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10/11/2016

Burma sanctions terminated

President Obama has issued an Executive Order terminating the Burma-related sanctions program, and Burma-related financial sanctions administered by OFAC are no longer in effect. The Executive Order terminates all OFAC-administered restrictions and authorizations under the Burma sanctions program pertaining to banking with Burma. This includes the OFAC general licenses issued in 2012 and 2013 that authorized certain correspondent account activity with Burmese banks. FinCEN also issued an exception to the prohibition imposed by the USA PATRIOT Act which allows financial institutions to maintain correspondent accounts for Burmese banks under certain conditions. See BankersOnline's OFAC Update for additional information.

10/07/2016

FFIEC cybersecurity webinars announced

The FFIEC has announced it will host two webinars for financial institutions in October in recognition of National Cybersecurity Awareness Month.
  • Mobile Financial Services — Appendix E of the Retail Payment System Booklet, October 13, 2016, at 3 p.m. Eastern. The FFIEC members updated the Information Technology examination handbook on April 29 to address financial institutions’ use of new and emerging technologies, specifically the rapid proliferation and technological advancements in the use and capabilities of mobile devices with respect to financial services. This webinar will provide an overview of the contents of the Appendix E of the Retail Payments Systems booklet and an opportunity to receive answers to questions regarding mobile financial services.
  • Getting the Most Out of Your FS-ISAC Membership, October 31, 2016, at 1 p.m. Eastern. On November 3, 2014, the FFIEC members issued a statement on Cybersecurity Threat and Vulnerability Monitoring and Sharing that encouraged financial institutions to join the Financial Services-Information Sharing and Analysis Center (FS-ISAC). Many financial institutions have expressed a desire to gain a better understanding on how to filter and utilize the information they receive through this membership service. This webinar will feature a guest speaker from the FS-ISAC who will provide tips on how to manage the information flow and filter information through the membership portal.

10/06/2016

OCC: Foreign correspondent bank risk evaluation

The OCC has issued Bulletin 2016-32 with risk management guidance to national banks, federal savings associations, and federal branches and agencies that addresses periodic reevaluations of risks associated with foreign correspondent banking accounts. The guidance reiterates the OCC’s supervisory expectation that banks assess these risks as part of their on-going risk management and due diligence practices.

10/06/2016

OCC and NCUA Hurricane Matthew announcements

The OCC has issued a proclamation allowing national banks and federal savings associations affected by Hurricane Matthew to close at their discretion. In issuing the proclamation, the OCC expects that only those bank offices directly affected by the extreme weather will close. Those offices should make every effort to reopen as quickly as possible to address the banking needs of their customers.

The NCUA has announced that credit unions in Florida and parts of the Eastern Seaboard should take steps to prepare for the arrival of Hurricane Matthew early Friday morning. NCUA Chairman Metsger stated, “If they haven’t already, credit unions should review their disaster recovery plans and be prepared for increased needs for member services. Members also should take steps in case public services and transportation are disrupted, including having cash on hand if their communities lose power and credit union branches and ATMs become unavailable.”

10/05/2016

OCC to host compliance and operation risk workshops in Ohio

The OCC will host two workshops in Cincinnati, Ohio, at the Hyatt Regency Cincinnati, November 9-10, for directors of national community banks and federal savings associations supervised by the OCC. The Compliance Risk workshop on November 9 combines lectures, discussion, and exercises on the critical elements of an effective compliance risk management program. Topics of discussion include the Bank Secrecy Act, Community Reinvestment Act, and the Truth-in-Lending (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA) Integrated Disclosures Rule, also known as TRID. The Operational Risk workshop on November 10 focuses on the key components of operational risk — people, processes and systems. The workshop also covers governance, third-party risk, vendor management, and cybersecurity.

10/05/2016

Task forces review payment solution proposals

The Federal Reserve Board has announced that nearly 500 members of the two national task forces convened by the Federal Reserve to make payments faster and more secure have begun to review and discuss 19 specific proposals submitted by interested task force members across the payments industry. The proposals outline potential approaches for a faster payment system in the United States. One task force is focused on faster payment capabilities, while the other is working to enhance payment system security.

10/05/2016

OFAC removals and changes

The Office of Foreign Assets Control has posted a Specially Designated National (SDN) List Update removing several Zimbabwe-related listings. The Update also included changes to one Zimbabwe-related, and two Kingpin Act-related, listings.

10/04/2016

Cantor Gaming loses $22.5 million for AML failures

FinCEN has assessed a civil money penalty of $12 million against CG Technology, L.P., doing business as Cantor Gaming, for egregious and systemic violations of the AML provisions of the Bank Secrecy Act (BSA). FinCEN’s analysis of reports filed under the BSA and information obtained from a 2010 examination by the Internal Revenue Service’s Small Business/Self-Employed Division, as well as a 2014 follow up audit by FinCEN, support this action. Additional supporting information concerning illegal gambling and money laundering surfaced stemming from a criminal investigation and indictment of 25 individuals, known as the “Jersey Boys,” conducted by the U.S Attorney’s Office for the Eastern District of New York.

FinCEN’s assessment is concurrent with the U.S. Attorney’s Offices for the Eastern District of New York and District of Nevada’s announcement of a non-prosecution agreement with Cantor Gaming. In that settlement, Cantor Gaming resolved possible criminal charges, agreeing to a forfeiture of $6 million and a criminal fine of $10.5 million. Six million dollars of the criminal fine and forfeiture will be credited to partially satisfy FinCEN’s $12 million civil money penalty.

For more information on these actions, see "Cantor Gaming pays $22.5MM for AML violations," in our BSA/AML Penalties pages.

09/30/2016

Treasury targets major narcotics trafficker

OFAC has designated German Muñoz Hoyos as a Specially Designated Narcotics Trafficker (SDNT) under the Kingpin Act for playing a significant role in international narcotics trafficking. OFAC also designated five individuals for acting for or behalf of Muñoz, and six entities that are owned, controlled, or directed by him and/or his associates. Several entries were also removed from OFAC's Specially Designated Nationals List. See our OFAC Update for additional information.

09/30/2016

Federal Reserve issues C&D to Chinese bank

The Federal Reserve Board has issued a Consent Cease and Desist Order to Agricultural Bank of China, Beijing ("Bank"), and Agricultural Bank of China, New York Branch ("Branch"), following a recent examination of the Branch, during which the Federal Reserve Bank of New York identified "significant deficiencies in the Branch’s risk management and compliance with applicable federal and state laws, rules, and regulations relating to anti-money laundering compliance, including the Bank Secrecy Act …; the rules and regulations issued thereunder by the U.S. Department of the Treasury …; and the requirements of Regulation K of the Board of Governors to report suspicious activity and to maintain an adequate BSA/AML compliance program …."

The order requires the Bank's board of directors and the Branch's management to take steps to improve, with regard to BSA/AML and OFAC compliance, their corporate governance and management oversight, their BSA/AML compliance program, the Branch's customer due diligence program, and their program for monitoring and reporting of suspicious activity. The Bank and Branch are to engage an independent third party to conduct a review of the Branch's U.S. dollar clearing transaction activity from October 1, 2014, to March 31, 2015, to determine whether suspicious activity involving high risk customers or transactions at, by, or through the Branch was properly identified and reported. The Bank and the Branch must also enhance the Bank's compliance with OFAC regulations and the internal audit program for the Branch.

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

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