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Banker's Toolbox, Inc., leaders in compliance solutions for financial institutions, announced the acquisition of Georgia-based MainStreet Technologies (MST). MST is an industry leader in the loan risk management space. This acquisition adds to a strong and growing portfolio of compliance-related solutions and will continue to enhance the value Banker's Toolbox brings to both their customers and the industry. (Read full press release here.)

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OFAC targets three for roles in South Sudan conflict

Treasury has announced that OFAC has imposed sanctions on three individuals pursuant to Executive Order (E.O) 13664: Israel Ziv and Obac William Olawo, for being leaders of entities whose actions have the purpose or effect of expanding or extending the conflict in South Sudan, and Gregory Vasili, for actions that have undermined peace, stability, and security in South Sudan. Additionally, OFAC designated six entities for being owned or controlled by Ziv and Olawo.

Any property or interests in property of those designated by OFAC that is within or transiting U.S. jurisdiction or the possession or control of a U.S. person must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all transactions by U.S. persons or within or transiting the United States that involve any property or interests in property of a designated person. Such property includes all property of entities 50 percent or more owned by one or more designated persons. For identifying information on the designated individuals and entities, see our OFAC Update.


Financial well-being of older Americans

The Bureau's Office of Financial Protection for Old Americans has released a new report, "Financial Well-being of Older Americans," with detailed information on the financial well-being scores by individual characteristics and issues of interest to people who work with older adults.


HUD rule amending FHA home warranty requirements

The Department of Housing and Urban Development has published a final rule [83 FR 64269] to streamline the home warranty requirements for FHA single-family mortgage insurance by removing the regulations that require borrowers to purchase 10-year protection plans in order to qualify for certain mortgages on newly constructed single-family homes. This action conforms with the changes made by the Housing and Economic Recovery Act of 2008 (HERA). HUD, however, is retaining the requirement that the Warranty of Completion of Construction (form HUD-92544) be executed by the builder and the buyer of a new construction home, as a condition for FHA mortgage insurance.

The rule, which will be effective March 14, 2019, follows publication of a February 6, 2013, proposed rule.


NCUSIF operating level lowered

The NCUA Board held an open meeting at the agency’s headquarters on December 13, 2018, and unanimously approved three items:

  • Lowering the normal operating level of the National Credit Union Share Insurance Fund to 1.38 percent from 1.39 percent.
  • Posting the final report of the agency’s Regulatory Reform Task Force in the Federal Register, following a briefing by the Office of the General Counsel.
  • A final rule making technical amendments to agency regulations to correct minor drafting errors and rescind certain unnecessary provisions.


Minority-owned depository institutions data

The Federal Reserve System has released its list of minority owned depository institutions and their branches as of September 30, 2018.


FHFA proposes rule on credit score validation

The Federal Housing Finance Agency (FHFA) is seeking public comment on a proposed rule that would establish standards and criteria for the validation and approval of third-party credit score models used by Fannie Mae and Freddie Mac. The proposed rule would establish a four-phase process to validate and approve credit score models:

  • Solicitation of applications from credit score model developers
  • Review of submitted applications
  • Credit score assessment
  • Enterprise business assessment

A Fact Sheet on the proposed rule was also released. Comments will be accepted for 90 days following Federal Register publication.


SSA review of Rep Payee selection

The Social Security Administration has published [83 FR 64422] a request for comments on the appropriateness of its order of preference lists for selecting representative payees (payees) and the effectiveness of its policy and operational procedures in determining when to change a payee. The SSA is seeking the information to determine whether and how it should make any changes to its representative payee program to help ensure that it selects suitable payees for its beneficiaries. Comments are requested by January&nbsp:28, 2019.


Fed issues notice of intent to prohibit two Wyoming bankers

The Federal Reserve Board has issued a Notice of Intent to Prohibit from the banking industry the current CEO and EVP of Farmers State Bank, Pine Bluffs, Wyoming, after they were found responsible in a civil action for having misappropriated trade secrets from, breached their fiduciary duty to, and converted the property of, Central Bank & Trust, Lander, Wyoming, while employed by Central, in a bid to obtain their current positions and seats on the Board at Farmers. The court issued judgment against the two individuals and in favor of Central, awarding Central over $2.2 million in damages (including $75,000 in punitive damages).

The Board alleges that the two individuals, while still employed at Central, acquired Central's confidential and proprietary information and later used it after being hired as CEO and EVP, respectively, of Farmers State Bank, and acted on behalf of Farmers while still employed at Central.


