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The Department of Defense's Military Lending Act (MLA) website has added a notice that its next system release (version 5.18) is scheduled for Thursday, February 15, 2024. It will include security and performance enhancements. The MLA website will be unavailable from 6:00 PM until 9:00 PM PST (9 PM to midnight, EST) on February 15.

The Federal Housing Finance Agency has announced that U.S. house prices rose in November, up 0.3 percent from October, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). House prices rose 6.6 percent from November 2022 to November 2023. The previously reported 0.3 percent price increase in October remained unchanged.

For the nine census divisions, seasonally adjusted monthly price changes from October 2023 to November 2023 ranged from -0.2 percent in the New England division to +0.7 percent in the Mountain division. The 12-month changes ranged from +3.1 percent in the West South Central division to +9.8 percent in the New England division.

On January 29, 2024, FinCEN announced it had issued a finding and notice of proposed rulemaking that identifies Al-Huda Bank, an Iraqi bank that serves as a conduit for terrorist financing, as a foreign financial institution of primary money laundering concern. Along with its finding, FinCEN proposed imposing a special measure that would sever the bank from the U.S. financial system by prohibiting domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank.

UPDATED: Comments on the notice of proposed rulemaking will be accepted for 30 days (through March 1, 2024) following its January 31, 2024. publication at 89 FR 6074 in the Federal Register.

In a coordinated action, OFAC designated Hamad al-Moussawi, owner and chairman of Al-Huda Bank, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF. His identifying information can be found in this BankersOnline OFAC Update.

On January 29, the Office of the Comptroller of the Currency requested comment on a proposed rulemaking that would update the OCC’s rules under 12 C.F.R. § 5.33 for business combinations involving national banks and federal savings associations. The proposal also includes a policy statement to clarify the OCC’s review of applications under the Bank Merger Act (BMA).

The proposed rulemaking is part of the OCC’s effort to enhance transparency around its process of reviewing transactions under the BMA. It would also serve to provide additional guidance to stakeholders around the OCC’s review of applications. The proposed policy statement specifically would discuss:

• General principles for the OCC’s review of applications under the BMA, including indicators for applications likely consistent with approval and applications that raise supervisory or regulatory concerns
• The OCC’s consideration of the financial stability; managerial and financial resources and future prospects; and convenience and needs statutory factors under the BMA
• The OCC’s decision process for extending the public comment period or holding a public meeting

A comment period of 60 days will open when the notice of proposed rulemaking is published.

• Overview of the proposed rulemaking
• Related OCC Bulletin 2024-4
• UPDATE 2/13/2024: Published at 89 FR 10010 on 2/13/2024, with a comment period ending 4/15/2024.
• UPDATE 4/10/2024: The OCC has extended until June 15, 2024, the comment period on this proposal.

Ballard Spahr, LLC, reported in its January 25, 2024, Consumer Finance Monitor that the U.S. District Court for the District of Columbia has approved the Consumer Financial Protection Bureau’s $6.0 million settlement of class claims of alleged discrimination by the CFPB against 85 Black and Hispanic employees. The class consists of all “minority employees and women who work or worked as Consumer Response Specialists and have been subjected to and harmed by the Bureau’s agency-wide pattern or practice of discrimination and retaliation and discriminatory policies and practices,” according to the complaint.

The settlement fund will be distributed to the 85 class members. In addition to the $6.0 million settlement fund, the settlement provides for an award of $1.5 million in attorney’s fees for class counsel. The class action lawsuit was filed in 2018 against the CFPB’s former Acting Director Mick Mulvaney. Class representatives alleged that they were consistently paid less than their White male colleagues, unfairly denied promotions since 2011, and faced retaliation for making discrimination complaints.

FinCEN has published [89 FR 5995] in the January 30, 2024, Federal Register a Notice and Request for Comments on the proposed information collection associated with requests made to FinCEN, by certain persons, for beneficial ownership information, consistent with the requirements of the Beneficial Ownership Information Access and Safeguards final rule.

