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The NCUA has announced it issued five notices of prohibition in August. The affected individuals, who had previously been convicted of crimes of dishonesty, are prohibited from participating in the affairs of any federally insured financial institution. They are former employees or institution-affiliated parties of:

• Portland Maine Police Department Federal Credit Union in Portland, Maine;
• Oshkosh Central Credit Union in Oshkosh, Wisconsin;
• HD York Federal Credit Union in York, Pennsylvania;
• Oil Country Federal Credit Union in Titusville, Pennsylvania; and
• Morehead Community Federal Credit Union in Morehead, Kentucky.

The Department of the Treasury has released preliminary data from an annual survey of U.S. portfolio holdings of foreign securities at year-end 2015 and posted the data on the Treasury website. The final survey report, which will include additional detail as well as possible revisions to the data, will be released on October 31, 2016. The survey was undertaken jointly by the U.S. Department of the Treasury, the Federal Reserve Bank of New York, and the Board of Governors of the Federal Reserve System.

The Summer 2016 issue of Money Smart News has been posted by the FDIC, featuring articles on enhancements for small business; an easier way to join the Money Smart Alliance; tips on cybersecurity for bank customers; a discussion of mobile business and modernization of the payment system; and lending practices in financial education for postsecondary students. English and Spanish versions are available.

The Federal Housing Finance Agency (FHFA) Index for July 2016 has been released. Nationally, interest rates on conventional purchase-money mortgages decreased from June to July, 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 3.62 percent for loans closed in late July, down 7 basis points from June. The average interest rate on all mortgage loans was 3.63 percent, also down 7 basis points. The average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 3.80 percent, down 8 basis points. The effective interest rate on all mortgage loans was 3.77 percent in July -- a drop of 6 basis points. The average loan amount for all loans was $325,700 in July, $8,200 less than the June average.

Treasury and the federal banking agencies have issued a joint fact sheet on foreign correspondent banking that outlines supervisory and enforcement processes with respect to anti-money laundering and sanctions in the area of correspondent banking. The report indicates that about 95% of BSA/OFAC compliance deficiencies identified by the regulators are corrected by the institution’s management without the need for any enforcement action or penalty. Treasury also posted a blog article, "Complementary Goals - Protecting the Financial System from Abuse and Expanding Access to the Financial System," about the joint agency report.

The OCC has announced it is seeking members for its minority depository institutions advisory committee (MDIAC) and mutual savings association advisory committee (MSAAC). The MDIAC assists the OCC in assessing the needs and challenges facing minority depository institutions. The MSAAC provides the OCC with advice and recommendations regarding the current and future circumstances and needs of mutual savings associations. Nominations for both committees must be received on or before October 7, 2016.

The FDIC has announced that insured commercial banks and savings institutions reported aggregate net income of $43.6 billion in the second quarter of 2016, up $584 million from 2015. The increase in earnings was mainly attributable to a $5.2 billion increase in net interest income and a $981 million decline in expenses for litigation reserves at a few large banks. Of the 6,058 insured institutions reporting second quarter financial results, 60.1 percent reported year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable in the second quarter fell to 4.5 percent from 5.8 percent a year earlier. This is the lowest percentage since the first quarter of 1998.

The FDIC has announced that more than ninety percent of small banks are likely to pay less for deposit insurance beginning in the current quarter. The reduction in assessments will occur because the ratio of the amount in the Deposit Insurance Fund (DIF) to insured deposits reached 1.17 percent at the end of June. That was the highest level in more than eight years, and marks a significant milestone for the DIF, which fell into negative territory following the recent financial crisis. FDIC Chairman Gruenberg issued an opening statement at the FDIC press event and also remarked, “Assessment rates for 93 percent of institutions with less than $10 billion in assets are expected to decline. On average, regular quarterly assessments are expected to decline by about one-third for these smaller institutions. The improvement in the Deposit Insurance Fund since the financial crisis reflects progress in implementing the long-term fund management plan put into place by the FDIC in the post-crisis period, as well as improving conditions in the banking industry.” FIL-58-2016 was also issued on the reductions in deposit insurance assessments.

The CFPB has released its monthly complaint snapshot, this time highlighting consumer complaints about bank accounts and services. The report shows that consumers continue to experience problems managing their accounts. This month’s report also highlights trends seen in complaints coming from Ohio.

The Quarterly Banking Profile for the second quarter 2016 has been released by the FDIC.

