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CFPB sues TCF National Bank for overdraft opt-in practices

The Consumer Financial Protection Bureau has announced it brought suit against TCF National Bank, Sioux Falls, South Dakota (per FDIC records -- the CFPB press release lists the headquarters in Wayzata, Minnesota), for tricking consumers into costly overdraft services. The Bureau alleges that TCF designed its application process to obscure the fees and make overdraft service seem mandatory for new customers to open an account. The CFPB also believes that TCF adopted a loose definition of consent for existing customers in order to opt them into the service and pushed back on any customer who questioned the process. The lawsuit seeks redress for consumers, an injunction to prevent future violations, and a civil money penalty.

As described in the Bureau's complaint, TCF relied on overdraft fee revenue more than most other banks its size and recognized early on that the opt-in rule could negatively impact its business. In late 2009, Bank management estimated that approximately $182 million in annual revenue was “at risk” because of the opt-in rule. Through consumer testing, the bank determined that the less information it gave consumers about opting in, the more likely consumers would opt in.

The Bureau’s complaint alleges that TCF’s strategy also consisted of bonuses to branch staff who got consumers to sign on. For example, in 2010, branch managers at the larger branches could earn up to $7,000 in bonuses for getting a high number of opt-ins on new checking accounts. After the bank phased out the bonuses, certain regional managers instituted opt-in goals for branch employees. Staff had to achieve extremely high opt-in rates of 80 percent or higher for all new accounts. While the bank’s official policy was that an employee could not be terminated for low opt-in rates, many employees still believed they could lose their job if they did not meet their sales goals.

The Bureau alleges that the bank’s strategy worked and that by mid-2014, about 66 percent of the bank’s customers had opted in, a rate more than triple that of other banks. According to the Bureau’s complaint, the chief executive officer of the bank even named his boat the “Overdraft.” TCF’s senior executives were so pleased with the bank’s effectiveness at convincing consumers to opt in that they had parties to celebrate reaching milestones, such as getting 500,000 consumers to sign up.

The Bureau's complaint alleges that TCF violated the Electronic Fund Transfer Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. TCF National Bank reported total assets of $21 billion as of 9/30/16, with 360 retail branches across Minnesota, Wisconsin, Illinois, Michigan, Colorado, Arizona, and South Dakota.


FEMA announces suspensions of Missouri communities

The Federal Emergency Management Agency has published, at 82 FR 7697 in the Monday, January 23, 2017, Federal Register, a final rule identifying communities in Jackson County, Missouri, that are scheduled for suspension from the National Flood Insurance Program as of today, January 20, 2017, for noncompliance with the floodplain management requirements of the program.


Board amends Regulations A and D

The Federal Reserve Board has published two final rules in the January 23, 2017, Federal Register.

  • Amendments to Regulation A (12 CFR Part 201), at 82 FR 7635, to reflect the Board's approval of an increase in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically increased by formula as a result of the Board's primary credit rate action.
  • Amendments to Regulation D (12 CFR Part 204), at 82 FR 7636, to revise the rate of interest paid on balances maintained to satisfy reserve balance requirements (“IORR”) and the rate of interest paid on excess balances (“IOER”) maintained at Federal Reserve Banks by or on behalf of eligible institutions. The final amendments specify that IORR is 0.75 percent and IOER is 0.75 percent, a 0.25 percentage point increase from their prior levels.

These amendments take effect on January 23, 2017.


December residential construction activity mixed

HUD and the Census Bureau have announced the residential construction statistics for December 2016.

