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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., Mar 18 2019
E.g., Mar 18 2019


Fed and FDIC to hold joint meetings on proposed bank merger

The Federal Reserve and the FDIC will jointly hold two public meetings on the proposed merger of BB&T Corporation, Winston-Salem, North Carolina, with SunTrust Banks, Inc., Atlanta, Georgia. As part of the proposal, BB&T would merge SunTrust Bank with and into its subsidiary state non-member bank, BranchBanking and Trust Company, Winston-Salem, North Carolina.

The purpose of the meetings is to collect information relating to the convenience and needs of the communities to be served, including a review of the insured depository institutions' performance under the Community Reinvestment Act. The agencies also will consider and collect information on other factors relevant to making a decision on the application, including the effects of the proposal on the stability of the U.S. banking or financial system, the financial and managerial resources and future prospects of the companies, and competition in the relevant markets.


U.S. payments usage study slated

The Federal Reserve Board will conduct its seventh triennial study to examine U.S. payments usage. Financial institutions and payments organizations will receive invitations to participate in the effort. Based on survey data provided by participants, past reports from the studies have documented substantial changes in the aggregate volume and composition of noncash payments in the United States since 2000. Recent reports have also revealed dynamic changes in aggregate payments fraud, automated teller machine withdrawals, and payment authentication methods, among other topics. Data from previous implementations of the Federal Reserve Payments Study are available.


Outdated tax regs repealed

Treasury has announced the repeal of 296 unnecessary, duplicative or obsolete tax regulations that have forced taxpayers to waste both time and resources.


Minority-owned depository institutions data

The Federal Reserve has released December 31, 2018, compiled quarterly data on depository institutions that participate in the Treasury’s Minority Bank Deposit Program.


NMLS releases Mortgage Industry Report for 2018 Q4


HUD publishes penalty inflation adjustments

The Department of Housing and Urban Development has published [84 FR 9451, March 15, 2019] a final rule providing for 2019 inflation adjustments of civil monetary penalty amounts required by the Federal Civil Penalties Inflation Adjustment Act of 1990.

Among the changes is an increase in the maximum civil money penalty for violations by FHA mortgagees and lenders (24 CFR §30.35) from $9,819 per violation and $1,963,870 per year, to $10,067 per violation and $2,013,399 per year, based on a cost-of-living adjustment multiplier of 1.02522.

The changes will be effective April 15, 2019.


40 organizations join CFPB cohort

The Bureau has announced that 40 organizations have joined its 2019 Your Money, Your Goals cohort. Cohort member organizations receive training and technical assistance on how to use the Bureau's Your Money, Your Goals tools to help non-profit and government agencies integrate financial empowerment into their existing service models.


FDIC Q4 2018 State Profiles

The FDIC has posted links to its Fourth Quarter 2018 State Profiles, which provide a quarterly summary of banking and economic conditions in each state.


Counterfeit cashier's checks on NJ bank

The OCC has issued its Alert 2019-2 concerning counterfeit cashier's checks in circulation purporting to have been issued by the First National Bank of Elmer, Elmer, New Jersey, in connection with an online job opportunity overpayment scam. For additional information, see our Alerts and Counterfeits page.


Bureau offers home buyer boot camp

The CFPB says prospective homeowners can sign up for "Get Homebuyer Ready" - a two-week boot camp that will take them step-by-step through the entire home buying process and equip them with helpful tools and resources along the way.


Bureau highlights bill-pay disclosure problems

In its latest Supervisory Highlights, the CFPB discussed findings that one or more of the institutions it examined deceptively represented that payments made through an institution’s online bill-pay service would be debited on the date selected by the consumer or a few days after the selected date, while failing to disclose or failing to disclose adequately that, in instances where a payee accepts only a paper check, the debit may occur earlier than the selected date.

The paper bill-pay checks were sent several days prior to the consumer-designated payment date, at the discretion of the institution(s), apparently to ensure that payments were received by their due dates. The payment would be debited from the consumer’s account when the payee presented and cashed the check, which may have occurred earlier or later than the date selected by the consumer. The failure to notify consumers that their bill-pay payments, if made by paper check, may be debited on a date sooner than the date selected as part of the transaction caused some consumers to pay overdraft fees.

