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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., Nov 18 2018
E.g., Nov 18 2018


Bureau updates small entity guides for EGRRCPA

The Bureau of Consumer Financial Protection has posted updated (November 2018) versions of its Small Entity Compliance Guides for the HOEPA and Loan Originator rules to reflect the broadened and expanded exemption for manufactured home retailers in section 107 of EGRRCPA and certain other updates detailed in the Version Log for each guide document.


Treasury sanctions 17 involved in Khashoggi murder

On Thursday, OFAC designated Saud al-Qahtani, his subordinate Maher Mutreb, Saudi Consul General Mohammed Alotaibi, and 14 other members of an operations team for having a role in the killing of Jamal Khashoggi. These individuals were designated pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act, to target perpetrators of serious human rights abuse and corruption.

As a result of these designations, any property or interests in property of the individuals designated today within or transiting U.S. jurisdiction is blocked. Additionally, U.S. persons are generally prohibited from engaging in transactions with blocked persons, including entities 50 percent or more owned by designated persons. For identity information on the 17 individuals, see our OFAC Update.


FinCEN reissues and expands GTOs

FinCEN announced Thursday the issuance of revised Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used in all-cash purchases of residential real estate. The purchase amount threshold, which previously varied by city, is now set at $300,000 for each covered metropolitan area. FinCEN is also requiring that covered purchases using virtual currencies be reported. FinCEN posted a copy of the GTO and an FAQ about the orders. The order covers the period from November 17, 2018, through May 15, 2019.

The GTOs' coverage has been expanded to include 12 metropolitan areas, defined as follows:

  • Texas counties of Bexar, Tarrant and Dallas
  • Florida counties of Miami-Dade, Broward and Palm Beach, in Florida
  • Boroughs of Brooklyn, Queens, Bronx, Staten Island and Manhattan, in New York City
  • California counties of San Diego, Los Angeles, San Francisco, San Mateo and Santa Clara
  • City and County of Honolulu in Hawaii
  • Washington county of King
  • Massachusetts counties of Suffolk and Middlesex
  • Illinois county of Cook.

Note that the orders do not affect banks or credit unions directly, although they should be aware of them in case they detect activity that may signal attempts to avoid the GTO. The orders are addressed to title insurance companies and their subsidiaries or agents.


FHA 2018 Annual Report

The Federal Housing Administration (FHA) has released its 2018 Annual Report to Congress on the economic condition of the agency's Mutual Mortgage Insurance Fund (MMI Fund). The report states the MMI Fund had a total Economic Net Worth of $34.8 billion and a Capital Reserve Ratio that remains above the statutory minimum for a fourth consecutive year.


FHFA Performance and Accountability Report

The Federal Housing Finance Agency has released its Performance and Accountability Report, which details FHFA's activities as regulator of the Federal Home Loan Bank System and as regulator and conservator of Fannie Mae and Freddie Mac during fiscal year 2018. For the tenth consecutive year, FHFA received an unmodified audit opinion on its FY 2018 financial statements from the U.S. Government Accountability Office.


Fannie and Freddie refinance volume down

The Federal Housing Finance Agency has reported that Fannie Mae and Freddie Mac completed 253,135 refinances in the third quarter of 2018, compared with 299,460 in the second quarter. FHFA's third quarter Refinance Report also shows that 1,865 loans were refinanced through the Home Affordable Refinance Program (HARP), bringing the total number of HARP refinances to 3,493,005 since inception of the program in 2009. The Report also indicates:

  • Through the third quarter of 2018, 33 percent of HARP refinances for underwater borrowers were for shorter-term 15- and 20-year mortgages, which build equity faster than traditional 30-year mortgages.
  • One U.S. territory and nine states account for more than 70 percent of borrowers who remain eligible for HARP and have a financial incentive to refinance as of June 30, 2018: Puerto Rico, Illinois, New Jersey, Florida, Michigan, Ohio, Pennsylvania, Maryland, Alabama and Georgia.
  • Borrowers who refinanced through HARP had a lower delinquency rate compared with borrowers eligible for HARP who did not refinance through the program.


