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Yesterday, the Securities and Exchange Commission reported charges against global software company SAP SE for violations of the Foreign Corrupt Practices Act (FCPA) arising out of bribery schemes in South Africa, Malawi, Kenya, Tanzania, Ghana, Indonesia, and Azerbaijan. The company agreed to monetary sanctions of nearly $100 million in disgorgement and prejudgment interest to settle the SEC’s charges.

The SEC’s order finds that SAP, whose American Depositary Shares are listed on the New York Stock Exchange, violated the FCPA by employing third-party intermediaries and consultants from at least December 2014 through January 2022 to pay bribes to government officials to obtain business with public sector customers in the seven countries. According to the SEC’s order, SAP inaccurately recorded the bribes as legitimate business expenses in its books and records, despite the fact that certain of the third-party intermediaries could not show that they provided the services for which they had been contracted. The SEC’s order finds that SAP failed to implement sufficient internal accounting controls over the third parties and lacked sufficient entity-level controls over its wholly owned subsidiaries.

In 2016, the SEC charged SAP with books and records and internal accounting controls violations in connection with a bribery scheme in Panama.

SAP consented to the SEC’s order finding that it violated the anti-bribery, recordkeeping, and internal accounting controls provisions of the Securities Exchange Act of 1934. SAP agreed to cease and desist from committing or causing any violations of these provisions and to pay disgorgement of $85 million plus prejudgment interest of more than $13.4 million, totaling more than $98 million, which will be offset by up to $59 million paid by SAP to the South African government in connection with its parallel investigations into the same conduct.

The Federal Reserve Board, FDIC, and OCC have issued an overview video on the final rule issued on October 24, 2023, to strengthen and modernize their regulations implementing the Community Reinvestment Act.

The nearly one-hour video on the regulators' YouTube channels provides an overview of the new CRA rule and its objectives. Additional topics in the recording include assessment areas, community development, evaluation framework, performance tests, ratings, data collection and reporting, and applicability dates.

OCC Bulletin 2024-2, issued yesterday, announced the OCC's publication [89 FR 872] on January 8, 2024, of a notice to adjust the maximum amount of each civil money penalty (CMP) within the OCC's jurisdiction pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. The adjusted maximum penalties are effective as of January 8, 2024, for violations occurring on or after November 2, 2015.

The NCUA published [89 FR 1441] a notice this morning to adjust the maximum amount of each CMP within its jurisdiction.

Yesterday, FinCEN released a Financial Trend Analysis (FTA), Identity-Related Suspicious Activity: 2021 Threads and Trends, on information in BSA Reports filed in 2021. FinCEN’s analysis found that approximately 1.6 million reports (42% of the reports filed that year) related to identity—indicating $212 billion in suspicious activity.

The report, which is part of what FinCEN has previously referred to as its Identity Project, explores how bad actors exploit identity-related processes involved in processing transactions as well as opening and accessing accounts. FinCEN identified over 14 typologies commonly indicated in identity-related BSA reports. The most frequently reported were fraud, false records, identity theft, third-party money laundering, and circumvention of verification standards. These top five typologies accounted for 88% of identity-related BSA reports and 74% of the total identity-related suspicious activity amount reported during calendar year 2021.

Trends found in the BSA reporting include:

• Although identity-related suspicious activity impacted all types of financial institutions, depository institutions filed the most identity-related BSA reports, around 54% of all identity-related filings.
• While most financial institutions in the identity-related BSA dataset reported impersonation as their top identity exploitation, money services businesses most often reported circumvention of verification.
• The report found that compromised credentials have a disproportionate financial impact as compared to other types of identity exploitation.

FinCEN’s FTAs highlight the value of information filed by financial institutions in accordance with the BSA. Additional reports on a variety of topics are located on FinCEN’s website.

The OCC will host a public hearing of the FFIEC Appraisal Subcommittee on appraisal bias on February 13, 2024, from 10:00 a.m. to 1:00 p.m. ET, at its headquarters, 400 7th Street SW, Washington, D.C.

The subcommittee panel will include a representative from each of the five Federal Financial Institutions Examination Council (FFIEC) regulatory agencies, the U.S. Department of Housing and Urban Development and the Federal Housing Finance Agency. Witnesses will include representatives from the Appraisal Foundation, state appraiser licensing and regulatory organizations, and active appraisers.

