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Treasury targets corruption in South Sudan

On Friday, Treasury announced that OFAC had sanctioned Ashraf Seed Ahmed Al-Cardinal and Kur Ajing Ater for their involvement in bribery, kickbacks and procurement fraud with senior government officials in South Sudan. OFAC is also designating five companies determined to be owned or controlled by Al-Cardinal, and one company owned or controlled by Ajing.

As a result of Friday’s action, all property and interests in property of the designated individuals and entities, and of any entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other designated persons, that are in the United States or in the possession or control of U.S. persons, are blocked and must be reported to OFAC.

For identification information on Al-Cardinal, Aijing, and the six entities, see BankersOnline's OFAC Update.


Citibank fined $30 million for OREO violations

The OCC announced on Friday a $30 million civil money penalty against Citibank, N.A., Sioux Falls, South Dakota, for violations related to the holding period for other real estate owned (OREO). Although the bank has repeatedly committed to implementing corrective actions, it has failed to do so, and violations have continued to occur.

For additional information, see "Citibank pays $30 million for OREO violations," in BankersOnline's Penalty pages.


CFPB issues final HMDA rule for relief to smaller institutions

The Consumer Financial Protection Bureau has announced its approval of a rule that finalizes certain aspects of its May 2019 Notice of Proposed Rulemaking under the Home Mortgage Disclosure Act (HMDA). It extends for two years the current temporary threshold for collecting and reporting data about open-end lines of credit under HMDA. The rule also clarifies partial exemptions from certain HMDA requirements that Congress added in the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).

The rule will be effective in two stages, on January 1, 2020, and January 1, 2022.

The CFPB intends to issue a separate final rule next year addressing changes to the permanent thresholds for closed-end and open-end transactions.


Federal Reserve to match regs to bank risk profiles

The Federal Reserve Board has finalized rules that tailor its regulations for domestic and foreign banks to more closely match their risk profiles. The rules reduce compliance requirements for firms with less risk while maintaining the most stringent requirements for the largest and most complex banks. The rules also establish a framework that sorts banks with $100 billion or more in total assets into four different categories based on several factors, including asset size, cross-jurisdictional activity, reliance on short-term wholesale funding, nonbank assets, and off-balance sheet exposure. Significant levels of these factors result in risk and complexity to a bank and can in turn bring risk to the financial system and broader economy.

These rules will become effective 60 days after Federal Register publication.


Fed announces intent to ban California banker

The Federal Reserve Board announced yesterday it has filed a Notice of Intent to prohibit and to issue a cease and desist order requiring restitution or reimbursement against Mai Ly-Vu, a former branch manager and vice president of Pacific Premier Bank, Irvine, California. If finalized, the Fed would ban her from the banking industry and require her to pay $18,700 in restitution to the bank. Ly-Vu is alleged to have engaged in unsafe or unsound banking practices and breach of fiduciary duty by failing to disclose her personal financial interests in extensions of credit by the bank to companies owned by her husband and other members of her immediate family.


ITIN expiration alert

The IRS has issued a reminder that taxpayers with expiring Individual Taxpayer Identification Numbers (ITINs) can get their them renewed more quickly and avoid refund delays next year by submitting their renewal application now. An ITIN is a tax ID number used by taxpayers who don't qualify to get a Social Security number. Any ITIN with middle digits 83, 84, 85, 86 or 87 will expire at the end of this year. In addition, any ITIN not used on a tax return in the past three years will expire. As a reminder, ITINs with middle digits 70 through 82 that expired in 2016, 2017 or 2018 can also be renewed.


Members of South African corruption network sanctioned

Treasury announced yesterday that OFAC has sanctioned members of a significant corruption network in South Africa that leveraged overpayments on government contracts, bribery, and other corrupt acts to fund political contributions and influence government actions. For identification information on the four individuals sanctioned and on two updates of existing listings, see BankersOnline's OFAC Update.


FDIC guidance for institutions affected by Tropical Storm Imelda

The FDIC has posted FIL-56-2019, which provides guidance on steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Texas affected by Tropical Storm Imelda.