Included in the notice are FinCEN's estimates of the burden to state, local and tribal law enforcement agencies, and for financial institutions. An appendix to the Notice and Request for Comments summarizes the proposed data fields to be submitted by authorized recipients. Financial institutions would submit the reporting company name, TIN type, and TIN, and a check mark agreeing to a system-provided certification of compliance statement.

Comments will be accepted through April 1, 2024.

Note: This proposal does not in any way change the current rule in 31 C.F.R. § 1010.230 requiring financial institutions to obtain certification of beneficial ownership information from its customers. Amendments to that rule are not expected until at least the end of 2024.

The Federal Housing Finance Agency has reported that 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. 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.

For the nine census divisions, seasonally adjusted monthly price changes from September 2023 to October 2023 ranged from -0.3 percent in the New England division to +1.1 percent in the Middle Atlantic division. The 12-month changes ranged from +2.6 percent in the Mountain division to +9.9 percent in the Middle Atlantic division.

The Treasury Department has reported the OFAC and the United Kingdom have taken joint action against a network of individuals that targeted Iranian dissidents and opposition activists for assassination at the direction of the Iranian regime. The network is led by Iranian narcotics trafficker Naji Ibrahim Sharifi-Zindashti (Zindashti) and operates at the behest of Iran’s Ministry of Intelligence and Security (MOIS). Treasury reports that Zindashti’s network has carried out numerous acts of transnational repression including assassinations and kidnappings across multiple jurisdictions in an attempt to silence the Iranian regime’s perceived critics. The network has also plotted operations in the United States.

For identification information on the targeted individuals, see this BankersOnline's OFAC Update.

The FDIC has released a list of orders of 13 administrative enforcement actions taken against banks and individuals in December 2023, including 12 orders and one Decision and Order. There were four orders of termination of deposit insurance; three orders terminating consent orders; two consent orders; one order terminating supervisory prompt corrective action directive; one order of prohibition from further participation; one order to pay a civil money penalty (CMP); and one Decision and Order to Prohibit from Further Participation and Assessment of Civil Money Penalty.

The Treasury Department reported yesterday that OFAC has imposed sanctions on key officials of the forces of Ansarallah, commonly known as the Houthis, for their support of acts of terrorism targeting commercial shipping. Yesterday’s action targets four individuals who have supported the Houthis’ recent attacks against commercial vessels in the Red Sea and Gulf of Aden, including holding civilian crews hostage. Concurrent with OFAC’s designations, the United Kingdom also imposed sanctions on these key figures of Houthi forces.

For the names and identification information of the four individuals, see yesterday's BankersOnline OFAC Update.

The U.S. Department of Housing and Urban Development has announced that it has entered into a Voluntary Compliance Agreement (VCA) with HUD-funded Tennessee housing providers Alco Greenbriar Partners LP, Alco Properties, Inc., and Alco Management, Inc., requiring the respondents to pay $50,000 in compensation to aggrieved parties. The VCA resolves findings of noncompliance related to Section 504 of the Rehabilitation Act of 1973 and Title II of the Americans with Disabilities Act, as identified in a Letter of Findings of Noncompliance, as well as findings of noncompliance related to the Violence Against Women Act.

Federal Reserve Financial Services has announced its launch of FedDetect Anomaly Notification for FedACH Services, a new risk management service that helps financial institutions identify anomalous activity and supplement their fraud detection and alerting tools. This new addition to FedACH Risk Management Services allows financial institutions to receive notifications via secure email when anomalous FedACH activity is detected.

The new service can help financial institutions catch potential fraud attempts with account verification through micro-entry return and forward-entry monitoring. It can also help originating financial institutions adhere to Nacha rules around notifications of change and avoid future rule violations.

This morning, FinCEN published [89 FR 4820] a final rule to reflect inflation adjustments to its civil monetary penalties as mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. This rule adjusts certain maximum civil monetary penalties within the jurisdiction of FinCEN to the amounts required by that Act.