The meeting is open to the public, but in-person and virtual attendees must register to attend no later than February 9. Registration for in-person attendance may close sooner if maximum capacity is reached.

The Federal Reserve Board has released the minutes from its meetings from November 13 through December 13, 2023, to review and determine the discount rates provided to depository institutions through the discount window.

The Consumer Financial Protection Bureau has announced its adoption of a final rule to adjust for inflation the maximum amount of each civil penalty within the CFPB’s jurisdiction. The adjustments are required by the Federal Civil Penalties Inflation Adjustment Act of 1990 (Inflation Adjustment Act), as amended.

The changes are effective January 15, 2024. The inflation multiplier used this year was 1.03241. The Bureau's notice has been published at 89 FR 1787 in the January 11, 2023, Federal Register.

On Monday, Secretary of the Treasury Janet L. Yellen offered remarks on the current status of the Beneficial Ownership Information Reporting initiative. She noted that in just the first week of reporting, over 100,000 filings have been made. She said, "We’re also making reporting as easy as possible for the small businesses at the heart of the American economy so that the benefits for small businesses, and for all of us, will far outweigh what should be a relatively straightforward effort to comply. The reporting process is simple, quick, and free. A small business shouldn’t need a certified public accountant or lawyer. To help companies understand the requirements, we’re hard at work getting the word out. We’re coordinating with federal and state government offices and partnering with the Small Business Administration to hold virtual and in-person events. We’ve published guidance in multiple languages, including specifically for small businesses. We have a Contact Center that is live and taking questions."

On other topics, Secretary Yellen said, "In line with the U.S. Strategy on Countering Corruption, we are ... pursuing increased transparency in our real estate and investment adviser sectors. We aim to issue a notice of proposed rulemaking early this year that will be an important step toward bringing greater transparency to residential real estate transactions, and we are considering next steps to address risks associated with commercial real estate."

The Federal Reserve Banks made public eight Community Reinvestment Act compliance evaluations in December 2023. Six of those evaluations were rated "Satisfactory." We congratulate two banks that earned ratings of "Outstanding" on their evaluations (links are to the public portion of the evaluations):

• Dokotah Bank, Aberdeen, South Dakota
• Heartland Bank, Whitehall, Ohio

The Internal Revenue Service yesterday announced Monday, January 29, 2024, as the official start date of the nation's 2024 tax season when the agency will begin accepting and processing 2023 tax returns.

The IRS expects more than 128.7 million individual tax returns to be filed by the April 15, 2024, tax deadline.

Although the IRS will not officially begin accepting and processing tax returns until January 29, people do not need to wait until then to work on their taxes if they're using software companies or tax professionals. For example, most software companies accept electronic submissions and then hold them until the IRS is ready to begin processing later this month. IRS Free File will also be available on IRS.gov starting January 12 in advance of the filing season opening.

Yesterday, OCC Bulletin 2024-1 announced the publication of answers to frequently asked questions about the State Small Business Credit Initiative 2.0 (SSBCI) based on the facts and circumstances presented in the questions.

The FAQs do not introduce new policy or guidance and are based on previously communicated policy, guidance, and interpretations.

The Federal Trade Commission has reported it has issued its biennial report to Congress on the National Do Not Call (DNC) Registry that shows the number of consumers who have placed their telephone numbers on the Registry over the past two years has reached more than 249 million.

The report also notes that the FTC has received more than two million Do Not Call complaints in fiscal year (FY) 2023 with people overwhelmingly reporting these violations came via robocalls, as opposed to live telemarketing.

Imposter scam, medical needs and prescription scam calls led the list of commonly reported call topics in FY 2023, followed by calls related to reducing debt and energy, solar, and utilities. In response to the consistently high number of complaints from the public about impersonator scams, the FTC recently continued its rulemaking initiative to combat business and government impersonation fraud. A data spotlight issued in June 2023 found that bogus bank fraud warnings were the most common form of text message scam reported to the agency, and that many of the most common text scams impersonate well-known businesses.

The CFPB on Friday announced its publication of Issue Spotlight: Federal Student Loan Return to Repayment, on the CFPB’s oversight of student loan servicing practices in the early months of the resumption of federal student loan repayments after over three years of a payment pause due to the COVID-19 emergency.

