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E.g., Nov 29 2020
E.g., Nov 29 2020

11/17/2020

FTC 2020 Annual Financial Report

The Federal Trade Commission has issued its Fiscal Year 2020 Agency Financial Report, which describes the agency’s strong fiscal management and key program performance during the past year. The report highlights the Commission’s 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.

11/17/2020

IRS 2020 Criminal Investigation Report released

The IRS has released its Criminal Investigation Division's Annual Report, highlighting the agency's successes and criminal enforcement actions taken in fiscal year 2020, the majority of which occurred during the COVID-19 pandemic. A key achievement was the identification of over $10 billion in tax fraud and other financial crimes. The 2020 report is interactive, summarizes a wide variety of investigative activity during the year and features examples of cases from each field office on a wide range of financial crimes. The federal fiscal year begins October 1 and ends on September 30.

11/17/2020

FHFA Performance and Accountability Report

The Federal Housing Finance Agency has released its annual 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 2020.

For the twelfth consecutive year, FHFA received an unmodified audit opinion on its FY 2020 financial statements from the U.S. Government Accountability Office. Included in the unmodified opinion, GAO noted no material weaknesses or significant deficiencies in FHFA's internal controls. GAO also found no instances of reportable noncompliance with the applicable laws and regulations it tested.

The Report also identified key management challenges and priorities the FHFA it must address going forward. It listed—

  • Finalizing FHFA's Capital Rule and issuing a proposed rule on Capital Planning
  • Transitioning away from LIBOR
  • Responsibly ending the conservatorships of the Enterprises
  • Developing resolution-related rulemaking to be prepared if one of its regulated entities should fail
  • Finalizing and publishing the Enterprise Liquidity Rule

11/17/2020

OCC updates licensing requirements

The OCC has released a final rule updating and clarifying licensing policies and procedures. The final rule makes various changes to the OCC’s Rules, Policies, and Procedures for Corporate Activities, (12 CFR part 5), including eliminating unnecessary requirements consistent with safe, sound, and fair operation of the federal banking system. It is part of the OCC’s continual effort to modernize its rules and reduce unnecessary regulatory burden.

The rule makes the following changes, among others:

  • Makes the definition of “well managed” consistent for all filing types.
  • Eliminates the filing requirement for FSAs that adopt without change the OCC’s model or optional bylaws.
  • Adds numerous provisions to 12 CFR 5.33 permitting national banks and FSAs to elect to follow the procedures applicable to state banks or state savings associations, respectively, for certain business combinations.
  • For operating subsidiaries:
    • Permits an eligible operating subsidiary of a qualifying national bank or FSA to engage in an activity that is substantively the same as a previously approved bank or FSA activity, respectively, by filing a notice with the OCC (national banks) or an application through expedited review (FSAs).
    • Removes the annual national bank operating subsidiary reporting requirement.
  • For non-controlling investments by a national bank and pass-through investments by an FSA:
    • With prior OCC approval, permits investments in enterprises that have not agreed to OCC supervision.
    • Provides an expedited review procedure for these investments under certain conditions.
    • Expands the investments eligible for notice.
    • Permits investments without a filing in enterprises conducting activities limited to those previously reported by the national bank or FSA in a previous non-controlling investment or pass-through investment filing.
  • Provides procedures for granting and revoking citizenship and residency waivers for national bank directors.
  • Permits national banks to request approval for a reduction in capital over more than four quarters.
  • Changes the definition of “troubled condition” for purposes of changes in directors and senior executive officers to align with OCC supervisory practices. The updated definition specifies that an enforcement action (a cease-and-desist order, consent order, or formal written agreement) must require the national bank or FSA to improve its financial condition for it to be considered in “troubled condition” solely as a result of the enforcement action.

Conforming changes to 12 CFR parts 3 and 7 are also made. The final rule is effective January 1, 2021, except for a change to paragraph 5.20(e)(2) relating to the OCC's taking into account a proposed insured national bank's or FSA's description of how it will meet its CRA objectives, which will be effective on publication of the final rule.

11/16/2020

FDIC guidance to facilitate recovery on Puerto Rico

The FDIC has issued FIL-105-2020, offering guidance to FDIC-supervised financial institutions on steps intended to provide regulatory relief and to facilitate recovery in areas of Puerto Rico affected by severe storms and flooding.