The Federal Reserve Board has announced it has issued a notice of intent seeking a $1.2 million civil money penalty and a permanent ban on employment in the banking industry in an enforcement action against Christopher Ashton, a foreign exchange (FX) trader at Barclays PLC who is alleged to have manipulated FX pricing benchmarks. The trader is alleged to have used electronic chat rooms to coordinate FX trading, facilitate manipulation of FX pricing benchmarks, disclose confidential customer information to traders at other organizations, and engage in other unsafe and unsound practices.

The Federal Reserve Board has updated the list of bank holding companies who have elected to become or be treated as financial holding companies through August 25, 2016.

The June 2016 G.20 Finance Companies Owned and Managed Receivables Outstanding and Auto Loans: Terms of Credit data have been posted by the Federal Reserve System.

Federal Reserve Financial Services has posted a notice concerning how FedACH will deliver non-future-dated return items beginning with the September 23, 2016, implementation of Same Day ACH processing.

The NCUA has announced it will host a free 90-minute webinar, "High-Impact Community Partnerships," on September 21, 2016, at 2 p.m. ET.

The Federal Trade Commission requests public comment on its Standards for Safeguarding Customer Information (16 CFR Part 314, the “Safeguards Rule”). The Rule, which took effect in 2003, requires financial institutions to develop, implement and maintain a comprehensive information security program for handling customer information. The Commission seeks comments on a number of questions, including the economic impact and benefits of the Rule; possible conflict between the Rule and state, local or other federal laws or regulations; and the effect on the Rule of any technological, economic or other industry changes. The comment deadline is November 7, 2016.

Update: Published at 81 FR 61632 on 9/7/2016.
Update: The FTC extended the comment period deadline to November 21, 2016, with a notice published on 11/15/2016.

The FDIC has released a list of 21 enforcement actions involving banks and individuals in July. Included was one consent order issued jointly with the Illinois Department of Financial and Professional Regulation, Division of Banking, for affirmative action by Sauk Valley Bank & Trust, Sterling, Illinois, relating to deficiencies in that bank's BSA/AML compliance program. Among other actions, the bank was ordered to arrange for a two-year look back by an independent and qualified auditor, on deposit account and transaction activity to determine whether SAR filings need to be completed, and an internal review of CTRs filed over the same period to determine which CTRs include errors. There were also nine removal and prohibition orders issued to institution-affiliated individuals formerly employed by nine separate institutions, and five Section 19 orders. The list also included six orders terminating prior enforcement actions.

In a presentation at "Designing Resilient Monetary Policy Frameworks for the Future," a symposium sponsored by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyoming, Federal Reserve Board Chair Janet L.Yellen discussed the policy tools that are needed to ensure that we have a resilient monetary policy framework. The Chair also offered a few remarks on the near-term outlook for the U.S. economy and the potential implications for monetary policy. Yellen concluded, “Although fiscal policies and structural reforms can play an important role in strengthening the U.S. economy, my primary message today is that I expect monetary policy will continue to play a vital part in promoting a stable and healthy economy. New policy tools, which helped the Federal Reserve respond to the financial crisis and Great Recession, are likely to remain useful in dealing with future downturns. Additional tools may be needed and will be the subject of research and debate. But even if average interest rates remain lower than in the past, I believe that monetary policy will, under most conditions, be able to respond effectively.”

The Department of Defense has published at 81 FR 58840 in the August 26, 2016, Federal Register an "Interpretive rule" in the form of an FAQ on its Military Lending Act regulation at 32 CFR Part 232. The series of 19 questions and answers "provides guidance on certain questions the Department has received regarding compliance with the July 2015 final rule." The rule became effective upon publication.

The First National Bank of Omaha has been issued orders by the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau to pay a total of $7.5 million in civil money penalties and approximately $27.75 million in restitution to affected consumers for unfair or deceptive acts or practice under the Federal Trade Commission Act (OCC order) and unfair, deceptive or abusive acts or practices under the Consumer Protection Act (Bureau) in the marketing and sale of debt-cancellation add-on products and the billing of consumers for credit monitoring services they did not receive. This is the eighth action the Bureau has taken in coordination with another regulator to address illegal practices with respect to credit card add-on products and the 12th action the Bureau has taken in total to address such practices. See "FNB of Omaha hit with $7.5 CMPs and $27.75 M restitution" in our Penalties pages, for more on this story.

The Office of the Comptroller of the Currency (OCC) has been informed that an entity calling itself Banc of Omaha purports to be a lender specializing in business capital. Banc of Omaha is not a licensed or chartered bank but is using a logo similar to that of Mutual of Omaha Bank, which is a chartered financial institution regulated by the OCC.