Former 'bank' execs pay $2.7M to settle SEC charges

The Security and Exchange Commission has announced that two former executives behind an allegedly fraudulent initial coin offering (ICO) that was stopped by the Commission earlier this year have been ordered to pay nearly $2.7 million and prohibited from serving as officers or directors of public companies or participating in future offerings of digital securities. AriseBank’s then-CEO Jared Rice Sr. and then-COO Stanley Ford were accused of offering and selling unregistered investments in their purported “AriseCoin” cryptocurrency by depicting AriseBank as a first-of-its-kind decentralized bank offering a variety of services to retail investors.


Chinese company pays $2.7M to settle Iranian sanctions violations

OFAC has announced that Yantai Jereh Oilfield Services Group Co., Ltd., headquartered in Yantai, China, and its affiliated companies and subsidiaries worldwide (collectively referred to hereafter as the “Jereh Group”), have agreed to pay $2,774,972 to settle the company’s potential civil liability for 11 apparent violations of the Iranian Transactions and Sanctions Regulations.


Bureau proposes 'No-Action' policy and product sandbox

The Bureau published in today's Federal Register a request for public comment on its proposed Policy on No-Action Letters and the Bureau Product Sandbox, which is intended to carry out certain of the Bureau’s authorities under Federal consumer financial law; and a proposed information collection associated with applications submitted by applicants requesting admission to the Product Sandbox. Comments will be accepted through February 11, 2019.


Bank trading revenue increases

The OCC has issued its Quarterly Report on Bank Trading and Derivatives Activities for the third quarter 2018, which reveals trading revenue of U.S. commercial banks and federal savings associations of $7.1 billion in the third quarter 2018, which was $0.2 billion, or 2.7 percent, more than the previous quarter. Trading revenue in the third quarter 2018 increased by 1.7 percent compared with the $6.9 billion reported in the third quarter 2017.


Third quarter 2018 CU data report

The NCUA has posted its Quarterly U.S. Map Review for the third quarter of 2018, which indicates federally insured credit unions generally saw continued positive trends. Nationally, overall membership continued to grow, concentrated in larger credit unions. Eighty-eight percent of federally insured credit unions reported positive net income during the first three quarters of 2018. Median annual loan growth in the year ending in the third quarter was 5.9 percent and median annual asset growth was 1.7 percent.


Communities to be suspended from flood insurance program

The Federal Emergency Management Agency has published in the December 13, 2018, Federal Register a rule identifying communities in four states that are scheduled to be suspended on December 21, 2018, from the National Flood Insurance Program for failure to comply with the floodplain management requirements of the program. The communities scheduled for suspension include:

  • IN: DeMotte, Remington, Rensselaer and unincorporated areas of Jasper County
  • LA: Carencro and Duson
  • MN: Carver, Chanhassen, Chaska, Mayer, Norwood Young America, Victoria, Waconia, Watertown, and unincorporated areas of Carvr County
  • NC: Unincorporated areas of Camden and Currituck Counties


Carson to chair Opportunity and Revitalization Council

The Department of Housing and Urban Development has announced the establishment by Executive Order of the White House Opportunity and Revitalization Council and the naming HUD Secretary Ben Carson as its chairperson. The Council’s 13 Federal member agencies will engage with governments at all levels on ways to more effectively use taxpayer dollars to revitalize low-income communities. The Council will improve revitalization efforts by streamlining, coordinating, and targeting existing Federal programs to Opportunity Zones, economically distressed communities where new investments may be eligible for preferential tax treatment.


NMDB mortgage statistics released

The Federal Housing Finance Agency has released the first set of national statistics derived from the National Mortgage Database as a step toward implementing the monthly mortgage market survey public data disclosure required by the Housing and Economic Recovery Act of 2008 (HERA). The NMDB contains information for a nationally representative sample of residential mortgages in the U.S. The select summary statistics from the NMDB describe loan characteristics for various loan groups. The statistics also describe various loan types, including loan size, borrower credit scores, home values, down payments and other product features. The statistics provide useful benchmarks for the residential mortgage market.


Regulators to host conference call on CBLR for bankers

The FDIC, OCC and Fed will host an interagency conference call for bankers on December 18, 2018, to discuss the optional community bank leverage ratio (CBLR) framework. See FDIC FIL-85-2018 for details on time and access to the presentation.


