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The NCUA has announced it will receive $69.8 million from UBS in damages and interest for claims arising from losses to Members United and Southwest, two corporate credit unions that failed during the financial crisis, related to purchases of residential mortgage-backed securities. As liquidating agent for Members United and Southwest, the NCUA Board initiated litigation against UBS. UBS will also be liable for attorneys' fees and expenses in an amount to be determined.

The Department of Housing and Urban Development has announced it is charging landlords in Beloit, Kansas, with violating the Fair Housing Act after allegedly discriminating against a female tenant with disabilities by not renewing her lease, sending her a notice containing discriminatory statements about her disability, and retaliating against her for filing a previous fair housing complaint.

The Financial Stability Oversight Council (FSOC) has released a statement providing a public update on its review of potential risks to U.S. financial stability that may arise from asset management products and activities. The statement details the Council’s views regarding potential financial stability risks and next steps to respond to these potential risks. The Council’s evaluation of risks focused on: (1) liquidity and redemption; (2) leverage; (3) operational functions; (4) securities lending; and (5) resolvability and transition planning. Remarks by Treasury Secretary Lew prepared for delivery at the FSOC meeting were also released.

The Office of Foreign Assets Control has announced its publication of Hizballah-related sanctions regulations, effective as of publication on April 15, 2016. OFAC also included it its announcement a number of SDN List entries (individuals and entities) that it is updating to indicate they are subject to secondary sanctions under the new regulations. See our April 15 OFAC Update for more information.

The OCC has issued an alert concerning counterfeit cashier's checks purporting to be issued by Pioneer Bank, Roswell, New Mexico. Details from the OCC's alert can be found in our April 15, 2016, Alert.

The former president of an Oklahoma bank has agreed to a Federal Reserve Board Consent Order to Cease and Desist and to make restitution to the bank of $6,600. See our Penalties page for more information.

The Federal Housing Finance Agency (FHFA) has announced that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac will offer principal reduction modifications to certain seriously delinquent, underwater borrowers who are still struggling in the aftermath of the financial crisis to help them avoid foreclosure and stay in their homes. The new Principal Reduction Modification program is a one-time offering for borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac and who meet specific eligibility criteria. The modification will be available to owner-occupant borrowers who are 90 days or more delinquent as of March 1, 2016, whose mortgages have an outstanding unpaid principal balance of $250,000 or less, and whose mark-to-market loan-to-value (MTMLTV) ratios exceed 115 percent. See a Fact Sheet for eligibility criteria.

The NCUA has announced it will receive $50.3 million in damages and interest from Credit Suisse for claims arising from losses to Members United and Southwest corporate credit unions related to purchases of residential mortgage-backed securities. The NCUA Board initiated litigation as liquidating agent for the failed corporate credit unions. Last month, the NCUA accepted Credit Suisse's offer of judgment of $29 million in damages (see our March 25 story). With the addition of prejudgment interest determined by the Court, the amount to be paid by Credit Suisse increased to $50.3 million. Credit Suisse will also be liable for attorneys' fees and expenses in an amount to be determined.

The Federal Trade Commission will host a forum on June 9 exploring the growing world of marketplace lending and its implications for consumers. This forum is the first in a series of Commission events looking at consumer protection across different areas of emerging financial technology.

A live twitter chat will be hosted by the National Credit Union Administration to help consumers protect their money and personal information from consumer financial fraud. The chat is scheduled for April 27, beginning at 11 a.m. EDT. Credit unions and consumers can follow @MyCUgov and contribute to the conversation using the #NCUAChat hashtag on Twitter.

The OCC will host a public meeting in Washington of the Mutual Savings Association Advisory Committee (MSAAC) on May 3, 2016, beginning at 8:30 a.m. EDT. The purpose of the meeting is to advise the OCC on regulatory changes or other steps the OCC may be able to take to ensure the continued health and viability of mutual savings associations and other issues of concern to mutual savings associations.

The April 13, 2016, issue of the Beige Book has been published by the Federal Reserve Bank of Chicago in HTML and PDF formats. The report is compiled eight times a year. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by District and sector. An overall summary of the twelve district reports is prepared by a designated Federal Reserve Bank on a rotating basis.

The Treasury Department has announced that the Financial Stability Oversight Council (FSOC) will meet in the Treasury Cash Room in Washington, D.C. at 5 PM EDT on April 18. The agenda will include both an open and an executive session. This meeting is open to the press. A live webcast of the open session will also be available. The preliminary agenda for the open session includes an update regarding the Council’s ongoing work on asset management.

