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The Securities and Exchange Commission yesterday announced it has adopted rules to enhance and standardize climate-related disclosures by public companies and in public offerings. The final rules reflect the Commission’s efforts to respond to investors’ demand for more consistent, comparable, and reliable information about the financial effects of climate-related risks on a registrant’s operations and how it manages those risks while balancing concerns about mitigating the associated costs of the rules.

The adopting release is published on SEC.gov and will be published in the Federal Register. The final rules will become effective 60 days following publication of the adopting release in the Federal Register, and compliance dates for the rules will be phased in for all registrants, with the compliance date dependent on the registrant’s filer status.

• Fact sheet

Federal Reserve Board Governor Michelle W. Bowman spoke yesterday at the Harvard Law School Faculty Club on "Tailoring, Fidelity to the Rule of Law, and Unintended Consequences."

Governor Bowman said, in her opening remarks, "I would like to frame the discussion by offering my views on a key element underpinning the U.S. bank regulatory framework: the role of tailoring. While the principle itself is simple—setting regulatory priorities and allocating supervisory resources in a risk-based way—the consequences of tailoring (or not) can reverberate throughout the banking system, the broader U.S. financial system, and the economy. I see a clear nexus between tailoring and fidelity to the law, including a targeted focus within our statutorily mandated prudential responsibilities."

Bowman added, "Both the pending capital reform proposals and the final climate guidance illustrate how regulatory actions can deviate from the principle of tailoring without any express recognition of this effect." She noted that "the federal banking agencies have proposed several reforms to the capital framework, among them the Basel III "endgame" and new long-term debt requirements that would apply to all banks with over $100 billion in assets. I have expressed concern with both of these proposals on the merits, in terms of striking the right balance between safety and soundness and efficiency and fairness, and out of concern for potential unintended consequences. Another concern is whether these proposals show fidelity to the law, which requires regulatory tailoring above the $100 billion asset threshold."

Our monthly check of the Federal Reserve Board's archive of CRA evaluation ratings reveals that the Reserve Banks made public 15 evaluations of member banks in February 2024. Thirteen of those evaluations were rated "Satisfactory." We congratulate Charles Schwab Bank, SSB, and Charles Schwab Premier Bank, SSB, both of Westlake, Texas, for receiving ratings of "Outstanding."

The FDIC has announced another update of its Risk Management Manual of Examination Policies (RMS Manual). This update affects Section 15.1 (Formal Administrative Actions).

The Department of the Treasury has reported that OFAC has designated two individuals and five entities associated with the Intellexa Consortium for their role in developing, operating, and distributing commercial spyware technology used to target Americans, including U.S. government officials, journalists, and policy experts.

For the names and identification information of the designated parties, see this BankersOnline OFAC Update.

The FDIC has released a list of 56 recently released CRA evaluation ratings of state non-member FDIC-insured financial institutions. Three banks (located in Camden, SC; Doylestown, PA; and Sewell, NJ) were assigned "Needs to Improve" ratings. Forty-six received "Satisfactory" ratings. We congratulation seven institutions whose evaluations were rated "Outstanding":

• State Bank of Bement, Bement, IL
• Decorah Bank & Trust Company, Decorah, IA
• Comenity Bank, Wilmington, DE
• Northwest Bank, Warren, PA
• Comenity Capital Bank, Draper, UT
• Sallie Mae Bank, Salt Lake City, UT
• Pioneer Federal Savings and Loan Association, Deer Lodge, MT

Yesterday, the Department of the Treasury announced that OFAC has designated 11 individuals, including Zimbabwe’s President Emmerson Mnangagwa, and three entities for their involvement in corruption or serious human rights abuse pursuant to E.O. 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act.

Concurrently, President Biden signed an Executive Order terminating the national emergency with respect to Zimbabwe and revoking the Executive Orders that have authorized Zimbabwe-specific sanctions. As a result, the economic sanctions administered by OFAC pursuant to the Zimbabwe sanctions program are no longer in effect.

The president’s Executive Order of March 4, 2024, “Termination of Emergency With Respect to the Situation in Zimbabwe,” terminated the national emergency declared in E.O. 13288 and built upon in E.O. 13391 and E.O. 13469. As a result:

• All persons blocked solely pursuant to Executive Order 13288, 13391, or 13469 (the authorities of the Zimbabwe Sanctions Program) are being removed from OFAC’s Specially Designated Nationals and Blocked Persons (SDN) List;
• All property and interests in property blocked solely pursuant to the Zimbabwe Sanctions Program is now unblocked; and
• OFAC will remove the Zimbabwe Sanctions Regulations from the Code of Federal Regulations.

For details on the new, removed, and updated SDN listings and a link to the Executive Order, see BankersOnline's March 4, 2024, OFAC Update.

Yesterday, SBA Administrator Isabel Casillas Guzman announced the next generation of the SBA’s Lender Match tool for businesses to connect to capital through SBA’s network of approved banks and private lenders. The enhanced Lender Match will provide Americans seeking funding to start and grow their businesses with a simple, online tool that will more effectively match them with the SBA’s competitive lending products and additional offerings from a trusted network of banks and private lenders.

