its launch of FedDetect Anomaly Notification for FedACH Services, a new risk management service that helps financial institutions identify anomalous activity and supplement their fraud detection and alerting tools. This new addition to FedACH Risk Management Services allows financial institutions to receive notifications via secure email when anomalous FedACH activity is detected.

The new service can help financial institutions catch potential fraud attempts with account verification through micro-entry return and forward-entry monitoring. It can also help originating financial institutions adhere to Nacha rules around notifications of change and avoid future rule violations.

This morning, FinCEN published [89 FR 4820] a final rule to reflect inflation adjustments to its civil monetary penalties as mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. This rule adjusts certain maximum civil monetary penalties within the jurisdiction of FinCEN to the amounts required by that Act.

The rule amends 31 CFR 1010.821 and is effective today.

In anticipation of potential new NSF fees for transactions rejected "right at the swipe, tap, or click," the CFPB has announced a proposed new rule that would prevent non-sufficient funds fees on transactions that financial institutions decline in real time. These types of transactions include declined debit card purchases and ATM withdrawals, as well as some declined peer-to-peer payments. The proposed rule would cover banks, credit unions, and certain peer-to-peer payment companies.

Financial institutions almost never charge fees for transactions that are declined in real time at the swipe, tap, or click. For example, a $100 grocery purchase with a debit card may be declined in real time when the account only has $90. These types of transactions are not processed like Automated Clearing House transactions, and are generally not assessed fees. The CFPB said it is taking proactive steps to ensure that financial institutions do not impose these fees, which can occur for a host of reasons that are out of the consumer’s control. Specifically, as technology advances, financial institutions may be able to decline more transactions right at the swipe, tap, or click. These transactions include ATM, debit or prepaid card, online transfer, in-person bank teller, and certain person-to-person transactions. The CFPB’s proposed rule would consider fees for transactions declined in real time to be abusive and unlawful under the Consumer Financial Protection Act.

The proposal would add new Part 1042, "Nonsufficient Funds Fees," to Chapter X of Title 12 of the Code of Federal Regulations. Comments on the proposal will be accepted through March 25, 2024.

PUBLICATION UPDATE: Published at 89 FR 6031 in the January 31, 2024, Federal Register.