The rule amends 31 CFR 1010.821 and is effective today.

In anticipation of potential new NSF fees for transactions rejected "right at the swipe, tap, or click," the CFPB has announced a proposed new rule that would prevent non-sufficient funds fees on transactions that financial institutions decline in real time. These types of transactions include declined debit card purchases and ATM withdrawals, as well as some declined peer-to-peer payments. The proposed rule would cover banks, credit unions, and certain peer-to-peer payment companies.

Financial institutions almost never charge fees for transactions that are declined in real time at the swipe, tap, or click. For example, a $100 grocery purchase with a debit card may be declined in real time when the account only has $90. These types of transactions are not processed like Automated Clearing House transactions, and are generally not assessed fees. The CFPB said it is taking proactive steps to ensure that financial institutions do not impose these fees, which can occur for a host of reasons that are out of the consumer’s control. Specifically, as technology advances, financial institutions may be able to decline more transactions right at the swipe, tap, or click. These transactions include ATM, debit or prepaid card, online transfer, in-person bank teller, and certain person-to-person transactions. The CFPB’s proposed rule would consider fees for transactions declined in real time to be abusive and unlawful under the Consumer Financial Protection Act.

The proposal would add new Part 1042, "Nonsufficient Funds Fees," to Chapter X of Title 12 of the Code of Federal Regulations. Comments on the proposal will be accepted through March 25, 2024.

PUBLICATION UPDATE: Published at 89 FR 6031 in the January 31, 2024, Federal Register.

The Federal Reserve Board announced yesterday that the Bank Term Funding Program (BTFP) will cease making new loans as scheduled on March 11. The program will continue to make loans until that time and is available as an additional source of liquidity for eligible institutions. After March 11, banks and other depository institutions will continue to have ready access to the discount window to meet liquidity needs, said the Board.

As the program ends, the interest rate applicable to new BTFP loans has been adjusted such that the rate on new loans extended from now through program expiration will be no lower than the interest rate on reserve balances in effect on the day the loan is made. This rate adjustment ensures that the BTFP continues to support the goals of the program in the current interest rate environment. This change is effective immediately. All other terms of the program are unchanged.

• BTFP Term Sheet

On Tuesday, OFAC, in coordination with Australia and the United Kingdom, designated Alexander Ermakov, a cyber actor who played a pivotal in the 2022 ransomware attack against Medibank Private Limited, an Australian healthcare insurer.

Australia sanctioned Ermakov on Monday for utilizing ransomware to attack the Medibank network and for the exfiltration of sensitive data of 9.7 million users of Medibank services. Tuesday, the United States and the United Kingdom, in solidarity with Australia, took action against Ermakov because of the similar risk he presents to the United States and the UK.

For identification information on Ermakov, see BankersOnline's January 23, 2024, OFAC Update.

The Financial Stability Board, an international body that monitors and makes recommendations about the global financial system, has released its work program for 2024.

The program details the FSB’s planned work, sets out new initiatives, and provides an indicative timeline of main publications for 2024. Priority areas of work include:

• Supporting global cooperation on financial stability
• Completing resolution reforms
• Enhancing the resilience of non-bank financial intermediation (NBFI)
• Enhancing cross-border payments
• Harnessing the benefits of digital innovation while containing its risks
• Enhancing cyber and operational resilience
• Addressing financial risks from climate change

Ahead of the G20 Leaders Summit in November 2024, the FSB will publish its comprehensive Annual Report on its work to promote global financial stability.

The U.S. Department of Housing and Urban Development (HUD) announced yesterday it is charging an individual property manager and ownership entity in Livingston, Montana, for retaliation against a tenant for their exercise of fair housing rights, retaliatory behavior including coercion, intimidation, threats, or interference in violation of Section 818 of the Fair Housing Act.

