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The CFPB announced Friday that HMDA Modified Loan Application Register (LAR) data have been published for approximately 5,400 financial institutions. This is the first year in which additional data reported by certain institutions under the 2015 HMDA rule are available. The Modified LARs contain loan level information for 2018 on individual HMDA filers, modified to protect privacy.

The Board of Directors of the FDIC approved on Friday proposals to amend two rules to simplify the process for making insurance determinations in the event a bank is placed into receivership.

The first proposal amends Part 370 of the FDIC's Rules and Regulations for "Recordkeeping for Timely Deposit Insurance Determination" to address issues raised as the FDIC worked with banks to implement the rule since it was originally approved in November 2016. The proposal also provides an optional one-year extension of the rule's original compliance deadline of April 1, 2020. Part 370 is currently applicable to the 36 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.

FDIC Board Member Martin J. Gruenberg issued a statement explaining his vote against the proposed Part 370 amendment.

The second proposal amends Part 330 of the FDIC's Rules and Regulations, which applies to all FDIC-insured institutions, regardless of size. Currently, in order for deposits in a joint account to be insured separately from deposits individually owned by the account's co-owners upon the failure of an insured institution, each co-owner of the joint account must have signed a signature card. The proposal is narrowly focused on providing an alternative method to satisfy this requirement. Institutions could continue to maintain signature cards, but the proposal also would allow the signature card requirement to be satisfied by other information contained in an institution's deposit account records establishing co-ownership of a joint account. The proposal would not expand or contract deposit insurance coverage for joint accounts and would not impose any new requirements on depositors or FDIC-insured institutions.

Comments on both proposals will be accepted for 30 days following publication.

Update: The proposed amendments to Part 330 were published at 84 FR 13143 on 4/4/2019, with comments due 5/6/2019. The proposed amendments to Part 370 were published at 84 FR 14814 on 4/11/2019, with comments due 5/13/2019.

The Federal Reserve Board published [84 FR 12049 4/1/19], changes to part II of the Federal Reserve Policy on Payment System Risk related to procedures for determining the net debit cap and maximum daylight overdraft capacity of a U.S. branch or agency of a foreign banking organization (FBO). The changes remove references to the Strength of Support Assessment ranking; remove references to FBOs' financial holding company status; and adopt alternative methods for determining an FBO's eligibility for a positive net debit cap, the size of its net debit cap, and its eligibility to request a streamlined procedure to obtain maximum daylight overdraft capacity. The changes are effective April 1, 2020.

UPDATE: The Federal Reserve Board announced March 24, 2020, an implementation delay to October 1, 2020, to allow foreign banking organizations and the Federal Reserve Banks to focus on heightened priorities [surrounding the COVID-19 pandemic] rather than establishing new arrangements for accessing intraday credit. See the Board's Federal Register notice.

The OCC, Federal Reserve and FDIC have published [84 FR 11879, 3/29/2019] a final rule delaying tthe effective date of their rule to address changes to credit loss accounting under U.S. generally accepted accounting principles, including banking organizations' implementation of the current expected credit losses methodology (CECL). The final rule had an effective date of April 1, 2019, and provides that banking organizations may early adopt the final rule prior to that date. The agencies have determined that a delay of the effective date to July 1, 2019, is appropriate.

The Department of Housing and Urban Development has announced that it is charging Facebook with violating the Fair Housing Act by encouraging, enabling, and causing housing discrimination through the company’s advertising platform. HUD alleges that Facebook unlawfully discriminates based on race, color, national origin, religion, familial status, sex, and disability by restricting who can view housing-related ads on Facebook’s platforms and across the internet. Further, HUD claims Facebook mines extensive data about its users and then uses those data to determine which of its users view housing-related ads based, in part, on these protected characteristics.

HUD has approved a Conciliation Agreement with a Modesto, California, rental property owner and his management company, Tri-Tal Realty, resolving allegations that they refused to rent a unit to a couple because they have three children. The case came to HUD’s attention when Project Sentinel, a HUD Fair Housing Initiatives Program agency, filed a complaint on behalf of the couple, alleging that the family was denied the opportunity to rent a two-bedroom unit managed by Tri-Tal Realty because they have children. The housing providers deny that they discriminated against the couple.