NCUA to launch alternating exam pilot program

On January 1, 2019, the NCUA and six state credit union regulators will launch an alternating examination pilot program for a select group of federally insured, state-chartered credit unions. The NCUA has posted an FAQ about the program.


FCC to create database of reassigned numbers

The Federal Communications Commission voted yesterday to create a reassigned numbers database to help reduce unwanted calls to consumers. Callers using the database will be able to find out if telephone numbers assigned to consumers who want their calls have been disconnected and made eligible for reassignment. Any such numbers can then be purged from their call lists, thereby decreasing the number of unwanted calls to consumers. To further encourage callers to use the database, the Commission is providing callers a safe harbor from liability for any calls to reassigned numbers caused by database error.


FTC settles credit card laundering scheme

The FTC has announced a settlement with two defendants charged with laundering millions of dollars in credit card charges through fraudulent merchant accounts. A complaint filed by the FTC stated the defendants created Money Now Funding to launder funds from fraudulent operations and processed almost $6M through the credit card network. A monetary judgment of $5.8 million has been suspended due to the defendants’ inability to pay. For additional details, see "Credit card launderers barred and fined," in our Penalties pages.


Mortgage performance improves slightly

The OCC has issued its third quarter Mortgage Metrics Report, which shows 95.4 percent of mortgages included in the report were current and performing at the end of the quarter, compared to 94.8 percent last year. The report also showed that servicers initiated 28,508 new foreclosures during the third quarter of 2018­, a 3.7 percent decrease from the previous quarter and a 16.8 percent decrease from a year ago. Servicers implemented 25,701 mortgage modifications in the third quarter of 2018, and 69.2 percent of the modifications reduced borrowers’ monthly payments.


HUD and VA support for homeless vets

HUD and the VA have announced a second round of funding to help provide permanent homes to veterans and their families experiencing homelessness in six states and the District of Columbia. The funding is provided through the HUD-Veterans Affairs Supportive Housing Program, and gives an additional 424 vouchers to local public housing agencies across the country.


NMLS MLO annual renewal period ending

The NMLS annual renewal period for registered mortgage loan originators (MLOs) ends December 31. Failure to renew your bank's and its MLOs' registrations may impact your MLOs’ ability to engage in mortgage loan origination activity. More information is available on the NMLS MLO renewals page.


FinCEN again extends FBAR deadline

FinCEN has announced 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) FinCEN issued on March 10, 2016, which proposes to revise the regulations implementing the Bank Secrecy Act (BSA) 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 raised regarding the filing requirement and its application to the individuals with signature authority over, but no financial interest in, certain types of accounts as outlined in its previous extension notice.


Israel joins FATF

The Financial Action Task Force has announced that Israel has become the 38th member of the international anti-money laundering organization, joining 35 jurisdictions and 2 regional organizations. A FATF report on Israel’s measures to combat money laundering and terrorist financing was also released.


FHFA Guarantee Fees report

The FHFA has issued and submitted to Congress its 2017 annual report on single-family guarantee fees charged by Fannie Mae and Freddie Mac. Guarantee fees are intended to cover the credit risk and other costs that Fannie Mae and Freddie Mac incur when they acquire single-family loans from lenders. These include projected credit losses from borrower defaults over the life of the loans, administrative costs, and a return on capital. The report compares year-over-year 2017 to 2016, and provides data over five years back to 2013


FTC requests comment on ID Theft rules

The Federal Trade Commission has published [83 FR 63604] a request for public comment on its Identity Theft Rules [16 CFR 681], as part of the Commissions systematic review of its current regulations and guides. This review focuses on the Red Flags Rule and the Card Issuers Rule. It's likely that any proposed change to these rules will be mirrored by revisions by the Bureau and other agencies. Comments are due by February 11, 2019.


Beta HMDA platform for 2018 data available

The CFPB has announced the beta launch of the HMDA Platform for data collected in 2018. The beta release provides financial institutions an opportunity to become familiar with the HMDA Platform and, in particular, determine whether their sample LAR data complies with the reporting requirements outlined in the Filing Instructions Guide for HMDA data collected in 2018. During the beta period, financial institutions may test and retest 2018 HMDA data files as often as desired. All test data uploaded during the beta period will be removed from the system when the filing period opens in January 2019.

You'll need a Legal Entity Identifier (LEI) that uniquely identifies the institution, and that LEI must be recognized by the HMDA Platform in order to create a new account or test data with an existing account. If your institution has an LEI, and that LEI is not currently recognized by the HMDA Platform, fill out and submit this form to have the information added to the HMDA Platform. If your institution has not registered for an LEI and intends to file HMDA data collected in 2018, visit the Global LEI Foundation for information on obtaining an LEI.