The Office of the Comptroller of the Currency (OCC) has announced the selection of Donna Murphy to be Deputy Comptroller for Compliance Risk. She will oversee development of policy and examination procedures relating to consumer, Bank Secrecy Act and anti-money laundering, and Community Reinvestment Act issues. Ms. Murphy will also serve as a key advisor to the Committee on Bank Supervision and to the Comptroller of the Currency on compliance and CRA matters. Her appointment is effective May 1.

The Office of Foreign Assets Control (OFAC) has designated three Mexican brothers, as well as the Laredo Drug Trafficking Organization (Laredo DTO), as Specially Designated Narcotics Traffickers under the Foreign Narcotics Kingpin Designation Act (Kingpin Act). OFAC also designated five other Mexican nationals for their criminal activities in support or on behalf of the Laredo DTO or its leadership. As a result of this action, all assets of those designated that are based in the United States or in the control of U.S. persons are frozen, and U.S. persons are generally prohibited from engaging in transactions with them. For details, see "OFAC targets Laredo drug trafficking organization," in our OFAC Updates pages.

The OCC has released its Risk Appetite Statement, which sets boundaries of acceptable levels of risk in key areas of agency operations. The Statement documents the agency's overall conservative risk appetite. It also states that the OCC will accept more risk in some areas to remain nimble, and can adapt to the changing needs of supervising national banks and federal savings associations. Agency management and employees will use the statement to evaluate their decisions and actions during the course of overseeing national banks and federal savings associations as well as the execution of agency management functions such as human resources, procurement, and information technology.

"Serving the Credit-Invisible," a new report posted by the NCUA, explains how credit unions can build loan programs based on sound underwriting, appropriate risk management, loan monitoring and staff training that can help them reach this underserved population. The report details how to evaluate a loan applicant who is “credit-invisible” and describes best practices for serving those members within the normal boundaries of safety and soundness. Credit-invisible consumers may lack credit scores because they have limited or incomplete credit histories. They are not necessarily subprime borrowers, but their credit activity may not be reported to a credit bureau. Nonetheless, these consumers may have a good history of making timely payments for expenses like rent, insurance and utilities. The CFPB reported in 2015 that as many as 26 million Americans may fall into this category.

In a speech at the ACAMS AML and Financial Crimes Conference yesterday, FinCEN Director Jennifer Shasky Calvery provided insight into the agency's recent geographic targeting orders (GTOs) issued in January 2016 requiring identification information for high-end cash buyers in Manhattan and in Miami-Dade County. Those GTOs, which are effective from March 1 through August 27, 2016, require certain title insurance companies to identify the individuals behind entities used to pay "all cash" -- transactions not requiring mortgage financing -- for high-end residential real estate. The Director said that the GTOs were designed to produce valuable data about some of these "opaque transactions" that will assist law enforcement and inform broader efforts to identify the greatest money-laundering risks in the real estate sector. She characterized the GTOs as "a pilot effort in two jurisdictions that are popular destinations for luxury buyers, have a higher than average percentage of all-cash transactions, and are the focus of heightened law enforcement interest."

The Federal Reserve Board has released the minutes of its February 8 and March 14, 2016, discount rate meetings.

The FDIC has scheduled a meeting of its Systemic Resolution Advisory Committee for 9 a.m. April 14, in Washington. The FDIC created the committee in 2011 to receive advice and feedback on issues related to the implementation of the resolution authorities contained in the Dodd-Frank Act.

The Bureau has announced the addition of several new members to leadership positions within the Bureau. The positions announced are:

• Elizabeth Ellis - Deputy Associate Director for the External Affairs Division;
• Katherine Gillespie - Deputy Associate Director for the Consumer Education and Engagement Division;
• Seth Frotman - Student Loan Ombudsman and Assistant Director for the Office for Students and Young Consumers;
• Grady Hedespeth - Assistant Director for the Office of Small Business Lending;
• Chris Johnson - Assistant Director for the Office of Consumer Response; and
• John Schroeder - Midwest Regional Director for the Office of Supervision Examinations.

The Federal Deposit Insurance Corporation and the Federal Reserve Board on Wednesday jointly announced determinations and provided firm-specific feedback on the 2015 resolution plans of eight systemically important, domestic banking institutions. The agencies jointly determined that the plans of Bank of America, Bank of New York Mellon, JP Morgan Chase, State Street, and Wells Fargo were not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code, the statutory standard established in the Dodd-Frank Act. The agencies have issued joint notices of deficiencies to these five firms detailing the deficiencies in their plans and the actions the firms must take to address them. Each firm must remediate its deficiencies by October 1, 2016. If a firm has not done so, it may be subject to more stringent prudential requirements.