Fed Board to review practices

The Federal Reserve Board has announced it will review during 2019 the strategies, tools, and communication practices it uses to pursue its congressionally-assigned mandate of maximum employment and price stability. The review will include outreach to a broad range of interested stakeholders.


Reg J simplified

The Federal Reserve Board has approved final amendments to simplify Regulation J (Collection of Checks and Other Items by Federal Reserve Banks and Funds Transfers through Fedwire) and to make it conform more closely with Regulation CC (Availability of Funds and Collection of Checks). The amendments become effective as of January 1, 2019.


Regulators' statement on supervisory practices following wildfires

A joint press release by the OCC, Fed, FDIC, NCUA, Conference of State Bank Supervisors and the California Department of Business Oversight published a statement on supervisory practices regarding financial institutions and their customers affected by California wildfires. The agencies will provide appropriate regulatory assistance and flexibility to affected institutions subject to their supervision. The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities.


McWilliams discusses financial services trends

In remarks delivered at the Office of Financial Research and the University of Michigan’s Center on Finance, Law, and Policy Fourth Annual Financial Stability Conference in Washington, D.C., FDIC Chairman McWilliams discussed the following trends affecting financial services and how regulators should respond to those trends:

  • The evolving role of banks in the financial system
  • Migration in mortgage activity from banks to nonbanks
  • Implications of migration for banks and regulators


FTC issues 2018 financial report

The Federal Trade Commission has issued its Fiscal Year 2018 Agency Financial Report, which describes the Commission’s strong fiscal management and key program performance of the agency during the past year. The report highlights FTC accomplishments in furtherance of its missions to protect consumers and promote competition, and reaffirms the agency’s commitment to responsible stewardship of resources and sound financial operations.


Otting on condition of U.S. banking system

In a speech in Tokyo, Comptroller Otting discussed the strength and resiliency of the U.S. banking system and ongoing efforts to ensure the system continues to be a source of strength for the U.S. and global economies.


FDIC RFI on small-dollar lending

The FDIC has announced that it is seeking public comment on issues related to small-dollar lending by FDIC-supervised financial institutions. The Request for Information (RFI) solicits comments on the consumer demand for small-dollar credit products, the supply of small-dollar credit products currently offered by banks, and what the FDIC can do to better enable banks to offer responsible, prudently underwritten credit products to meet consumer demand.


2018 Money Smart version released

The FDIC has released the 2018 version of its popular instructor-led Money Smart for Adults financial education curriculum. Instructors can use the fully scripted materials with minimal preparation to deliver unbiased, relevant, and accurate financial education. The 2018 version of Money Smart for Adults replaces the previous version, which was released in 2010. Features of the 2018 version include:

  • Fourteen modules that cover basic financial topics and include vibrant graphics and exercises;
  • Expanded content on topics such as mobile banking, reading a pay statement, renting an apartment, and creative ways to save money, as well as updated information on standard topics such as credit reports and scores;
  • Activities that allow participants to practice what they've learned during training and apply it to their own lives;
  • A "Take Action" section that encourages participants to identify at least one thing they plan to do because of what they learned during the training;
  • An updated Guide to Presenting Money Smart for Adults that guides instructors on how to use the Money Smart material effectively, along with supplemental tools and tips for supporting participants with disabilities; and
  • An updated Scenarios for Financial Inclusion supplement featuring individuals with disabilities considering various financial decisions.


FDIC Board meeting notice

The FDIC has posted the notice of its Board meeting to be held on November 21, 2018.


OFAC updates Congo sanctions regs

The Office of Foreign Assets Control has published [83 FR 57308] a final rule amending the Democratic Republic of the Congo Sanctions Regulations to implement Executive Order 13671 of July 8, 2014 (“Taking Additional Steps to Address the National Emergency With Respect to the Conflict in the Democratic Republic of the Congo”). The rule also incorporates other technical and conforming changes. The amendments are effective immediately.


OCC releases enforcement actions

The OCC has released a list of new enforcement actions taken against OCC-supervised institutions and individuals formerly affiliated with such institutions. Included were two Cease and Desist orders issued to banks in Miami, Florida, and Lafayette, Ohio; the $100 million Civil Money Penalty Orders issued to Capital One Bank (USA), N.A, and Capital One, NA, reported here on October 24; a Formal Agreement with a Naples, TX bank; and a Prompt Corrective Action Directive issued to a Newark, New Jersey, bank.