  • BUILDING PERMITS—Privately owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,210,000, 0.2 percent below the revised November rate, but 0.7 percent above the December 2015 estimate of 1,201,000. Single-family authorizations in December were at a rate of 817,000, 4.7 percent above the revised November figure. Authorizations of units in buildings with five units or more were at a rate of 355,000 in December. An estimated 1,186,900 housing units were authorized by building permits in 2016. This is 0.4 percent above the 2015 figure of 1,182,600.
  • HOUSING STARTS—Privately owned housing starts in December were at a seasonally adjusted annual rate of 1,226,000, 11.3 percent above the revised November rate and 5.7 percent above the December 2015 rate. Single-family housing starts in December were at a rate of 795,000, 4.0 percent below the revised November figure. The December rate for units in buildings with five units or more was 417,000. An estimated 1,166,400 housing units were started in 2016. This is 4.9 percent above the 2015 figure.
  • HOUSING COMPLETIONS—Privately owned housing completions in December were at a seasonally adjusted annual rate of 1,123,000, 7.9 percent below the revised November rate of 1,219,000, but 8.7 percent above the December 2015 rate. Single-family housing completions in December were at a rate of 761,000, 0.9 percent below the revised November rate. The December rate for units in buildings with five units or more was 355,000. An estimated 1,062,300 housing units were completed in 2016. This is 9.7 percent above the 2015 figure.


Yellen on economic outlook and monetary policy

In a presentation at he Stanford Institute for Economic Policy Research, Federal Reserve Board Chair Yellen reviewed the economic outlook and the conduct of monetary policy. She discussed the progress to date, maintaining sustainable growth in a context of price stability, and evaluating the appropriate stance of monetary policy. In her concluding remarks, Yellen said, "it is important to emphasize the considerable uncertainty that attaches to such assessments and the need to constantly update them. In particular, the path of the neutral federal funds rate, which plays an important role in determining the appropriate policy path, is highly uncertain. For example, productivity growth is a key determinant of the neutral rate, and while most forecasters expect productivity growth to pick up from its recent unusually slow pace, the timing of such a pickup is highly uncertain. Indeed, there is little consensus among researchers about the causes of the recent slowdown in productivity growth that has occurred both at home and abroad. The strength of global growth will also have an important bearing on the neutral rate through both trade and financial channels, and here, too, the scope for surprises is considerable. Finally, I would mention the potential for changes in fiscal policy to affect the economic outlook and the appropriate policy path. At this point, however, the size, timing, and composition of such changes remain uncertain. However, as this discussion highlights, the course of monetary policy over the next few years will depend on many different factors, of which fiscal policy is just one."


OCC announces enforcement actions

The Office of the Comptroller of the Currency (OCC) released its January list of new enforcement actions. There were six orders listed, two against banks and four against individuals. The previously announced civil money penalty order against HSBC Bank USA, N.A., McLean, Virginia, was included. The other action against a bank was a formal agreement. The personal orders included previously announced actions brought for removal and prohibition and assessment of civil money penalties against two former foreign exchange traders; and removal and prohibition orders issued against the former Senior Vice President and Commercial Real Estate Loan Office of Superior Bank, Birmingham, Alabama, and a former Business Banker of First National Bank of Pennsylvania, Pittsburgh, Pennsylvania.


Conversion to federal charter booklet revised

OCC Bulletin 2017-5 announces the issuance of a revision of the “Conversions to Federal Charter” booklet of the Comptroller’s Licensing Manual. The revised booklet replaces the “Conversions” booklet issued in April 2010.


Treasury statement on succession

The Department of the Treasury released late on Thursday evening, a statement attributed to a Treasury Spokesperson:

"To ensure the smooth continuity of leadership at the Department of the Treasury, Acting Under Secretary Adam Szubin will serve as Acting Secretary of the Treasury, effective January 20, 2017. He will serve in that capacity until a new Secretary is confirmed and in place. At that point, Mr. Szubin will leave government service to pursue other endeavors."


Bureau Blog articles

The CFPB has posted two articles on its Blog: one announcing easy-to-remember guidelines to help people reduce credit card debt and the other on understanding the overdraft “opt-in” choice.


Financial services company pays $500K for impeding whistleblowers

The SEC has announced that Seattle-based financial services company HomeStreet Inc. has agreed to pay a $500,000 penalty to settle charges that it conducted improper hedge accounting and later took steps to impede potential whistleblowers. In addition, HomeStreet’s treasurer, Darrell van Amen, agreed to pay a $20,000 penalty to settle charges that he caused the accounting violations.