FEMA to suspend communities from flood program

FEMA has published a notice [84 FR 54520] in this morning's Federal Register identifying communities in four states that are scheduled for suspension from the National Flood Insurance Program on October 18, 2019, due to their noncompliance with the floodplain management requirements of the program. If FEMA receives documentation that a listed community has adopted the required floodplain management measures prior to October 18, the suspension will not occur.

  • Mississippi: Columbia, Tylertown, and unincorporated areas of Lamar, Marion, and Walthall counties
  • Oregon: Depoe Bay, Newport, Salem, Siletz, Toledo, Turner, Waldport, Yachats, and unincorporated areas of Lincoln and Marion counties
  • South Carolina: Hardeeville and unincorporated areas of Jasper County
  • Texas: San Felipe, Sealy, and unincorporated areas of Austin County


FinCEN adjusts penalty caps

FinCEN has published a final rule [84 FR 54495] in the October 10, 2019, Federal Register making inflation adjustments of civil money penalties, as mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. The rule adjusts certain penalties within the jurisdiction of FinCEN to the maximum amount required by the Act. The amendments are effective on publication, and have been posted to 31 CFR 1010.821 (Penalty adjustment and table) in BankersOnline's Regulations pages.


Executive order on agency guidance documents

On October 9, 2019, the president issued an Executive Order on "Promoting the Rule of Law Through Improved Agency Guidance Documents." The Order declares that "it is the policy of the executive branch, to the extent consistent with applicable law, to require that agencies treat guidance documents as non-binding both in law and in practice, except as incorporated into a contract, take public input into account when appropriate in formulating guidance documents, and make guidance documents readily available to the public. Agencies may impose legally binding requirements on the public only through regulations and on parties on a case-by-case basis through adjudications, and only after appropriate process, except as authorized by law or as incorporated into a contract."

The Order also provides that each affected agency or agency component "shall establish or maintain on its website a single, searchable, indexed database that contains or links to all guidance documents in effect from such agency or component."


$112M available for housing for disabled

HUD has announced that $112 million is available to expand the supply of permanent affordable housing for very low-income persons with disabilities through its Section 811 Program - traditional Section 811 Supportive Housing for Persons with Disabilities and Section 811 Project Rental Assistance. The available funding includes $75 million in capital advances for the development of new supportive housing for this vulnerable population.


September FOMC minutes released

The Federal Reserve Board has released the minutes of the Federal Open Market Committee meeting held on September 17-18, 2019. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the meeting was included. The Committee decided to lower the target range for the federal funds rate to 1-3/4 to 2 percent.


SEC forms Asset Management Advisory Committee

The Securities and Exchange Commission announced yesterday it has formed an Asset Management Advisory Committee to provide the Commission with diverse perspectives on asset management and related advice and recommendations. Topics the committee may address include trends and developments affecting investors and market participants, the effects of globalization, and changes in the role of technology and service providers. The committee is comprised of a group of outside experts, including individuals representing the views of retail and institutional investors, small and large funds, intermediaries, and other market participants.


IRS guidance on tax treatment of virtual currency

The Internal Revenue Service has released new guidance for taxpayers who engage in transactions involving virtual currency.


IRS announces new payment option

The IRS has announced that a new payment option has been added to the IRS's private debt collection program to make it easier for those who owe to pay their tax debts. Taxpayers now can choose the convenient option of a preauthorized direct debit to make one payment or a series of payments toward their federal tax debt. With direct debit, the taxpayer will give their written permission to the private collection agency (PCA) to authorize a payment on the taxpayer's behalf to the Treasury Department.


$31M in LifeLock refund checks to be sent by FTC

The Federal Trade Commission has reported it will begin sending refund checks totaling more than $31 million as part of a previously announced settlement with LifeLock, Inc. related to allegations that the identity theft protection provider violated a 2010 Commission data security order. The FTC is mailing more than one million checks averaging about $29. Recipients should deposit or cash checks within 60 days.


