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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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E.g., Jul 19 2019
E.g., Jul 19 2019


$48M to help disabled vets rehabilitate homes

HUD and the U.S. Department of Veterans Affairs (VA) have announced $4.8M in funding through the Veterans Housing Rehabilitation and Modification Pilot (VHRMP) to assist disabled veterans with modifying or rehabilitating their homes to make them more accessible. The VHRMP has awarded the funds to grantees in the District of Columbia, Georgia, Louisiana, New Mexico, and Texas.


Fed posts 2018 debit card fee data

The FRB has posted the following highlights on 2018 debit card interchange fees:

  • The average interchange fee per covered transaction was slightly lower in 2018 for transactions processed over dual-message networks than for those processed over single-message networks: $0.22 and $0.24, respectively.
  • By contrast, the average interchange fee per exempt transaction was considerably higher in 2018 for transactions processed over dual-message networks than for those processed over single-message networks: $0.54 and $0.25, respectively.
  • Since Regulation II took effect on October 1, 2011, neither the average interchange fee per covered transaction nor the average interchange fee per exempt transaction have changed significantly.
  • By contrast, the average interchange fee per exempt transaction increased slightly for dual-message networks in 2018 compared to previous years, while the average interchange fee per exempt transactions remained largely unchanged from 2017 to 2018 for single-message networks after declining in previous years.
  • Exempt transactions constituted 37.2 percent of total volume and 36.0 percent of total value for debit card transactions in 2018, with the proportions slightly higher for transactions processed over dual-message networks than for those processed over single-message networks. These proportions have changed little since Regulation II took effect.
  • The vast majority of prepaid card transactions were exempt from the interchange fee standard in 2018: 92.9 percent by volume and 94.1 percent by value. Overall, prepaid card transactions constituted 6.3 percent of total volume and 5.8 percent of total value for debit card transactions in 2018.


Members of global Iranian nuclear enrichment network designated

OFAC has announced it has designated a network of seven front companies and five agents involved in the procurement of sensitive materials for sanctioned elements of Iran’s nuclear program. The individuals and entities targeted are based in Iran, China, and Belgium and have acted as a procurement network for Iran’s Centrifuge Technology Company (TESA), which plays a crucial role in Iran’s uranium enrichment nuclear program through the production of centrifuges used in facilities belonging to the Atomic Energy Organization of Iran (AEOI). The targeted companies and agents are identified in BankersOnline's OFAC Update.


OCC enforcement actions announced

The OCC has released a list of enforcement actions taken in June against OCC-supervised institutions and individuals affiliated with them. Among those actions were:

  • an Order for Removal and Prohibition, to Cease and Desist, and to pay a Civil Money Penalty in the amount of $27,500 issued to McKinley Dailey, a former loan officer of First Southern National Bank, Lancaster, Kentucky, who made “side loans” in his name and the name of an associate and transferred the proceeds to customers with the understanding the they would repay him, causing a loss to the bank. The order to cease and desist included an order that Dailey also pay restitution of the $26,385.97 loss to the bank.
  • a Formal Agreement with The First National Bank of Tahoka, Tohoka, Kentucky
  • a Prompt Corrective Action directive issued to City National Bank of New Jersey, Newark, New Jersey


Treasury targets four under Global Magnitsky Act

The Treasury Department has announced that OFAC has designated two Iraqi military members, Rayan al-Kildani and Waad Qado, and two former Iraqi governors, Nawfal Hammadi al-Sultan and Ahmed al-Jubouri under Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption. Many of the corruption- and abuse-related actions committed by these sanctioned individuals occurred in areas where persecuted religious communities are struggling to recover from the horrors inflicted on them by ISIS. For identity information on the four designees, see BankersOnline's OFAC Update.


NCUA approves rules changes and proposal

The National Credit Union Administration Board has announced it has approved three items on its recent meeting agenda:


DMDC updates schedule for MLA site enhancements

The Defense Manpower Data Center (DMDC) has posted a revised notice yesterday about its plan (announced in June to make significant changes to the Military Lending Act (MLA) website ( to enhance security of the site and better protect the personal information of Service members. A user account will be required to access both the Single Record Request and the Multiple Record Request capabilities of the MLA website. No search for active service on the MLA website will be possible without a user account.

In addition to the username, password, company name, and challenge questions currently required to create a user account, beginning July 25, 2019, new MLA website users will be required to supply the user's first name, last name, address, and e-mail address in order to create their user account.