11/16/2020

Reduced SBA 504 loan debenture rates

The SBA has announced the updated interest rates for the Certified Development Companies 504 Loan Program. The program now allows for 10, 20, and 25-year interest rates at 2.231 percent, 2.364 percent, and 2.399 percent, respectively. Small businesses can now apply for a 504 loan at these low-interest rates.

11/16/2020

Business info to be masked in IRS tax transcripts

The IRS has announced that starting December 13 it will begin masking sensitive data on business tax transcripts to protect business taxpayers from identity theft. The following information will be visible on the new tax transcript:

  • Last four digits of any Employer Identification Number listed on the transcript: XX-XXX1234
  • Last four digits of any Social Security number or Individual Tax Identification Number listed on the transcript: XXX-XX-1234
  • Last four digits of any account or telephone number
  • First four characters of the first, and last name for any individual (first three characters if the name has only four letters)
  • First four characters of any name on the business name line
  • First six characters of the street address, including spaces
  • All money amounts, including wage and income, balance due, interest and penalties

For both the individual and business tax transcript, there is space for a Customer File Number. The Customer File Number is an optional 10-digit number (any number other than the taxpayer's SSN or EIN) that can be created, usually by third parties, that allow them to match a transcript to a taxpayer. The Customer File Number field will appear on the transcript when that number is entered on Line 5 of Form 4506-T, Request for Transcript of Tax Return, and Form 4506T-EZ.

11/16/2020

Virginia man sentenced for PPP fraud

The Justice Department has announced the sentencing of a man from Virginia for defrauding the Paycheck Protection Program (PPP). Court documents indicate that Tarik Jaafar, of Ashburn, Virginia, conspired with his wife, Monika Magdalena Jaworska, to create four shell companies. These companies conducted no legitimate business and existed solely as a means to execute the scheme to defraud. From April 13 to May 6, Jaafar and Jaworska applied for 18 separate PPP loans in the names of the four shell companies valued at approximately $6.6 million, falsely claiming, among other things, that the businesses had employees and they needed the loans to pay their employees’ salaries. Jaafar and Jaworska fraudulently induced banks to distribute approximately $1.4 million in loans which they intended to use for their personal benefit.

On June 20, Jaafar and Jaworska were arrested at John F. Kennedy International Airport as they attempted to flee to Poland. The majority of the funds were recovered by the banks and by law enforcement. On August 25, Jaafar pleaded guilty to conspiracy to defraud the United States.

11/16/2020

Classic FICO validated for Fannie and Freddie

The Federal Housing Finance Agency has announced the validation and approval of the Classic FICO credit score model for use by Fannie Mae and Freddie Mac (the Enterprises). The validation and approval of Classic FICO by the Enterprises allows them to continue supporting the mortgage market while assessing more modern credit score models that were submitted in response to the 2020 Joint Enterprise Credit Score Solicitation.

Enterprise announcements:

11/16/2020

CFPB and Colorado AG to hold joint virtual office hours

The CFPB has announced it will hold joint, virtual office hours on December 2, 2020, as part of the American Consumer Financial Innovation Network (ACFIN). Joint office hours provide innovators with the opportunity to discuss issues such as financial technology, innovative products or services, and other matters related to financial innovation with officials from the CFPB and state partners. CFPB Director Kathleen L. Kraninger and Colorado Attorney General Philip Weiser will participate in this event.

Innovators interested in participating in a meeting during the joint, virtual office hours should request the meeting and describe the topic(s) they would like to discuss during their session. Requests must be received by November 23, 2020. A confirmation for the specific meeting time will then be provided to the requester.

11/16/2020

Former Wells CEO and chairman charged by SEC

The SEC has charged former Wells Fargo & Company CEO and Chairman John G. Stumpf and former head of Wells Fargo’s Community Bank Carrie L. Tolstedt for their roles in allegedly misleading investors about the success of the Community Bank, Wells Fargo’s core business. The SEC’s filings include settled charges against Stumpf, who agreed to pay a $2.5 million penalty, and a litigated action alleging Tolstedt committed fraud.

According to the SEC’s complaint against Tolstedt, from mid-2014 through mid-2016, Tolstedt publicly described and endorsed Wells Fargo’s “cross-sell metric” as a means of measuring Wells Fargo’s financial success despite the fact that this metric was inflated by accounts and services that were unused, unneeded, or unauthorized. The complaint further alleges that Tolstedt signed misleading sub-certifications as to the accuracy of Wells Fargo’s public disclosures when she knew or was reckless in not knowing that statements in those disclosures regarding Wells Fargo’s cross-sell metric were materially false and misleading.

