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FHA has issued Mortgagee Letter 2018-08 announcing revised requirements for Home Equity Conversion Mortgage (HECM) servicers when they assign FHA-insured reverse mortgages to the agency for claim payment. Effective immediately, FHA-approved HECM servicers can use alternative supporting documentation in lieu of previously required materials that, in many instances, delayed claim processing.

HUD Deputy Secretary Patenaude, on behalf of HUD Secretary Carson, and Israel’s Deputy Finance Minister Cohen yesterday signed a Memorandum of Cooperation to increase collaboration between the United States and the State of Israel on a host of housing, community development and mortgage finance issues. The cooperative memorandum establishes the formal exchange of information and research related to low- and moderate-income housing, mortgage and housing finance, rental housing assistance, management of public housing, and community development.

• Press release

The FHFA has released an updated strategic plan for its Office of Minority and Women Inclusion (OMWI) that reflects the Agency's commitment to promoting diversity and inclusion. The strategic plan covers fiscal years 2019-2021 and describes how OMWI will support the diversity and inclusion mandates included in both the Housing and Economic Recovery Act of 2008 and the Dodd-Frank Act. The strategic plan outlines OMWI's plan for leading diversity and inclusion and equal employment opportunity efforts at FHFA and diversity and inclusion efforts at Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System, which includes 11 Banks and the Office of Finance.

The OCC has released a list of new enforcement actions taken in September against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations.

A former teller was banned from participation in the banking industry for misappropriation of $22,000 in bank and customer funds in 2004 and a former customer service representative was banned from the industry for unauthorized withdrawals totaling $7,016 in 2016 from the accounts of an elderly customer of the bank.

The former private banking senior manager of a now closed federal branch of the Royal Bank of Canada was banned from the industry and assessed a $100,000 civil money penalty for facilitating transactions in 2013 in which his clients and others made international money transfers between Brazil and the U.S. through an informal network without required due diligence or recordkeeping, for personal gain, in violation of BSA/AML law and regulations.

HUD has announced it is awarding an additional $50 million in voucher funding to 26 public housing agencies (PHAs) in Puerto Rico, Texas, California, and Florida that were severely impacted by major natural disasters in 2017.

FIL-63-2018, issued Friday, announced additions to the FDIC's cybersecurity awareness resources for financial institutions. There are two new vignettes for the Cyber Challenge.

Cyber Challenge facilitates discussion between financial institution management and staff about operational risk issues. Its exercises are designed to provide valuable information about an institution's current state of preparedness and identify opportunities to strengthen resilience to operational risk. Cyber Challenge is not a regulatory requirement; rather, it is an optional resource that may assist financial institutions in strengthening their resilience to operational risk.

FATF President Marshall Billingslea, of the United States, chaired the first Plenary meeting of FATF-XXX in Paris on October 17–19, 2018. The main issues dealt with by this Plenary were:

• Operations and streamlining the FATF
• Major strategic initiatives
• Mutual evaluations and follow-up reviews, and compliance
• Other Strategic Initiatives

The FATF also amended its Standards to respond to the increasing use of virtual assets for money laundering and terrorist financing. This includes an amendment of the FATF Recommendations and Glossary to clarify to which businesses and activities the FATF requirements apply in the case of virtual assets.

On Friday, the Treasury Department issued proposed guidance related to the new Opportunity Zone tax incentive. The tax benefit, created by the 2017 Tax Cuts and Jobs Act, is designed to spur economic development and job creation by encouraging long-term investments in economically distressed communities nationwide. The proposed regulations clarify what gains qualify for deferral, which taxpayers and investments are eligible, the parameters for Opportunity Funds, and other guidance. The proposed regulations should provide investors and fund sponsors the information they need to confidently enter into new business arrangements in designated Opportunity Zones. The Treasury Department plans on issuing additional guidance before the end of the year.

Bloomberg has reported that FinCEN senior adviser Natalie Edwards has been charged with giving a journalist information from suspicious activity reports (SARs) involving Paul Manafort, Rick Gates, and accused Russian agent Maria Butina, key figures in Special Counsel Robert Mueller's probe of Russian interference in the U.S. 2016 election.

The Treasury Department announced yesterday the Office of Foreign Assets Control identified Colombian national Pedro Luis Zuleta Noscue as a significant foreign narcotics trafficker under the Foreign Narcotics Kingpin Designation Act. Four additional Colombian nationals were also designated for their involvement in the narcotics trafficking activities of Pedro Luis Zuleta Noscue.

As a result of yesterday’s action, all assets in which these persons have an interest in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons. Penalties for violations of the Kingpin Act range from civil penalties of up to $1,466,485 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines for criminal violations of the Kingpin Act.

For identity information on the five individuals, see our OFAC Update.