In September of 2019, existing MLA website users will be required to update their accounts with the additional fields (user's first name, last name, address, and e-mail address). The July and September dates represent a delay of about a month when compared with the earlier announcement.


HDHP/HSA chronic condition benefits expanded

The Treasury Department has announced the expansion of the preventive care benefits that may be provided by high deductible health plans (HDHPs) for a range of chronic conditions. The expanded list of preventive care benefits provided by an HDHP covers medical care services and prescription drugs for certain chronic conditions. Because individuals covered by an HDHP generally may establish and deduct contributions to a health savings account (HSA), they will be able to pay for services and treatment using untaxed funds in their HSAs.


Volcker Rule reviews of foreign funds delayed

The Federal Reserve, OCC, and FDIC issued a joint press release yesterday announcing that they will not take action related to restrictions under the Volcker Rule for certain foreign funds for an additional two years. Certain foreign funds that are organized and offered outside of the United States are excluded from the definition of covered fund under the agencies' implementing regulations. However, these foreign funds could become subject to restrictions under the Volcker Rule because of governance arrangements with or investment by foreign banking entities.


FTC: Does COPPA Rule need changes?

The Federal Trade Commission is requesting comments on the effectiveness of the amendments the agency made to the Children’s Online Privacy Protection Rule (COPPA Rule) in 2013 and whether additional changes are needed. The COPPA Rule, which first went into effect in 2000 to implement the Children’s Online Privacy Protection Act, requires certain websites and other online services that collect personal information from children under the age of 13 to provide notice to parents and obtain verifiable parental consent before collecting, using, or disclosing personal information from those children. Specific questions on which the FTC is seeking comment include:

  • Has the Rule affected the availability of websites or online services directed to children?
  • Does the Rule correctly articulate the factors to consider in determining whether a website or online service is directed to children, or should additional factors be considered? For example, should the Rule be amended to better address websites and online services that may not include traditionally child-oriented activities, but have large numbers of child users?
  • What are the implications for COPPA enforcement raised by technologies such as interactive television, interactive gaming, or other similar interactive media?
  • Should the Commission consider a specific exception to parental consent for the use of education technology in schools?
  • Should the Commission modify the Rule to encourage general audience platforms to identify and police child-directed content uploaded by third parties?


Bureau updates advisory on elder financial exploitation

The CFPB has announced it has issued an updated advisory urging financial institutions to report suspected incidents of financial exploitation of older adults to the appropriate local, state and federal authorities. The Bureau also recommended that financial institutions file Suspicious Activity Reports (SARs) with the federal government when they suspect elder financial exploitation (EFE).

The updated advisory includes information on state reporting requirements and laws authorizing (in some states) delays in disbursing funds, the Senior Safe Act and SAR filing, and cooperation with adult protection service agencies, law enforcement and other government agencies.


July Beige Book posted

The Federal Reserve Board has posted the July 17, 2019, Beige Book, which summarizes comments received from contacts outside the Federal Reserve System on overall economic activity, employment and wages, and prices.

The report indicates that economic activity continued to expand at a modest pace overall from mid-May through early July, with little change from the prior reporting period. Employment grew at a modest pace, slightly slower than the previous reporting period. Labor markets remained tight, with contacts across the country experiencing difficulties filling open positions. The reports indicated that the rate of price inflation was stable to down slightly from the prior reporting period.


Fed discount rate meeting minutes

The minutes of the June 19, 2019 Federal Reserve Board discount rate meeting have been released. In a joint meeting of the Federal Open Market Committee (FOMC) and the Board, the FOMC decided to maintain the target range for the federal funds rate at 2.25 to 2.50 percent.


Powell on monetary policy in post-crisis era

In a presentation in Paris, France, at the "Bretton Woods: 75 Years Later—Thinking about the Next 75" conference organized by the Banque de France and the French Ministry for the Economy and Finance, Federal Reserve Board Chairman Powell discussed the current economic conditions in the United States and highlighted some significant structural changes in the environment facing monetary policymakers in the post-crisis era.


NMLS updates user agreement

The NMLS Industry Terms of Use have been updated. Effective August 10, when NMLS users log into the system, they will be required to accept the new terms of use.


Business email compromise attempts hit $301M a month

FinCEN has issued a report warning that manufacturing and construction firms are top targets for business email compromise attacks. The number of suspicious activity reports describing business email compromise (BEC) incidents reported monthly has grown rapidly, averaging nearly 500 per month in 2016, and above 1,100 per month in 2018. The total value of attempted BEC thefts, as reported in SARs, climbed to an average of $301 million per month in 2018 from only $110 million per month in 2016. For portions of this report, FinCEN analyzed randomly selected, statistically representative samples of SAR narratives on BEC incidents filed in 2017 and 2018 to assess BEC trends and methods.