An SEC order against Stumpf finds that in 2015 and 2016 he signed and certified statements filed with the Commission, which he should have known were misleading, regarding both Wells Fargo’s Community Bank cross-sell strategy and its reported metric. According to the order, Stumpf failed to ensure the accuracy of his certifications after being put on notice that Wells Fargo was misleading the public about the cross-sell metric.

11/16/2020

COVID-19-related loan flexibilities extended

The Federal Housing Finance Agency has announced that Fannie Mae and Freddie Mac (the Enterprises) will extend several loan origination flexibilities through December 31, 2020. The changes are to ensure continued support for borrowers during the COVID-19 national emergency. The flexibilities were set to expire on November 30, 2020.

Extended flexibilities include:

  • Alternative appraisals on purchase and rate term refinance loans:
  • Alternative methods for documenting income and verifying employment before loan closing; and
  • Expanding the use of powers of attorney to assist with loan closings

11/13/2020

Enterprises extend purchase of loans in forbearance

The Federal Housing Finance Agency has approved an extension of the current temporary policy that allows for the purchase of certain single-family mortgages in forbearance that meet specific eligibility criteria as set by Fannie Mae and Freddie Mac (the Enterprises). The policy is extended for loans originated through December 31, 2020.

11/13/2020

Bureau reports on accuracy of payment info received by CRAs

The Bureau has released its quarterly consumer trends report regarding the prevalence of actual payment information in consumer credit reporting. Key findings of the report include

  • Across the three most common installment loan types (auto loans, student loans, and mortgages), shares of credit accounts with actual payment amount information furnished have generally trended upward, and by March 2020, contained actual payment information in more than 90 percent of credit accounts.
  • Shares of revolving and credit card accounts with actual payment information furnished significantly declined over the same time period. The share of credit card accounts containing actual payment data peaked in the fourth quarter of 2013 at 88 percent and has since declined by more than half to 40 percent. Compared to actual payment, other data variables in a consumer’s consumer report, such as balance amount and credit limit, are consistently furnished across loan types.
  • Furnishing actual payment information appears to be an either/or proposition for credit card issuers. Issuers either furnish actual payment information for nearly all accounts or not at all
  • In 2013, up to 70 percent of the largest credit card issuers furnished actual payment data for nearly all accounts. As of 2020, only about half of issuers with recent payments furnish these data.

11/13/2020

FDIC amends branch application requirements

The FDIC has published [85 FR 72551] a final rule to amend its application requirements for the establishment and relocation of branches and offices so that such applications no longer require statements regarding the compliance of such proposals with the National Historic Preservation Act of 1966 and the National Environmental Policy Act of 1969. The final rule amends the FDIC's regulations to remove those requirements embedded in its branch application procedures, and rescinds related FDIC statements of policy, consistent with branch application procedures for national banks and insured state member banks supervised by the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System.

The amendments become effective December 14, 2020.

11/13/2020

Debt Collector pays $500,000 for reporting violations

The CFPB has announced a settlement with Afni, Inc.to address its violations in providing information to consumer reporting agencies. Afni is a non-bank Illinois-based debt collector that specializes in collecting debt on behalf of telecommunications companies and furnishes information to consumer reporting agencies about consumers’ credit. The consent order requires Afni to take certain steps to prevent future violations and imposes a $500,000 civil money penalty.

Details of Afni's violations and a link to the Bureau's consent order can be found in BankersOnline's penalty page, "Afni, Inc. pays $500K for FCRA violations."

11/12/2020

IRS updates life expectancy and RMD tables

The IRS has published [85 FR 72472] in today's Federal Register a final regulation to update its life expectancy and distribution period tables used for determining required minimum distributions from qualified retirement plans, individual retirement accounts and annuities, and certain other tax-favored employer-provided retirement arrangements.

Although the final regulations are effective upon publication, they apply to distribution calendar years beginning on or after January 1, 2022.

11/12/2020

NCUA amends corporate CU regulation

The NCUA has published [85 FR 71817] a final rule amending its corporate credit union regulation (12 CFR part 704). The final rule updates, clarifies, and simplifies several provisions of the NCUA's corporate credit union regulation, including:

  • permitting a corporate credit union to make a minimal investment in a credit union service organization (CUSO) without the CUSO being classified as a corporate CUSO under the NCUA's rules;
  • expanding the categories of senior staff positions at member credit unions eligible to serve on a corporate credit union's board; and
  • amending the minimum experience and independence requirement for a corporate credit union's enterprise risk management expert.