On the enhanced Lender Match platform, small business owners benefit from an improved, mobile-first user interface that ensures better access and usability. Borrowers will now be able to easily view all of their matched lenders in one place, allowing the borrower to find and compare lenders to help them decide where to apply for a loan. The enhanced tool will also verify borrowers and screen for fraud to streamline the process for both lenders and borrowers. Importantly, with Lender Match, small businesses that are not matched to lenders will be connected to the SBA’s local network of free advisors to help them get capital-ready.

The FDIC has has updated its Risk Management Manual of Examination Policies (RMS Manual). This month's update affects Section 3.3 (Securities).

This morning, the CFPB announced it has finalized a rule to cut excessive credit card late fees. The rule will curb fees that cost American families more than $14 billion a year. The CFPB estimates that American families will save more than $10 billion in late fees annually once the final rule goes into effect by reducing the typical fee from $32 to $8 for card issuers that together with their affiliates have one million or more open credit card accounts.

The final rule reduces the current maximum late fees from $30 for the first late payment and $41 for subsequent late payments to $8 and ends automatic inflation adjustments for that amount for issuers that have one million or more open accounts. Specifically, the final rule:

• Lowers the immunity provision dollar amount for late fees to $8
• Ends the automatic annual inflation adjustment. The CFPB will instead monitor market conditions and adjust the $8 late fee immunity threshold as necessary.
• Requires credit card issuers to show their math. Larger card issuers will be able to charge fees above the threshold so long as they can prove the higher fee is necessary to cover their actual collection costs.

The rule does not change the credit card issuer’s ability to raise interest rates, reduce credit lines, and take other actions to deter consumers from paying late.

The final rule does not adopt these revisions for “Smaller Card Issuers” (i.e., card issuers that together with their affiliates had fewer than one million open credit card accounts for the entire preceding calendar year). For Smaller Card Issuers, the final rule revises the safe harbor threshold amounts for late fees to $32 for the initial violation and $43 for each subsequent violation that occurs in one of the next six billing cycles.

The effective date of the final rule will be 60 days after publication of the rule in the Federal Register.

• Statement of CFPB Director Rohit Chopra
• Executive summary
• Key changes chart
• Unofficial redline of the final rule
• UPDATE:Updated 3/5/2024 to clarify that the reduced fee cap applies only to larger card issuers
• PUBLICATION AND EFFECTIVE DATE UPDATE: Published at 89 FR 19128 on 3/15/2024, with an effective date of 5/14/2024. However, the U.S. Chamber of Commerce has filed a suit in the Northern District of Texas seeing a preliminary injunction to stop the CFPB from implementing the rule.

FinCEN reported yesterday that on Friday, in the case of National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), a federal district court in the Northern District of Alabama, Northeastern Division, entered a final declaratory judgment, concluding that the Corporate Transparency Act exceeds the Constitution’s limits on Congress’s power and enjoining the Department of the Treasury and FinCEN from enforcing the Corporate Transparency Act against the plaintiffs.

FinCEN will comply with the court’s order for as long as it remains in effect. As a result, the government is not currently enforcing the Corporate Transparency Act against the plaintiffs in that action: Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024). Those individuals and entities are not required to report beneficial ownership information to FinCEN at this time.

Update: On March 11, 2024, the Defendants (Yellen, et al) filed a Notice of Appeal of the Court's Final Judgment to the U.S. Court of Appeals for the Eleventh Circuit.

The U.S. Department of Housing and Urban Development has announced it is charging PadSplit, Inc., a property management company, Kevin Lee Forrestal and Lydia Forrestal, the property owners, in Decatur, Georgia, with discrimination against a tenant because of her disability. HUD’s Charge of Discrimination alleges that respondents failed to grant a reasonable accommodation when a hearing-impaired complainant requested to have a service animal to assist with her disability.

HUD’s Charge of Discrimination alleges that the property’s management company and its employees, and the condominium unit’s owners, prohibited a hearing-impaired resident from using a service animal in their unit, and refused to install a visual doorbell and smoke detector, preventing her full use of her unit. Ultimately, their actions resulted in the resident’s decision to move out of the unit.

The OCC has released a list of Community Reinvestment Act (CRA) performance evaluations that became public in February. Of the 31 evaluations made public this month, one (in Kentland, Indiana) is rated needs to improve, 24 are rated satisfactory, and the following six are rated outstanding:

• Commercial Banking Company, Valdosta, GA
• The First National Bank of Monterey, Monterey, IN
• F&M Community Bank, N.A., Preston, MN
• The First National Bank of Nevada, Missouri, Nevada, MO
• The Conway National Bank, Conway, SC
• First National Bank Texas, Killeen, TX

The Federal Housing Finance Agency has announced updates to the implementation of new credit score requirements for single-family loans acquired by Fannie Mae and Freddie Mac (the Enterprises).

The FHFA is aligning the implementation date of the bi-merge credit reporting requirement with the transition from the Classic FICO credit score model. This aligned transition is expected to occur in the fourth quarter of 2025.

To better support market participants with this transition, the Enterprises will accelerate the publication of VantageScore 4.0 historical data, originally expected to be published in the first quarter of 2025, to early in the third quarter of 2024. FHFA and the Enterprises continue to work towards providing similar data to support the transition to the FICO 10T model, contingent upon achieving the necessary conditions for acquisition and publication of this data. FHFA will provide further details on implementation timing for FICO 10T once this process is complete.