HUD’s Charge of Discrimination alleges that the property manager and owner of a Livingston, Montana, ten-unit apartment complex retaliated against a tenant after the tenant informed the property manager that his unwanted conduct toward her daughter was inappropriate given the property manager’s position as landlord. After the tenant confronted the property manager, the property manager took several retaliatory actions, including sending multiple threats of eviction, revoking tenancy privileges, and sending harassing text messages, culminating in seeking to evict the complainant. The tenant felt compelled to leave the unit and seek out alternative, less desirable housing because of the retaliation.

The Federal Reserve Board has announced it will extend until May 12, 2024, the comment period on its debit card interchange fee proposal to allow the public more time to analyze the proposal and prepare their comments. Comments on the proposal were originally due by February 12, 2024. In addition, to assist the public in commenting on the proposed new methodology for determining the base component of the interchange fee cap, additional data concerning this aspect of the proposal are being made available on the Board’s website.

The Internal Revenue Service, Employee Benefits Security Administration, and Pension Benefit Guaranty Corporation have published [89 FR 4215] in today's Federal Register a Request for Information to develop a public record for purposes of the directive in section 319 of SECURE 2.0, requiring that these agencies review the existing reporting and disclosure requirements for certain retirement plans under the Employee Retirement Income Security Act of 1974, as amended (ERISA) and the Internal Revenue Code that are applicable to each agency.

Following this review, the agencies are to report to Congress, no later than December 29, 2025, concerning the effectiveness of the reporting and disclosure requirements. The report will include recommendations on consolidating, simplifying, standardizing, and improving such requirements with the dual goals of reducing compliance burdens and ensuring plan participants' and beneficiaries' timely receipt and better understanding of the information they need to monitor their plans, prepare for retirement, and get the benefits they have earned. The report will also consider how participants and beneficiaries are providing preferred contact information, the methods by which plan sponsors and plans are furnishing disclosures, and the rate at which participants and beneficiaries are receiving, accessing, understanding, and retaining disclosures.

Comments must be received by April 22, 2024.

The Department of the Treasury on Monday announced that OFAC had designated Iraqi airline Fly Baghdad and its CEO for providing assistance to the Islamic Revolutionary Guard Corps–Qods Force (IRGC-QF) and its proxy groups in Iraq, Syria, and Lebanon. OFAC also designated three leaders and supporters of one of the IRGC-QF’s main Iran-aligned militias in Iraq, Kata’ib Hizballah (KH), as well as a business that moves and launders funds for KH.

Treasury also announced that OFAC has imposed a fifth round of sanctions on Hamas since the October 7 terrorist attack on Israel. Monday’s action targets networks of Hamas-affiliated financial exchanges in Gaza, their owners, and associates, and particularly financial facilitators that have played key roles in funds transfers, including cryptocurrency transfers, from the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) to Hamas and Palestinian Islamic Jihad (PIJ) in Gaza. Concurrent with OFAC’s designations, the United Kingdom and Australia are also placing sanctions on key Hamas officials and facilitators.

For the names and identification information of individuals, entities, and aircraft targeted in these OFAC actions, see the January 22, 2024, BankersOnline OFAC Update.

The FDIC on Friday announced it has issued letters demanding five entities and certain associated parties cease and desist from making false and misleading statements about FDIC deposit insurance. The FDIC is demanding that Atmos Financial, PBC (Atmos); BybitcoinEx, Inc. (BybitcoinEx); ORGANO Payments, Inc. and its subsidiary OGPay (OGPay); Horizon Globex GmbH (Horizon), which operates Upstream Exchange; and Zil Money Corporation (Zil) take immediate corrective action to address these false or misleading statements.

Based upon evidence collected by the FDIC, the companies and certain associated parties made false representations by: (1) stating or suggesting that these entities are FDIC-insured or that certain uninsured financial products are insured by the FDIC; (2) misusing the FDIC name or logo; (3) misrepresenting the nature or extent of deposit insurance; and/or (4) failing to clearly identify the insured depository institutions with which they have a relationship for the placement of customer deposits and into which funds may be deposited. The FDIC said these material misrepresentations and omissions are false and misleading, and have the potential to harm consumers.