The amendments will be effective December 14, 2020.

11/12/2020

OFAC sanctions suppliers for Iranian military firm

OFAC has designated a network of six companies and four individuals that facilitated the procurement of sensitive goods, including U.S.-origin electronic components, for Iran Communication Industries (ICI), an Iranian military firm designated by the United States in 2008 and by the European Union in 2010 for being owned or controlled by Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), the overall manager and coordinator of Iran’s ballistic missile program.

This action was taken in accordance with Executive Order 13382, an authority aimed at freezing the assets of proliferators of weapons of mass destruction and their supporters. Concurrent with Treasury’s designations, the U.S. Attorney’s Office for the District of Columbia is filing charges by criminal complaint against two of the entities (DES International Co. and Soltech Industry Co., Ltd.) and one of the individuals (Chin Hua Huang) designated today.

Identification information for the designated individuals and entities can be found in BankersOnline's OFAC Update.

11/12/2020

Bureau reviewing payday lending disclosures

The CFPB has published a notice and request for comment [85 FR 71886] on an information collection plan titled "Generic Information Plan for the Development and Testing of Disclosures and Related Materials" to test Payday Loan disclosures. The results of this testing (estimated to conclude September 2021) may be used, along with other Bureau considerations, to inform the decision-making process around whether to move forward with a rulemaking related to payday loan disclosures.

11/12/2020

Fed services fees for 2021

The Federal Reserve Board has issued a press release announcing the fee schedules that will be effective January 4, 2021, for payment services provided by the Federal Reserve Banks to depository institutions.

The Reserve Banks will maintain the current schedule of prices for payment services provided to depository institutions (priced services) in 2021, with the exception of a modification to the Check Services participation fee, which will increase on average 2.7 percent. Fees will remain unchanged for the Reserve Banks' FedACH Service, National Settlement Service, Fedwire Funds Service, Fedwire Securities Service, and FedLine Solutions. The 2021 fee schedule for each of the priced services is available on the Federal Reserve Banks' financial services website at FRBservices.org.

11/10/2020

G.19 Consumer Credit data

The Federal Reserve has posted its September 2020 G.19 Consumer Credit data. Consumer credit increased at a seasonally adjusted annual rate of 2-1/4 percent during the third quarter. Revolving credit decreased at an annual rate of 2-1/2 percent, while nonrevolving credit increased at an annual rate of 4 percent. In September, revolving credit increased at an annual rate of 4-3/4 percent, while nonrevolving credit increased at an annual rate of 4-3/4 percent.

11/10/2020

Sanctions imposed on petroleum network, Syrian officials and entities

Treasury has announced the OFAC has taken action against Syrian military officials, members of the Syrian Parliament, Government of Syria entities, and Syrian and Lebanese persons attempting to revive Syria’s deteriorating petroleum industry. Seven individuals and ten entities were designated.

Treasury's press release said the State Department also took action against two Syrian persons in accordance with Section 2 of Executive Order 13894, “Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Syria.”

More information on the individuals and entities targeted in these actions, see BankersOnline's November 9, 2020, OFAC Update.

11/10/2020

FinCEN advisory on FATF jurisdiction list

FinCEN has issued FIN-2020-A009, an "Advisory on the Financial Action Task Force-Identified Jurisdictions with Anti-Money Laundering, Combating the Financing of Terrorism, and Proliferation Deficiencies."

  • Iran and North Korea continue to be listed by FATF as "high-risk" jurisdictions.
  • Iceland and Mongolia have been removed from FATF's "Jurisdictions under Increased Monitoring" statement
  • Remaining on the "Increased Monitoring" list are Albania, The Bahamas, Barbados, Botswana, Burma (Myanmar), Cambodia, Ghana, Jamaica, Mauritius, Nicaragua, Pakistan, Panama, Syria, Uganda, Yemen, and Zimbabwe (some countries did not report their actions on its reforms because of the COVID-18 pandemic, and the list may not reflect their current status).

Financial institutions filing SARs with a connection to the advisory should include the key term "October 2020 FATF FIN-2020-A009” in SAR field 2 (Filing Institution Note to FinCEN) and the narrative.