FinCEN has established an exchange forum that focuses on BEC scams and issued an updated advisory [FIN-2019-A005] on email compromise fraud schemes that target vulnerable business processes.


Al-Qa'ida in Mali targeted

The Treasury Department announced Tuesday that OFAC, in concert with the Department of State, took action targeting Jama’at Nusrat al-Islam wal-Muslimin (JNIM), a previously designated west African terrorist group, by designating a JNIM leader as a Specially Designated Global Terrorist (SDGT) under Executive Order 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. OFAC designated Bah Ag Moussa for acting for or on behalf of JNIM. OFAC also designated Bah Ag Moussa for acting for or on behalf of JNIM leader Iyad ag Ghali, designated in 2013. The Department of State also designated Ali Maychou as an SDGT. For identity information, see BankersOnline's OFAC Update.


Fed releases G.17 industrial production data

The Federal Reserve has posted June 2019 G.17 Industrial Production and Capacity Utilization data. Industrial production was unchanged in June, as increases for both manufacturing and mining offset a decline for utilities.


FDIC amendments to simplify coverage determinations

The FDIC Board has approved amendments to two rules to simplify the process for making insurance determinations in the event a bank is placed into receivership.

Part 370 of the FDIC's Rules and Regulations, "Recordkeeping for Timely Deposit Insurance Determination," has been amended to address a number of issues. Most notably, it will now allow for an optional one-year extension of the rule's original compliance deadline of April 1, 2020. Other changes are more technical and are intended to address issues that became apparent as the FDIC staff worked with institutions to comply with Part 370 since it was first adopted in November 2016. The rule is currently applicable to the 32 FDIC-insured institutions that have more than two million deposit accounts and establishes recordkeeping requirements to facilitate rapid payment of insured deposits to customers if one of those institutions were to fail. The amendments to Part 370 will be effective October 1, 2019.

The FDIC also amended Part 330 of its Rules and Regulations, "Deposit Insurance Coverage," to expand the types of evidence it would consider when determining whether joint accounts qualify for increased deposit insurance coverage. This change affects all insured depository institutions regardless of size. The FDIC will continue to look to signature cards when determining deposit insurance coverage on joint accounts but may now also rely on other information contained in a bank's deposit account records that establishes co-ownership of a joint account, such as evidence that the institution has issued a mechanism for accessing the account to each co-owner or evidence of usage of the account by each co-owner.. This change does not expand or contract deposit insurance coverage for joint accounts and does not place any increased burden on depositors or FDIC-insured institutions. The amendment to § 330.9 of Part 330, which has been posted to BankersOnline's Regulations pages, will be effective 30 days after publication in the Federal Register. UPDATE: The amendments to Part 330 have been scheduled for publication on 7/22/2019, and they will be effective 8/21/2019.


Protecting your bank from phishing attempts's July 15 FED360° newsletter includes an article, "Gone phishing—Tips to help protect your organization from phishing attempts." Phishing is used by threat actors in attempts to acquire sensitive information using a fraudulent solicitation, via email or on a website (or through text messages) in which the fraudster poses as a legitimate business or reputable person. The article offers tips to help protect banks and other organizations from phishing attempts:

  • Educate your staff on what phishing is, how to spot it and how/where to report it when it occurs.
  • Consider having occasional "testing" phishing exercises.
  • Have clear and well documented policies on how to manage phishing attempts to ensure staff respond appropriately
  • When possible, use technology to aid in the identification of phishing emails though the classification of internal versus external email sources
  • Add warning messages to the header of all incoming emails from external senders, alerting employees to review external messages with extra care
  • Maintain contemporary anti-virus and anti-malware scanning software to offer additional protections in the event staff inadvertently click on suspicious links embedded in the body of an email
  • Stay on top of the evolving phishing tactics by consulting with your information security staff to monitor trends and adjust internal policies and procedures accordingly
  • Restrict or remove email and web browsing on systems routinely used for payments processing


Financial literacy reform efforts continue

Treasury and the Financial Literacy and Education Commission (FLEC) yesterday released the Commission's report on Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts. The report highlights the importance of financial literacy and education for all Americans, identifies ways to efficiently and effectively deliver financial education, and recommends actions to improve federal efforts to build financial capacity for consumers and communities.