The FDIC determined that the plan submitted by Goldman Sachs was not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code, and identified deficiencies. The Federal Reserve Board identified a deficiency in Morgan Stanley's plan and found that the plan was not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code. Neither agency found that Citigroup's 2015 resolution plan was not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code, although the agencies did identify shortcomings that the firm must address.

The Office of Comptroller of the Currency has announced that it has assessed HSBC Bank US, N.A. a $35 million civil money penalty (CMP), and ordered the bank to make restitution to harmed customers. The OCC found that the bank’s billing practices violated Section 5 of the Federal Trade Commission (FTC) Act, 15 U.S.C. § 45(a)(1), which prohibits unfair and deceptive acts or practices (UDAP). The $35 million civil money penalty reflects a number of factors, including the scope and duration of the violations and financial harm to customers from the unfair practices. For more information, see "HSBC Bank US, NA penalized $35M for unfair billing practices," in our Penalties pages.

The U.S. Government Accountability Office (GAO) has issued a report to Congress on the effects of the growth of nonbank servicers in the mortgage market. This report examines, among other things, recent trends in mortgage servicing and the oversight framework in which nonbank servicers operate. The GAO analyzed mortgage industry data from January 2006 through June 2015; reviewed relevant laws and documents from regulatory and housing agencies and an industry group; conducted a literature review; and interviewed consumer groups, regulators and other agency officials, and market participants. The GAO recommends that Congress consider granting the FHFA authority to examine third parties that do business with Fannie Mae and Freddie Mac. In addition, the GAO said the CFPB should take steps to collect more data on the identity and number of nonbank servicers. The 102-page report was also released in a single-page summary format and a larger-print accessible version.

The Counter ISIL Finance Group (CIFG) has concluded its fourth meeting, held in Rome, Italy. CIFG co-chairs United States, Italy, and Saudi Arabia commemorated the first anniversary of the group meetings by jointly issuing a fact sheet listing achievements and four key objectives.

Federal Reserve Financial Services has announced the update of the Deposit Visual Reference Guide [PDF; HTML] to conform to the January 4, 2016, amendments to FRB Operating Circular 2 and the Cash Services Manual of Procedures.

U.S. Treasury Secretary Lew has authored an article, "Foreign Affairs: America and the Global Economy: The Case for U.S. Leadership," appearing in the upcoming issue of Foreign Affairs. The article underscores how U.S. leadership of the global economic system has produced remarkable economic successes over the past 70-plus years, and why sustaining that economic leadership and adapting it to the challenges of our time are critical to future U.S. and global stability and prosperity. The Secretary also delivered remarks on the topic at the Council on Foreign Relations.

The OCC will host two workshops in Corpus Christi, Texas, at the Omni Corpus Christi Hotel, May 17-18, including its first workshop on operational risk. The Credit Risk workshop on May 17 focuses on credit risk within the loan portfolio, such as identifying trends and recognizing problems. The workshop also covers the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change. The Operational Risk workshop on May 18 focuses on the key components of operational risk—people, processes and systems. The session also covers governance, third-party risk, vendor management, and cybersecurity.

The NCUA has reported that, with the completion of a settlement with Goldman Sachs, the regulator will have recovered more than $3 billion from Wall Street firms that sold faulty mortgage-backed securities to five corporate credit unions (CCUs). The NCUA joined the Department of Justice and other governmental plaintiffs in a $5 billion settlement that includes $575 million to settle NCUA’s claims against Goldman Sachs. The settlement resolves two lawsuits filed by NCUA as liquidating agent for three CCUs, U.S. Central, WesCorp and Southwest, against the firm for losses incurred as a result of the purchases of the faulty securities by the CCUs, which later failed.

The United Nations and the Financial Action Task Force (FATF) will hold an open briefing on April 14, 2016, on "#StopTerrorFinance: Countering the financing of terrorism and depriving terrorist groups, particularly Al-Qaida, ISIL (Da'esh) and their affiliates, from their sources of funding." The briefing, which will be webcast live at http://webtv.un.org, provides an opportunity for the two UN Committees, UN Members and FATF to discuss new and emerging terrorist financing trends, and to highlight initiatives, including those with the private sector, to help countries enhance their information sharing and strengthen global efforts to prevent and counter terrorism financing.

The Department of Justice (DOJ) has announced that the United States has settled civil mortgage fraud claims against Wells Fargo Bank, N.A. (Wells Fargo) and Wells Fargo executive Kurt Lofrano, stemming from Wells Fargo’s participation in the Federal Housing Administration (FHA) Direct Endorsement Lender Program. In the settlement, Wells Fargo agreed to pay $1.2 billion and admitted, acknowledged and accepted responsibility for, among other things, certifying to the Department of Housing and Urban Development (HUD), during the period from May 2001 through December 2008, that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not. See "Wells Fargo settles with DOJ for mortgage lending practices" in our Penalties pages for additional information.