The CFPB has announced it has issued Consumer Financial Protection Circular 2024-01 regarding preferencing and steering practices by digital intermediaries for consumer financial products or services. The circular was issued to law enforcement agencies and regulators to explain "how companies operating comparison-shopping tools can break the law when they steer consumers to certain products or lenders because of kickbacks."

The FDIC, Federal Reserve Board, and OCC have jointly announced they and the Federal Reserve Banks of San Francisco and Chicago will host the 2024 National Interagency Community Reinvestment Conference in Portland, Oregon, March 4 to 7.

The biennial conference offers participants the opportunity to learn about the Community Reinvestment Act (CRA) and to discuss best practices, innovations, and emerging challenges in community development with experts from around the country. The 2024 program will focus on the agencies’ new CRA rule, and will include regulator-led sessions on the rule and panels on community development policy and activities. There will be pre-conference tours of local community development organizations and projects.

The conference will also include a panel discussion with Federal Reserve Vice Chair for Supervision Michael J. Barr, FDIC Chairman Martin J. Gruenberg, and Acting Comptroller of the Currency Michael J. Hsu. The panel discussion will be livestreamed.

To register for the conference and view the full agenda, visit the National Interagency Community Reinvestment Conference website.

The FDIC and OCC have issued their Community Reinvestment Act examination schedules for the second and third quarters of 2024.

• FDIC schedule for second quarter
• FDIC schedule for third quarter
• OCC schedule for second and third quarters

FinCEN has reported that the Financial Action Task Force (FATF), an intergovernmental body that establishes international standards for anti-money laundering, countering the financing of terrorism, and countering the financing of proliferation of weapons of mass destruction (AML/CFT/CPF), issued an additional public statement at the conclusion of its plenary meeting this month reiterating how the Russian Federation’s war of aggression against Ukraine continues to run counter to FATF’s principles, and, thus, the suspension of the membership of the Russian Federation continues to stand. The FATF highlighted the potential risks to the international financial system, including growing financial connectivity of Russia with the Democratic People’s Republic of Korea (DPRK) and Iran, and risks of proliferation financing, malicious cyber activities, and ransomware attacks. In order to protect the international financial system, the FATF continues to urge all jurisdictions to remain vigilant to these risks.

The FATF also updated its lists of jurisdictions with strategic AML/CFT/CPF deficiencies. U.S. financial institutions should consider the FATF’s stance toward these jurisdictions when reviewing their obligations and risk-based policies, procedures, and practices.

On February 23, 2024, the FATF added Kenya and Namibia to its list of Jurisdictions Under Increased Monitoring and removed Barbados, Gibraltar, Uganda, and the United Arab Emirates from that list.

The FATF’s list of High-Risk Jurisdictions Subject to a Call for Action remains the same, with Iran, DPRK, and Burma subject to calls for action. Iran and DPRK are still subject to the FATF’s countermeasures, while Burma is still subject to the application of enhanced due diligence, but not countermeasures.

Yesterday, OFAC redesignated the Los Pochos Drug Trafficking Organization (DTO), and designated three members and four affiliated companies based in Guatemala. First sanctioned in 2019 pursuant to the Kingpin Act, the Los Pochos DTO is a Guatemala-based organization primarily engaged in cocaine trafficking from Guatemala through Mexico to the United States.

For the names and identification information of the designated parties, see this BankersOnline OFAC Update.

This morning, the FDIC has published [89 FR 14649] a Federal Register notice that it intends to terminate its receiverships of the following 17 banks on or after March 29, 2024:

• Warren Bank, Warren, MI
• Citizens State Bank, New Baltimore, MI
• Rockbridge Commercial Bank, Atlanta, GA
• Independent Bankers' Bank, Springfield, IL
• Barnes Banking Company, Kaysville, UT
• Centennial Bank, Ogden, UT
• Lincoln Park Savings Bank, Chicago, IL
• Crescent Bank and Trust Company, Jasper, GA
• Liberty Bank, Eugene, OR
• The Cowlitz Bank, Longview, WA
• Ravenswood Bank, Chicago, IL
• Premier Bank, Jefferson City, MO
• K Bank, Randallstown, MD
• First Banking Center, Burlington, VT
• The Bank of Miami, N.A., Coral Gables, FL
• Community South Bank, Parsons, TN
• Seaway Bank and Trust, Chicago, IL

The Federal Trade Commission has announced that the owners of a money-making scheme that claimed to use artificial intelligence to boost earnings for consumers’ e-commerce storefronts have agreed to surrender millions in assets to settle the FTC’s case against them. In addition, all the businesses and two of their owners face a lifetime ban on selling business opportunities or coaching programs involving ecommerce stores.

In a case filed in August 2023, the FTC charged that Roman Cresto, John Cresto, and Andrew Chapman, along with multiple companies they controlled, including Automators AI, Empire Ecommerce, and Onyx Distribution, deceived consumers with unfounded promises of “passive investment income” in online storefronts supposedly powered by AI.