Application of securities laws to Opportunity Zone investments

The Securities and Exchange Commission and the North American Securities Administrators Association (NASAA) have issued a Staff Statement that summarizes the application of federal and state securities laws to opportunity zone investments. The "opportunity zone" program was established by the Tax Cuts and Jobs Act in December 2017 to provide tax incentives for long-term investing in designated economically distressed communities.

The summary discusses:

  • What qualified opportunity zones (QOZs) are
  • When interests in qualified opportunity funds (QOFs) would be “securities” under federal and state securities laws
  • Registration of securities offerings with the SEC and/or state securities regulators and potential exemptions from securities registration for investments in a QOF (particularly through Rule 506 of federal Regulation D)
  • Broker-dealer registration requirements for persons selling interests in QOFs
  • Registration and exemptions from registration for QOFs that are “investment companies” and considerations for advisers to a QOF


Second quarter Call Report materials

FDIC FIL-40-2019, issued on behalf of the FDIC, OCC, and Fed, provides information on the Consolidated Reports of Condition and Income (Call Report) for June 30, 2019. The Call Report does not include any new or revised data items this quarter. Most institutions must file their Call Reports by July 30, 2019.


CFPB support for organizations servicing the economically vulnerable

The Bureau has posted an article with information for organizations committed to helping people manage their money and work toward their goals. It is looking for approximately 40 organizations from across the country that are interested in using its "Your Money, Your Goals" toolkit, issue-focused booklets, and companion guides to help build the financial well-being of the people they serve. The Bureau will host a webinar on August 7, 2019 at 3 p.m. ET that will describe the application process.


Nomura Securities to repay $25M

The Securities and Exchange Commission announced yesterday it has instituted two related enforcement actions against Nomura Securities International Inc., which has agreed to repay approximately $25 million to customers for its failure to adequately supervise traders in mortgage-backed securities. The SEC orders find that Nomura bond traders made false and misleading statements to customers while negotiating sales of commercial and residential mortgage-backed securities (CMBS and RMBS).


FinCEN advisory on FATF list

The Financial Crimes Enforcement Network (FinCEN) has issued an advisory [FIN-2019-A004] to financial institutions regarding the Financial Action Task Force’s (FATF) updated list of jurisdictions with strategic anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies and relevant actions by the U.S. Government. These changes may affect U.S. financial institutions’ obligations and risk-based approaches regarding relevant jurisdictions. The advisory also reminds financial institutions of the status and obligations involving these jurisdictions.


NCUA Board to meet Thursday

The NCUA has published [84 FR 33787] a notice of the 10:00 a.m. July 18, 2019, open meeting of its Board. Among other matters for discussion, the Board will consider NCUA rules on fidelity bonds, guidance regarding prohibitions imposed by statute, and NCUA rules on real estate appraisals.


Regulators propose rule on land development loans

The Federal Reserve, FDIC, and OCC have issued a joint press release requesting public comment on a proposal to clarify the treatment of land development loans under the agencies' capital rules. This proposal expands on the agencies' September 2018 proposal to revise the definition of high volatility commercial real estate (HVCRE) as required by the Economic Growth, Regulatory Relief, and Consumer Protection Act. The land development proposal would clarify that loans that solely finance the development of land for residential properties would meet the revised definition of HVCRE, unless the loan qualifies for another exemption. Comments will be accepted for 30 days after publication in the Federal Register.


OCC okays Gulf weather related closures

The OCC has issued a proclamation allowing national banks, federal savings associations, and federal branches and agencies of foreign banks at their discretion to close offices affected by severe weather along the Gulf Coast.


Bureau debunks military personal finances myths

The Bureau has posted a Bureau Blog article examining five myths in the military community about personal finance:

  • Credit card companies are required to waive annual fees for servicemembers
  • The Servicemembers Civil Relief Act (SCRA) only helps by lowering interest rates
  • The Military Lending Act (MLA) doesn’t protect a spouse or dependent children
  • You need to pay someone to help you with your financial issues
  • Financial issues are too complicated for the average person


Student loan debt relief scheme stopped by FTC

The Federal Trade Commission has stopped a student loan debt relief scheme, alleging it bilked more than $23 million from thousands of consumers with false claims that it would service and pay down their student loans. After the FTC filed a complaint seeking to end the deceptive practices, a federal court order halted the scheme and froze its assets. The complaint stated that, since at least 2014, the operators of Mission Hills Federal and Federal Direct Group have lured consumers into paying hundreds to thousands of dollars in illegal upfront fees with false promises to lower consumers’ monthly student loan payments. The defendants also allegedly tricked consumers into submitting their monthly student loan payments directly to the defendants by falsely claiming to take over servicing the consumers’ loans. In reality, the defendants either only applied minimal payments on consumers’ loans or, in many instances, applied none of the payments to the loans, diverting consumers’ payments to themselves.