• Long hold times and abandoned calls: The report finds that borrowers are frequently forced to wait on hold for more than an hour when calling their servicer, and many give up without ever receiving assistance. Many servicers were able to boost their financial performance by dramatically reducing staffing during the pandemic. However, servicers have not met the foreseeable borrower demand for help with their loans.
• Significant delays in processing income-driven repayment plan applications: Millions of income-driven repayment plan applications were submitted between August and October 2023. As of late October, servicers reported more than 1.25 million pending income-driven repayment plan applications – with more than 450,000 of those applications pending for more than 30 days with no resolution. Processing times vary across servicers, with some servicers taking five times longer than others to process applications.
• Inaccurate and untimely billing statements: Borrowers are receiving faulty and confusing bills from servicers. Errors include listing premature due dates before the end of the payment pause, inflating monthly payment amounts due to the servicer using outdated poverty guidelines, or using the incorrect income when calculating a borrower’s new income-driven repayment plan payment. These mistakes can cause significant borrower confusion, and can further strain the servicers’ resources by forcing borrowers to contact their servicer to resolve the errors.

On Friday, the Federal Reserve Board announced the Chairs and Deputy Chairs of the 12 Federal Reserve Banks for 2024.

Boston
Corey Thomas, chairman and chief executive officer, Rapid7, Inc., Boston, Massachusetts, renamed Chair.

Roger W. Crandall, chairman, president, and chief executive officer, Massachusetts Mutual Life Insurance Company, Springfield, Massachusetts, renamed Deputy Chair.

New York
Vincent Alvarez, president, New York City Central Labor Council, AFL-CIO, New York, New York, renamed Chair.

Pat Wang, president and chief executive officer, Healthfirst, New York, New York, named Deputy Chair.

Philadelphia
Anthony Ibarguen, chief executive officer, Quench USA, Inc., King of Prussia, Pennsylvania, renamed Chair.

Sharmain Matlock-Turner, chief executive officer, Urban Affairs Coalition, Philadelphia, Pennsylvania, renamed Deputy Chair.

Cleveland
Heidi L. Gartland, chief government and community relations officer, University Hospitals, Cleveland, Ohio, named Chair.

Richard Kramer, chairman, chief executive officer, and president, Goodyear Tire & Rubber Co., Akron, Ohio named Deputy Chair.

Richmond
Jodie W. McLean, chief executive officer, EDENS, Washington, D.C., renamed Chair.

Lisa M. Hamilton, president and chief executive officer, The Annie E. Casey Foundation, Baltimore, Maryland, renamed Deputy Chair.

Atlanta
Claire Lewis Arnold, chief executive officer, Leapfrog Services, Inc., Atlanta, Georgia, renamed Chair.

Gregory A. Haile, former president, Broward College, Fort Lauderdale, Florida, renamed Deputy Chair.

Chicago
Jennifer F. Scanlon, president and chief executive officer, UL Solutions Inc., Northbrook, Illinois, renamed Chair.

Juan Salgado, chancellor, City Colleges of Chicago, Chicago, Illinois, renamed Deputy Chair.

St. Louis
Carolyn Chism Hardy, president and chief executive officer, Chism Hardy Investments, LLC, Bartlett, Tennessee, named Chair.

Lal Karsanbhai, president and chief executive officer, Emerson Electric Co., St. Louis, Missouri, named Deputy Chair.

Minneapolis
Chris Hilger, chairman, president, and chief executive officer, Securian Financial, St. Paul, Minnesota, named Chair.

Paul D. Williams, president and chief executive officer, Project for Pride in Living, Minneapolis, Minnesota, named Deputy Chair.

Kansas City
Patrick A. Dujakovich, president, Greater Kansas City AFL-CIO, Kansas City, Missouri, renamed Chair.

Jandel Allen-Davis, M.D., president and chief executive officer, Craig Hospital, Englewood, Colorado, named Deputy Chair.

Dallas
Thomas J. Falk, retired chairman and chief executive officer, Kimberly-Clark Corporation, Dallas, Texas, renamed Chair.

Claudia Aguirre, president and chief executive officer, BakerRipley, Houston, Texas, renamed Deputy Chair.