The FDIC advisory Committee on Economic Inclusion (ComE-IN) will meet on October 24 to discuss the 2017 FDIC Household Survey data results, review of UK-Financial Conduct Authority (FCA) mobile study, and youth employment programs and deposit accounts. The meeting will be open to the general public and will be held from 9 a.m. to 3:45 p.m. in the FDIC's Board Room, 6th Floor, 550 17th Street, N.W., Washington, D.C. The meeting also will be webcast live. The meeting agenda and a link to the webcast can be found here.

The FFIEC has launched its redesigned Bank Secrecy Act/Anti-Money Laundering (BSA/AML) InfoBase website, which is provided for sharing bank examination procedure information with examiners, financial institutions, the public, and other stakeholders. The InfoBase was redesigned to improve the overall experience for users. It includes improved site navigation, enhanced search capabilities, mobile-friendly capability, and new functionality that allows users to download various sections of the FFIEC BSA/AML Examination Manual.

The NCUA Board on Thursday unanimously approved two actions:

• A supplemental final rule that amends the agency’s 2015 risk-based capital rule to delay the effective date of the rule until January 1, 2020, and raises the asset threshold for a complex credit union from $100 million to $500 million. Update: Published at 83 FR 55467 11/6/2018.
• A proposed rule to clarify, update, and simplify federal credit union bylaws.

HUD and the Census Bureau have released statistics on new residential construction for September 2018.

• Building Permits: Privately owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,241,000, 0.6 percent below the revised August rate of 1,249,000, and 1.0 percent below the September 2017 rate of 1,254,000. Single-family authorizations in September were at a rate of 851,000, 2.9 percent above the revised August figure of 827,000. Authorizations of units in buildings with five units or more were at a rate of 351,000 in September.
• Housing Starts: Privately owned housing starts in September were at a seasonally adjusted annual rate of 1,201,000, 5.3 percent below the revised August estimate of 1,268,000, but 3.7 percent above the September 2017 rate of 1,158,000. Single-family housing starts in September were at a rate of 871,000, 0.9 percent below the revised August figure of 879,000. The September rate for units in buildings with five units or more was 324,000.
• Housing Completions: Privately owned housing completions in September were at a seasonally adjusted annual rate of 1,162,000, 4.1 percent below the revised August estimate of 1,212,000 but 7.0 percent above the September 2017 rate of 1,086,000. Single-family housing completions in September were at a rate of 844,000, 8.7 percent below the revised August rate of 924,000. The September rate for units in buildings with five units or more was 312,000

The FRB and the Federal Open Market Committee have released the minutes, statement, and projection materials for the September 25–26, 2018, FOMC meeting. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the meeting was also included as an addendum to the minutes. The minutes suggest that further gradual increases in the federal funds rate "would most likely be consistent with a sustained economic expansion, strong labor market conditions, and inflation near 2 percent over the medium term." The next FOMC meeting is set for November 7–8.

The Bureau has posted an update to its Fall 2018 rulemaking agenda, which focuses on implementing directives mandated in the EGRRCPA, the Dodd-Frank Act, and other statutes. The Bureau has moved its rulemaking on small business lending data collection to its "long-term actions" list, which also includes plans for defining abusive acts and practices under the Dodd-Frank Act. The update suggests the Bureau will issue a proposal on small loans in January and a proposal addressing the Fair Debt Collection Practices Act in March.

Among the EGRRCPA initiatives, the CFPB plans to issue proposals addressing the expanded exemptions from mortgage escrow requirements for certain creditors with assets of $10 billion or less, and to address some or all of the issues related to various HMDA projects, such as taking another look at the discretionary data added in the 2015 HMDA rule. It also notes that several sections of the EGRRCPA, such as the section 101 provision for qualified mortgage status for certain portfolio loans, don't require regulatory action, but rulemaking may nonetheless be helpful to better implement or clarify those provisions.

The Federal Stability Oversight Council announced Wednesday that it has rescinded its determination that material financial distress at Prudential Financial, Inc. could pose a threat to U.S. financial stability and that Prudential shall be subject to supervision by the Board of Governors of the Federal Reserve System and enhanced prudential standards. The Dodd-Frank Act requires the Council to reevaluate its nonbank financial company determinations at least annually.

The Treasury Department reported Wednesday that OFAC has imposed sanctions on Afaq Dubai, an Iraq-based money services business (MSB) that has been moving money for the Islamic State of Iraq and Syria (ISIS). OFAC named Afaq Dubai as a Specially Designated Global Terrorist under Executive Order 13224, for assisting in, sponsoring, or providing support for, ISIS. As a result of OFAC’s action, all property and interests in property of Afaq Dubai subject to U.S. jurisdiction are blocked and U.S. persons are generally prohibited from engaging in transactions with them. For identity information on Afaq Dubai, see our OFAC Update.