In its complaint, the FTC charged that the defendants offered consumers high returns from profitable e-stores. The defendants also offered to teach consumers how to successfully set up and manage e-stores on Amazon and Walmart themselves using a “proven system” and the powers of artificial intelligence. The FTC alleged, however, that the vast majority of the defendants’ clients did not make the promised earnings or even recoup their sizable investment. Instead, most lost significant amounts of money, and Amazon and Walmart routinely suspended, blocked, or terminated the stores that defendants operated for their clients for repeated policy violations.

The orders contain a total monetary judgment of $21,765,902.65, which is partially suspended based on the defendants’ inability to pay the full amount. If the defendants are found to have lied to the FTC about their financial status, the full judgment would be immediately payable.

The Federal Housing Finance Agency reported yesterday that U.S. house prices rose 6.5 percent between the fourth quarter of 2022 and the fourth quarter of 2023, according to the FHFA House Price Index. House prices were up 1.5 percent compared to the third quarter of 2023. FHFA’s seasonally adjusted monthly index for December was up 0.1 percent from November.

The CFPB has posted a blog article, "Unlawful fees in the mortgage market," announcing that the Bureau has joined the Federal Trade Commission in filing an amicus brief with the U.S. Court of Appeals for the Eleventh Circuit (Atlanta, Georgia) in the case of Glover and Booze v. Ocwen Loan Servicing, LLC.

The case involves Ocwen's practice of charging a fee for making a payment online or by telephone, where the fee had not been agreed to in the agreement creating the debt, and a law had not affirmatively authorized the fee. Glover and Booze sued Ocwen after learning that such fees are illegal, and won their cases in a lower court. Ocwen has appealed the lower court's verdict to the Court of Appeals.

The FTC and the CFPB filed the amicus brief to urge the Court of Appeals to find in favor of Glover and Booze.

The U.S. Department of the Treasury yesterday reported that OFAC, in coordination with the United Kingdom, has taken action against the Deputy Commander of Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), Mohammad Reza Falahzadeh, as well as a Houthi group member, Ibrahim al-Nashiri. OFAC has also designated Cap Tees Shipping Co., Limited, the owner and operator of the ARTURA, a vessel used to ship Iranian commodities that were sold to support both the Houthis and the IRGC-QF.

Treasury also reported that OFAC has taken action against two companies registered in Hong Kong and the Marshall Islands — Kohana Company Limited and Iridescent Co Ltd. — that own and operate a vessel, the Panama-flagged KOHANA, shipping over $100 million in Iranian commodities to businesses in the People’s Republic of China on behalf of Iran’s Ministry of Defense and Armed Forces Logistics.

For identification information on the targeted individuals, entities, and vessels, see BankersOnline's February 27, 2024, OFAC Update.

The FDIC has issued Financial Institution Letter FIL-8-2024 with guidance to help financial institutions and facilitate recovery in areas of Washington affected by wildfires that caused significant property damage August 18–25, 2023.

FinCEN has published two notices and requests for comment to extend its authority to require the collection of information.

On Friday, February 23, FinCEN published [89 FR 13802] a notice on the proposed renewal, without change, of an existing information collection requirement for geographic targeting orders (GTOs). This will allow FinCEN to continue renewing its GTOs while its proposal for requiring nationwide Real Estate Reports of non-financed transfers of residential real estate remains under consideration. Comments are due by April 23, 2024.

On Monday, February 26, FinCEN published [89 FR 14148] a notice on the proposed renewal, without change, of its existing information collection requirement in 31 CFR 1010.230 related to beneficial ownership requirements for legal entity customers. The current requirement for banks to obtain certifications of beneficial ownership from entity customers will continue until FinCEN proposes and issues and makes effective a final rule to change the requirements in section 1010.230, which is not expected until at least the end of 2024. Comments on FinCEN's notice are due by April 26, 2024.

The FDIC has issued Financial Institution Letter FIL-7-2024 with guidance to help financial institutions and facilitate recovery in areas of California affected by severe storm and flooding, which caused significant property damage January 21–23, 2024.

The Federal Trade Commission reports it is taking action against tax preparation company H&R Block for unfairly deleting consumers’ tax data and requiring them to contact customer service when they downgrade to more affordable online products, and deceptively marketing their products as “free” when they were not free for many consumers.

In an administrative complaint, FTC staff alleges that H&R Block’s online tax filing products lead consumers into higher-cost products made for more complicated tax filings, despite many consumers not needing the additional tax forms and schedules offered by those products. In addition, H&R Block fails to clearly explain which of its products cover what forms, schedules, or tax situations, leading many consumers to start completing their tax returns in products that are more expensive than they need. When consumers later realized they did not need or want those more expensive products, though, H&R Block presented them with a series of time-consuming challenges when attempting to downgrade after already spending substantial time entering their tax information.

Specifically, when consumers choose to downgrade, H&R Block requires consumers to contact its customer support via chat or phone. Then, its system deletes all the tax data the consumers have entered, requiring them to start their tax return from scratch, creating a significant disincentive to downgrading. This stands in contrast to the upgrade process, where consumers’ data seamlessly moves to the more expensive product instantly.