11/10/2020

OCC: COVID-19 effects on federal banking system

The OCC has posted its Semiannual Risk Perspective for Fall 2020, reporting the key issues facing the federal banking system and the effects of the COVID-19 pandemic on the federal banking industry.

Although banks are still in strong financial condition, profitability is stressed due to low interest rates and increasing levels of problem loans. The OCC reported credit, strategic, operational, and compliance risks, among the key risk themes in the report:

  • Credit risk is increasing as the economic downturn impacts customer ability to service debts.
  • Strategic risk is an emerging issue due to the historically low rate environment, potential credit stress and their effect on bank profitability.
  • Operational risk is elevated as financial institutions respond to altered work environments and an evolving and complex operating environment. Cybersecurity threats contribute as a key driver of the heightened operational risk environment.
  • Compliance risk is elevated due to a combination of altered work environments, and the requirement to quickly implement federal, state, and proprietary programs designed to support businesses and consumers.

The report also highlights emerging trends in payment products and services as a special topic in emerging risks.

11/10/2020

Fed posts October SLOOS results

The Federal Reserve Board has released the October 2020 Senior Loan Officer Opinion Survey (SLOOS) on Bank Lending Practices, which addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the third quarter of 2020.

Loans to businesses: Respondents indicated that, on balance, they tightened their standards and terms on commercial and industrial loans to firms of all sizes. Banks reported weaker demand for C&I loans from firms of all sizes. Meanwhile, banks tightened standards and reported weaker demand across all three major commercial real estate loan categories—construction and land development loans, nonfarm nonresidential loans, and multifamily loans—over the third quarter of 2020.

Loans to households: Banks tightened standards across all categories of residential real estate loans and across all three consumer loan categories—credit card loans, auto loans, and other consumer loans—over the third quarter of 2020 on net. Banks reported stronger demand for credit card loans, auto loans, and most categories of RRE loans.

Banks also responded to a set of special questions inquiring about their forbearance policies. For all loan categories, a majority of banks reported that less than 5 percent of loans were in forbearance in the third quarter. Payment deferral was the most widely cited form of forbearance for CRE, RRE, and consumer loans, while covenant relief was the most cited form of forbearance for C&I loans. For most categories, a borrower’s degree of financial hardship was the factor most widely cited as important in determining banks’ willingness to approve forbearance requests or the terms of forbearance.

11/09/2020

Agencies on LIBOR transition

The OCC, Federal Reserve Board, and FDIC have announced they have issued an interagency Statement on Reference Rates for Loans reiterating that the agencies do not endorse a specific replacement rate for the London InterBank Offered Rate (LIBOR), which is expected to cease after 2021. Banks may use any reference rate for loans that the banks determine to be appropriate for their funding models and customer needs. Banks should include language in lending contracts that provides for using a robust fallback rate if the initial reference rate is discontinued. The statement emphasizes that—

  • all banks should have risk management processes in place, commensurate with the size and complexity of their exposures, to identify and mitigate their LIBOR transition risks. For more information, refer to the FFIEC "joint Statement on Managing the LIBOR Transition."
  • examiners will not criticize banks solely for using a reference rate, including a credit-sensitive rate, other than the secured overnight financing rate (SOFR), for loans.

The agencies encourage banks to determine appropriate reference rates for lending activities and begin transitioning loans away from LIBOR without delay. They also encourage banks to accelerate outreach to lending customers to ensure that they are aware of, and prepared for, the transition from LIBOR. Finally, the agencies encourage banks to consider any technical changes that might be required for internal systems to accommodate new reference rates or fallback rates.

11/09/2020

Treasury targets corrupt Lebanese official

The Department of the Treasury has announced that OFAC has sanction Gibran Bassil the president of the Free Patriotic Movement political party and member of the Lebanese parliament for his role in corruption. For detailed identification information on Bassil, see BankersOnline's November 6, 2020, OFAC Update

11/09/2020

Federal Reserve supervision and regulation report

The Federal Reserve Board has published its latest supervision and regulation report, which summarizes banking conditions and information about the Federal Reserve's bank regulatory and supervisory activities. The current edition includes detailed information on the strength of the banking system in light of the economic and financial stresses from the COVID-19 containment measures. Additionally, it describes current areas of supervisory focus from the Federal Reserve as well as how banks and bank supervisors have adapted to a largely remote working environment.

The Board also announced that it is updating the list of firms supervised by its Large Institution Supervision Coordinating Committee (LISCC) Program, which was established in 2010 to supervise the largest and most complex firms.

