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Free Webinar: CDD/Beneficial Ownership — One Year Out
Thursday, May 11th - 1:00 PM CT

We're almost one year out from the new Customer Due Diligence (CDD) rule's deadline. Join us as we discuss all things CDD, including policies, procedures and training. We will help you prepare and discuss what steps your core, new account platform and AML software vendors are taking now to ensure you're compliant by May 2018. (Register here.)

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FinCEN SAR Stats bulletin released

Issue 3 of SAR Stats has been released by FinCEN. SAR Stats (formerly By the Numbers) is a compilation of numerical data gathered from the FinCEN Suspicious Activity Reports (Form 111) filed by financial institutions. SAR Stats is published as a full report once a year.


Companies could pay nearly $900M for trade violations

OFAC has announced a $100,871,266 settlement agreement with Zhongxing Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd. and their subsidiaries and affiliates ((collectively referred to as “ZTE”), to settle ZTE’s potential civil liability for 251 apparent violations of the Iranian Transactions and Sanctions Regulations. The maximum penalty for the violations was determined to be $106,180,280.

ZTE’s settlement with OFAC is concurrent with a settlement agreement between ZTE and the Department of Commerce’s Bureau of Industry and Security, and ZTE’s plea agreement (pending court approval) with the Department of Justice’s National Security Division and U.S. Attorney’s Office for the Northern District of Texas. The Department of Justice has reported that in the plea agreement, ZTE has agreed to pay a $430,488,798 penalty, and that ZTE simultaneously reached settlement agreements with the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). In total ZTE has agreed to pay the U.S. Government $892,360,064. The BIS has suspended an additional $300,000,000, which ZTE will pay if it violates its settlement agreement with the BIS.


FTC tips for businesses impersonated in phishing scams

The Federal Trade Commission notes that consumers are not the only ones harmed by phishing scams. It’s not just a problem for computer users, but also for the businesses that the scammers are impersonating. And people who have been scammed may look to impersonated businesses for help. The Commission has released tips and a video for businesses on how to respond if they are impersonated as part of a phishing scam. Among the steps businesses should take are notifying customers as soon as possible through social media, email or letters; contacting law enforcement; providing resources for affected consumers; and reviewing the company’s security practices.


Counterfeit cashier's checks alert

The OCC has issued an alert concerning counterfeit cashier's checks purporting to have been issued by Community Bank of Texas (the bank's name is CommunityBank of Texas, National Association) that have been distributed nationwide in connection with online job opportunity and auction scams. See our Alerts and Counterfeits page on OCC Alert 2017-2 for details.


FTC annual survey of consumer complaints

The Federal Trade Commission has released its annual summary of consumer complaints. Debt collection complaints remained the top category, but imposter scam complaints ranked second, replacing identity theft, which dropped to third.


OCC workshops for directors scheduled for Phoenix

The OCC has announced it will host two workshops at the Crowne Plaza Phoenix Airport in Phoenix, Arizona, April 11-12, for directors of national community banks and federal savings associations supervised by the OCC.

  • The Credit Risk workshop on April 11 focuses on credit risk within the loan portfolio, such as identifying trends and recognizing problems. The workshop also covers the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change.
  • The Operational Risk workshop on April 12 focuses on the key components of operational risk—people, processes and systems. The workshop also covers governance, third-party risk, vendor management, and cybersecurity.


Prohibition notices issued by NCUA

NCUA issued six notices of prohibition in February to individuals who had previously been convicted of crimes of dishonesty and, as a result, are prohibited from participating in the affairs of any federally insured financial institution. When they pleaded guilty or were convicted, the six former credit union employees had been ordered to make restitution payments of from $6,000 to $1.9 million.


Medical company settles with OFAC

OFAC has announced a $515,400 settlement with United Medical Instruments, Inc. (“UMI”), a company incorporated in California. UMI agreed to settle its potential civil liability for 56 alleged violations of the Iranian Transactions and Sanctions Regulations. The alleged violations occurred between 2007 and 2009 when UMI made sales of medical imaging equipment with knowledge or reason to know that the goods were intended specifically for supply or re-exportation to buyers located in Iran, and when it facilitated the sales of medical imaging equipment from a company located in the United Arab Emirates to Iran. For more information, see our OFAC Update.


FTC forum on artificial intelligence and blockchain tech

The Federal Trade Commission has released the agenda for its March 9, 2017, FinTech Forum on the consumer implications of two rapidly developing technologies: artificial intelligence and blockchain. The half-day forum will begin at 9 a.m. Pacific time and feature two panel discussions. The first panel will focus on the potential benefits and risks for consumers with the use of artificial intelligence, which involves the capability of machines to mimic human thinking or actions such as learning and problem solving, in consumer products or services, including personalized financial services. The second panel will examine the potential applications and consumer implications of blockchain, a technology for recording electronic transactions utilizing distributed ledger technology, including uses both within and beyond payments services.


California bank gets BSA/AML penalty

FinCEN and the OCC have announced their assessment of civil money penalties totaling $7 million on Merchants Bank of California, Carson, California, for significant willful violations of the Bank Secrecy Act. The OCC imposed a $1 million CMP for violations of previous consent orders and other violations. FinCEN levied a $7 million penalty, accepting the payment of the OCC's penalty as credit toward the FinCEN fine. The $7 million payment represents approximately 40% of the bank's capital, per its September 30, 2016, Call Report. For further information on these enforcement actions against the bank, see "Merchants Bank of California, N.A.," in our penalties pages.


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UDAAP Reality Check

We will explore what makes a practice unfair or deceptive by digging into what regulators and the courts have had to say.

Stop That Payment!

Bankers must understand the differences between the use of their systems' stop payment functionality and the actual right to stop payment

Penalties View All

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