The Bureau reported that the institution(s) involved are revising their customer communications -- marketing and explanatory material -- to disclose that paper checks will be mailed before the date requested by the consumer and will be charged to the consumer's account when the checks are presented. Those institutions also worked on remediating consumers charged an overdraft fee when bill-pay checks hit their accounts before the payment date the consumer requested.


18th edition of CFPB Supervisory Highlights

The Bureau has released its 18th edition of Supervisory Highlights, which covers its supervision activities generally completed between June 2018 and November 2018, and includes examination findings in the areas of automobile loan servicing, deposits, mortgage servicing, and remittances.


Brainard on CRA improvement

In remarks at the 2019 Just Economy Conference of the National Community Reinvestment Coalition, Federal Reserve Board Governer Lael Brainard discussed "how we can preserve what is working well with the Community Reinvestment Act (CRA) and make it better," and regulators' efforts for improving their regulatory approach to the CRA. One of the potential improvements Brainard discussed is a change to how institutions define their CRA assessment areas in light of increased digital delivery of bank services.


Fed bans former Goldman Sachs bankers

The Federal Reserve Board has announced it has prohibited Tim Leissner and Ng Chong Hwa (a/k/a Roger Ng) -- both former senior investment bankers employed by foreign subsidiaries of The Goldman Sachs Group, Inc. -- from the banking industry for their participation in a scheme to illegally divert billions of dollars from a Malaysian sovereign wealth fund. Leissner was also fined $1.42 million and consented to the permanent ban.

Leissner and Ng coordinated bond offerings arranged by Goldman for 1Malaysia Development Berhad (1MDB) in 2012 and 2013. The funds diverted from 1MDB were then used for Leissner's and Ng's personal benefit and to bribe certain government officials in Malaysia and Abu Dhabi. In August 2018, Leissner pleaded guilty to criminal charges brought by the Department of Justice in the Eastern District of New York for conspiring to violate the Foreign Corrupt Practices Act and to commit money laundering. In that plea agreement, Leissner agreed to forfeit $43.7 million. Ng was indicted in October 2018 on similar charges.


FSOC will accept comments on determinations guidance

The Federal Stability Oversight Council has published a rule [84 FR 8958, amending 12 CFR part 1310] stating that the Council shall not amend or rescind its interpretive guidance on nonbank financial company determinations without providing the public with notice and an opportunity to comment consistent with the Administrative Procedure Act. This rule is effective April 12, 2019.


Israeli bank to pay $195M for aiding tax evasion

The Department of Justice announced yesterday that Mizrahi-Tefahot Bank Ltd., and its subsidiaries, United Mizrahi Bank (Switzerland) Ltd. and Mizrahi Tefahot Trust Company Ltd., entered into a deferred prosecution agreement with the Department of Justice filed in the U.S. District Court for the Central District of California. As part of the agreement, Mizrahi-Tefahot will pay $195 million to the United States.

In the deferred prosecution agreement and related court documents, Mizrahi-Tefahot admitted that from 2002 until 2012 the actions of its bankers, relationship managers, and other employees defrauded the United States and specifically the Internal Revenue Service with respect to taxes by conspiring with U.S. taxpayer-customers and others. Mizrahi-Tefahot employees’ acts of opening and maintaining bank accounts in Israel and elsewhere around the world and violating Mizrahi-Tefahot’s Qualified Intermediary Agreement with the IRS enabled U.S. taxpayers to hide income and assets from the IRS.

The $195 million payment consists of: 1) restitution in the amount of $53 million, representing the approximate unpaid pecuniary loss to the United States as a result of the criminal conduct; 2) disgorgement in the amount of $24 million, representing the approximate gross fees paid to the bank by U.S. taxpayers with undeclared accounts at the bank from 2002 through 2012; and 3) a fine of $118 million.