OFAC targets N. Korean official and entities

Treasury announced Monday that OFAC had designated three individuals in response to the North Korean regime’s ongoing and serious human rights abuses and censorship. Individuals designated yesterday are senior officials of previously sanctioned government bodies, including the Ministry of State Security, the Ministry of Public Security, WPK Organization and Guidance Department, and the WPK Propaganda and Agitation Department. For identity information, see our OFAC Update.


Student loan debt relief operators banned

The Federal Trade Commission has announced the operators of two Florida-based student loan debt relief schemes are banned from the debt relief business as part of agreements settling Commission allegations that they collected illegal upfront fees and falsely promised to help some consumers enroll in government programs that would reduce or forgive their student loan debt. The settlements with Student Debt Doctor and American Student Loan Consolidators are part of Operation Game of Loans, a coordinated federal-state law enforcement initiative targeting deceptive student loan debt relief schemes first announced by the Commission in October 2017.


CFPB 2018 Financial Literacy Report

The CFPB has issued a report summarizing its 2018 activities and achievements in financial education.


Ukraine- related general licenses extended

OFAC has announced the extension of the expiration date of certain general licenses related to EN+ Group PLC, United Company RUSAL PLC, and GAZ Group, and issued four general licenses.


Fed updates US model package

The Federal Reserve Board has announced an update and overview of the FRB/US model package and dataset. The FRB/US model was launched almost 25 years ago as a large macroeconomic model of the US economy. References and documentation about the FRB/US model and some of its history can be found on the public website. While the model has been modestly updated and changed over the years, the FEDS Note summarizes a more comprehensive set of modifications introduced with the November 2018 public release of the model and provides some motivation for why they were made.


FATF report on UK AML actions

The FATF has issued its mutual evaluation report on the United Kingdom’s efforts to combat money laundering and terrorist financing. An executive summary was also made available.


2019 Deemed-Issuance Ratio announced

The Federal Housing Finance Agency (FHFA) has announced the deemed-issuance ratio for calendar year 2019 in accordance with Internal Revenue Service (IRS) guidelines on the trading of the Uniform Mortgage-Backed Security (UMBS).


Kraninger confirmed as director of Bureau

The Hill reports that the Senate has confirmed Kathy Kraninger to be director of the Consumer Financial Protection Bureau (CFPB), granting her a five-year term to lead the agency.


FDIC announces deposit insurance app process resources and RFI

The FDIC has announced multiple initiatives and resources related to applications for deposit insurance for organizers of new, or de novo, banks, and to promote a more transparent, streamlined and accountable process for all applications submitted to the agency. As part of the initiatives, the FDIC is seeking comment from interested parties on all aspects of the deposit insurance application process. Through a Request for Information (RFI), the FDIC is soliciting feedback on a number of topics, including ways in which the FDIC could or should support the continuing evolution of emerging technology and Fintech companies; aspects of the application process that may discourage potential applications; possible changes to the application process for traditional community bank proposals; and other suggestions for improving the effectiveness, efficiency, or transparency of the application process. The RFI also solicits comments to address any other matters of interest or concern to affected stakeholders. Comments on the RFI will be due sixty days from publication in the Federal Register. The resources listed in the press release were:

UPDATE: The RFI was published at 83 FR 63868 on 12/12/2018, with comments due by 2/11/2019.


Mortgage company to settle Bureau UDAAP claims

The CFPB has announced it has filed a complaint in federal court alleging a claim of deception against Village Capital & Investment LLC, a non-bank mortgage company headquartered in Henderson, Nevada. The Bureau and Village Capital also filed a proposed stipulated final judgment and order to resolve the claim.

The Bureau alleges that Village Capital violated the Consumer Financial Protection Act of 2010 by misleading veterans regarding its Interest Rate Reduction Refinancing Loans—loans that allow veterans to refinance their mortgages at lower interest rates with a loan guaranteed by the Department of Veterans Affairs. Specifically, the Bureau alleges that Village Capital misled veterans by overstating the benefits of refinancing.

If entered by the court, the proposed order would require Village Capital to pay $268,869 in redress to consumers and a civil penalty of $260,000. The order would also prohibit Village Capital from misrepresenting the terms or benefits of mortgage refinancing.