11/06/2020

FinCEN renews GTOs

The Financial Crimes Enforcement Network (FinCEN) has announced the renewal of its 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 renewed GTOs are identical to the May 2020 GTOs. The purchase amount threshold remains $300,000 for each covered metropolitan area. The terms of this Order are effective beginning November 6, 2020 and ending on May 4, 2021.

The new GTOs cover certain counties within these major U.S. metropolitan areas: Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle.

FinCEN's GTOs do not require banks to take any action. We report on them because they may affect a bank's customers.

11/06/2020

Bureau files complaint against student loan debt relief companies

The CFPB yesterday filed a complaint against Performance SLC, LLC (PSLC), a California debt-relief business focused on federal student loan debt; Performance Settlement, LLC (PSettlement), a California debt-settlement company; and Daniel Crenshaw, the owner and CEO of the two companies.

The Bureau alleges that PSLC and Crenshaw charged illegal advance fees in violation of the Telemarketing Sales Rule (TSR) to student loan borrowers seeking to obtain loan consolidation, loan forgiveness, or income-driven repayment plans for their federal student loans, and that PSLC failed to make required disclosures to certain consumers in violation of the TSR. The Bureau also alleges that PSettlement and Crenshaw used deceptive tactics in violation of the Consumer Financial Protection Act (CFPA) in order to induce consumers to sign up for PSettlement’s services. The complaint seeks redress to consumers, injunctive relief, and the imposition of civil money penalties against the defendants.

11/06/2020

Driver Loan, LLC and CEO subjects of Bureau suit

The CFPB has announced it has filed a lawsuit against Driver Loan, LLC, and its Chief Executive Officer, Angelo Jose Sarjeant, for allegedly engaging in deceptive acts or practices in taking deposits from and offering credit to consumers.

Driver Loan, based in Doral, Florida, offers short-term, high-interest loans to consumers funded by deposits made by other consumers. The Bureau alleges that Driver Loan and Sarjeant violated the Consumer Financial Protection Act of 2010 (CFPA) by misrepresenting the risks associated with the deposit product it offered to consumers and by misrepresenting the annual percentage rate (APR) for extensions of credit it offered to other consumers. The Bureau’s complaint alleges that since 2017, Driver Loan purports to have offered short-term, high-interest personal loans totaling over $30 million, typically to drivers who work with ride-share companies. The loans range from $100 to $500 each and are repayable in 15 daily installments. The Bureau alleges that Driver Loan deceptively markets its loans as having an APR of 440% when the actual APRs are about 975%.

11/06/2020

FOMC statement issued

The Federal Reserve Board has voted unanimously to maintain the interest rate paid on required and excess reserve balances at 0.10 percent, effective November 6, 2020. As part of its policy decision, the Federal Open Market Committee (FOMC) voted to authorize and direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive:

  • Undertake open market operations as necessary to maintain the federal funds rate in a target range of 0 to 1/4 percent.
  • Increase the System Open Market Account holdings of Treasury securities and agency mortgage-backed securities (MBS) at the current pace. Increase holdings of Treasury securities and agency MBS by additional amounts and purchase agency commercial mortgage-backed securities (CMBS) as needed to sustain smooth functioning of markets for these securities
  • Conduct term and overnight repurchase agreement operations to support effective policy implementation and the smooth functioning of short-term U.S. dollar funding markets.
  • Conduct overnight reverse repurchase agreement operations at an offering rate of 0.00 percent and with a per-counterparty limit of $30 billion per day; the per-counterparty limit can be temporarily increased at the discretion of the Chair.
  • Roll over at auction all principal payments from the Federal Reserve's holdings of Treasury securities and reinvest all principal payments from the Federal Reserve's holdings of agency debt and agency MBS in agency MBS.
  • Allow modest deviations from stated amounts for purchases and reinvestments, if needed for operational reasons.
  • Engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions.

The Board also voted unanimously to approve the maintain the primary credit rate at the existing level of 0.25 percent.

11/06/2020

CFPB issues no-action letter to BofA

The CFPB announced yesterday it has granted a no-action letter (NAL) to Bank of America, N.A. regarding certain small-dollar credit products. The NAL provides increased regulatory certainty that the Bureau will not bring a supervisory or enforcement action against a company for providing a product or service under certain facts and circumstances. Bank of America’s NAL application is based on the NAL Template issued by the Bureau on May 22, 2020 in response to an application from the Bank Policy Institute. The Bureau approved the NAL Template to further competition in the small-dollar lending space, which fosters access to credit while including important protections for consumers who seek small-dollar loan products.