McWilliams discusses banking issues

In remarks at the Institute of International Bankers Annual Washington Conference, FDIC Chairman McWilliams discussed issues being worked on by the FDIC that are relevant to international bankers. She commented on the Volcker Rule, tailoring, fintech, and international coordination. McWilliams concluded, “The topics I have discussed today represent just a few of the many issues we are currently working on at the FDIC. We continue to review our supervisory process and regulatory regime, and expect to propose two major interagency rulemakings very soon. The first proposes to tailor the application of capital and liquidity requirements for foreign banks, and the second would tailor the Dodd-Frank resolution planning requirements. Separately, the FDIC also expects to issue an Advanced Notice of Proposed Rulemaking soon to revise the resolution planning requirements for insured depository institutions.


Russia-based bank sanctioned

The Treasury Department has announced that OFAC has designated Evrofinance Mosnarbank, a Moscow-based bank that is jointly owned by Russian and Venezuelan state-owned companies. Monday’s action, taken pursuant to Executive Order (E.O.) 13850, targets a foreign financial institution that has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Petroleos de Venezuela S.A. (PdVSA), which is itself an entity that has long been a vehicle for corruption, embezzlement, and money laundering by former Venezuelan President Maduro and his cronies. PdVSA, which was designated for operating in the oil sector of Venezuela on January 28, 2019, is a Venezuelan state-owned oil company. For identity information on the bank, see our OFAC Update.


Get-rich-quick victims to get $644,000

The Federal Trade Commission has reported that it will be mailing 12,072 refund checks totaling more than $644,000 to people who lost money to a get-rich-quick scheme that falsely claimed they could earn significant money working online by using products marketed as “secret codes” by the operators of the Mobile Money Code scheme.


$125M to be sent to scammed investors

The Securities and Exchange Commission has announced it settled charges against 79 investment advisers who will return more than $125 million to clients, with a substantial majority of the funds going to retail investors. The Commission's Share Class Selection Disclosure Initiative incentivized investment advisers to self-report violations of the Advisers Act resulting from undisclosed conflicts of interest, promptly compensate investors, and review and correct fee disclosures. The orders issued today address advisers who directly or indirectly received 12b-1 fees for investments selected for their clients without adequate disclosure, including disclosures that were inconsistent with the advisers’ actual practices.


New law protects minors against ID theft

The CFPB has posted an article regarding a new federal law (section 301 of EGRRCPA) that went into effect September 21, 2018, which lets parents and child welfare representatives of people under 16, as well as legal guardians, request a security freeze, also called a credit freeze, on their behalf.


HUD agreement resolves housing discrimination allegations

HUD has announced it has entered into a Conciliation/Voluntary Compliance Agreement with a resident and owners of a San Diego apartment complex. The agreement resolves allegations that Wakeland Atmosphere, L.P. and FPI Management, Inc., the owners and managers of Atmosphere Apartments, refused to grant the resident’s request for a designated parking space close to the building.


Amended Venezuela general licenses and FAQs


Powell on monetary policy

In a presentation at the 2019 SIEPR Economic Summit, Stanford Institute of Economic Policy Research, Federal Reserve Board Chair Jerome H. Powell reviewed the actions of the Federal Open Market Committee (FOMC) over the last ten years starting with the lowering of the federal funds rate to close to zero, forward guidance, and quantitative easing. He then discussed balance sheet normalization, forward guidance, the normalization of policy communication, and beyond normalization.

Powell concluded with comments on current conditions and the economic outlook: “Right now, most measures of the health and strength of the labor market look as favorable as they have in many decades. Inflation will probably run a bit below our objective for a time due to declines in energy prices, but those effects are likely to prove transitory. Core inflation, which is often a reliable indicator of where inflation is headed over time, is quite close to 2 percent. Despite this favorable picture, we have seen some cross-currents in recent months. With nothing in the outlook demanding an immediate policy response and particularly given muted inflation pressures, the Committee has adopted a patient, wait-and-see approach to considering any alteration in the stance of policy. Considering monetary policy more broadly, we are inviting thorough public scrutiny and are hoping to foster conversation regarding how the Fed can best exercise the precious monetary policy independence we have been granted. Our goal is to enhance the public's trust in the Federal Reserve--our most valuable asset.”