There were also four Removal/Prohibition Orders issued to:

  • a former teller at JPMorgan Chase Bank, NA (Columbus, OH), found to have misappropriated $80,000 from a vault and manipulated cash totals to conceal the theft;
  • a former personal bankers at JPMorgan Chase Bank, NA (Columbus, OH), found to have converted the proceeds of a bank customer's checks to her own use, causing a loss to the bank of $42,000;
  • a former teller at PNC Bank, NA (Wilmington, DE), found to have stolen approximately $21,500 from her cash drawer; and
  • a former customer service and sales representative at Wells Fargo Bank, NA (Sioux Falls, SD), found to have made unauthorized withdrawals totaling $12,800 from a customer's account.


Treasury targets key terrorism networks

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action Tuesday to target four Hizballah-affiliated individuals who lead and coordinate the group’s operational, intelligence, and financial activities in Iraq.

See our OFAC Update for identifying information on these four designees and other additions to OFAC's SDN List.


Illinois bank pays $15,000 for Flood Act violations

The Federal Reserve Board has issued an order assessing a $15,000 civil money penalty on an Illinois bank for a pattern or practice of violations of § 208.25 of Regulation H, which implements the National Flood Insurance Act.


OCC enforcement actions manual released

The OCC's Bulletin 2018-41 was issued Tuesday to announce the agency's Policies and Procedures Manual, Institution-Affiliated Party Enforcement Actions and Related Matters. This manual generally sets forth the OCC’s existing policies and procedures for taking enforcement actions against a current or former institution-affiliated party (IAP) in response to violations of laws, regulations, final agency orders, conditions imposed in writing, or written agreements; unsafe or unsound practices; or breaches of fiduciary duty. The OCC also updated its policies and procedures manuals (PPMs) regarding bank enforcement actions and related matters and civil money penalties, primarily to ensure consistency with its policies and procedures for enforcement actions against IAPs. These PPMs are effective upon issuance.

This bulletin rescinds OCC Bulletin 2016-5, Civil Money Penalties, issued February 26, 2016, and OCC Bulletin 2017-48, Bank Enforcement Actions and Related Matters, issued October 31, 2017.


Proposed rule on 401(k) hardship distributions

The IRS has published [83 FR 56763] in today's Federal Register proposed amendments to the regulations relating to hardship distributions from section 401(k) plans. The amendments reflect statutory changes affecting section 401(k) plans, including recent changes made by the Bipartisan Budget Act of 2018. These regulations would affect participants in, beneficiaries of, employers maintaining, and administrators of plans that contain cash or deferred arrangements or provide for employee or matching contributions. Comments and requests for a public hearing must be received by January 14, 2019.


Update on FHFA single-security initiative

The Federal Housing Finance Agency has issued an update on its Single Security Initiative (SSI) and the Common Securitization Platform (CSP) initiative. The report details activity and progress on the development of the CSP and toward the launch of a single, common security called the Uniform Mortgage-Backed Security (UMBS).


October 2018 SLOOS

The Federal Reserve has issued the October 2018 Senior Loan Officer Opinion Survey on Bank Lending Practices, which addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the previous three months.


U.S. Faster Payments Council formed

A group of payments industry leaders has announced the formation of a newly incorporated organization, the U.S. Faster Payments Council (FPC), to work toward the goal of a ubiquitous, world-class payment system that allows Americans to safely and securely pay anyone, anywhere, at any time and with near-immediate funds availability. The FPC will be focused on private-sector approaches to solving problems and addressing issues that inhibit adoption of faster payments. Through dialogue, collaboration and education, the FPC will channel its resources toward the most pressing challenges and opportunities.


FEMA to suspend communities in four states

FEMA has published a final rule [83 FR 56269] identifying communities in Colorado, Iowa, North Carolina and Oregon to be suspended from the National Flood Insurance Program on November 16, 2018, for noncompliance with the floodplain management requirements of the program.