San Francisco
David P. White, chief executive officer, 3CG Ventures, and former national executive director, Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA), Los Angeles, California, named Chair.

Russell A. Childs, chief executive officer and president, SkyWest, Inc., St. George, Utah, named Deputy Chair.

The FDIC has released a list of 68 banks whose evaluations of compliance with the Community Reinvestment Act were recently made public. We congratulate four banks on the list whose evaluations were rated Outstanding:

• West Bank, West Des Moines, Iowa
• Pioneer Bank, Albany, New York
• Montecito Bank & Trust, Santa Barbara, California
• Genesis Bank, Newport Beach, California

First Trust and Savings Bank, Coralville, Iowa, received a "Needs to Improve" rating. The remaining 63 banks' evaluations were rated Satisfactory.

The Federal Trade Commission has announced it has joined the State of Connecticut in filing a complaint against auto dealer Chase Nissan LLC d/b/a Manchester City Nissan, its owner, and key employees, for systematically deceiving consumers about the price of certified used cars, add-ons, and government fees.

The complaint alleges that the dealership, in addition to deceiving consumers, regularly charges them junk fees for certification, add-on products, and inflated government charges without the consumers’ consent, sometimes costing them thousands of dollars in unwanted and unauthorized charges.

Connecticut also alleges that all these practices are deceptive or unfair under Connecticut law.

The CFPB emailed a reminder yesterday that it opened the filing period for HMDA data collected in 2023 on January 1, 2024. Submissions will be considered timely if received on or before Friday, March 1, 2024.

Yesterday, the Securities and Exchange Commission announced that it obtained an asset freeze and other emergency relief concerning an alleged $93 million real estate investment fraud perpetrated by Miami-based developer Rishi Kapoor. The SEC also charged Location Ventures LLC, Urbin LLC, and 20 other related entities in connection with the fraud scheme.

According to the SEC’s complaint, from approximately January 2018, until at least March 2023, Kapoor and certain of the defendant entities solicited investors by, among other things, making several material misrepresentations and omissions regarding Kapoor, Location Ventures, Urbin, and their real estate developments. The false statements allegedly included misrepresenting Kapoor’s compensation; his cash contribution to the capitalization of Location Ventures; the corporate governance of Location Ventures and Urbin; the use of investor funds; and Kapoor’s background. The SEC’s investigation uncovered that Kapoor allegedly misappropriated at least $4.3 million of investor funds and improperly commingled approximately $60 million of investor capital between Location Ventures, Urbin, and some of the other charged entities. The complaint also alleges that Kapoor caused some entities to pay excessive fees and to represent higher returns to investors by significantly understating cost estimates.

The complaint charges Kapoor, Location Ventures, Urbin, and the 20 related entities with violating provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC seeks permanent injunctions, civil monetary penalties, an officer-and-director bar against Kapoor, and disgorgement of ill-gotten gains with prejudgment interest against Kapoor and certain of the charged entities.

The Federal Reserve Board has released the minutes of the December 12–13, 2023, meeting of the Federal Open Market Committee.

The CFPB yesterday posted a Bureau Blog article on "Holding debt collectors responsible for false statements," to announce that the Bureau has filed an amicus brief in the U.S. Court of Appeals for the First Circuit to help ensure consumers can hold debt collectors responsible when they make false representations.

In this case — Carrasquillo v. CICA Collection Agency — an individual filed for bankruptcy, so collection efforts against the person should generally have stopped. However, a debt collector still sent the person a letter to collect on the debt and said that the consumer could be sued if they didn’t pay it. Because of the bankruptcy rules, that statement was false—the consumer couldn’t actually be sued. The individual sued to hold the debt collector accountable for the misrepresentation, but the debt collector pleaded ignorance. The debt collector claimed that they were only responsible under the law when they intended to say something false.

As the CFPB’s amicus brief explains, a debt collector can be liable under the Fair Debt Collection Practices Act even if they claim that they did not know that their statement was false. A debt collector will not be held responsible in a lawsuit brought by an individual if they can show that they didn’t intend to make the false representation and that they had effective procedures in place designed to prevent the mistake. But debt collectors cannot just stick their heads in the sand and claim ignorance. This interpretation has been upheld by numerous courts, and it is what Congress clearly intended. The brief also explains that consumers generally do not lose the law’s important protections when they file for bankruptcy.