Under the terms of the agreement, the owners and manager will pay $10,000 to the couple and $5,000 to Project Sentinel. In addition, the agreement requires that Tri-Tal Realty revise its policies and that its employees attend annual fair housing training for the next three years.

• HUD press release

A summary of the NMLS Ombudsman meeting held during the 2019 NMLS Annual Conference & Training is now available.

Nationally, interest rates on conventional purchase-money mortgages decreased from January to February, according to several indices of new mortgage contracts:

• The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 4.46 percent for loans closed in late February, down 14 basis points from 4.60 percent in January.
• The average interest rate on all mortgage loans was 4.50 percent, down 15 basis points from 4.65 in January.
• The average interest rate on conventional, 30-year, fixed-rate mortgages of $484,350 or less was 4.67 percent, down 11 basis points from 4.78 in January.
• The effective interest rate on all mortgage loans was 4.60 percent in February, down 16 basis points from 4.76 in January.

The average loan amount for all loans was $313,400 in February, up $5,900 from $307,500 in January.

The FHA has issued its semi-annual Credit Risk Transfer Progress Report describing the status and volume of credit risk transfer transactions through the fourth quarter of 2018. The Report provides a comprehensive picture of how Fannie Mae and Freddie Mac transfer a substantial portion of credit risk to the private sector through a variety of transactions in both the single-family and multifamily markets.

• FHA press release

The Federal Reserve Board has released a document providing additional information on its stress testing program. The release of the document follows an announcement in February that the Board had finalized changes intended to increase the transparency of its stress tests without compromising their ability to test the resiliency of the nation's largest banks.

• Press release

The FDIC has announced the selection of six new members to its Advisory Committee on Community Banking, which has been providing advice and recommendations to the FDIC on a broad range of community bank policy and regulatory matters since it was established in 2009.

The SEC has announced the revocation of a Seattle area-based registered investment adviser and barred its principal from the securities industry for stealing money from a private fund the adviser managed. The remaining assets will be liquidated and placed in a fund for distribution to harmed investors. According to the SEC’s order, Dennis Gibb, the owner of Sweetwater Investments Inc., stole more than $3 million from Sweetwater Income Flood LP, a private fund Sweetwater managed, to pay for personal expenses, including his mortgage and car payments, and to keep Sweetwater’s business afloat.

FATF President Marshall Billingslea was invited to speak to the United Nations Security Council during their open debate on threats to international peace and security caused by terrorist acts. The Security Council adopted a new resolution, committing to further work with the FATF to prevent, detect and disrupt the financing of terrorism. The FATF has also released a follow-up report on the progress Norway has made to tackle money laundering and terrorist financing.

The CFPB has announced the release of “Want credit to work for you?” — the newest addition to the Bureau's Your Money, Your Goals suite of financial empowerment tools. The third in a series released by the Bureau, this booklet provides eight tools to help consumers through the various stages of building credit, maintaining good credit, and fixing credit if it is bad.

The March 2019 edition of FDIC Consumer News addresses credit and debit card rewards programs and how consumers can minimize the pitfalls and maximize the benefits of using them.

The OCC will host two workshops in Manhattan, Kansas, at the Four Points by Sheraton Manhattan, May 7 and 8, for directors of national community banks and federal savings associations.

• The Compliance Risk workshop on May 7 addresses the critical elements of an effective compliance risk management program. The workshop also focuses on major compliance risks and critical regulations. Topics of discussion include the Bank Secrecy Act, Flood Disaster Protection Act, Fair Lending, Home Mortgage Disclosure Act, Community Reinvestment Act, and other compliance hot topics.
• The Operational Risk workshop on May 8 focuses on the key components of operational risk—people, processes, and systems. The workshop also covers governance, third-party risk, vendor management, internal fraud, and cybersecurity.