  • Colorado: Towns of Breckenridge and Silverthorne and unincorporated areas of Summit County
  • Iowa: Cities of Bevington, Carlisle, Cumming, Des Moines, Hartford, Indianola, Lacona, Martensdale, Norwalk and Spring Hill and unincorporated areas of Warren County
  • North Carolina: Cities of Charlotte, Concord, Kannapolis, and Locust; Towns of Cornelius, Davidson, Fairview, Harrisburg, Huntersville, Midland and Stanfield; and unincorporated areas of Iredell, Mecklenburg and Rowan Counties
  • Oregon: Cities of Brookings and Gold Beach and unincorporated areas of Curry County


OFAC extends general licenses

OFAC has announced the extension of the expiration date of certain general licenses related to EN+ Group plc (EN+), United Company RUSAL PLC (RUSAL), and GAZ Group (GAZ). A Treasury spokesperson stated "EN+, RUSAL, and GAZ are proposing substantial corporate governance changes that could potentially result in significant changes in control of these sanctioned entities. As the review of these complex proposals is ongoing, OFAC is extending the expiration date of related licenses until January 7."


Federal Reserve Supervision and Regulation Report

The Federal Reserve has released its November 2018 Supervision and Regulation Report, which summarizes banking conditions and the Federal Reserve’s supervisory and regulatory activities, in conjunction with semiannual testimony before Congress by the Vice Chairman for Supervision. The report does not reflect the full extent of tailoring of regulations and supervision--required by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA)--which is in varying stages of implementation. Supervisory portfolios are described in their pre-EGRRCPA form. Changes to regulatory thresholds adopted to reflect EGRRCPA are underway and will be reflected in the next report.


Fed to publish U.S. financial stability report

The Federal Reserve Board has announced it intends to begin publishing a semiannual report presenting the Board's view of the outlook for U.S. financial stability. The Financial Stability Report will include a summary of the Board's framework for assessing the resilience of the U.S. financial system and a discussion of key indicators related to the main financial stability vulnerabilities tracked by the Board: asset valuations, borrowing by businesses and households, leverage in the financial sector, and funding risks. The report is intended to help the public and market participants understand and evaluate the Board's assessment of financial stability conditions.


OCC OKs closing banks affected by wildfires

The Office of the Comptroller of the Currency announced Tuesday that it has issued a proclamation allowing institutions it supervises affected by wildfires and high winds in California to close, and reminded those institutions of the OCC's Bulletin 2012-28, "Supervisory Guidance on Natural Disasters and Other Emergency Conditions."

The announcement also included a link to the OCC's Major Disaster News Center page, which includes information for consumers and other bank customers impacted by disasters.


Treasury targets supporters of Russian occupation of Crimea and control of Eastern Ukraine

The U.S. Department of the Treasury's Office of Foreign Assets Control announced Thursday it had imposed additional sanctions in response to Russia’s continuing malign activity and destabilizing behavior by designating three individuals and nine entities under Ukraine-related authorities. These designations include two individuals and one entity engaged in serious human rights abuses under the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014 (SSIDES), as amended by Section 228 of the Countering America’s Adversaries Through Sanctions Act (CAATSA). OFAC also imposed sanctions on eight entities and one individual that were responsible for advancing Russian interests by operating in the Crimea region of Ukraine pursuant to Executive Order (E.O.) 13685 as codified pursuant to CAATSA, and which authorizes sanctions on, among others, any person determined to operate in the Crimea region of Ukraine. One of these eight entities is also being designated pursuant to Executive Order 13661 for being owned or controlled by, directly or indirectly, Bank Rossiya and Yuri Valentinovich Kovalchuk, persons whose property and interests in property are blocked pursuant to the E.O. 13661.

As a result of Thursday’s action, all property and interests in property of the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. For identifying information on the individuals and entities targeting in OFAC's action, as well as several administrative updates to OFAC's SDN List, see our OFAC Update.


FHFA and Bureau release mortgage origination dataset

The Federal Housing Finance Agency (FHFA) and the Bureau of Consumer Financial Protection (BCFP) have released for public use a new loan-level dataset collected through the National Survey of Mortgage Originations (NSMO) that provides insights into borrowers’ experiences in getting a residential mortgage.