SBA programs to be discussed at NCUA webinar

The NCUA has announced a 90-minute webinar, "SBA Opportunities for Credit Unions," scheduled for 2 p.m. ET on February 15. The webinar will provide an update on the new SBA One automated lending platform and will discuss SBA’s Microenterprise Loan Program for credit unions making loans smaller than $50,000. The webinar will also provide an update on NCUA’s member-business lending rule.


Western Union pays $586M for fraud and money laundering

The Federal Trade Commission has announced that the Western Union Company, a global money services business headquartered in Englewood, Colorado, has agreed to forfeit $586 million and enter into agreements with the Federal Trade Commission, the Justice Department, and the U.S. Attorneys’ Offices of the Middle District of Pennsylvania, the Central District of California, the Eastern District of Pennsylvania and the Southern District of Florida. In its agreement with the Justice Department, Western Union admits to criminal violations including willfully failing to maintain an effective anti-money laundering program and aiding and abetting wire fraud. The forfeited money will fund restitution payments to consumers who were harmed by the company's unlawful actions.

In a related action, FinCEN announced it has issued a consent assessment of a civil money penalty of $184 million against Western Union Financial Services, Inc. (WUFSI). WUFSI consented to FinCEN’s determination that prior to 2012, WUFSI willfully violated the Bank Secrecy Act’s anti-money laundering (AML) requirements by failing to implement and maintain an effective, risk-based AML program and by failing to file timely suspicious activity reports (SARs). FinCEN’s penalty is in conjunction with the actions by the U.S. Department of Justice (DOJ) and the U.S. Federal Trade Commission (FTC), and will be satisfied by Western Union's forfeiture to the U.S. Treasury.

For further details on this story, see "Western Union forfeits $586M for AML violations and consumer fraud," in our Penalties pages.


CFPB sues largest student loan servicer

The Consumer Financial Protection Bureau announced yesterday that it has sued Navient Corporation and its subsidiaries, alleging that Navient has failed to provide the most basic functions of adequate student loan servicing at every stage of repayment for both private and federal loans. The Bureau stated that Navient provided bad information in writing and over the phone, processed payments incorrectly, and failed to act when borrowers complained about problems, and that Navient's actions systematically made it harder for borrowers to obtain the important right to pay according to what they can afford. These illegal practices made paying back student loans more difficult and costly for certain borrowers, according to the Bureau's press release.

Formerly part of Sallie Mae, Inc., Navient is the largest student loan servicer in the United States. It services the loans of more than 12 million borrowers, including more than 6 million accounts under its contract with the Department of Education. Altogether, it services more than $300 billion in federal and private student loans. Named in today’s lawsuit are Navient Corporation and two of its subsidiaries: Navient Solutions is a division responsible for loan servicing operations; Pioneer Credit Recovery specializes in the collection of defaulted student loans.

The suit alleges that Naviant:

  • fails to correctly apply or allocate borrower payments to their accounts
  • steers struggling borrowers toward paying more than they have to on loans
  • obscured information consumers needed to maintain their lower payments
  • deceived dprivate student loan borrowers about requirements to release their cosigners from a loan
  • harmed the credit of disabled borrowers, including severely injured veterans
  • made illegal misrepresentations concerning the federal loan rehabilitation program available to defaulted borrowers

The suit alleges violations of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Fair Credit Reporting Act, and the Fair Debt Collections Practices Act. The suit seeks redress for consumers harmed by Navient’s illegal practices. The CFPB is also seeking to keep Navient from continuing the illegal conduct described in the complaint, and to prevent new borrowers from being harmed.


Bureau publishes Bulletin on production incentives

The CFPB published in the January 18 Federal Register its November 28, 2016, Compliance Bulletin 2016-03, "Detecting and Preventing Consumer Harm from Production Incentives." The bulletin compiles guidance that has previously been given by the CFPB in other contexts and highlights examples from the CFPB's supervisory and enforcement experience in which incentives contributed to substantial consumer harm. It also describes compliance management steps supervised entities should take to mitigate risks posed by incentives.