The OCC has released CRA evaluations for 25 OCC-supervised institutions whose evaluations became public in December 2023.

Of the evaluations listed, 18 are rated satisfactory, and the following seven are rated outstanding:

• BMO Harris Bank, NA, Chicago, Illinois
• Catalyst Bank, Opelousas, Louisiana
• Citizens National Bank of Albion, Albion, Illinois
• First National Bank Colorado, Las Animas, Colorado
• Geddes FS & LA, Syracuse, New York
• Lone Star National Bank, Pharr, Texas
• Sunrise Banks, NA, Saint Paul, Minnesota

The FDIC has released a list of enforcement actions it took in November 2023.

• Horicon Bank, Horicon, Wisconsin, was assessed a $23,000 civil money penalty for engaging in a pattern or practice of violations of the Flood Disaster Protect Act and FDIC regulations.
• Removal and Prohibition Orders were issued against:
  • Sheree Leanne Carter, formerly a teller at Rockland Trust Company, Rockland, Massachusetts, after the FDIC found, and Carter neither admitted nor denied that over a span of 16 years she stole funds from the bank by taking cash from her teller drawer and cash intended for the bank's ATMs. manipulated the bank's systems and records to create fictitious transactions before audits and to cancel those transactions after the audits were completed, to avoid detection and conceal her embezzlement for personal gain of approximately $430,000.
  • Lladira Hernandez, formerly a client success representative at Central Valley Community Bank, Fresco, California, after the FDIC determined, and Hernandez neither admitted nor denied that, between May and August 2022, she initiated unauthorized ACH debits from four separate customers; and also fraudulently created an online banking profile for a customer, linked her own accounts to it and, after
    resigning from the bank, initiated unauthorized transfers.
  • William J. Burnell, formerly the chief credit officer of NBC Bank, New Orleans, Louisiana, after the FDIC determined, and he neither admitted nor denied, that during 2015 and 2016 he approved loans to borrowers that he knew were not creditworthy. An earlier Order for Assessment of a Civil Money Penalty against him was terminated.
• Cease and Desist Consent Orders were issued to Peoples Bank, Munster, Indiana; Commenity Servicing, LLC, Columbus, Ohio; First Fed Bank, Port Angeles, Washington; Liberty Bank, Inc., Salt Lake City, Utah, and; Brighton Bank, Brighton, Tennessee.

The National Credit Union Administration has announced it issued an Notice of Prohibition to Andrea Alice Nedow, a former teller/member service representative at Traverse Catholic Federal Credit Union, Traverse City, Michigan, after a finding that she made unauthorized withdrawals from member accounts. She was later prosecuted for embezzlement by local law enforcement, and, on January 24, 2023, she pleaded guilty to two charges of embezzlement.

FinCEN yesterday announced it has begun to accept Beneficial Ownership Information reports. Existing reporting companies have until January 1, 2025, to register. Reporting companies newly created or registered in 2024 have 90 days after receiving actual or public notice that their company's creation or registration is effective.

OFAC has designated one individual and three entities responsible for facilitating the flow of Iranian financial assistance to Houthi forces and their destabilizing activities. Among those designated are the head of the Currency Exchangers Association in Sana’a, and three exchange houses in Yemen and Türkiye. These persons have facilitated the transfer of millions of dollars to the Houthis at the direction of U.S.-designated Sa’id al-Jamal, who is affiliated with Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).

For the names and identification information of the designated parties, see the December 28, 2023, BankersOnline OFAC Update.

• Treasury Department press release

The Federal Trade Commission has announced it has filed suit against Grand Canyon Education, Inc. (GCE), Grand Canyon University (GCU), and Brian Mueller—the CEO of GCE and president of GCU—for deceiving prospective doctoral students about the cost and course requirements of its doctoral programs and about being a nonprofit, while also engaging in deceptive and abusive telemarketing practices.

