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11/07/2016

NCUA releases new digital services guidebook

The NCUA has notified credit unions they can get information and advice on negotiating contracts for digital services in its new guidebook, Basics of Data Processing Contracts. The guidebook, which provides detailed, comprehensive instructions on negotiating contracts with third-party vendors for digital services is available from NCUA’s Small Credit Union Learning Center.

11/07/2016

FDIC recovery guidance for Virginia banks

FDIC FIL-74-2-16 was issued on Friday, to announce steps intended to provide regulatory relief to financial institutions and to facilitate recovery in areas of Virginia affected by Hurricane Matthew.

11/07/2016

FinCEN restricts North Korean access

Treasury has announced that FinCEN has issued a final rule under Section 311 of the USA PATRIOT Act to further restrict North Korea’s access to the U.S. financial system. The final rule prohibits U.S. financial institutions from opening or maintaining correspondent accounts for North Korean banks and also requires U.S. financial institutions to apply additional due diligence measures in order to prevent North Korean financial institutions from gaining improper indirect access to U.S. correspondent accounts. The rule was proposed in June 2016 along with publication of the notice of finding that North Korea is a jurisdiction of “primary money laundering concern” engaged in illicit conduct, including using state-controlled financial institutions and front companies to engage in proliferation of weapons of mass destruction and ballistic missiles and to evade international sanctions.

Update: The rule was published at 81 FR 78715 on November 8, 2016. It becomes effective December 9, 2016.

11/04/2016

Technical amendments to FinCEN BSA regs

The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has published at 81 FR 76863 in today's Federal Register a final rule to make a number of technical amendments. This final rule updates various sections of the regulations implementing the Bank Secrecy Act (``BSA'') by removing or replacing outdated references to obsolete BSA forms, removing references to outdated recordkeeping storage media, and replacing several other outdated terms and references. The changes, which affect 31 CFR parts 1010, 1020, 1021, 1022, 1023, 1024, 1025, and 1026, are effective today.

11/02/2016

Treasury sanctions financial supporters of al-Qaida

The Treasury Department has announced that, on Tuesday, the U.S., in partnership with the United Arab Emirates, acted to disrupt the operations and support networks of al-Qaida in the Arabian Peninsula. Treasury’s Office of Foreign Assets Control (OFAC) designated the Al Omgy and Brothers Money Exchange (Al Omgy Exchange) and the company’s two owners, Said Salih Abd-Rabbuh al-Omgy and Muhammed Salih Abd-Rabbuh al-Omgy, under Executive Order (E.O.) 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. As a result of Tuesday's action, all property and interests in property of Al Omgy Exchange, and Said and Muhammed al-Omgy subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. See our OFAC Update for additional information.

Treasury reported that, acting under its authorities, the Central Bank of the UAE recently took swift action to eliminate any access to the UAE financial sector by Al Omgy Exchange in advance of Tuesday's OFAC action.

11/01/2016

FDIC proposal to consolidate regulations

The FDIC published at 81 FR 75753 in today's Federal Register a proposed rule that would rescind and remove Part 391 subpart A (Security Procedures, transferred from the former Office of Thrift Supervision) from the Code of Federal Regulations and to amend FDIC regulations at Part 326 to make the removed OTS regulations applicable to state savings associations. Comments on the proposal are due by January 3, 2017.

11/01/2016

NCUA bans five individuals

The National Credit Union Administration announced it issued five orders of prohibition in October to individuals who have been convicted of crimes of dishonesty and, as a result, are prohibited from participating in the affairs of any federally insured financial institution.

  • a former employee of a Manistique, Michigan, credit union who had pleaded no contest to charges of embezzlement and larceny, and had been sentenced to prison and ordered to pay restitution of $9,399;
  • a former employee of a Glens Falls, New York, credit union who had pleaded guilty to the charges of grand larceny and falsifying business records, and had been sentenced to prison and ordered to pay restitution of $8,071;
  • a former employee of a Toledo, Ohio, credit union who had pleaded guilty to the charges of theft and embezzlement, and had been sentenced to prison and ordered to make restitution of $251,438;
  • a former employee of Fairfield, Iowa, credit union who had consented to the issuance of the prohibition order to settle and resolve the NCUA Board's claims against her; and
  • a former employee of a Lenexa, Kansas, credit union who had pleaded guilty to charges of wire fraud and embezzlement, and had been sentenced to time served, and ordered to pay restitution of $34,035.

10/31/2016

FATF report: Terrorist financing in Africa

The Financial Acton Task Force (FATF) has released a report on terrorist financing in West and Central Africa. The report looks at the confirmed and suspected funding sources of terrorist groups that are operating in this region. It identifies the terrorist financing risks that are unique to the region, such as cattle rustling. Cash, including foreign currency, also plays an important role in terrorist financing in the West and Central African region. The report identifies challenges that the region faces to regulate financial products and sectors, and emphasizes the need for better cross-border collaboration.

10/31/2016

OCC reports unauthorized removal of information

The OCC has announced it has notified Congress and other federal agencies of a major information security incident, as required by the Federal Information Security Modernization Act (FISMA). The incident involves a former OCC employee who downloaded a large number of files onto two removable thumb drives prior to his retirement and, when contacted, was unable to locate or return the thumb drives to the agency.

10/28/2016

India call center scam targeted US victims

ICE has announced that 61 individuals and entities have been charged in a Federal court indictment for their alleged involvement in a transnational criminal organization that victimized tens of thousands of people in the United States, resulting in hundreds of millions of dollars in losses. The indictment alleges that the defendants were involved in a sophisticated fraudulent scheme organized by conspirators in India, including a network of call centers in Ahmedabad, India. Using information obtained from data brokers and other sources, call center operators allegedly called potential victims while impersonating officials from the IRS or U.S. Citizenship and Immigration Services. According to the indictment, the call center operators then threatened potential victims with arrest, imprisonment, fines or deportation if they did not pay taxes or penalties to the government. If the victims agreed to pay, the call centers would then immediately turn to a network of U.S.-based co-conspirators to liquidate and launder the extorted funds as quickly as possible by purchasing prepaid debit cards or through wire transfers. The prepaid debit cards were often registered using misappropriated personal identifying information of thousands of identity theft victims, and the wire transfers were directed by the criminal associates using fake names and fraudulent identifications. The co-conspirators allegedly used “hawalas,” in which money is transferred internationally outside of the formal banking system, to direct the extorted funds to accounts belonging to U.S.-based individuals. According to the indictment, these individuals were expecting the hawala transfers but were not aware of the illicit nature of the funds. The co-conspirators also allegedly kept a percentage of the proceeds for themselves.

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