The Treasury Department has reported that the Financial Action Task Force (FATF), the global standard-setting body for anti-money laundering and countering the financing of terrorism (AML/CFT), concluded its fifth Plenary under the Singaporean presidency on February 23. The FATF made several key advances, including kicking off a public consultation on potential changes to the FATF Recommendation on wire transfer information and the adoption of new guidance on trusts. The FATF also noted its concern on Russian Federation’s growing financial connectivity with North Korea and Iran.

The FDIC has released a list of 15 orders of administrative enforcement actions taken against banks and individuals in January 2024. The administrative enforcement actions in those 15 orders consisted of six orders to pay civil money penalties, two combined prohibition orders and orders to pay civil money penalties, two prohibition orders, four consent orders, and one order terminating a consent order.

• Nine orders against individuals who are current or former institution-affiliated parties of Bank of England, England, Arkansas, connected to violations of section 5 of the Federal Trade Commission Act involving misrepresentations of personal and bank affiliations with the Department of Veterans Affairs in the course of taking applications for VA mortgage loans.
  • Assessments of civil money penalties and orders of removal/prohibition were issued to:
    • Ryan Qarana, former branch manager of the Bloomfield, MI, loan production office of the bank, for failing to ensure that loan officers in the Bloomfield, Michigan loan production office complied with Section 5; specifically by misrepresenting or failing to ensure that loan officers did not misrepresent: (1) available loan prices for mortgage loans, (2) that consumers could skip two months of their mortgage payments, and (3) the loan production office’s affiliation with the Department of Veterans Affairs. CMP $100,000.
    • Jasmine Jonna, former sales manager of the Bloomfield loan production office, for misrepresenting available loan prices for mortgage loans, misrepresenting to consumers that they could skip two months of their mortgage payments, and misrepresenting the loan production office’s affiliation with the Department of Veterans Affairs. CMP of $12,000.
  • Civil money penalties were assessed on:
    • Ramy Zoma, for misrepresenting the bank as affiliated with the Department of Veterans Affairs. CMP $2,500.
    • Janel Zaitona, for luring consumers to apply for mortgage loans with low, unavailable loan prices that would not be honored and subsequently increasing the price before closing the loan, and misrepresenting to consumers that they could skip two months of mortgage payments and by misrepresenting to consumers the Bank’s affiliation with the Department of Veteran’s Affairs. CMP $1,000
    • Salam Yaldo, for luring consumers to apply for mortgage loans with low, unavailable loan prices, that would not be honored and subsequently increasing the price before closing the loan; misrepresenting to consumers that they could skip two months of mortgage payments; and misrepresenting to consumers his and the Bank’s affiliation with the Department of Veterans Affairs. CMP $15,000
    • Zach Jabro, for failing, as the branch manager of the office, in certain aspects, to manage, monitor, and oversee the sales operations of the branch. CMP $110,000
    • Maria Abdulnoor, for luring consumers to apply for mortgage loans with low, unavailable loan prices that would not be honored and subsequently increasing the price before closing the loan, and misrepresenting to consumers that they could skip two months of mortgage payments. CMP $35,000.
  • Cease and desist orders were issued to Lamont Kennedy and Oday Sessi.
• An order to pay a civil money penalty of $2,000 was issued to Collins State Bank, Collins, Wisconsin, for violations of the Flood Disaster Protection Act, National Flood Insurance Act, and Part 339 of the FDIC's Rules and Regulations, by failing to obtain adequate flood insurance at the time of making, increasing, renewing, or extending four (4) loans.
• Removal/prohibition orders were issued to:
  • Laura Ellen Ellison, formerly a loan operations specialist for CommerceOne Bank, Birmingham, Alabama, for executing nine unauthorized wire transfers from accounts of two bank customers to her personal bank account at another bank, and creating false documentation to make the transfers appear to have been authorized.
  • Bonnie A. Kirkpatrick, formerly employed by First Farmers & Merchants State Bank, Brownsdale, Minnesota, after a finding that she forged withdrawal slips, took various amounts of money from multiple consumer accounts without permission or authority, and removed Bank funds from the cash drawer, all for her own personal gain.
• Consent orders were issued to First Farmers & Commercial Bank, Pikeville, Tennessee, and Lineage Bank, Franklin, Tennessee
• A consent order issued in September 2022 to Union Savings Bank, Cincinnati, Ohio, was terminated.

The CFPB has announced it has issued its first supervisory designation order in a contested matter, after determining that installment lender World Acceptance Corporation has met the legal requirements for supervision.

The CFPB’s procedures require the CFPB to issue a notice to an entity not currently subject to a supervisory examination. The entity can either consent to supervision or contest the notice. Typically, the notices have pointed to consumer complaints and other indicators of risk to consumers.

The order is not a finding that World Acceptance Corporation has engaged in wrongdoing.

The White House has released a statement in which President Biden announced “more than 500 new sanctions against Russia for its ongoing war of conquest on Ukraine and for the death of Aleksey Navalny, who was a courageous anti-corruption activist and Putin’s fiercest opposition leader. These sanctions will target individuals connected to Navalny’s imprisonment as well as Russia’s financial sector, defense industrial base, procurement networks and sanctions evaders across multiple continents. They will ensure Putin pays an even steeper price for his aggression abroad and repression at home.”

The U.S. is also “imposing new export restrictions on nearly 100 entities for providing backdoor support for Russia’s war machine [and] taking action to further reduce Russia’s energy revenues.”