November TIC data

The Department of the Treasury has released Treasury International Capital (TIC) data for November 2016. The sum total in November of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $23.7 billion. Of this, net foreign private inflows were $25.2 billion, and net foreign official outflows were $1.5 billion. Foreign residents increased their holdings of long-term U.S. securities in November; net purchases were $13.3 billion. Net purchases by private foreign investors were $12.2 billion, while net purchases by foreign official institutions were $1.1 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $17.5 billion.


FHFA requests comments

The Federal Housing Finance Agency (FHFA) is requesting public input on chattel loan pilot initiatives for Fannie Mae and Freddie Mac and the proposed Evaluation Guidance under the final rule on Duty to Serve Underserved Markets.


Industrial production and capacity utilization report

The Federal Reserve Board has released G.17 industrial production and capacity utilization data for December 2016. Industrial production rose 0.8 percent in December after falling 0.7 percent in November. For the fourth quarter as a whole, the index slipped at an annual rate of 0.6 percent. In December, manufacturing output moved up 0.2 percent and mining output was unchanged. The index for utilities jumped 6.6 percent, largely because of a return to more normal temperatures following unseasonably warm weather in November; the gain last month was the largest since December 1989. At 104.6 percent of its 2012 average, total industrial production in December was 0.5 percent above its year-earlier level. Capacity utilization for the industrial sector increased 0.6 percentage point in December to 75.5 percent, a rate that is 4.5 percentage points below its long-run (1972–2015) average.


Fed Board adjusts maximum CMPs

The Federal Reserve Board has announced that it has finalized a rule adjusting the Board's maximum civil money penalties, as required by law. In November 2015, a law was passed that requires all federal agencies to adjust their maximum civil money penalty limits annually for inflation, rather than every four years as previously required. The maximum civil money penalty limits depend on several factors, including the severity and type of violation. Additionally, the law dictates the annual adjustment formula for federal agencies. The new penalty amounts apply as of January 15, 2017.


January Beige Book

The Federal Reserve has posted the January 2017 issue of the Beige Book. The full report and a national summary are available.


FHA amends reverse mortgage program rules

The Federal Housing Administration has published in today's Federal Register a final rule making several changes to FHA's Home Equity Conversion Mortgage (HECM) program. The HECM program is FHA’s reverse mortgage program that enables seniors who have equity in their homes to withdraw a portion of the accumulated equity. The intent of the Home Equity Conversion Mortgage program is to ease the financial burden on elderly homeowners facing increased health, housing, and subsistence costs at a time of reduced income. The changes are effective September 19, 2017. They affect rules at 24 CFR Parts 30 and 206.


FTC halts phony rentals and free credit report scam

The Federal Trade Commission has announced it has has charged Credit Bureau Center LLC and three individuals with luring consumers with fake rental property ads and deceptive promises of “free” credit reports into signing up for a costly credit monitoring service. At the FTC’s request, a federal court temporarily halted the operation, which has raked in millions of dollars. The agency seeks to permanently stop the allegedly illegal practices and return money to consumers. According to the Commission’s complaint, the defendants placed Craigslist ads for rental properties that did not exist or that they were not authorized to offer for rent. When people responded to the ads, the defendants impersonated property owners and sent emails offering property tours if consumers would first obtain their credit reports and scores from the defendants’ websites. These sites claimed to provide “free” credit reports and scores, but then enrolled consumers in a credit monitoring service with continuing $29.95 monthly charges. Many people did not realize they had been enrolled until they noticed unexpected charges on their bank or credit card statements, sometimes after several billing cycles.


OCC will allow closings in DC Friday

The OCC has issued a proclamation allowing national banks and federal savings associations in the District of Columbia to close at their discretion for the Presidential Inauguration. Inauguration Day is a federal holiday within the District.