The Federal Trade Commission has announced that the aggregated consumer complaint data received by the Commission is being released on a quarterly basis in a new interactive online format. The FTC hears from millions of consumers each year about fraud, identity theft, and other problems, allowing the Commission to warn other consumers about scams they should watch out for, while also providing the agency with an important source of information to support its enforcement actions. The Consumer Protection Data Spotlight will provide a more timely snapshot of what consumers are reporting, while empowering users to explore the data by types of fraud, state, and a variety of other dimensions.

The Treasury Department has released Treasury International Capital (TIC) data for August 2018. The sum total in August of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $108.2 billion. Of this, net foreign private inflows were $104.6 billion, and net foreign official inflows were $3.6 billion. Foreign residents increased their holdings of long-term U.S. securities in August; net purchases were $77.1 billion. Net purchases by private foreign investors were $70.0 billion, while net purchases by foreign official institutions were $7.2 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $54.7 billion.

The Federal Reserve has posted its G.17 statistical release on Industrial Production and Capacity Utilization for the month of September. Industrial production increased 0.3 percent in September, about the same rate of change as in the previous two months. Output growth in September was held down slightly by Hurricane Florence, with an estimated effect of less than 0.1 percentage point. For the third quarter as a whole, total industrial production advanced at an annual rate of 3.3 percent.

OFAC has posted an important technical notice for users of OFAC's SDNALL.ZIP.

OFAC acted yesterday against a vast network of businesses providing financial support to the Basij Resistance Force (Basij), a paramilitary force subordinate to Iran’s Islamic Revolutionary Guard Corps (IRGC). Among other malign activities, the IRGC’s Basij militia recruits, trains, and deploys child soldiers (as young as 12 years old) to fight in IRGC-fueled conflicts across the region. This Iran-based network is known as Bonyad Taavon Basij, which is translated as Basij Cooperative Foundation, and comprises at least 20 corporations and financial institutions. The Bonyad Taavon Basij employs shell companies and other measures to mask Basij ownership and control over a variety of multibillion-dollar business interests in Iran’s automotive, mining, metals, and banking industries, many of which have significant international dealings across the Middle East and with Europe. A number of financial institutions were designated in OFAC's action. For details and identification information, see our OFAC Update.

The Federal Reserve Board, FDIC and OCC have published answers to frequently asked questions (FAQ) about appraisals and evaluations for real estate transactions that are covered by the interagency appraisal rules. These FAQs clarify existing regulatory requirements and guidance provided in the 2010 Interagency Appraisal and Evaluation Guidelines and in the 2016 Interagency Advisory on Use of Evaluations in Real Estate-Related Financial Transactions. The FAQs are the agencies’ interpretations of existing rules and guidance based on the facts and circumstances presented in the questions, but they are not official rules or regulations.

• ""Frequently Asked Questions on the Appraisal Regulations and the Interagency Appraisal and Evaluation Guidelines”
• FRB SR 18-19
• FDIC FIL-62-2018
• OCC Bulletin 2018-39

The Federal Reserve Board has released the results of a study on changes in U.S. payments fraud from 2012 to 2016. The study found that, by value and number, fraud across core noncash payments was generally growing faster than non-fraudulent payments from 2012 to 2015, but payments fraud remains rare and represents only a fraction of one percent of the total value or number of payments during that period.

The Federal Trade Commission has announced a Texas company has agreed to pay $3 million to settle charges it failed to take reasonable steps to ensure the accuracy of tenant screening information that it provided to landlords and property managers, a violation of federal law that caused some potential renters to be falsely associated with criminal records. A complaint filed by the FTC charged RealPage, Inc. violated the Fair Credit Reporting Act by failing to take reasonable steps to ensure the accuracy of tenant screening information provided to its clients. The amount RealPage has agreed to pay as part of the settlement is the largest civil penalty the FTC has obtained against a background screening company.

The SEC has issued an order that conditionally exempts affected persons from certain requirements of the federal securities laws for periods following the impact of Hurricane Michael. The order provides regulatory relief to publicly traded companies, investment companies, accountants, transfer agents, municipal advisors, and others affected by Hurricane Michael. The loss of property, power, transportation, and mail delivery due to the hurricane poses challenges for some individuals and entities that are required to provide information to the SEC and shareholders.

• SEC press release

FinCEN has posted a notice encouraging financial institutions affected by Hurricane Michael to contact FinCEN and their functional regulator as soon as practicable to discuss any delays in their ability to file required Bank Secrecy Act Reports (CTRs, SARs, etc.).

FinCEN also posted a notice that Hurricane Michael victims in affected areas of Florida and Georgia have until February 28, 2019, to file their Report of Foreign Bank and Financial Accounts (FBAR) for the 2017 calendar year.