Specifics of the sanctions will be announced by the Treasury Department's Office of Foreign Assets Control.

The CFPB has published [89 FR 13852] its previously announced proposed rule on overdraft lending at very large financial institutions in today's Federal Register. Comments are due by April 1, 2024,

The OCC reports that Acting Comptroller of the Currency Michael J. Hsu yesterday offered remarks to the Financial Stability Board’s Crypto Working Group.

In his remarks, Mr. Hsu shared his perspective on the importance of coordination and collaboration on the supervision of global institutions, particularly with regard to crypto-asset activities. He also discussed the relationship between crypto and tokenization.

Acting Comptroller of the Currency Michael J. Hsu yesterday discussed banking and commerce, regulatory effectiveness, and financial stability in remarks at Vanderbilt University in Nashville, Tennessee.

In his remarks, Mr. Hsu discussed the blurring of the lines between banking and commerce in payments and private credit/equity, and how this might lead to financial instability. He also offered thoughts on the potential for the Financial Stability Oversight Council’s recently adopted analytic framework to identify and address financial stability risks as they emerge.

The Federal Housing Administration yesterday announced a new loss mitigation home retention option for borrowers with FHA-insured single family forward mortgages who are behind on their mortgage payments. The new offering, called the Payment Supplement, provides mortgage servicers with an additional tool to temporarily reduce a borrower’s monthly mortgage payment by up to 25 percent without modifying the mortgage’s current interest rate. The Payment Supplement is meant to help those borrowers who cannot sufficiently be assisted by existing FHA home retention solutions because the interest rate on their mortgage is lower than current interest rates.

When implemented, the Payment Supplement will allow mortgage servicers to temporarily reduce a borrower’s mortgage payment by using funds from a Partial Claim which enables the borrower to access up to 30 percent of the outstanding balance of their FHA-insured mortgage. The Partial Claim amount is placed in a junior lien and paid back when the homeowner sells or refinances the home or the mortgage otherwise terminates. Under the Payment Supplement, the Partial Claim funds are used in the following way:

• First, the Partial Claim is used to pay any arrearages and to bring the borrower’s mortgage payment current.
• Next, the remaining funds are deposited in an FHA custodial account managed by the mortgage servicer and used to temporarily supplement the principal and interest portion of a borrower’s mortgage payment each month, with a target of up to a 25 percent reduction in monthly principal and interest payments.

The Payment Supplement option is available to all borrowers who have not already exhausted their Partial Claim allowance through previous loss mitigation actions.

Mortgage servicers may begin implementing Payment Supplement on May 1, 2024, but must implement the solution for all eligible borrowers by January 1, 2025.

In addition to the publication of the Payment Supplement policy, FHA also announced yesterday that it is extending its full suite of temporary loss mitigation options through April 30, 2025.

The Federal Reserve Board has released the minutes of the January 30–31, 2024, Federal Open Market Committee meeting.

The CFPB has announced it has issued a procedural rule updating the process by which financial institutions can appeal supervisory findings. The updated rule broadens the CFPB officials eligible to evaluate appeals, the options for resolving an appeal, the matters subject to appeal, and makes additional clarifying changes.

The changes in the updated appeals process include:

• The Supervision Director will select an appeals committee of three CFPB managers with relevant expertise who did not work on the matter being appealed, and who will advise the Supervision Director in conjunction with attorneys assigned by the CFPB’s General Counsel.
• The appeals committee will now be able to remand a matter to Supervision staff for consideration of a modified finding, in addition to the existing options of upholding or rescinding the finding.
• Institutions may now file an appeal of any compliance rating or finding, not only an adverse rating.

Publication Update: Published on 2/22/2024 at 89 FR 13263. It became applicable on publication.

The Federal Trade Commission has finalized its Trade Regulation Rule on Impersonation of Government and Businesses (16 C.F.R. Part 461), which prohibits the impersonation of government, businesses, and their officials or agents in interstate commerce as deceptive or unfair acts or practices.

The new rule will become effective 30 days after it is published in the Federal Register.

The FTC has also issued a supplemental notice of proposed rulemaking that would, if finalized as proposed, amend the amend the new rule to revise its title, add a prohibition on the impersonation of individuals, and extend liability for violations of the rule to parties who provide goods and services with knowledge or reason to know that those goods or services will be used in impersonations of the kind that are themselves unlawful under the Rule.

In its press release announcing the rule on impersonation of government and businesses and the supplemental notice of proposed rulemaking that would amend the rule, the FTC said it is proposing the amendments in light of surging complaints around impersonation fraud, as well as public outcry about the harms caused to consumers and to impersonated individuals. The Commission said that “emerging technology – including AI-generated deepfakes – threatens to turbocharge this scourge, and the FTC is committed to using all of its tools to detect, deter, and halt impersonation fraud.”

Comments on the supplemental notice of proposed rulemaking will be accepted for 60 days after Federal Register publication.

FinCEN has issued a Small Entity Compliance Guide for Beneficial Ownership Information Access and Safeguards Requirements to provide an overview of the Beneficial Ownership Information Access and Safeguards Rule (Access Rule) requirements for small entities (including financial institutions) that obtain beneficial ownership information (BOI) from FinCEN.