Affordable Mortgage Lending Guide info updated

The FDIC has issued FIL-84-2018 to announce the update of the Affordable Mortgage Lending Guide Part I: Federal Agencies and Government Sponsored Enterprises, to reflect the most up-to-date information available about the mortgage products offered through federal housing programs, Fannie Mae and Freddie Mac.


Third quarter 2018 credit union performance

The NCUA has released data on the financial performance of federally insured credit unions for the quarter ending September 30, 2018. The reports include an overview of the quarterly Call Report data as well as tables showing the recent history of major credit union performance indicators.


Agencies publish proposed appraisal rule amendments

The OCC, Federal Reserve and FDIC have finally published their Notice of Proposed Rulemaking inviting comment on proposed amendments to the agencies’ regulations requiring appraisals for certain real estate-related transactions. The proposed rule, announced on November 20, would increase the threshold level at or below which appraisals would not be required for residential real estate-related transactions from $250,000 to $400,000. Comments will be accepted through February 5, 2019.


Bureau settles FCRA claims with State Farm Bank

Yesterday, the CFPB announced a settlement with State Farm Bank, FSB, a federal savings association headquartered in Bloomington, Illinois. As described in the consent order, the Bureau found that State Farm Bank violated the Fair Credit Reporting Act, Regulation V, and the Consumer Financial Protection Act of 2010 by obtaining consumer reports without a permissible purpose; furnishing to credit-reporting agencies (CRAs) information about consumers’ credit that the bank knew or had reasonable cause to believe was inaccurate; failing to promptly update or correct information furnished to CRAs; furnishing information to CRAs without providing notice that the information was disputed by the consumer; and failing to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information provided to CRAs. Under the order, State Farm Bank must revise its practices to comply with the FCRA, Regulation V and the CFPA.


FTC: The check's in the mail

The Federal Trade Commission has announced it is mailing 43,456 checks totaling more than $3.5 million to consumers subjected to deceptive and unfair sales and financing tactics by the Sage Auto Group and its owners between 2014 and 2016. Affected consumers will receive their checks soon. The average refund amount is $81.76.


Quarles on banks in rural communities of the West

Federal Reserve Board Vice Chairman Randal K. Quarles offered a presentation on Banks as Vital Infrastructure for Rural Communities of the West yesterday at the Stanford Institute for Economic Policy Research. He spoke about the economy of the Western United States and linked the recent and future performance of the western economy to the central and supportive role banks play as vital infrastructure in their communities.


December Beige Book available

The Federal Reserve Board has posted the December 5, 2018, issue of the Beige Book, which summarizes comments received from contacts outside the Federal Reserve System and is not a commentary on the views of the Federal Reserve officials. A summary and the full report are available.


CFPB 2017 Fair Lending Report

The Bureau has submitted its annual Fair Lending Report to Congress.


FDIC State Profiles

The third quarter 2018 issue of the FDIC State Profiles has been published containing a quarterly summary of banking and economic conditions in each state.


Discount rate meeting minutes

The Federal Reserve Board has posted the minutes of the Federal Open Market Committee (FOMC) interest rate meeting held on November 8, 2018. The FOMC decided to maintain the target range for the federal funds rate at 2 to 2.25 percent. Consistent with the FOMC's decision to leave the target range for the federal funds rate unchanged, the Board approved maintaining the existing interest rate (2.20 percent) paid on required and excess reserve balances. The Board also approved the establishment of the interest rate on discounts and advances made under the primary credit program (the primary credit rate) at the existing level (2.75 percent).


Report on non-performing loan sales

The Federal Housing Finance Agency (FHFA) has released its semiannual report providing information about the sale of non-performing loans (NPLs) by Fannie Mae and Freddie Mac (the Enterprises). The Enterprise Non-Performing Loan Sales Report includes information about NPLs sold from August 1, 2014 through June 30, 2018, and reflects borrower outcomes as of June 30. The sale of NPLs reduces the number of delinquent loans in the Enterprises' portfolios and transfers credit risk to the private sector. FHFA and the Enterprises impose requirements on NPL buyers designed to achieve more favorable outcomes for borrowers than foreclosure.


OCC releases CRA ratings for 28 banks

The Office of the Comptroller of the Currency has released a list of 28 national banks, federal savings associations, and insured federal branches of foreign banks whose Community Reinvestment Act performance evaluations were made public during the month of November. Twenty-five of the institutions received satisfactory ratings. These three institutions received ratings of outstanding:


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