FTC stops bogus job placement and resume repair scheme

The operator of a job placement company that deceived consumers with false promises of access to high-paying finance jobs and resume repair services for non-existent jobs will be permanently banned from providing employment services under the terms of a settlement with the Federal Trade Commission. The complaint alleged that the defendants charged recruiting fees of up to $2,500 to set up bogus interviews. Under the terms of the settlement, the defendants will be permanently banned from selling employment-related services to consumers, including job placement, resume repair, or arranging interviews. The defendants will also be prohibited from making material misrepresentations about any product or service, from actions that limit a consumer’s ability to submit reviews of a company online in violation of the Consumer Review Fairness Act, and further violations of the Telemarketing Sales Rule. The settlement also imposes a judgment of $1,744,422, of which all but $18,000 is suspended due to the defendants’ inability to pay. Should the defendants fail to pay the $18,000 judgment or be found to have misrepresented their financial status, the judgment would become payable in full.


IRS proposes tax relief for shifts from IBORs

Treasury has announced that the IRS is publishing proposed regulations [84 FR 54068] allowing taxpayers to avoid adverse tax consequences from changing the terms of debt, derivatives, and other financial contracts to replace reference rates based on interbank offered rates (IBORs) with certain alternative reference rates. The proposed rules respond to a request for guidance from the Alternative Reference Rates Committee, a broad-based committee of private sector and ex-officio government stakeholders convened by the Board of Governors of the Federal Reserve System in advance of the expected market transition from IBORs to alternative reference rates, such as the Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York.


Volcker Rule simplified

The FRB, FDIC, OCC, SEC and the Commodity Futures Trading Commission (CFTC) issued a joint press release yesterday announcing that they have finalized revisions to simplify compliance requirements relating to the "Volcker Rule." By statute, the Volcker Rule generally prohibits banking entities from engaging in proprietary trading or investing in or sponsoring hedge funds or private equity funds. Under the revised rule, firms that do not have significant trading activities will have simplified and streamlined compliance requirements, while firms with significant trading activity will have more stringent compliance requirements. Community banks generally are exempt from the Volcker rule by statute. The rules will be effective on January 1, 2020, with a compliance date of January 1, 2021.


New members of FDIC Community Banking advisory group

The FDIC has announced the names of new members of its Advisory Committee on Community Banking:

  • Shaza Andersen, CEO, Trustar Bank, Great Falls, Virginia
  • Sarah Getzlaff, CEO, Security First Bank of North Dakota, New Salem, North Dakota
  • Gilbert Narvaez, Jr., President & CEO, Falcon International Bank, Laredo, Texas
  • Mark Pitkin, President & CEO, Sugar River Bank, Newport, New Hampshire


$400,000 residential appraisal threshold effective October 9

The OCC, FDIC and Federal Reserve have published [84 FR 53579] in today's Federal Register the previously announced final rule increasing to $400,000 the threshold for requiring an appraisal by a state certified or licensed appraiser for residential real estate transactions. The portions of the rule increasing the appraisal threshold become effective on October 9, 2019.


NCUA extends application deadline

The NCUA has extended the deadline to November 30 for federally insured, low-income credit unions that want to become certified Community Development Financial Institutions to apply for qualification to use the agency’s streamlined CDFI certification process. This will be the final opportunity to take advantage of the streamlined certification process in 2019.


OCC Innovation Office Hours in Las Vegas

The OCC has announced it will hold Innovation Office Hours on October 28 in Las Vegas to promote responsible innovation in the federal banking system.

Office Hours are one-on-one meetings with Office of Innovation staff to discuss financial technology (fintech), new products or services, partnering with a bank or fintech company, or other matters related to responsible innovation in the federal banking system. OCC staff will provide feedback and respond to questions. Each meeting will last no longer than one hour. Requests for Office Hours sessions must be submitted by October 18.


Otting discusses community reinvestment and service

The OCC reported yesterday that Comptroller Joseph Otting discussed reinvestment and service in remarks at the National Asian American Coalition's 16th Annual Economic Development Conference. Otting highlighted the importance of modernizing the regulatory framework implementing the Community Reinvestment Act.


Consumer credit expands

According to G.19 Consumer Credit data posted by the Federal Reserve yesterday, consumer credit increased in August at a seasonally adjusted annual rate of 5-1/4 percent. Revolving credit decreased at an annual rate of 2-1/4 percent, and nonrevolving credit increased at an annual rate of 7-3/4 percent.