The preface of the Guide indicates it is explanatory only, does not supplement or modify any obligations imposed by statute or regulation, and does not supersede more recent guidance documents issued by FinCEN.

The Guide and other resource materials about the Beneficial Ownership Information Reporting rules can be found on FinCEN's BOI Reference Materials webpage.

The Treasury Department on Tuesday reported that OFAC has designated two individuals who are affiliates of the Russia-based ransomware group LockBit. This action is the first in an ongoing collaborative effort with the U.S. Department of Justice, Federal Bureau of Investigation, and international partners targeting LockBit.

For identification information on the two individuals, see BankersOnline's February 20, 2024, OFAC Update.

The Federal Reserve Board, OCC, and FDIC on February 16 reported in the 2023 Shared National Credit (SNC) Report that credit quality associated with large, syndicated bank loans remains moderate. However, the agencies noted declining credit quality trends due to the pressure of higher interest rates on leveraged borrowers and compressed operating margins in some industry sectors.

Risks in leveraged loans remain high, and risks in certain industries, including technology, telecom and media; health care and pharmaceuticals; and transportation services are also elevated. Risk in the real estate and construction sector is segmented, with deteriorating trends in some sub-sectors being offset by stability and/or improvement in other sub-sectors. Industries affected by the pandemic, including transportation services and entertainment/recreation, continue to show notable improvement.

The 2023 review reflects the examination of SNC loans originated on or before June 30, 2023. The review focused on leveraged loans and stressed borrowers from various industry sectors.

• Joint press release

The Federal Communications Commission has announced its adoption of new rules to further protect consumers from unwanted robocalls and robotexts. The new rule will make it simpler for consumers to revoke consent, and requires that callers and texters implement requests in a timely manner.

The new rules require that robocallers and robotexters honor do-not-call and consent revocation requests within a reasonable time, not to exceed 10 business days from receipt. Last week’s action also codifies the Commission’s 2015 ruling that consumers can revoke consent under the TCPA through any reasonable means.
Under the ruling, consumers will be able to opt out of test messages using “stop,” “quit,” “end,” “revoke,” “opt out,” “cancel,” or “unsubscribe" via reply text message as a per se reasonable means to revoke consent.

The ruling also adds to the FCC rules the Commission’s 2012 ruling that clarified that a one-time text message confirming a consumer’s request that no further text messages be sent does not violate the TCPA as long as the confirmation text merely confirms the called party’s opt-out request and does not include any marketing information.

The Commission also seeks comment on whether the TCPA applies to robocalls and robotexts from wireless providers to their own subscribers and whether consumers should have the ability to revoke consent and stop such communications.

The order becomes effective 30 days after Federal Register publication (with some exceptions).

The Federal Trade Commission on Friday announced that a federal court has issued an order banning the operators of the Home Matters USA mortgage relief scam from the telemarketing and debt relief businesses and requiring them to turn over $19 million as a result of a lawsuit by the Commission and the California Department of Financial Protection and Innovation (DFPI).

The FTC and DFPI sued companies doing business as Home Matters USA, Academy Home Services, Atlantic Pacific Service Group, and Golden Home Services America and the owners of the companies, Michael R. Nabati, Armando Solis Barron, Dominic Ahiga (also known as Michael D. Grinnell), and Roger S. Dyer in September 2022, charging them with taking millions of dollars from thousands of struggling homeowners seeking mortgage relief.

The court found that the defendants falsely promised to reduce homeowners’ mortgage payments and prevent foreclosures, defrauding distressed homeowners out of millions of dollars. The scheme harmed more than 3,000 people nationwide, particularly elders and veterans.

The OCC, FDIC, and Federal Reserve Board have released the hypothetical scenarios for their annual Dodd-Frank stress tests, which help ensure that large banks can lend to households and businesses even in a severe recession.

The OCC has released its February 2024 list of enforcement actions taken against national banks and federal savings associations and related individuals.