In its complaint, the FTC says that GCU and GCE told prospective students that the total cost of GCU’s “accelerated” doctoral programs was equal to the cost of just 20 courses (or 60 credits). In reality, the school requires that almost all doctoral students take additional “continuation courses” that add thousands of dollars in costs. The U.S. Department of Education reported that fewer than 2% of GCU doctoral program graduates completed their program within the cost that GCU advertises, and almost 78% of these students take five or more continuation courses. The complaint also says that, despite operating the school for the profit of GCE and its investors, the defendants deceptively marketed the school as a nonprofit.

The defendants also used abusive telemarketing calls to try to boost enrollment at GCU, according to the complaint. GCE advertised on websites and social media urging prospective students to submit their contact information on digital forms. GCE telemarketers then used the information to illegally contact people who have specifically requested not to be called, as well as people on the National Do Not Call Registry. GCE has also made illegal calls to numbers it purchased from lead generators.

The FTC says the defendants’ deceptive claims and abusive telemarketing calls violated the FTC Act and the Telemarketing Sales Rule and asks the court to provide redress to consumers and prohibit the institution from further violations of the law.

The OCC, Federal Reserve Board, FDIC, and NCUA have this morning published [88 FR 89820] a final rule in the Federal Register adopting final changes to the Uniform Rules of Practice and Procedures (Uniform Rules) to recognize the use of electronic communications in all aspects of administrative hearings and to otherwise increase the efficiency and fairness of administrative adjudications. The OCC, Board, and FDIC are also modifying their agency-specific rules of administrative practice and procedure (Local Rules). The OCC also is integrating its Uniform Rules and Local Rules so that one set of rules applies to both national banks and Federal savings associations and amending its rules on organization and functions to address service of process.

The changes affect 12 CFR Parts 3, 4, 6, 19, 108, 109, 112, 150, and 165 (OCC); Parts 238 and 263 (Federal Reserve); Part 308 (FDIC); and Part 747 (NCUA). The amendments are to become effective April 1, 2024.

The OCC, Federal Reserve, and FDIC yesterday published [88 FR 89489] a joint notice and request for comment on proposed revisions to the reporting forms and instructions for the Call Reports and the FFIEC 002 relating to the reporting on (1) loans to nondepository financial institutions and other loans, (2) guaranteed structured financial products, and (3) proposed long–term debt requirements. The proposed revisions to the FFIEC 002 report form and instructions relate to the reporting on the loans to nondepository financial institutions and other loans. These proposed changes apply to all three versions of the Call Report (FFIEC 031, FFIEC 041, and FFIEC 051) and to the Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC 002), as applicable.

In addition, the agencies are requesting comment on a proposal to adopt ongoing standards for electronic signatures to comply with the Call Report signature and attestation requirement.

These proposed changes would be effective as of the June 30, 2024, report date, except for those related to the proposed long–term debt requirements, which would take effect the same quarter as the effective date of any final rule on such requirements.

Redlined copies of the FFIEC 031, FFIEC 041, and FFIEC 051 Call Report forms showing the proposed changes and the related draft reporting instructions will be available on the FFIEC’s webpages for these reports, which can be accessed from the FFIEC’s Reporting Forms webpage.

Comments must be submitted by February 26, 2024.

• FDIC Financial Institution Letter FIL-68-2023.
  

On Tuesday, the FDIC released the public sections of resolution plans of nine large domestic covered insured depository institutions (IDIs) that were due by December 1, 2023.

FDIC regulations require a covered insured depository institution to submit a resolution plan under which the FDIC, as receiver, might resolve the institution under the Federal Deposit Insurance Act in a way that provides depositors timely access to their insured deposits, maximizes returns on the sale or disposition of assets, and minimizes creditor losses.

The nine IDIs include (with links to the public portion of their plans):

• Bank of America NA
• Bank of New York Mellon
• Citibank, NA
• Goldman Sachs Bank USA
• JPMorgan Chase Bank NA
• Morgan Stanley Bank NA
• Morgan Stanley Private Bank, NA
• State Street Bank and Trust Company
• Wells Fargo Bank NA

On Tuesday, the OCC issued Bulletin 2023-40 announcing revisions to the asset-size threshold amounts used to define “small bank or savings association” and “intermediate small bank or savings association” under the Community Reinvestment Act (CRA) regulations. The thresholds—which apply to any national bank, federal savings association, or state savings association (collectively, bank)—become effective January 1, 2024. This bulletin adjusts the threshold amounts based on the annual percentage change in a measure of the Consumer Price Index.