OCC stress testing rule amended

The OCC has announced a final rule amending its stress testing rule consistent with section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act.

The final rule, which has not yet been published in the Federal Register, revises the minimum threshold for national banks and federal savings associations to conduct stress tests from $10 billion to $250 billion; revises the frequency with which certain national banks and federal savings associations are required to conduct stress tests; reduces the number of required stress testing scenarios from three to two; and makes certain additional technical changes to the stress testing requirements. The final rule, which affects 12 CFR part 46, will become effective November 24, 2019.


Unemployment rate at 50 year low

The White House has announced that the Bureau of Labor Statistics (BLS) released its monthly Employment Situation Report for September 2019. The household survey finds that the unemployment rate fell to 3.5 percent, marking the 19th consecutive month at or below 4 percent unemployment. The unemployment rate is the lowest it has been since May 1969—over 50 years ago.


Billings housing providers charged with FHA violations

HUD has announced it has charged housing providers in Billings, Montana, with violating the Fair Housing Act by refusing to rent to, and making discriminatory statements about, a family with children. This case came to HUD’s attention when a Montana mother filed a complaint alleging that Alice S. Klundt, Alice S. Klundt Living Trust, and Terry Pollert, who collectively own and manage a single-family rental home in Billings, refused to rent the home to her because she had two daughters under the age of eighteen.


FDIC issues 5 outstanding CRA ratings

The FDIC has released a list of banks recently evaluated for compliance with the Community Reinvestment Act. Of the 77 banks listed, 71 received Satisfactory ratings, and one bank was rated Needs to Improve. We congratulate five banks that received Outstanding ratings (links are to their evaluations):


FTC order halts bogus real estate seminars

The Federal Trade Commission has announced that a federal temporary restraining order has been issued against Utah-based Zurixx, LLC and affiliated companies, which the Commission and the Utah Division of Consumer Protection allege have used deceptive promises of big profits to lure consumers into real estate seminars costing thousands of dollars. The order prohibits Zurixx from making unsupported marketing claims and from interfering with consumers’ ability to review Zurixx and its products. The court has appointed a temporary monitor over Zurixx and instructed the companies to preserve their assets.


NCUA posts final rule on audits and verifications

The NCUA has published [84 FR 53303] a final rule amending its regulations governing the responsibilities of a federally insured credit union to obtain an annual supervisory committee audit of the credit union. The final rule implements recommendations outlined in the agency's Regulatory Reform Task Force's Regulatory Reform Agenda and will provide additional flexibility to FICUs. Specifically, the Board is: replacing the Supervisory Committee Guide with a simplified appendix to the part (12 CFR part 715); eliminating two audit types that FICUs seldom use; and eliminating a specific deadline for outside, compensated persons to deliver written audit reports to FICUs. The amendments to 12 CFR 715 will be effective January 6, 2020.


Georgia banker banned from industry

The Federal Reserve Board has announced it has issued a consent prohibition order to John D. Evans, a former commercial real estate banker at Columbus Bank & Trust, Columbus, Georgia who, while employed in that capacity, embezzled a total of $1,046,602.40 by issuing official checks from a bank fee reserve account held in the name of a customer.


NCUA posts final rule on FCU bylaws

The NCUA Board has published [84 FR 53278] a final rule to update, clarify, and simplify the federal credit union bylaws. The final rule updates and conforms the bylaws to legal opinions issued by the NCUA's Office of General Counsel and provides greater flexibility to federal credit unions (FCUs). The final rule also makes other changes that are designed to remove outdated or obsolete provisions. The rule, which amends NCUA regulations in 12 CFR parts 701 and 746, will be effective January 2, 2020.


FDIC terminates receiverships

The FDIC has published [84 FR 53149] a notice that it has terminated the receiverships of Freedom Bank of Georgia (Commerce, GA) and Valley Bank (Fort Lauderdale, FL) as of October 1, 2019.


CFPB advisory committee members announced

CFPB Director Kraninger has announced the appointment of members to the CFPB's Consumer Advisory Board, Community Bank Advisory Council, Credit Union Advisory Council, and Academic Research Council.