The Federal Reserve has posted January 2019 data to its G.20 Finance Companies Owned and Managed Receivables Outstanding compilation.

The IRS has announced that starting May 13 only individuals with tax identification numbers may request an Employer Identification Number (EIN) as the “responsible party” on the application.

The change, made as part of the agency's ongoing security enhancements, will prohibit entities from using their own EINs to obtain additional EINs. The requirement will apply to both the paper Form SS-4, Application for Employer Identification Number, and online EIN application.

Individuals named as the responsible party on the application must have either a Social Security number or an individual taxpayer identification number.

The Federal Trade Commission has announced that Office Depot, Inc. and a California-based tech support software provider have agreed to pay a total of $35 million to settle Commission allegations that the companies tricked customers into buying millions of dollars’ worth of computer repair and technical services by deceptively claiming their software had found malware symptoms on the customers’ computers. Office Depot has agreed to pay $25 million and its software supplier, Support.com, Inc., has agreed to pay $10 million as part of their settlements with the FTC. The FTC intends to use these funds to provide refunds to consumers.

In its complaint, the FTC alleges that Support.com worked with Office Depot for nearly a decade to sell technical support services at its stores. Office Depot and Support.com used PC Health Check, a software program, as a sales tool to convince consumers to purchase tech repair services from Office Depot and OfficeMax, Inc., which merged in 2013.

OFAC has posted a bulletin announcing a $1,869,144 settlement with Stanley Black & Decker, Inc,. and its foreign subsidiary, Jiangsu Guoqiang Tools Co., Ltd. (“GQ”).

Stanley Black & Decker, a company based in New Britain, Connecticut, on behalf of itself and its subsidiary located in China, GQ, has agreed to settle its potential civil liability for 23 apparent violations of the Iranian Transactions and Sanctions Regulations. Specifically, between about June 29, 2013, and December 30, 2014, GQ exported and attempted to export 23 shipments of power tools and spare parts, with a total value of $3,201,647.73, to Iran or to a third country with knowledge that such goods were intended specifically for supply, transshipment, or re-exportation, directly or indirectly, to Iran. OFAC determined that Stanley Black & Decker voluntarily self-disclosed the apparent violations on behalf of GQ, and that the apparent violations constitute an egregious case. The statutory maximum civil monetary penalty amount for the Apparent Violations is $6,922,757, and the base civil monetary penalty amount for the Apparent Violations is $3,461,378.

For further background on this agreement, see our Penalty Page article, "Stanley Black & Decker settles with OFAC for $1.87 million."

Treasury announced Tuesday that OFAC has taken action against 25 individuals and entities, including a network of Iran, UAE, and Turkey-based front companies, that have transferred over a billion dollars and euros to the Islamic Revolutionary Guard Corps and Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), in addition to procuring millions of dollars’ worth of vehicles for MODAFL. Tuesday’s action exposes an extensive sanctions evasion network established by the Iranian regime, which it increasingly relies on as the United States’ maximum pressure campaign severely constricts the regime’s sources of revenue. OFAC also designated Iran’s MODAFL pursuant to Executive Order (E.O.) 13224 for its role in assisting the IRGC-Qods Force (IRGC-QF), as well as an Iran-based bank for providing banking services to the IRGC-QF.

For identification information on the designated individuals and entities, see BankersOnline's OFAC Update.

The Federal Housing Finance Agency announced yesterday that U.S. house prices rose in January, up 0.6 percent from the previous month, according to the FHFA seasonally adjusted monthly House Price Index (HPI). The previously reported 0.3 percent increase for December 2018 remained unchanged. From January 2018 to January 2019, house prices were up 5.6 percent.

Federal Deposit Insurance Corporation Chairman Jelena McWilliams has announced the appointment of Nick Podsiadly as General Counsel. In addition, FDIC veteran Harrel Pettway has been promoted to Senior Deputy General Counsel, and Leonard Chanin has joined the FDIC as Deputy to the Chairman.