The NSMO is a component of the National Mortgage Database (NMDB®), the first comprehensive repository of detailed mortgage loan information designed to support policymaking and research efforts and to help regulators better understand emerging mortgage and housing market trends. The NMDB was launched by FHFA and the BCFP in 2012.

In each quarter since 2014, FHFA and the BCFP sent surveys to borrowers who had recently obtained mortgages to gather feedback on their experiences during the process of getting a mortgage, their perception of the mortgage market, and their future expectations. FHFA and the BCFP have been compiling the NSMO survey data and this dataset is the first public release.


November FOMC statement

The Federal Open Market Committee (FOMC) has issued its November 2018 statement and an implementation note. Information received since September 2018 indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has declined. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Indicators of longer-term inflation expectations are little changed, on balance.

In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 2 to 2-1/4 percent.


MSAAC charter renewed

The OCC has announced the renewal of the charter of its Mutual Savings Association Advisory Committee (MSAAC), which provides advice to the Comptroller of the Currency about mutual savings associations and assesses their current condition, regulatory changes that may promote their health and viability, and other issues affecting these institutions. The committee includes officers and directors of federal mutual savings associations of all types, sizes, operating strategies, and geographic areas, as well as from federal savings associations in a mutual holding company structure..


Super Typhoon Yutu relief guidance

The FDIC has issued FIL-69-2018 to announce steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of the Northern Mariana Islands affected by Super Typhoon Yutu.


MoneyGram pays $125M for violations of FTC order

MoneyGram International, Inc. has agreed to pay $125 million to settle allegations that the company failed to take steps required under a 2009 Federal Trade Commission order to crack down on fraudulent money transfers that cost U.S. consumers millions of dollars. Under that order, the company was required to promptly investigate, restrict, suspend, and terminate high-fraud agents. The $125 million payment is part of a global settlement that resolves allegations that MoneyGram also violated a separate 2012 deferred prosecution agreement with the Department of Justice.

In addition to the monetary payment, MoneyGram has agreed to an expanded and modified order that will supersede the 2009 order and apply to money transfers worldwide. The modified order requires, among other things, that the company block the money transfers of known fraudsters and provide refunds to fraud victims in circumstances where its agents fail to comply with applicable policies and procedures. In addition, the modified order includes enhanced due diligence, investigative, and disciplinary requirements.


FATF Bulletin and Australia report issued

FATF has posted the November edition of its Business Bulletin, which provides a brief update on outcomes from the October 2018 FATF plenary meeting that are relevant for the private sector. A follow-up report on Australia’s process in addressing deficiencies listed in its 2015 mutual evaluation was also released.


Streamlined Call Report proposal

The OCC, Federal Reserve and FDIC have jointly proposed for public comment a rule that would permit insured depository institutions with total assets of less than $5 billion that do not engage in certain complex or international activities to file the most streamlined version of the Call Report, the FFIEC 051 Call Report. The agencies also are proposing to reduce by approximately 37 percent the number of existing data items reportable in the FFIEC 051 Call Reports for the first and third calendar quarters.

The Federal Reserve Board and the OCC also are proposing similar reduced reporting for certain uninsured institutions that they supervise with less than $5 billion in total consolidated assets that meet the same criteria. Comments on the proposal will be accepted for 60 days following publication.


Federal judge stays implementation of Payday Loan Rule

CUNA News reports that a judge in the U.S. District Court for the Western District of Texas ordered a stay Tuesday of the August 2019 compliance date of the Bureau of Consumer Financial Protection’s short-term, small-dollar lending rule. The Bureau said October 26 that it intends to issue a proposed rule to amend the "Payday Loan Rule" in January.


NJ property owner charged with housing discrimination

HUD has announced that it has charged a Paramus, New Jersey, property owner with housing discrimination for allegedly refusing to rent an apartment to an African-American woman because of her race. The charge further alleges that the owner used racial slurs in a text message he sent to the woman informing her that she did not get the apartment.


OFAC releases report of terrorist assets

The 2017 Terrorist Assets Report has been reported to Congress by OFAC. It is the Twenty-sixth Annual Report to the Congress on Assets in the United States Relating to Terrorist Countries and International Terrorism Program Designees.


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