Details on OCC Alert 2016-9 can be found in BankersOnline's Alerts and Counterfeits pages.

HUD has announced new Federal Housing Administration (FHA) procedures to strengthen the process mortgage servicers use to help struggling families avoid foreclosure and remain in their homes. The FHA is streamlining the loss mitigation protocols that servicers must use when evaluating and deploying "home retention options," foreclosure alternatives that allow delinquent borrowers to retain their homes. Mortgagee Letter 2016-14 informs servicers of updated procedures for the evaluation and use of FHA’s Loss Mitigation Home Retention Options, the Manufactured Housing Review before initiation of foreclosure, and the servicing of FHA-insured Mortgages for Servicemember-Borrowers. Specifically, the FHA will:

• Require servicers to convert successful 3-month trial modifications into permanent modifications within 60 days instead of the average four-to-six months;
• Allow borrowers with three missed mortgage payments to qualify for a partial claim to bring their loans current versus the previous requirement for a minimum of four missed payments;
• End the traditional stand-alone Loan Modification option so struggling borrowers can access the FHA-HAMP option, with its greater payment relief, sooner; and
• Eliminate the required 12-month term for FHA’s special forbearance option. This will allow servicers to offer this option to more unemployed households.

The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac (the Enterprises), at the FHFA's direction, will implement a new refinance option aimed at borrowers with high loan-to-value ratios. The new refinance offering will provide much-needed liquidity for borrowers who are current on their mortgage but are unable to refinance through traditional programs because their loan-to-value ratio exceeds the Enterprises' maximum limits. In addition the Home Affordable Refinance Program (HARP) will be extended through September 30, 2017. Links to Fannie Mae and Freddie Mac fact sheets were also provided.

The NCUA has encouraged credit unions to work with their members and consider options for assisting them that include offering new loans with special loan terms or rates and reduced documentation, providing payment flexibility for current loans, or potentially restructuring existing loans. Federal credit unions with questions about these options should contact their examiners. Credit Unions are also reminded that NCUA Letter 11-CU-13 provides they may provide emergency financial services to nonmembers as part of their authority to engage in charitable activities under their incidental powers. Such services could include check cashing for nonmembers, access to ATM networks, or other means to access cash, to meet the short-term, emergency needs of nonmembers. Federal credit unions providing these emergency services must do so on a charitable basis, meaning that service charges cannot exceed direct costs.

FinCEN has published at 81 FR 58425 in today's Federal Register a proposed rule that would amend portions of 31 CFR parts 1010 and 1020 to remove the anti-money laundering program exemption for banks that lack a Federal functional regulator, including, but not limited to, private banks, non-federally insured credit unions, and certain trust companies. The proposed rule would prescribe minimum standards for anti-money laundering programs for banks without a Federal functional regulator to ensure that all banks, regardless of whether they are subject to Federal regulation and oversight, are required to establish and implement anti-money laundering programs, and would extend customer identification program requirements and beneficial ownership requirements to those banks not already subject to these requirements. Comments on the proposal are due by October 24, 2016.

The Consumer Financial Protection Bureau has created a new webpage, Know Before You Owe: The settlement professional's guide, to help settlement professionals navigate through the changes that are a part of the Know Before You Owe (a/k/a "TRID") mortgage initiative. The new page includes links leading to explanations of—

• how the previous four disclosures (early TIL, GFE, TIL and HUD-1) were consolidated into the Loan Estimate and Closing Disclosure;
• what has and hasn't changed about settlement agent and creditor responsibilities, consumer privacy and electronic delivery; and
• key areas to focus on when selected as the settlement agent for a transaction.

The Federal Housing Finance Agency (FHFA) has released its house price index (HPI) for the second quarter 2016. House prices increased 1.2 percent in the second quarter and rose 5.6 percent from the second quarter of 2015. FHFA’s seasonally adjusted monthly index for June was up 0.2 percent from May. The HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

Federal Reserve Bank Services has posted its 2016 holiday currency ordering schedule. Two special ordering periods are listed: October 28–November 3 and December 2–December 9.

Fannie Mae and Freddie Mac announced Tuesday the publication of the redesigned Uniform Residential Loan Application (URLA), the standardized form used by borrowers to apply for a mortgage loan. This is the first substantial revision made to the form in more than 20 years and the changes will allow lenders to deliver an easier, more consumer-friendly loan application experience. The redesigned URLA form includes a reorganized layout, simplified terminology, and new data fields that capture necessary information in an easy-to-read format.