The Federal Reserve has released the February 1-5, 2016, E.2 survey of terms of business lending.

The FDIC has announced its activities for the April National Financial Capability Month featuring educational opportunities for both adults and young people to build their financial knowledge and skills to achieve brighter financial futures. Two webinars will provide an overview FDIC educational resources:

• Recursos en español de la FDIC (FDIC Resources in Spanish), April 12, 2016, 3:00–4:30 pm. EDT
• Money Smart Product Family and Implementation Examples, April 20, 2016, 1:00–3:30 pm. EDT

The CFPB Blog explains that while many consumers submit complaints to the regulator online, they can talk to a real person in more than 180 languages by calling Monday through Friday, 8 a.m. – 8 p.m. ET a toll-free telephone number, (855) 411-CFPB (2372). Services to consumers who are deaf, have hearing loss, or have speech disabilities are also available through a TTY/TDD number: (855) 729-CFPB (2372). The Bureau suggests before a consumer makes a call or online contact they have information available about the product or service they are complaining about, prepare a statement of what happened, know the name of the company that is the subject of the complaint, and provide the consumer’s contact information for a response.

The Federal Reserve Board has published a proposed rule in today's Federal Register with technical amendments to its rule requiring global systemically important bank holding companies (GSIBs) to hold additional amounts of risk-based capital. The proposal would not materially change the underlying rule finalized by the Board in July 2015. That rule established the criteria for identifying a firm as a GSIB and the methodology a GSIB is required to use to determine its risk-based capital surcharge, which corresponds to the systemic risk of that firm. The proposed amendments clarify that GSIBs must continue to calculate their surcharges using year-end data, while their related surcharge data will be reported on a quarterly basis. The proposal also clarifies that these firms are required to compute their surcharge scores using billions of dollars. The amendments also provide additional information on how GSIBs should calculate their short-term wholesale funding scores, which help to determine their surcharges, during the rule's transition period. Comments will be accepted through May 13, 2016.

The Securities and Exchange Commission has announced the acceptance of an Offer of Settlement submitted by Las Vegas Sands Corp. (LVS) in response to a cease-and- desist order issued by the SEC. LVS agreed to pay a $9 million penalty to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) by failing to properly authorize or document millions of dollars in payments to a consultant facilitating business activities in China and Macao. For details, see Vegas casino pays $9M CMP for FCPA violations in our Penalties pages.

A sealed opinion in the case of MetLife, Inc. v. Financial Stability Oversight Council (FSOC) rendered in the U.S. District Court for the District of Columbia, has been unsealed (released) by the issuing judge. The opinion of the Court was that MetLife was eligible for designation for supervision by the Federal Reserve Board (FRB), but due to the FSOC’s unacknowledged departure from its guidance and express refusal to consider cost required the Court to rescind the Final Determination made by the FSOC that MetLife was subject to supervision by the FRB. The FSOC was empowered by provisions of the Dodd-Frank Act to designate certain nonbank financial companies for supervision by the FRB. The FSOC published in the Federal Register on April 11, 2012, a final rule and interpretive guidance (Guidance) for Nonbank Financial Company Determinations and created a Designations web page. The Guidance was utilized by the FSOC to evaluate nonbank financial companies that could become subject to supervision by the FRB. The FSOC notified MetLife on July 16, 2013, it was being considered for supervision designation. MetLife representatives met with the FSOC twelve times and submitted 21,000 pages of documents in opposition to designation. A hearing was held on November 3, 2014. The FSOC made a “Final Determination” that “material financial distress” at MetLife could pose a threat to the financial stability of the United States and on December 18, 2014, voted to designate MetLife. MetLife filed a complaint in U.S. District Court in Washington, D.C., challenging the decision of the (FSOC). Treasury Secretary Lew issued a statement on the Court's opinion.

Federal Reserve Financial Services has published the April 2016 issue of FedFocus featuring an article on how one financial institution has embraced the ease and automation of the FedPayments Reporter Service. Other topics discussed include: "Putting all our payment eggs in a single basket," "Spring into your FEDucaton," and "Fed Facts: Cash in on a wealth of personal finance resources."

The February 2016 G.19 Consumer Credit Report has been released by the Federal Reserve. Consumer credit increased at a seasonally adjusted annual rate of 5-3/4 percent, revolving credit increased at a 3-3/4 percent annual rate, while nonrevolving credit increased at a 6-1/2 percent annual rate.

The FDIC has issued guidance to help financial institutions and to facilitate recovery in areas of Texas and Mississippi affected by severe storms, tornadoes and flooding.

• FIL-26-2016 (Texas)
• FIL-27-2016 (Mississippi)