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The National Credit Union Administration has announced it issued an Notice of Prohibition to Andrea Alice Nedow, a former teller/member service representative at Traverse Catholic Federal Credit Union, Traverse City, Michigan, after a finding that she made unauthorized withdrawals from member accounts. She was later prosecuted for embezzlement by local law enforcement, and, on January 24, 2023, she pleaded guilty to two charges of embezzlement.

FinCEN yesterday announced it has begun to accept Beneficial Ownership Information reports. Existing reporting companies have until January 1, 2025, to register. Reporting companies newly created or registered in 2024 have 90 days after receiving actual or public notice that their company's creation or registration is effective.

The FDIC has released a list of enforcement actions it took in November 2023.

• Horicon Bank, Horicon, Wisconsin, was assessed a $23,000 civil money penalty for engaging in a pattern or practice of violations of the Flood Disaster Protect Act and FDIC regulations.
• Removal and Prohibition Orders were issued against:
  • Sheree Leanne Carter, formerly a teller at Rockland Trust Company, Rockland, Massachusetts, after the FDIC found, and Carter neither admitted nor denied that over a span of 16 years she stole funds from the bank by taking cash from her teller drawer and cash intended for the bank's ATMs. manipulated the bank's systems and records to create fictitious transactions before audits and to cancel those transactions after the audits were completed, to avoid detection and conceal her embezzlement for personal gain of approximately $430,000.
  • Lladira Hernandez, formerly a client success representative at Central Valley Community Bank, Fresco, California, after the FDIC determined, and Hernandez neither admitted nor denied that, between May and August 2022, she initiated unauthorized ACH debits from four separate customers; and also fraudulently created an online banking profile for a customer, linked her own accounts to it and, after
    resigning from the bank, initiated unauthorized transfers.
  • William J. Burnell, formerly the chief credit officer of NBC Bank, New Orleans, Louisiana, after the FDIC determined, and he neither admitted nor denied, that during 2015 and 2016 he approved loans to borrowers that he knew were not creditworthy. An earlier Order for Assessment of a Civil Money Penalty against him was terminated.
• Cease and Desist Consent Orders were issued to Peoples Bank, Munster, Indiana; Commenity Servicing, LLC, Columbus, Ohio; First Fed Bank, Port Angeles, Washington; Liberty Bank, Inc., Salt Lake City, Utah, and; Brighton Bank, Brighton, Tennessee.

OFAC has designated one individual and three entities responsible for facilitating the flow of Iranian financial assistance to Houthi forces and their destabilizing activities. Among those designated are the head of the Currency Exchangers Association in Sana’a, and three exchange houses in Yemen and Türkiye. These persons have facilitated the transfer of millions of dollars to the Houthis at the direction of U.S.-designated Sa’id al-Jamal, who is affiliated with Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).

For the names and identification information of the designated parties, see the December 28, 2023, BankersOnline OFAC Update.

• Treasury Department press release

Yesterday, we reported that FijnCEN had issued a final rule regarding access to Beneficial Ownership Information that certain entities will be required to file with FinCEN beginning January 1, 2024.

In connection with its press release announcing the final rule, FinCEN issued two interagency statements to give banks and non-bank financial institutions guidance on the interplay between the final rule and FinCEN’s existing Customer Due Diligence Rule.

• Interagency Statement for Banks
• Statement for Non-Bank Financial Institutions

FinCEN also issued a Fact Sheet about the final rule.

The Financial Crimes Enforcement Network (FinCEN) has scheduled for December 22, 2023, Federal Register publication a final rule with regulations regarding access by authorized recipients to beneficial ownership information (BOI) that will be reported to FinCEN pursuant to section 6403 of the Corporate Transparency Act (CTA).

The summary of the rule indicates the regulations implement the strict protocols required by the CTA to protect sensitive personally identifiable information (PII) reported to FinCEN and establish the circumstances in which specified recipients have access to BOI, along with data protection protocols and oversight mechanisms applicable to each recipient category. The disclosure of BOI to authorized recipients in accordance with appropriate protocols and oversight will help law enforcement and national security agencies prevent and combat money laundering, terrorist financing, tax fraud, and other illicit activity, as well as protect national security.

The Introduction in the Supplementary Information to be published with the rule states, "Financial institutions with customer due diligence requirements under applicable law will have access to BOI to facilitate compliance with those requirements, as will the Federal functional regulators or other appropriate regulatory agencies that supervise or assess those financial institutions’ compliance with such requirements." It also states "FinCEN will implement the CTA requirement to revise the 2016 CDD Rule [31 CFR 1010.230] through a future rulemaking process. That process will provide the public with an opportunity to comment on the effect of the final provisions of the BOI reporting and access rules on financial institutions’ customer due diligence obligations."