Treasury Secretary Mnuchin and Office of Management and Budget (OMB) Director Mulvaney have jointly released details of the fiscal year 2018 final budget results. The deficit in FY 2018 was $779 billion, $113 billion more than in the prior fiscal year but $70 billion less than forecast in the FY 2019 Mid-Session Review (MSR). As a percentage of Gross Domestic Product (GDP), the deficit was 3.9 percent, 0.4 percentage point higher than the previous year.

Federal Reserve Board Chairman Powell will host a town hall meeting with educators from across the country on February 6, 2019. The educators will join the Chairman at 7 p.m. EST in the Board Room of the Board's main building in Washington, D.C., and participate via webcast from Federal Reserve Bank offices throughout the country. The Chairman will respond to questions from both the in-person audience and participants at the Reserve Bank offices. The event will be live streamed to the public.

OCC Bulletin 2018-38, issued yesterday, announces updates to the “Agricultural Lending,” “Oil and Gas Exploration and Production Lending,” and “Trade Finance and Services” booklets of the Comptroller’s Handbook, which are used by examiners in their examination and supervision of those areas.

The FDIC has announced its release of a Spanish-language version of Money Smart for Older Adults. The curriculum, now offered in English and Spanish, has been updated to provide new information and resources to help older adults and their caregivers recognize and prevent fraud, scams, and other types of financial exploitation. The curriculum also includes information to help older adults plan for a secure financial future and make informed financial decisions.

The Bureau has announced that, in celebration of National Hispanic Heritage month, it has released an update of its Spanish Glossary of Financial Terms. The glossary provides both financial educators and the industry with an extensive list of financial terms translated into Spanish.

Bureau Acting Director Mick Mulvaney said yesterday that the Bureau is planning a rulemaking to define the types of practices qualify as "abusive" under the Dodd-Frank Act, reports National Mortgage News, to provide more clarity to the financial services industry about the as-yet undefined standard. Mulvaney spoke at the annual conference of the Mortgage Bankers Association.

In a presentation at the Federal Reserve Bank of Kansas City yesterday, Fed Governor Lael Brainard said that the Board is actively involved in the process of revising Community Reinvestment Act regulations. She addressed concerns voiced by members of the Fed's Community Advisory Council that the recent OCC advance notice of rulemaking was not issued on an interagency basis. Governor Brainard said, "Even though the Federal Reserve did not join in the publication of the ANPR, we will be reading the comment letters in anticipation of working with the Comptroller and Federal Deposit Insurance Corporation on a joint proposal. We understand the importance of having the agencies work toward one set of CRA regulations that are clear and consistently applied and will do everything we can to make that possible. CRA regulations are complicated, and the regulators will benefit from perspectives from a variety of channels, so I encourage you all to submit comments. The CRA is too important to the financial well-being of communities across this country for banks and community members to disengage in any part of this process."

Brainard also said that the Federal Reserve "is interested in promoting greater consistency and predictability in CRA evaluations and ratings. We see the value of clearer definitions and metrics that use publicly available information to identify local credit needs and opportunities."

HUD has announced it will speed federal disaster assistance to the State of Florida and provide support to homeowners and low-income renters forced from their homes due to Hurricane Michael.

The FDIC, OCC, and FRB have posted FIL-60-2018 with materials pertaining to the Consolidated Reports of Condition and Income (Call Report) for the September 30, 2018, report date. Institutions are requested to plan to complete as early as possible the preparation, editing, and review of their Call Report data and the submission of these data to the agencies’ Central Data Repository (CDR).

The materials include Supplemental Instructions concerning two new data items related to reciprocal deposits added to Schedule RC-E, Deposit Liabilities, in response to the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).

The NCUA has announced the liquidation of the Radio, Television and Communication Federal Credit Union of Staten Island, New York. Palisades Federal Credit Union of Pearl River, New York, immediately assumed most of the liquidated credit union’s assets and all members, shares, and loans. Palisades Federal Credit Union is a federally chartered credit union has assets of nearly $192 million and serving 14,351 members, according to its most recent Call Report.

Radio, Television and Communication Federal Credit Union, which reported assets of $3 million and 416 members on its last Call Report, is the seventh federally insured credit union liquidated in 2018. The NCUA made the decision to liquidate the credit union and discontinue its operations after determining the credit union was insolvent with no prospect for restoring viable operations on its own.

The Bureau has posted an article providing links to short, easy-to-understand answers to some of the CFPB’s most-visited questions on its website about debt collection.

The NMLS 2019 Annual Renewal Period for federal registrations begins November 1. According to federal regulations, all mortgage loan originators actively registered prior to July 1, 2018, must renew their registrations for 2019. The NMLS annual renewal period ends December 31. Guidance on preparing for and completing registration renewal is posted on the NMLS site.