OFAC sanctions Balkan president

OFAC has designated Milorad Dodik, President of Republika Srpska, one of two entities that make up Bosnia and Herzegovina. Specifically, Dodik was designated for his role in defying the Constitutional Court of Bosnia and Herzegovina in violation of the rule of law, thereby actively obstructing the Dayton Accords; he was also designated for conduct that poses a significant risk of actively obstructing the same. See our OFAC Update for additional information.


January 2017 NCUA Report released

In the latest issue of The NCUA Report, an article by NCUA’s Office of Small Credit Union Initiatives discusses the new, streamlined application process NCUA and the CDFI Fund have created for qualifying low-income credit unions, and how this process can help more credit unions become CDFI certified.


CATS launched at OCC

The OCC has announced the launch of the agency’s Central Application Tracking System (CATS), which is the OCC’s new web-based system for banks to file licensing and public welfare investment applications and notices. CATS replaces e-Corp and CD-1 Invest, the current OCC electronic filing systems. See OCC Bulletin 2016-37 for details.


OCC makes Licensing Manual change

OCC Bulletin 2017-4 announced an update of the “Management Interlocks” booklet of the Comptroller’s Licensing Manual, which replaces the booklet of the same title issued in October 2009. The revised booklet incorporates updated requirements following the integration of the Office of Thrift Supervision into the OCC in 2011 and clarifies guidance for both national banks and federal savings associations.


Labor posts new FAQs on Fiduciary Rule

The Department of Labor has posted a second set of FAQs on its Fiduciary Conflict of Interest rule. This group of questions focuses particularly on technical questions raised by financial service providers, generally limited to investment advice concerning ERISA-covered plans, IRAs, and other plans covered by section 4975(e)(1) of the Internal Revenue Code.


New HUD test program for low-income seniors

HUD has announced awards totaling approximately $15 million to select owners of HUD-assisted senior housing developments to help their low-income senior tenants to age in their own homes and delay or avoid the need for nursing home care. HUD will cover costs related to hiring a full-time Enhanced Service Coordinator and a part-time Wellness Nurse to connect the elderly with the supportive services they need to maintain independent living and age-in-place.


Canadian bank pays $0.5M to settle OFAC violations

OFAC has announced that Toronto-Dominion Bank (“TD Bank”), a financial institution headquartered in Toronto, Ontario, has agreed to remit $516,105 to settle its potential civil liability for 167 apparent violations of the Cuban Assets Control Regulations (CACR), and of the Iranian Transactions Sanctions Regulations (ITSR). OFAC also has issued a Finding of Violation to TD Bank, the parent company of wholly owned subsidiaries Internaxx Bank SA and TD Waterhouse Investment Services for 3,491 violations of the CACR and ITSR.


January 2017 FedFlash available

Federal Reserve Financial Services has posted the January 2017 issue of FedFlash.


ANPR comments extended on enhanced cyber risk management standards

The Federal Reserve, FDIC and OCC have announced the extension through February 17, 2017, of the comment period for their advance notice of proposed rulemaking on enhanced cyber risk management standards for large and interconnected entities under their supervision and those entities’ service providers. The agencies are considering five categories of cyber standards: cyber risk governance, cyber risk management, internal dependency management, external dependency management, and incident response, cyber resilience, and situational awareness. This announcement extends the comment period by one month.


New Jersey bank closed

The FDIC has announced that Harvest Community Bank, Pennsville, New Jersey, has been closed by the New Jersey Department of Banking and Insurance, which appointed the FDIC as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First-Citizens Bank & Trust Company, Raleigh, North Carolina, to assume all of the deposits of Harvest Community Bank. Harvest Community Bank is the first FDIC-insured institution to fail in 2017.


CFPB updates student loan Payback Playbook prototype

The CFPB has announced an update of its student loan Payback Playbook prototype.