The threshold amounts are the same as those announced last week by the FDIC and Federal Reserve System—Beginning January 1, 2024, a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.564 billion is a “small bank or savings association.” A “small bank or savings association” with assets of at least $391 million as of December 31 of both of the prior two calendar years and less than $1.564 billion as of December 31 of either of the prior two calendar years is an “intermediate small bank or savings association.”

The Federal Trade Commission has announced it will extend by 30 days the comment period on its proposed rule prohibiting junk fees. Comments will now be accepted through February 7, 2024.

The CFPB has announced it has joined the Department of Justice in suing Colony Ridge, a Texas-based developer and lender, for operating an illegal land sales scheme and targeting tens of thousands of Hispanic borrowers with false statements and predatory loans. The lawsuit filed in federal district court alleges Colony Ridge sells unsuspecting families flood-prone land without water, sewer, or electrical infrastructure, and that the company sets borrowers up to fail with loans they cannot afford. Roughly 1-in-4 Colony Ridge loans ends in foreclosure, after which the company repurchases the properties and sells them to new borrowers. The CFPB and Justice Department are seeking redress for borrowers harmed by Colony Ridge and an immediate end to its illegal practices. This is the CFPB’s first federal court lawsuit charging a defendant with violations of the Interstate Land Sales Full Disclosure Act.

The lawsuit names as defendants three Texas-based Colony Ridge affiliate companies, as well as Loan Originator Services, a nonbank mortgage company licensed to originate loans in Texas. Colony Ridge has developed more than 40,000 lots spread across an unincorporated area of Liberty County, Texas, approximately 30 miles northeast of Houston. Colony Ridge markets these subdivisions using the names “Terrenos Houston” and “Terrenos Santa Fe.”

Colony Ridge targets Spanish-speaking borrowers: it advertises almost exclusively in Spanish, often in TikTok or other social media posts featuring, for example, national flags and regional music from Latin America. In these advertisements, Colony Ridge promises consumers the dream of home ownership with its own seller financing: an easy-to-obtain loan product that requires no credit check and only a small deposit.

The complaint alleges that Colony Ridge has lured tens of thousands of Hispanic consumers into their predatory loan products. Foreclosure and property deed records from September 2019 through September 2022 show that Colony Ridge initiated foreclosures on at least 30% of seller-financed lots within just three years of the purchase date, with most loan failures occurring even sooner. Records also confirm that Colony Ridge accounted for more than 92% of all foreclosures recorded in Liberty County between 2017 and 2022.

The complaint seeks to stop Colony Ridge’s alleged unlawful conduct, provide redress for affected consumers, and impose a civil penalty payable to the CFPB victims relief fund. If the defendants are found liable, the amount of any restitution will be determined in the litigation in federal court.

According to the December 2023 FHFA House Price Index for December, U.S. house prices rose in October, up 0.3 percent from September, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). House prices rose 6.3 percent from October 2022 to October 2023. The previously reported 0.6 percent price increase in September was revised to a 0.7 percent increase.

• FHFA 12/26/2023 press release

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau jointly announced the following new residential sales statistics for November 2023:

• New Home Sales: Sales of new single‐family houses in November 2023 were at a seasonally adjusted annual rate of 590,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.2 percent (±15.6 percent)* below the revised October rate of 672,000, but is 1.4 percent (±19.8 percent)* above the November 2022 estimate of 582,000.
• Sales Price: The median sales price of new houses sold in November 2023 was $434,700. The average sales price was $488,900.
• For Sale Inventory: The seasonally‐adjusted estimate of new houses for sale at the end of November was 451,000. This represents a supply of 9.2 months at the current sales rate.

The Treasury Department has published a Request for Information to inform its development of a national strategy for financial inclusion. Treasury was directed to develop a strategy to improve financial inclusion in the Joint Explanatory Statement accompanying the Financial Services and General Government Appropriations Act of 2023.

The Treasury Department initiated work on the strategy in 2023 and is seeking input from a wide variety of stakeholders to ensure that the strategy identifies clear and actionable opportunities for the public, private, and nonprofit sectors to advance financial inclusion and broaden access to financial products and services among underserved communities.

Written comments and information are requested on or before February 20, 2024.