The rule will be effective 60 days after publication (February 20, 2024).

On Wednesday, the Department of the Treasury reported that OFAC continued to tighten enforcement of the price cap on Russian oil by building on previous actions targeting shipowners and vessels implicated in transporting Russian crude oil above the cap. In line with actions previously taken by partners in the Price Cap Coalition, OFAC designated a Government of Russia-owned ship manager as well as several obscure oil traders who have emerged as frequent participants in the seaborne transportation of Russian-origin oil following the imposition of the price cap.

OFAC also, in coordination with the Price Cap Coalition, updated the Guidance on Implementation of the Price Cap Policy for Crude Oil and Petroleum Products of Russian Federation Origin. Yesterday’s actions are in line with commitments made by Leaders of the Group of Seven (G7) on December 6, 2023 to tighten compliance and enforcement of the price cap policy on Russian oil, including by imposing sanctions on those engaged in deceptive practices and by updating compliance rules and regulations as necessary.

For the names and identification information of the designated parties, and links to two new Russia-related General Licenses, see the December 20, 2023, BankersOnline OFAC Update.

The Financial Crimes Enforcement Network (FinCEN) has announced in Notice FIN-2023-NTC5 a further extension of time for certain Report of Foreign Bank and Financial Accounts (FBAR) filings in light of the notice of proposed rulemaking (NPRM) that FinCEN issued on March 10, 2016, which proposes to revise the regulations implementing the Bank Secrecy Act (BSA) requirements regarding FBARs. Specifically, one of the proposed amendments would expand and clarify the exemptions for certain U.S. persons with signature or other authority over foreign financial accounts. This proposed amendment seeks to address questions previously raised by members of the public regarding the filing requirement and its application to U.S. persons with signature authority over, but no financial interest in, certain types of foreign financial accounts.

On December 9, 2022, FinCEN issued Notice 2022-1 to extend the filing date to April 15, 2024, for the FBAR for certain U.S. individuals with signature authority over, but no financial interest in, one or more foreign financial accounts. FinCEN has previously issued identical extensions that applied to similarly situated individuals. As stated in previous Notices, FinCEN received questions following prior amendments to the FBAR regulations, which required additional consideration with respect to certain exemptions. The proposed amendments in the NPRM seek to address these exemptions but, because the proposed rulemaking is not yet finalized, FinCEN is further extending the filing due date to April 15, 2025, for individuals whose filing due date for reporting signature authority was previously extended by Notice 2022-1.

Perhaps in 2024 we can stop waiting for the "other shoe to drop" with a final rule.

The Treasury Department yesterday reported that OFAC has imposed sanctions on 10 entities and four individuals based in Iran, Malaysia, Hong Kong, and Indonesia supporting Iran’s unmanned aerial vehicle (UAV) production. This network, led by Iran-based Hossein Hatefi Ardakani, has facilitated the procurement of U.S.- and foreign-origin components worth hundreds of thousands of dollars for the Islamic Revolutionary Guard Corps Aerospace Force Self Sufficiency Jihad Organization (IRGC ASF SSJO) and its UAV program.

Concurrent with OFAC’s action and following a multi-year investigation by Homeland Security Investigations (HSI), the Department of Justice announced the unsealing of an indictment charging Hossein Hatefi Ardakani and Gary Lam with crimes related to an illicit procurement network and scheme to unlawfully export U.S.-origin, dual-use, and sensitive technology to Iran. HSI’s global investigation identified a network of Iranian intermediary companies, front companies, and logistics businesses used to procure and facilitate the transfer of sensitive U.S.- and foreign-origin technology to Iran for its weapons programs. On October 18, 2023, OFAC designated Gary Lam, whose primary name is Lin Jinghe, for his support to an Iran-based procurement agent working on behalf of the IRGC-owned Saberin Kish Company.

For a link to the names and identification information of the designated individuals and entities, see this BankersOnline OFAC Update.

The CFPB yesterday announced it has ordered U.S. Bank National Association to pay nearly $21 million for keeping out-of-work consumers from accessing unemployment benefits at the height of the COVID-19 pandemic. U.S. Bank froze tens of thousands of accounts due to unprecedented numbers of fraudulent unemployment claims. However, it failed to provide people a reliable and quick way to regain access. The bank also failed to provide provisional account credits, while investigating potentially unauthorized transfers. The CFPB’s order requires U.S. Bank to pay $5.7 million to consumers harmed by its actions and to pay a $15 million penalty.

The Office of the Comptroller of the Currency reported it has separately fined U.S. Bank $15 million for the same conduct.

For additional information and links to the consent orders issued by the CFPB and OCC, see "U.S. Bank fined $30M for illegal conduct during pandemic" in BankersOnline’s Penalty pages.