New York issues updated cybersecurity regs

The New York State Department of Financial Services (DFS) has announced that it has updated its proposed first-in-the-nation cybersecurity regulation to protect New York State from the ever-growing threat of cyber-attacks. The proposed regulation, which will be effective March 1, 2017, will require banks, insurance companies, and other financial services institutions regulated by DFS to establish and maintain a cybersecurity program designed to protect consumers and ensure the safety and soundness of New York State’s financial services industry. The updated proposed regulation, which was submitted to the New York State Register on December 15, and published on December 28, will be finalized following a 30-day notice and public comment period.


OFAC adds non-proliferation and Syria designations

OFAC has announced it has taken action in response to the Organization for the Prohibition of Chemical Weapons (OPCW) - United Nations (UN) Joint Investigative Mechanism (JIM) findings that the Syrian regime used industrial chlorine as a weapon against its own people. OFAC is designating 18 senior regime officials connected to Syria’s weapons of mass destruction program and identifying five Syrian military branches as part of the Government of Syria. Any property or interest in property of the identified persons in the possession or control of U.S. persons or within the United States must be blocked. Additionally, transactions by U.S. persons involving these persons are generally prohibited. See our OFAC Update for more information.


OFAC guidance on provision of services under sanctions laws

OFAC has announced the publication of guidance on the provision of certain services relating to the requirements of U.S. sanctions laws (the “Compliance Services Guidance”). The Compliance Services Guidance does not reflect a change in OFAC’s policy with respect to the provision of these types of legal and compliance services. The Compliance Services Guidance responds to numerous inquiries received by OFAC, many from foreign companies at outreach events, relating to whether U.S. persons, including U.S. attorneys and compliance personnel, may provide certain services described in that guidance. OFAC is also publishing a number of new Frequently Asked Questions pertaining to the Compliance Services Guidance.


Payment system risk information available

The Federal Reserve has posted its first quarter 2016 peak and average daylight overdrafts and related fees plus the quarterly data updates.


FOMC releases 2011 files

The Federal Open Market Committee has posted links to the Beige Book, agenda, statement, minutes, transcripts, and presentation material from its 2011 meetings and conference calls.


OCC to host compliance workshops in Miami

The OCC will host two workshops in Miami, Florida, on February 7-8, for directors of national community banks and federal savings associations supervised by the OCC. The Risk Governance workshop will be offered on February 7 and the Compliance Risk workshop on February 8.


Bureau publishes annual CMP inflation adjustments

The CFPB has published at 82 FR 3601 in today's Federal Register a final rule adjusting for inflation the maximum amount of each civil penalty within the Bureau's jurisdiction. These adjustments are required by the Federal Civil Penalties Inflation Adjustment Act of 1990 (the Inflation Adjustment Act), as amended by the Debt Collection Improvement Act of 1996 and further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The amendments will be made to the Bureau's Adminstrative regulation, "Civil Penalty Adjustments," at 12 CFR Part 1083. The rule is effective January 15, 2017.


CFPB releases debt collection reports

In an early morning news release coordinated with its Debt Collection forum today in Washington, the CFPB released two documents and a copy of remarks to be delivered at the forum by Bureau Director Cordray. Consumer Experiences with Debt Collection, "provides an in-depth analysis of consumers’ encounters with the debt collection industry," according to the press release. It reports that over 40 percent of consumers who said they were approached about a debt in collection requested that a creditor or collector stop contacting them. Of these consumers, three in four report that debt collectors did not honor their request to cease contact.

The second document, Market Snapshot: Online Debt Sales, was described as "a study of potential risks in the online debt marketplace, where consumer debts and personal information are for sale for fractions of pennies on the dollar."

The Bureau also announced the start of a series of personal debt collection stories from consumers as part of an ongoing effort to highlight issues in the debt collection marketplace and inform consumers of their rights.


2017 Schedule of OCC Directors Workshops

The OCC has released the 2017 schedule of workshops for directors of national community banks and federal savings associations. The agency will offer five workshops at a cost of $99 each:

  • Building Blocks for Directors
  • Risk Governance
  • Compliance Risk
  • Credit Risk
  • Operational Risk

Each workshop is limited to 35 participants.