The Federal Housing Finance Agency has released its third quarter 2023 Foreclosure Prevention and Refinance Report. The report shows that Fannie Mae and Freddie Mac (the Enterprises) completed 43,356 foreclosure prevention actions during the quarter, raising the total number of homeowners who have been helped to 6,861,827 since the start of conservatorships in September 2008.

The report also shows that 33 percent of loan modifications completed in the third quarter reduced borrowers’ monthly payments by more than 20 percent. The number of refinances decreased from 93,952 in the second quarter of 2023 to 83,522 in the third quarter of 2023.

The Enterprises’ serious delinquency rate declined slightly from 0.55 percent to 0.54 percent at the end of the third quarter. This compares with 3.34 percent for Federal Housing Administration (FHA) loans, 1.99 percent for Veterans Affairs (VA) loans, and 1.52 percent for all loans (industry average).

Yesterday, we reported that FijnCEN had issued a final rule regarding access to Beneficial Ownership Information that certain entities will be required to file with FinCEN beginning January 1, 2024.

In connection with its press release announcing the final rule, FinCEN issued two interagency statements to give banks and non-bank financial institutions guidance on the interplay between the final rule and FinCEN’s existing Customer Due Diligence Rule.

• Interagency Statement for Banks
• Statement for Non-Bank Financial Institutions

FinCEN also issued a Fact Sheet about the final rule.

On Wednesday, the Department of the Treasury reported that OFAC continued to tighten enforcement of the price cap on Russian oil by building on previous actions targeting shipowners and vessels implicated in transporting Russian crude oil above the cap. In line with actions previously taken by partners in the Price Cap Coalition, OFAC designated a Government of Russia-owned ship manager as well as several obscure oil traders who have emerged as frequent participants in the seaborne transportation of Russian-origin oil following the imposition of the price cap.

OFAC also, in coordination with the Price Cap Coalition, updated the Guidance on Implementation of the Price Cap Policy for Crude Oil and Petroleum Products of Russian Federation Origin. Yesterday’s actions are in line with commitments made by Leaders of the Group of Seven (G7) on December 6, 2023 to tighten compliance and enforcement of the price cap policy on Russian oil, including by imposing sanctions on those engaged in deceptive practices and by updating compliance rules and regulations as necessary.

For the names and identification information of the designated parties, and links to two new Russia-related General Licenses, see the December 20, 2023, BankersOnline OFAC Update.

The Financial Crimes Enforcement Network (FinCEN) has scheduled for December 22, 2023, Federal Register publication a final rule with regulations regarding access by authorized recipients to beneficial ownership information (BOI) that will be reported to FinCEN pursuant to section 6403 of the Corporate Transparency Act (CTA).

The summary of the rule indicates the regulations implement the strict protocols required by the CTA to protect sensitive personally identifiable information (PII) reported to FinCEN and establish the circumstances in which specified recipients have access to BOI, along with data protection protocols and oversight mechanisms applicable to each recipient category. The disclosure of BOI to authorized recipients in accordance with appropriate protocols and oversight will help law enforcement and national security agencies prevent and combat money laundering, terrorist financing, tax fraud, and other illicit activity, as well as protect national security.

The Introduction in the Supplementary Information to be published with the rule states, "Financial institutions with customer due diligence requirements under applicable law will have access to BOI to facilitate compliance with those requirements, as will the Federal functional regulators or other appropriate regulatory agencies that supervise or assess those financial institutions’ compliance with such requirements." It also states "FinCEN will implement the CTA requirement to revise the 2016 CDD Rule [31 CFR 1010.230] through a future rulemaking process. That process will provide the public with an opportunity to comment on the effect of the final provisions of the BOI reporting and access rules on financial institutions’ customer due diligence obligations."

The rule will be effective 60 days after publication (February 20, 2024).

The Federal Financial Institutions Examination Council (FFIEC) has announced that the Federal Reserve Board, FDIC, and OCC, as members of the FFIEC, have released data on small business, small farm, and community development lending during 2022. The Community Reinvestment Act regulations require the agencies to annually disclose these data.

The FFIEC also prepared aggregate disclosure statements of small business and small farm lending for all of the metropolitan statistical areas and non-metropolitan counties in the United States and its territories. The statements are available here.

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