The Federal Reserve has revised its index of industrial production (IP) and the related measures of capacity and capacity utilization. On net, the revisions to the growth rates for total IP for recent years were small and positive, with the estimates for 2016 and 2017 a bit higher and the estimates for 2015 and 2018 slightly lower. Total IP is still reported to have increased from the end of the recession in mid-2009 through late 2014 before declining in 2015 and rebounding in mid-2016. Subsequently, the index advanced around 7 1/2 percent over 2017 and 2018.

Capacity for total industry expanded modestly in each year from 2015 to 2017 before advancing 1 1/2 percent in 2018; it is expected to advance about 2 percent in 2019. Revisions for recent years were very small and showed slightly less expansion in most years relative to earlier reports.This revision incorporated newly available annual data on output and prices.

The FDIC has issued FIL-15-2019 announcing steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Nebraska affected by severe winter storms, straight-line winds, and flooding.

The OCC has issued Bulletin 2019-16 announcing that the Task Force on Consumer Compliance of the FFIEC recently developed revised interagency exam procedures for Regulations E and Z. These procedures reflect Consumer Financial Protection Bureau amendments to Regulations Z and E relating to the creation of comprehensive consumer protections for prepaid accounts. Those amendments become effective April 1, 2019.

A notice has been posted on the Department of Defense MLA website that the site will be upgraded to version 4.9 on Tuesday, April 9, 2019. As a result of this upgrade, Name fields (First, Middle, and Last) will no longer accept numeric characters. Users can only enter Alphabetic characters, spaces, dashes, and apostrophes in the Name fields. This change was implemented as an additional security measure.

The notice indicates users should not experience any down time during this release.

U.S. Immigration and Customs Enforcement announced yesterday that members of the Joint Criminal Opioid and Darknet Enforcement (J-CODE) team released the results of Operation SaboTor, a coordinated international effort targeting drug trafficking organizations operating on the Darknet. This was J-CODE’s second coordinated action and follows the success of last year’s Operation Disarray.

As a result of Operation SaboTor, U.S. and international law enforcement agencies made 61 arrests and shut down 50 Darknet accounts used for illegal activity. Law enforcement executed 65 search warrants, seizing 299.5 kilograms of drugs, 51 firearms, and more than $7 million ($4.5 million in cryptocurrency, $2.48 million in cash, and $40,000 in gold).

The Securities and Exchange Commission has announced awards totaling $50 million to two whistleblowers whose high-quality information assisted the Commission in bringing a successful enforcement action. One whistleblower received an award of $37 million and the other received an award of $13 million. The $37 million award is the Commission’s third-highest award to date after the $50 million award made in March 2018 to joint whistleblowers and a more than $39 million award announced in September 2018.

The Financial Action Task Force (FATF) released today a report of the actions that Italy has taken, since the assessment of the country’s framework in 2015, to strengthen its legal, regulatory and operational framework to combat money laundering and the financing of terrorism and proliferation.

Italy has been in a regular follow-up process since the adoption of its 2015 Mutual Evaluation, published in February 2016. In line with the FATF Procedures for mutual evaluations, the country has reported back to the FATF on the actions it has taken since then.

• Italy progress report

The OCC has issued Bulletin 2019-15 to remind all national banks and federal savings associations that they are prohibited by regulation from disclosing nonpublic OCC information, including their CAMELS rating, without prior approval of the OCC, except in very limited circumstances. Any unauthorized disclosure or use of nonpublic OCC information without the express permission of the OCC may be subject to criminal penalties under federal law. Nonpublic OCC information includes:

• OCC reports of examination, including CAMELS ratings
• Supervisory correspondence
• Bank responses to supervisory correspondence
• Investigatory files
• Certain enforcement-related information, including matters requiring attention
• Confidential bank information
• Other OCC records created or obtained in connection with OCC supervision, licensing, regulation, or examination that are not required to be made available under the Freedom of Information Act, or that the OCC has not yet published or made publicly available

Any person who discloses or uses nonpublic information except as expressly permitted by the OCC or as provided by the OCC’s regulations may be subject to the criminal penalties provided. The legal prohibition on the release of nonpublic OCC information applies to all financial institutions supervised by the OCC.