  • Consumer Advisory Board
    • (Chair) Brent Neiser, Senior Director, National Endowment for Financial Education (Denver, CO)
    • Nikitra Bailey, EVP, Center for Responsible Lending (Durham, NC)
    • Nadine Cohen, Managing Attorney, Greater Boston Legal Services (Boston, MA)
    • Sameh Elamawy, CEO, Scratch Services, Inc. (San Francisco, CA)
    • Manning Field, COO, Acorns (Irvine, CA)
    • Clint Gwin, President & CEO, Pathway Lending (Nashville, TN)
    • Ronald Johnson, Former President, Clark Atlanta University (Atlanta, GA)
    • Tim Lampkin, CEO, Higher Purpose Co. (Clarksdale, MS)
    • Eric Kaplan, Director – Housing Finance Program, Milken Institute (Washington, DC)
    • Sophie Raseman, Director of Product, Brightside (San Francisco, CA)
    • Rebecca Steele, President/CEO, National Foundation for Credit Counseling (Washington, DC)
    • Tim Welsh, Vice Chairman Consumer and Business Banking, U.S. Bank (Minneapolis, MN)
  • Community Bank Advisory Council
    • (Chair) Aubrey Hulings, VP, Operations Manager, The Farmers National Bank of Emlenton (Emlenton, PA)
    • J. Erik Beguin, Founder, CEO and President, Austin Capital Bank (Austin, TX)
    • Maureen Busch, VP Compliance and CRA Officer, The Bank of Tampa (Tampa, FL)
    • Patrick Ervin, EVP, Independent Bank (Troy, MI)
    • Shan Hayes, President and CEO, Heartland Tri-State Bank (Elkhart, KS)
    • Bruce Ocko, Senior VP Director of Mortgage & Consumer Lending, Bangor Savings Bank (Bangor, ME)
    • Valerie Quiett, SVP and Chief Legal Officer, Mechanics and Farmers (M&F) Bank (Durham, NC)
    • Heidi Sexton, EVP/Chief Compliance and Risk Officer, Sound Community Bank (Seattle, WA)
  • Credit Union Advisory Council
    • (Chair) Sean Cahill, President & CEO, TrueSky Credit Union (Oklahoma City, OK)
    • Arlene Babwah, VP Risk Management, Coastal Federal Credit Union (Raleigh, NC)
    • Teresa Campbell, President & CEO, San Diego County Credit Union (San Diego, CA)
    • Rick Durante, VP, Director of Corporate Social Responsibility and Government Affairs, Franklin Mint Federal Credit Union (Chadds Ford, PA)
    • Doe Gregersen, Vice President & General Counsel, Landmark Credit Union (New Berlin, WI)
    • Brian Holst, General Counsel, Elevations Credit Union (Boulder, CO)
    • Racardo McLaughlin, VP Mortgage Originations/Operations (TwinStar Credit Union, Lacey, WA)
    • Rick Schmidt, President & CEO, WestStar Credit Union (Las Vegas, NV)
  • Academic Research Council
    • Michael Baye, Bert Elwert Professor of Business Economics, Indiana University (Bloomington, IN)
    • Karen Dynan, Professor of the Practice of Economics, Harvard University (Cambridge, MA)
    • Terri Friedline, Associate Professor, University of Michigan (Ann Arbor, MI)
    • John Lynch, Jr., Director of the Center for Research on Consumer Financial Decision Making and Senior Associate Dean for Faculty and Research, University of Colorado Boulder (Boulder, CO)
    • Brigitte Madrian, Dean/Marriott Distinguished Professor, Brigham Young University (Provo, UT)
    • Tom Miller, Professor of Finance and Jack R. Lee Chair, Mississippi State University (Mississippi State, MS)
    • Joshua Wright, Professor, Scalia Law School at George Mason University (Arlington, VA)


Settlement in Ponzi scheme case

The Federal Trade Commission announced Wednesday morning that multi-level marketer AdvoCare International, L.P. and Brian Connolly, its former chief executive officer, have agreed to pay $150 million and be banned from the multi-level marketing business to resolve Commission charges that the company operated an illegal pyramid scheme that deceived consumers into believing they could earn significant income as "distributors" of its health and wellness products. Carlton and Lisa Hardman, two top promoters, also settled charges that they promoted the illegal pyramid scheme and misled consumers about their income potential, agreeing to a multi-level marketing ban and a judgment of $4 million that will be suspended when they surrender substantial assets.