NCUA webinar on new field-of-membership rule

The NCUA has announced that a 90-minute webinar on NCUA's new field-of-membership rule, which takes effect on February 6, will begin at 2 p.m. ET on February 1.


NCUA December board meeting video

The video of the December 15, 2016, open meeting of the NCUA Board is now available on the agency’s website.


Operator of mortgage relief scheme banned

The Federal Trade Commission has announced that Damian Kutzner, one of the operators of a mortgage relief scheme that bilked millions of dollars from financially distressed homeowners, has agreed to a court order banning him from the debt relief business. The court order resolves the Federal Trade Commission's complaint and the contempt charges against Kutzner. It also bans him from providing certain financial products and services, and from making misrepresentations about any products or services. In addition, the order imposes a judgment of more than $18.3 million, representing the amount of consumer harm.


OFAC sanctions North Korean officials and agencies

OFAC has designated seven individuals and identified as blocked two entities of the North Korean regime in response to the regime’s ongoing and serious human rights abuses and censorship activities. Treasury is taking this action in conjunction with the State Department’s “Report on Serious Human Rights Abuses or Censorship in North Korea,” which is being submitted in accordance with the North Korea Sanctions and Policy Enhancement Act of 2016. As a result of these actions, any property or interest in property of those designated by OFAC within U.S. jurisdiction is frozen. Additionally, transactions by U.S. persons involving the designated persons are generally prohibited. The identifications of two entities as blocked were issued pursuant to E.O. 13722, which, among others, blocks the property and interests in property of the Government of North Korea and the Workers’ Party of Korea, including those two entities. See our OFAC Update for additional information.


OCC to fine and bar two FOREX traders

The OCC has issued notices of charges for prohibition and notices of assessment of civil money penalty against Richard Usher, former Head of G10 Spot Trading at JPMorgan Chase Bank, N.A., and Rohan Ramchandani, former Head of European Spot Trading at Citibank, N.A. The OCC also fined Usher and Ramchandani $5 million each for violating the Sherman Antitrust Act, engaging in unsafe or unsound practices, and breaching their fiduciary duties related to their conduct in the foreign exchange (FOREX) market. Concurrent with the OCC’s enforcement action, the Department of Justice also issued indictments against Usher and Ramchandani for violations of the Sherman Antitrust Act. In addition, the Federal Reserve announced enforcement actions against another trader in the Cartel chat room. Usher and Ramchandani may request a hearing challenging their respective notice of charges for prohibition and notice of assessment of civil money penalties. For additional details, see our Penalty page concerning the OCC's announcement.


OFAC targets ISIL financing and support

Treasury’s Office of Foreign Assets Control (OFAC) has acted to disrupt the Islamic State of Iraq and the Levant’s (ISIL) global fundraising and support network by designating four individuals – Neil Christopher Prakash, Khaled Sharrouf, Bachrumsyah Mennor Usman, and Oman Rochman – as Specially Designated Global Terrorists (SDGTs) pursuant to Executive Order (E.O.) 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. The individuals designated today include ISIL members based in Iraq, Syria, and Indonesia who are involved in ISIL’s propaganda, recruitment, and support networks in Southeast Asia and Australia. As a result of these actions, all property and interests in property of Prakash, Sharrouf, Usman, and Rochman subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.

OFAC also announced that the State Department has designated Jamaah Ansharut Daulah (JAD) and Alexanda Amon Kotey pursuant to E.O. 13224. JAD is a terrorist group based in Indonesia that was formed in 2015 and is composed of almost two dozen Indonesian extremist groups that pledged allegiance to ISIL leader Abu Bakr al-Baghdadi. Kotey, a British national, is one of four members of the ISIL execution cell known as “The Beatles.”

For links and further information, see our OFAC Update.


Discount rate meeting minutes available

The Federal Reserve Board has released the minutes of its discount rate meetings from November 14 to December 14, 2016.


Checking credit before shopping for a home

The CFPB has posted a blog article encouraging consumers who are considering buying a home to first check their credit history and scores. A link to a downloadable credit report checklist is also provided.


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