Veteran with assistance animal denied housing

HUD has announced the filing of a charge of discrimination against a Maine apartment owner who denied a veteran with disabilities the right to keep his assistance animal.


Venezuela’s counterintelligence agency designated

OFAC has announced the designation of the Government of Venezuela’s General Directorate of Military Counterintelligence, or La Dirección General de Contrainteligencia Militar, most commonly known as the DGCIM. As a result of this action, all property and interests in property of this entity, and of any entities that are owned, directly or indirectly, 50 percent or more by this entity, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. Identification information on the DGCIM is included in BankersOnline's OFAC Update.


National Fair Housing Training Academy launched

HUD has announced it is partnering with the John Marshall Law School in Chicago and Cloudburst Consulting Group, Inc., to develop the National Fair Housing Training Academy (NFHTA). The Academy will prepare fair housing advocates, lawyers, investigators, and other stakeholders on effective strategies and techniques for addressing discriminatory housing policies and practices throughout the nation.

John Marshall Law School will receive $1.5 million over the next two years under HUD’s Community Compass Technical Assistance and Capacity Building grant program and will provide training related to civil rights history, current trends in housing discrimination, and investigating housing discrimination complaints. Cloudburst Consulting Group, Inc., which partners with governmental agencies to promote social, economic, and environmental resilience, will receive nearly $1.5 million over the next two years to assist HUD in revolutionizing the way the Academy offers fair housing training throughout the nation, including launching an online platform to deliver trainings more effectively while resulting in significant cost savings to taxpayers.


Parts of FDIC Procedures Manual released

FDIC FIL 38-2019, issued yesterday, announces the posting of sections of the FDIC Applications Procedures Manual (manual) to its website to provide greater transparency regarding the FDIC's internal processes. The manual provides direction for FDIC professional staff assigned to review and process applications, notices, and other requests (filings) submitted to the FDIC. This is the first in a series of releases that will eventually include the complete manual, and each subsequent release will include multiple sections governing specific filing types. The manual does not establish supervisory requirements and is not industry guidance.

  • This initial release includes an Applications Overview section that addresses processing timeframes, filing receipt and acknowledgment, filing acceptance, review and evaluation of filing content, document preparation, delegations of authority, and other pertinent topics that are generally applicable to most types of filings.
  • The release also contains separate sections covering certain specific filing types, including federal deposit insurance, mergers, change in control, branch establishment, branch relocation, and branch closings.

The manual will be updated periodically for changes in laws, regulations, or processes. Additional resources related to the filing process are available on the FDIC's website.


Texas landlords face discrimination charge

HUD has announced that it is charging Plano, Texas, landlords Quang Dangtran, his wife, Ha Nguyen, and HQD Enterprise, LLC with violating the Fair Housing Act by refusing to lease a room to a prospective tenant because she is black.


FDIC Board to meet Tuesday

The FDIC Board has posted a notice of a meeting in open session at 10:00 a.m. EDT on Tuesday, July 16. On the agenda are memoranda and resolutions on:

  • a Final Rule to amend 12 CFR Part 370, "Recordkeeping for Timely Deposit Insurance Determination"
  • a Final Rule on Joint Deposit Accounts
  • a Notice of Proposed Rulemaking amending the Securitization Safe Harbor Rule


Powell discusses Monetary Policy Report to Congress

Federal Reserve Board Chair Powell has presented the Board’s semiannual Monetary Policy Report to Congress. He reviewed the current economic situation and outlook before turning to monetary policy and also provided an update of the ongoing public review of the Board’s framework for setting monetary policy.


June FOMC minutes

The minutes of, and FOMC statement from, the June 18-19, 2019, meeting of the Federal Open Market Committee have been released. The Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent.


White paper on synthetic ID fraud

The Federal Reserve's FedPayments Improvement Task Force has released Synthetic Identity Fraud in the U.S. Payment System—A Review of Causes and Contributing Factors, a white paper on the growing problem of synthetic identity fraud in the U.S. payment system. The paper is a compilation of insights from Federal Reserve and industry subject matter experts. It’s intended to be a resource for industry professionals on the current state of synthetic identity fraud, including the scope of the issue, causes, contributing factors and its impact on the payments industry.


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