The Federal Trade Commission has announced the agenda for the 12th session of of its Hearings Initiative, which will occur on April 9-10, 2019, and focus on the FTC's approach to consumer privacy. The hearing’s first day will feature panel discussions on the goals of privacy protection; data sensitivity; consumer demand and expectations for privacy; and current approaches to privacy. The second day will include discussions on notice and choice; access, deletion and correction; accountability; and whether the FTC's current authority is adequate for protecting consumer privacy.

The CFPB has posted an article answering five questions often asked about checking accounts:

1. How do I open a bank or credit union account?
2. When can I access the funds I’ve deposited in my account?
3. How do I stop automatic debit payments from my account?
4. How do I move my money to another bank or credit union?
5. Why did the bank or credit union close my account?

The CFPB has announced the availability of the FFIEC's 2019 edition of A Guide to HMDA Reporting: Getting It Right!, for HMDA submissions due March 1, 2020, of applications and originations during 2019. The 2019 edition reflects amendments made to HMDA by the Economic Growth, Regulatory Relief, and Consumer Protection Act and the 2018 HMDA interpretive and procedural rule issued by the CFPB. The appendices provide additional implementation materials reporting lenders may find useful.

The OCC, FRB, FDIC, NCUA, and the state regulators have issued a joint press release recognizing the serious impact of flooding in the Midwest on the customers and operations of many financial institutions and will provide appropriate regulatory assistance 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. A complete list of the affected disaster areas was also provided.

The record of the February 8, 2019, meeting of the Federal Advisory Council and Board of Governors of the Federal Reserve System has been posted. The items discussed included current market conditions, the outlook for banking in 2019, fintech and banking, affordable housing, emerging risks, employment and inflation dynamics, and monetary policy.

OFAC has designated Banco de Desarrollo Economico y Social de Venezuela (BANDES), and any entity in which BANDES owns, directly or indirectly, a 50 percent or greater interest, for operating in the financial sector of the Venezuelan economy, following a determination by Secretary of the Treasury Mnuchin, in consultation with Secretary of State Pompeo, that persons operating in Venezuela’s financial sector may be subject to sanctions. OFAC amended a previously issued General License and four new Venezuela-related general licenses in connection with this designation. Two FAQs were also issued. Details regarding the Licensing changes, FAQs and the entities added to the SDN Lists are in a BankersOnline OFAC Update.

Separately, OFAC published a notice with several new Iran-related and non-proliferation designations. See BankersOnline's OFAC Update for details.

The Federal Reserve System has released the 2018 combined annual audited financial statements for the Federal Reserve Banks, as well as statements for the 12 individual Federal Reserve Banks and the Board of Governors. The Federal Reserve Banks' 2018 earnings were approximately $63.1 billion, representing a decrease of $17.6 billion from 2017. Total Reserve Bank assets as of December 31, 2018, were approximately $4.1 trillion, a decrease of $392.1 billion from the previous year. The Federal Reserve System financial statements are available on the Federal Reserve Board's website.

The OCC has published the OCC Mortgage Metrics Report, Fourth Quarter 2018, which showed 95.8 percent of mortgages included in the report were current and performing at the end of the quarter, compared to 94.5 percent a year earlier. The report also showed that servicers initiated 29,515 new foreclosures during the fourth quarter of 2018­, a 3.5 percent increase from the previous quarter and a 14.5 percent decrease from a year ago. Servicers completed 20,256 mortgage modifications in the fourth quarter of 2018, and 73.2 percent of the modifications reduced borrowers’ monthly payments.

The OCC Quarterly Report on Bank Trading and Derivatives Activities for the fourth quarter 2018 indicates trading revenue of U.S. commercial banks and federal savings associations of $4.2 billion in the fourth quarter 2018, which was $2.9 billion, or 41.0 percent, less than the previous quarter. In addition, trading revenue in the fourth quarter 2018 decreased by 28.5 percent compared with the $5.8 billion reported in the fourth quarter 2017.