The federal court complaint also charges two other top AdvoCare promoters, Danny and Diane McDaniel, with "unlawfully promoting a pyramid scheme, making deceptive earnings claims, and providing others with the means and instrumentalities to do the same."


2020 NMLS annual renewal reminder

The NMLS 2020 annual renewal period for federal registrations begins November 1, 2019. Federal regulations require all mortgage loan originators actively registered prior to July 1, 2019, to renew their registrations for 2020. The renewal period ends December 31, 2019. The Federal Registry Resource Center Renew-Reactivate page has guidance on how to prepare for and complete a renewal.


Management interlock rules updated

The Federal Reserve Board, FDIC, and OCC have issued a joint press release announcing finalized updates to rules restricting the ability of a director or other management official to serve at more than one depository institution or depository holding company. The updates provide relief for community banks that have $10 billion or less in total assets and are unchanged from the proposal announced in December 2018.

Previously, the management interlock rules prohibited a management official working at a depository institution or holding company with more than $2.5 billion in total assets from simultaneously working at an unaffiliated depository organization with more than $1.5 billion in total assets. Those thresholds were established by Congress in 1996. To account for changes in the market, the final rule increases both thresholds to $10 billion in total assets.

The final rule responds to comments received during the recent review required by the Economic Growth and Regulatory Paperwork Reduction Act of 1996. It will take effect upon publication in the Federal Register.

UPDATE: Published at 84 FR 54465 on October 10, 2019.


FinCEN changing CTR filing instructions

FinCEN has reportedly notified discrete and batch CTR filers of revised instructions for completing item 2 of the CTR when a person conducts multiple transactions and more than one item 2 option applies to the conductor.

If more than one Item 2 option applies to a Part I person, a separate Part I section will be prepared on that person for each Item 2 option. For example, if the Part I person conducted a $5,000 deposit into their personal account and a separate $7,000 deposit into the account of another person/entity, there will be one Part I on that person reporting option 2a on the personal deposit with that amount and account number in Item 21 “Cash in amount”. There will be a second Part I on that person reporting option 2b on the person/entity account transaction with that amount and account number in Item 21.

According to our source, an October 2 post in a thread in BankersOnline's BSA/AML/CIP/OFAC discussion forum, the change is being made because CTRs have been rejected without a 2c owner record and users of the CTR data are unable to fully understand the transactions being reported using current instructions. No changes are being made to the filing form (other than an instruction update for item 2). FinCEN has proposed a target date for updating its batch filing of October 1, 2019, with a mandatory effective date of February 1, 2020.


Fed amends Regulations A and D

The Federal Reserve Board has published final rules with amendments to adjust the interest rates for primary and secondary credit from the Reserve Banks (Regulation A) and the interest paid by the Reserve Banks on required and excess reserve account balances (Regulation D).


Fed CRA evaluations for September

A review of the Federal Reserve Board's Community Reinvestment Act search page shows that the Board made public 21 evaluation ratings in September. Our congratulations to Bank of Clarke County, Berryville, Virginia, with a CRA Evaluation that received a rating of "Outstanding." The other 20 banks received "Satisfactory" ratings.


OCC CRA evaluations released

A list of Community Reinvestment Act performance evaluations that became public in September has been released by the OCC. Of the 35 evaluations listed, 21 are rated satisfactory, and one is rated needs to improve. Our congratulations to this "baker's dozen" of banks that received an outstanding rating (links are to PDF copies of the banks' evaluations):


McWilliams addresses NBA convention

FDIC Chairman McWilliams, in a presentation at the National Bankers Association's 92nd Annual Convention in Washington, D.C., thanked the attendees for being the voice of minority banks for over nine decades. The Chairman noted a recent research study also highlighted information that demonstrates the essential role that minority depository institutions (MDIs) play in serving low- or moderate-income (LMI) customers and minority customers.