Consumer credit increases

The Federal Reserve has released January 2019 G.19 Consumer Credit Report data, which indicates consumer credit increased at a seasonally adjusted annual rate of 5 percent. Revolving credit increased at an annual rate of 3 percent, while nonrevolving credit increased at an annual rate of 6 percent.


OCC lists key HMDA data fields

OCC Bulletin 2019-12, issued yesterday, informs OCC-supervised institutions about key data fields that the OCC has determined examiners will typically use to test and validate the accuracy and reliability of home mortgage loan data collected beginning in 2018. Of 110 data fields, 37 have been identified as key fields by the OCC, Fed, and FDIC on an interagency basis. OCC examiners will typically test and validate these 37 key fields for the banks that are required to collect, record, and report information for all HMDA data fields.


Guidance for Alabama banks following storms

The FDIC has issued FIL-11-2019 to provide guidance to help financial institutions and facilitate recovery in areas of Alabama affected by severe storms, straight-line winds and tornadoes.


Revisions to Call Report

The FDIC has issued FIL-10-2019 to announced that the Federal Financial Institutions Examination Council (FFIEC) has approved the implementation of changes to all three versions of the Call Report (FFIEC 031, 041, and 051), the Foreign Branch Report of Condition (FFIEC 030), the Abbreviated Foreign Branch Report of Condition (FFIEC 030S) and the Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101). The revised reporting requirements will be phased in starting as of the March 31, 2019, report date subject to approval by the U.S. Office of Management and Budget.

Redlined copies of forms 031, 041, 051 and 101 showing the reporting changes are available on the FFIEC's website on the page for each form.


FSOC proposes changes to nonbank designations guidance

The Financial Stability Oversight Council (FSOC) yesterday voted unanimously to issue for public comment proposed interpretive guidance on nonbank financial company designations. The proposed guidance would implement an activities-based approach to identifying and addressing potential risks to financial stability. It would also enhance the analytical rigor and transparency of the Council’s process for designating nonbank financial companies. Under the guidance, the Council would:

  • Prioritize its efforts to identify, assess, and address potential risks to U.S. financial stability through an activities-based approach. The Council would monitor diverse financial markets and market developments in consultation with relevant financial regulatory agencies. In the event a potential risk to U.S. financial stability is identified, the Council would leverage the expertise of existing regulators in pursuing the implementation of actions to address the risk.
  • Perform a cost-benefit analysis before designating any nonbank financial company. The Council would consider the benefits and costs of a designation for the U.S. financial system and the relevant company. The Council would designate a nonbank financial company only if the expected benefits justify the expected costs of the designation.
  • Assess the likelihood of a nonbank financial company’s material financial distress when evaluating the firm for a potential designation. Before designating a nonbank financial company, the Council would consider not only the impact of an identifiable risk, but also the likelihood that the risk will be realized. Doing so will ensure that the Council remains focused on those risks that are most likely to pose a threat to U.S. financial stability.
  • Create a more efficient and effective nonbank financial company designation process. The proposed guidance would create a more efficient and effective designation process by condensing the current three-stage process into two stages, increasing engagement and transparency to firms and their regulators, and creating off-ramps that allow firms to understand and address potential risks to financial stability



CCAR use of qualitative objection to be limited

The Federal Reserve Board has announced that it will limit the use of the "qualitative objection" in its Comprehensive Capital Analysis and Review (CCAR) exercise, effective with the 2019 cycle. The changes eliminate the qualitative objection for most firms due to the improvements in capital planning made by the largest firms. The instructions for the 2019 CCAR exercise were also released.

Update: Published at 84 FR 8953 3/13/2019' effective on publication.


Fed ANPR on whether to lower rate paid on reserve balances

The Federal Reserve Board on Wednesday invited public comment in an Advance Notice of Proposed Rulemaking (ANPR) on whether the Board should propose amendments to its Regulation D (Reserve Requirements of Depository Institutions) to lower the rate of interest paid on excess balances ("IOER") maintained at Reserve Banks by eligible institutions that hold a very large proportion of their assets in the form of balances at Reserve Banks. The change would be focused on "Pass‑Through Investment Entities" or "PTIEs" that could attract a very large quantity of deposits from institutional investors, yet at the same time avoid the costs borne by other depository institutions, such as the costs of capital requirements and the other elements of federal regulation and supervision, because of the limited scope of their product offerings and asset types.