• The previously announced cease and desist order, order for civil money penalty, and Gramm-Leach-Bliley agreement issued to City National Bank, Los Angeles, California.
• A cease and desist order against Blue Ridge Bank, N.A., Martinsville, Virginia, for unsafe or unsound practices, including those related to BSA/AML, capital ratios, capital and strategic planning, liquidity risk management, and information technology controls. The deficiencies in the BSA/AML compliance program resulted in violations of law, rule, or regulation, and the bank also failed to correct previously reported BSA problems.
• A formal agreement with The First National Bank of St. Ignace, St. Ignace, Michigan, for unsafe or unsound practices, including those related to capital planning, capital stress testing, and strategic planning, and a violation of law, rule, or regulation related to payment of dividends.
• An order of prohibition and for payment of a $50,000 civil money penalty against Stephen Adams, former senior vice president and managing director of residential lending, Sterling Bank and Trust, FSB, Southfield Michigan, for his role in failing to appropriately supervise, investigate, and discipline employees originating residential mortgage loans.
• Orders of prohibition issued to—
  • Cole R. Mann, former branch manager, PNC Bank, National Association, Wilmington, Delaware, for stealing, embezzling, or otherwise misappropriating funds from the bank and a bank customer
  • Chimere Shanta Mitchell, former fraud and claims operations specialist at Wells Fargo Bank, N.A., Sioux Falls, South Dakota, for misappropriating confidential information of bank customers, including more than 20 elderly customers, and selling the information to a third party, resulting in fraudulent transactions
  • Aaron Parsons, relationship banker and Webster Bank N.A., Stamford, Connecticut, for unauthorized withdrawals from accounts of bank customers, four of whom are elderly, and depositing the funds in his own bank account
  • Nyema'sha Taylor, former teller at Wells Fargo Bank, N.A., Sioux Falls, South Dakota, for knowingly processing unauthorized cash withdrawals from a customer’s account
  • Francis Andujar Velazquez, former senior customer service representative, Santander Bank, Wilmington, Delaware, for misappropriating funds from customers’ accounts by making purchases using confidential bank customer information and selling confidential information of bank customers to a third party and facilitating fraudulent transactions
  • Mirsha Yamili Wilson, former associate Banker, JPMorgan Chase Bank, N.A., Columbus, Ohio, for taking cash used to supply a bank branch’s ATMs and concealing the shortage
• Personal cease and desist orders against—
  • Colleen Kimmel, former general counsel, Sterling Bank and Trust, FSB, Southfield, Michigan, for her role in not ensuring the bank conducted or suggesting to the Board that the bank conduct an investigation into concerns related to a residential mortgage loan product, not ensuring the bank’s BSA program had an adequate system of internal controls, and not timely reporting suspicious activity related to certain residential mortgage loans
  • Jonathan Kolk, former residential underwriting manager, Sterling Bank and Trust, FSB, Southfield, Michigan, for capitulating to pressure to quickly underwrite certain residential mortgage loans and his role in underwriting, and supervising the underwriting of, loans that had false or fraudulent loan applications

The Social Security Administration has published [89 FR 11773] a proposed rule, "Use of Electronic Payroll Data to Improve Program Administration," describing the agency’s plans for accessing and using information from payroll data providers to reduce improper payments, including overpayments, which improves service to customers.

Unreported, late reported, and incorrectly reported earnings are often a cause of overpayments for people who receive Social Security Disability Insurance (SSDI) benefits and Supplemental Security Income (SSI) payments. When a person has been overpaid, the law requires the agency to ask for repayment, which can create financial difficulties for beneficiaries.

Social Security is working to reduce wage-related improper payments by using its legal authority to establish information exchanges with payroll data providers. These exchanges will help ensure the agency receives timely and accurate wage data. These exchanges and the agency’s planned business process is called the Payroll Information Exchange (PIE).

PIE will help reduce manual reporting errors as well as the reporting burden for individuals who authorize Social Security to obtain their wage and employment information through these information exchanges and work for employers whose payroll data is available through the exchange. PIE will also help to more quickly identify wages that often go unreported or undetected and which can lead to improper payments.

Comments on the proposal will be accepted through April 15, 2024.

The Treasury Department's Office of Foreign Assets Control has published [89 FR 12233] in today's Federal Register a final rule amending its North Korea Sanctions Regulations [31 C.F.R. 510] to modify a general license that authorizes certain transactions in support of specified humanitarian activities of nongovernmental organizations. Additionally, OFAC is adding general licenses to authorize the following: transactions related to the exportation and reexportation of items authorized by the U.S. Department of Commerce; the provision of certain agricultural commodities, medicine, and medical devices; and certain journalistic activities in North Korea.

The rule is effective today. OFAC also issued several new North Korea-related FAQs and amended three FAQs.

The Special Committee of the FDIC Board of Directors established to oversee an independent third-party review of the agency’s workplace culture issued a statement yesterday with an update on the progress of the review.

More than 350 people have contacted Cleary Gottlieb Steen & Hamilton LLP, the law firm conducting the review. For individuals who leave contact information, the Special Committee has set goals to respond within 48 hours. Cleary Gottlieb has also been reaching out to and conducting interviews with FDIC staff from various Divisions and Regional Offices. The Special Committee recognizes it can be difficult for some to share their stories and appreciates and supports those who have chosen to do so.

The FDIC has agreed to waive any confidentiality restriction currently in place with employees that would otherwise preclude them from discussing specifics of their case or management’s responses to Cleary Gottlieb, the FDIC’s OIG, or any Congressional committee or subcommittee. Accordingly, an individual is free to share documentation or other information related to harassment, interpersonal misconduct, or the FDIC’s workplace culture with investigators, even if prohibited by terms of a settlement agreement or a nondisclosure agreement (NDA) with the FDIC.

The Committee intends to complete its independent review in the second quarter of 2024.

The CFPB has announced its release of a report based on the first set of results from the newly updated Terms of Credit Card Plans survey. The survey data reveal that large banks are offering worse credit card terms and interest rates than small banks and credit unions, regardless of credit risk. In fact, reports the Bureau, the 25 largest credit card issuers charged customers interest rates of 8 to 10 points higher than small- and medium-sized banks and credit unions. This difference can translate to $400 to $500 in additional annual interest for the average cardholder.

The survey data include information on all general-purpose credit cards of the largest 25 credit card issuers in the United States. The data also include a representative sample of products from small- and medium-sized banks and credit unions across the country.