GE settles potential OFAC civil liability

OFAC has announced a $2,718,581 settlement with The General Electric Company (“GE”) of Boston, Massachusetts. GE, on behalf of three GE subsidiaries -- Getsco Technical Services Inc., Bentley Nevada, and GE Betz -- has agreed to settle its potential civil liability for 289 alleged violations of the Cuban Assets Control Regulations.

Between December 2010 and February 2014, the GE Companies appear to have accepted payment from The Cobalt Refinery Company, an entity identified on the List of Specially Designated Nationals and Blocked Persons since June 1995, for goods and services provided to a Canadian customer of GE. OFAC determined that GE voluntarily disclosed the apparent violations, and that the apparent violations constitute a non-egregious case. Additional details.


Former Regions Bank employee banned from banking

The Federal Reserve Board has announced it has issued a consent order of prohibition against Timothy McMillian, former employee of Regions Bank, Birmingham, Alabama, for using confidential customer account information for personal gain.

The order states that while he was employed as a Financial Relationship Counselor at Regions Bank, "McMillian accessed the Bank’s customer account profiles of at least four Regions customers, without authorization, and obtained confidential Regions customer account information, which he provided to co-conspirators, who impersonated the affected customers and unlawfully withdrew funds from their accounts," causing Regions Bank to suffer a financial loss.


CFPB and SC sue high rate loan brokers

The CFPB announced Tuesday that the Bureau and the South Carolina Department of Consumer Affairs have filed a lawsuit in federal district court in the District of South Carolina against Katharine Snyder, Performance Arbitrage Company, Inc., and Life Funding Options, Inc. The companies, owned and operated by Snyder, brokered contracts offering high-interest credit to veterans, many of whom are disabled, and to other consumers. The Bureau alleges that the companies and their owner violated the Consumer Financial Protection Act’s prohibition against deceptive acts or practices.The Bureau and South Carolina allege that Snyder and her companies—

  • misrepresented to consumers that the contracts the companies broker are valid and enforceable when, in fact, the contracts are void under federal and state law;
  • misrepresented to consumers that the product is a sale of payments and not a high-interest credit offer; and
  • failed to inform consumers of the products’ interest rates.

The complaint seeks an injunction against Snyder and her companies, redress to consumers, and the imposition of a civil money penalty.


FDIC proposes removal of transferred OTS rules

The FDIC has published [84 FR 52387] a notice of proposed rulemaking that would rescind and remove 12 CFR part 390, subpart R (Regulatory Reporting Standards, from the Code of Federal Regulations. The removal would simplify the FDIC's regulations by removing unnecessary rules, thereby improving ease of reference and public understanding. It also would create parity between state savings associations and state nonmember banks by having the regulatory reporting requirements, regulatory reports and audits of both classes of institutions addressed in the same FDIC rules. Comments must be received on or before November 1, 2019.


FTC asking if Negative Option Rule needs update

The Federal Trade Commission has published an advance notice of proposed rulemaking [84 FR 52393] seeking comment on the need for amendments to the Commission's “Rule Concerning the Use of Prenotification Negative Option Plans” (also known as the “Negative Option Rule”), 16 CFR part 425, to help consumers avoid recurring payments for products and services they did not intend to order and to allow them to cancel such payments without unwarranted obstacles. Comments will be accepted by December 2, 2019.


REAL ID enforcement reminder

The Department of Homeland Security (DHS) has issued a reminder to travelers that the upcoming REAL ID requirement and enforcement will start one year from yesterday. Beginning October 1, 2020, every air traveler must present a REAL ID-compliant driver’s license, state-issued enhanced driver’s license, or other acceptable forms of identification, such as a valid passport or U.S. military ID, to fly within the United States. Individuals who are unable to verify their identity will not be permitted to enter the Transportation Security Administration (TSA) checkpoint and will not be allowed to fly.

[Editor's note: The REAL ID-compliant licenses and enhanced state-issued IDs will have slight differences from their unenhanced versions. Bank customer service staff members should become familiar with the changes. Some states will use more rigorous identification verification procedures in issuing the new licenses and IDs. If you need to upgrade your license for travel (and admission to many federal buildings and venues), make sure you have the documentation needed under your state's requirements.]


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