The ANPR requests comment on the potential benefits and potential costs associated with the presence of such institutions in the U.S. financial system and their receipt of IOER on their balances at a Reserve Bank. Comments on the ANPR will be accepted for 60 days following its publication in the Federal Register.

UPDATE: Published 3/12/2019. Comments due by Monday, 5/13/2019.


Federal Reserve CRA evaluations

The Federal Reserve Board lists 37 CRA evaluations of Federal Reserve supervised banks that were made public in January and February of this year. Thirty-one of the listed banks received ratings of "Satisfactory." The following six banks received "Outstanding" ratings:

Right click a bank's name to download a PDF of its evaluation before opening it.


CCyB to remain at current level

The Fed Board has announced it has voted to affirm the Countercyclical Capital Buffer (CCyB) at the current level of 0 percent. In making this determination, the Board followed the framework detailed in the Board's policy statement for setting the CCyB for private-sector credit exposures located in the United States.


March Beige Book posted

The Federal Reserve Board has posted the March 6, 2019, issue of the Beige Book. The report, prepared by the Kansas City Reserve Bank, indicated that economic activity continued to expand in late January and February, with ten Districts reporting slight-to-moderate growth, and Philadelphia and St. Louis reporting flat economic conditions. About half of the Districts noted that the government shutdown had led to slower economic activity in some sectors including retail, auto sales, tourism, real estate, restaurants, manufacturing, and staffing services.


FFIEC Policy Statement on Report of Examination

The CFPB has posted an article on the issuance of the FFIEC Policy Statement on the Report of Examination, which was developed as part of the FFIEC’s examination moderation project. The FFIEC federal banking agency members (Fed, OCC and FDIC) are rescinding their 1993 Interagency Policy Statement on the Uniform Core Report of Examination, replacing it with the FFIEC Policy Statement.


HUD action resolves suit over mold in housing discrimination suit

HUD has announced it has approved a Conciliation Agreement with Highland Downs Apartments in Duarte, California. The agreement resolves allegations that Downs, LLC and EMNA Management, Inc., the owner and manager of the development, refused to remediate mold at the property as a reasonable accommodation for a couple with disabilities and retaliated against them for asking that the mold be removed.


Waco gets $1.5M to address lead hazards

HUD Secretary Carson has announced a grant of $1.5 million to the City of Waco, Texas, to protect children and families from lead-based paint and home health hazards. The city will utilize the funds to address lead hazards in over 140 housing units in the community to provide safer homes for very low-income families with children.


FTC seeks comments on privacy of bank customer info

The Federal Trade Commission is seeking comment on proposed amendments to two rules that protect the privacy and security of customer information held by financial institutions. In separate notices to be published in the Federal Register, the FTC is seeking comment on proposed changes to the Safeguards Rule and the Privacy Rule under the Gramm-Leach-Biliey Act. The Safeguards Rule, which went into effect in 2003, requires a financial institution to develop, implement, and maintain a comprehensive information security program. The Privacy Rule, which went into effect in 2000, requires a financial institution to inform customers about its information-sharing practices and allow customers to opt out of having their information shared with certain third parties.


OCC releases CRA evaluations

The OCC issued a list of Community Reinvestment Act (CRA) performance evaluations that became public during February. Of the 13 evaluations, 10 are rated "Satisfactory," one is rated "Needs to Improve," and these two banks were rated "Outstanding":


HUD announces fair housing actions

HUD has approved a Conciliation Agreement with a landlord and agent in San Francisco, CA, resolving allegations that they refused to rent to a tenant with disabilities because he had an emotional support animal. The agency also issued a Consent Order to resolve a discrimination claim against Lakes and More Realty, Inc., operating as Bemidji Property Management, and the owners of a rental home in Beltrami County, MN, alleging that they refused to rent the house to a family of five adults and six minor children because they are Native American and Hispanic, and had minor children.


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