11/06/2020

OCC Director’s Toolkit updated

The OCC has announced the update of its Director’s Toolkit to help bank directors for national banks and federal savings associations fulfill their corporate governance responsibilities. The Toolkit is a helpful guide for bank directors on strategic issues, risk management, and compliance responsibilities. The updated toolkit includes a revised Director's Book: Role of Directors for National Banks and Federal Savings Associations and adds a new publication, the Director’s Reference Guide to Board Reports and Information.

11/05/2020

Servicemembers consumer protection webinar

The NCUA and the CFPB will co-host a webinar on financial literacy and consumer financial protections for servicemembers. The November 18 “Financial Readiness Resources and Information for Servicemembers, Veterans, and their Families" webinar is scheduled to begin at 2 p.m. ET and run approximately 45 minutes. Participants will be able to log into the webinar and view it on their computers or mobile devices using the registration link. Registration is now open.

The NCUA’s Office of Consumer Financial Protection will share financial literacy resources for servicemembers and their families on MyCreditUnion.gov, and provide a brief overview of servicemember consumer financial protection laws and regulations. The CFPB’s Office of Servicemember Affairs will highlight their interactive learning tools and resources for servicemembers and their families.

11/05/2020

Refunds for victims of cryptocurrencies referral schemes

The Federal Trade Commission has announced it is sending PayPal payments totaling more than $470,000 to people who lost money to deceptive chain referral schemes involving cryptocurrencies. Promoters of Bitcoin Funding Team and My7Network falsely promised that participants could earn large amounts of money by paying cryptocurrency such as Bitcoin or Litecoin to enroll in the schemes. However, Bitcoin Funding Team and My7Network were chain referral schemes that depended on the recruitment of new people to make money. In fact, most participants failed to recoup their initial investments. The FTC will send 7,964 refunds through PayPal beginning on November 5, 2020. The average refund is approximately $59. Recipients who receive a refund via PayPal will have 30 days to accept the payment.

11/05/2020

FDIC CRA ratings released

The FDIC has posted a list of 72 banks recently evaluated for compliance with the Community Reinvestment Act. The list covers evaluation ratings that the FDIC assigned to institutions in August 2020. Sixty-six banks received a Satisfactory rating, and we congratulate the following six banks, which were rated Outstanding:

11/05/2020

COVID text scam warning from IRS

The IRS, state tax agencies, and the tax industry yesterday warned of a new text scam created by thieves that trick people into disclosing bank account information under the guise of receiving the $1,200 Economic Impact Payment. "Criminals are relentlessly using COVID-19 and Economic Impact Payments as cover to try to trick taxpayers out of their money or identities," said IRS Commissioner Chuck Rettig. "This scam is a new twist on those we've been seeing much of this year. We urge people to remain alert to these types of scams."

The scam text message states: "You have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment into your account. Continue here to accept this payment …" The text includes a link to a fake phishing web address. People who receive this text scam should take a screen shot of the text message that they received and then include the screenshot in an email to phishing@irs.gov with the following information:

  • Date/Time/Timezone that they received the text message
  • The number that appeared on their Caller ID
  • The number that received the text message

People who believe they are eligible for the Economic Impact ("Stimulus") Payment should go directly to IRS.gov. People who do not have a filing requirement but who are eligible for EIP can use a non-filers tool on IRS.gov until November 21 to claim their payment.

11/05/2020

Treasury Department quarterly refunding statement

The Treasury Department has announced it is offering $122 billion of Treasury securities to refund approximately $60.9 billion of privately-held Treasury notes maturing on November 15, 2020. This issuance will raise new cash of approximately $61.1 billion. The securities are:

  • A 3-year note in the amount of $54 billion, maturing November 15, 2023;
  • A 10-year note in the amount of $41 billion, maturing November 15, 2030; and
  • A 30-year bond in the amount of $27 billion, maturing November 15, 2050.

The 3-year note will be auctioned on a yield basis at 1:00 p.m. ET on Monday, November 9, 2020. The 10-year note will be auctioned on a yield basis at 1:00 p.m. ET on Tuesday, November 10, 2020. The 30-year bond will be auctioned on a yield basis at 1:00 p.m. ET on Thursday, November 12, 2020. All of these auctions will settle on Monday, November 16, 2020.

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