Additionally, the GSEs worked together to create a common corresponding dataset, called the Uniform Loan Application Dataset (ULAD) to ensure consistency of data delivery. The documents are being published now, in an effort to provide the industry with ample time to become familiarized with the URLA and ULAD updates and plan necessary changes to their systems.

Lenders may begin using the redesigned URLA on January 1, 2018. A timeline for required use of the redesigned URLA and ULAD will be established at a later date. The forms are preliminary, and could still be updated after a CFPB review.

HUD and the Census bureau have jointly announced that the sales of new single-family houses in July 2016 were at a seasonally adjusted annual rate of 654,000, 12.4 percent above the revised June rate and 31.3 percent above the July 2015 estimate. The median sales price of new houses sold in July 2016 was $294,600; the average sales price was $355,800. The seasonally adjusted estimate of new houses for sale at the end of July was 233,000. This represents a supply of 4.3 months at the current sales rate.

OFAC has announced the designation of two sons of the Lord’s Resistance Army (LRA) leader Joseph Kony, for acting for or on behalf of the LRA and/or their father. On March 8, 2016, OFAC designated the LRA and Joseph Kony for engaging in the targeting of civilians in the Central African Republic (CAR) through the commission of acts of violence, abduction, and forced displacement. See our OFAC Update for additional information.

The Federal Reserve Board has announced the execution of a cease and desist order and the issuance of a $37,500 civil money penalty (CMP) against a former institution-affiliated party of Central State Bank (now known as CBI Bank & Trust), Muscatine, Iowa.

The Board of Governors of the Federal Reserve System has released the minutes of its July 25, 2015, discount rate meeting.

The NCUA has reported it has received consumer calls about a suspicious text message claiming to come from the agency. The message reads: “National Credit Union Administration Alert for (recipient's phone number). Contact 844-234-5445.” This is not a communication from NCUA. The agency does not seek personal information through the Internet or on the telephone. Individuals are requested to contact NCUA's Consumer Assistance Center at 1-800-755-1030 between 8 a.m. and 5 p.m. Eastern if they receive one of these messages. The NCUA also recommends contacting your credit union and local law enforcement.

An article has been posted by the Federal Trade Commission with tips and links to resources to help those impacted by a flood or other weather related emergencies to begin the recovery process and avoid possible scams.

The Consumer Financial Protection Bureau has issued a press release and posted an article concerning elder financial abuse. A guide and best practices to help communities create partnerships for senior and ways individuals can support community efforts to fight elder financial exploitation are discussed.

HUD has announced an agreement with Delvista Towers Condominium Association, Inc., of Aventura, Florida, and its property management company, resolving allegations of housing discrimination against residents with disabilities. HUD claimed the condo association and its property managers denied the reasonable accommodation requests of residents with disabilities who needed assistance animals. The Fair Housing Act makes it illegal to discriminate in the terms and conditions of housing for an individual based on a disability, including denying reasonable accommodations or making them unavailable. This includes refusing to permit persons with disabilities to have assistance animals when necessary.

The Consumer Financial Protection Bureau (CFPB) has taken action against Wells Fargo Bank, N.A., for illegal private student loan servicing practices that increased costs and unfairly penalized certain student loan borrowers. The Bureau identified breakdowns throughout Wells Fargo’s servicing process including failing to provide important payment information to consumers, charging consumers illegal fees, and failing to update inaccurate credit report information. The CFPB's order requires Wells Fargo to improve its consumer billing and student loan payment processing practices. The company must also provide $410,000 in relief to borrowers and pay a $3.6 million civil penalty to the CFPB. See "Wells pays $4 million for student loan servicing violations," in our Penalties pages, for more on this story.

HUD and the VA have announced a second round of funding to help provide permanent homes to an estimated 108 veterans experiencing homelessness in seven states. The rental assistance announced today is provided through the HUD-Veterans Affairs Supportive Housing Program (HUD-VASH), which combines rental assistance from HUD with case management and clinical services provided by VA.

The FDIC has announced the release of the summer edition of Supervisory Insights. The featured article is "De Novo Banks: Economic Trends and Supervisory Framework," which provides an overview of trends in de novo formation; the process by which the FDIC reviews applications for deposit insurance; the supervisory process for de novo institutions; and steps the FDIC is taking to support de novo formations. Other articles include: “Matters Requiring Board Attention' Underscore Evolving Risks in Banking” and the "Regulatory and Supervisory Roundup."