On December 20, 2023, the FDIC Board of Directors adopted a final rule to amend part 328 of its regulations, which updates the FDIC’s regulations regarding false advertising, misrepresentations of deposit insurance coverage, and misuse of the FDIC’s name and logo. For example, the final rule clarifies that FDIC–associated terms or images may not be used in marketing and advertising materials to inaccurately imply or represent that any uninsured financial product or non–bank entity is insured or guaranteed by the FDIC.

The Federal Reserve Board on Friday announced it has issued an enforcement action against Industrial and Commercial Bank of China Ltd. and its New York branch for their unauthorized use and disclosure of confidential supervisory information (CSI). The consent order requires the bank to pay a civil money penalty of $2,431,956 and to submit a written plan to enhance the effectiveness of the branch's internal controls and compliance functions regarding the identification, monitoring, and control of CSI.

Confidential supervisory information includes reports of bank examinations and other confidential communications by banking regulators. It is illegal to disclose confidential supervisory information without prior approval of the appropriate banking regulator.

The Board's action was taken in conjunction with an action by the New York Department of Financial Services, the state supervisor of the bank's New York branch. The penalties announced by the Board and the Department of Financial Services total approximately $32.4 million.

OFAC has released the first video in its "OFAC Basics" video series. The OFAC Basics: Sanctions List Search YouTube video provides viewers with a brief tutorial on how to use OFAC’s Sanctions List Search Tool and recommended steps for assessing a potential match to one of OFAC’s published sanctions lists.

The “OFAC Basics” series serves as a companion series to the “Introduction to OFAC” series, also available on YouTube.

The CFPB has announced it has joined seven state attorneys general in suing Strategic Financial Solutions (SFS) and its web of shell companies for running an illegal debt-relief enterprise. The CFPB and state attorneys general also sued the chief architects of the illegal enterprise, Ryan Sasson and Jason Blust. The CFPB and attorneys general allege the enterprise has collected hundreds of millions of dollars in exorbitant, illegal fees from vulnerable consumers. The CFPB and attorneys general filed the suit under seal on January 10, 2024. They are requesting the court to order a stop to the enterprise’s illegal actions, order redress for consumers, and impose a civil money penalty. The seven states joining with the CFPB are Colorado, Delaware, Illinois, Minnesota, New York, North Carolina, and Wisconsin.

The Bureau's announcement says Strategic Financial Solutions markets itself as providing debt relief services. It has offices in New York City and Buffalo, New York. Ryan Sasson is the chief executive officer of SFS. SFS sits at the top of a web of shell companies and façade law firms, which are controlled by Sasson and fellow scheme architect Jason Blust. SFS runs an alleged scheme, involving dozens of entities, to dupe consumers and regulators. The company uses third parties to target financially vulnerable consumers with advertisements. The advertisements lead consumers to believe they may qualify for loans to help pay down debts. SFS employees then discuss these loans with consumers over the phone. Though SFS tells most, if not all, consumers that they do not qualify for the advertised loans, SFS encourages consumers to enroll in its debt-relief services. SFS promises that its network of law firms and lawyers will negotiate lower debt amounts.

In reality, say the CFPB and attorneys general, SFS provides little, if any, debt-relief service. SFS requires customers to make immediate payments into an escrow account. Long before it settles any debts, however, SFS collects the fees from the escrow account. While the illegal fees and false claims of legal assistance leave consumers worse off, Sasson and Blust pad their pockets through their web of shell companies that siphon the fees from the escrow accounts.

The CFPB and seven state attorneys general allege the actions of SFS violate the Telemarketing Sales Rule. The lawsuit also alleges violations of New York and Wisconsin state laws. Specifically, the complaint alleges that SFS harms consumers by charging illegal advance fees before any of a consumer's debts have been settled, and by falsely claiming that contracted law firms will negotiate lower payoff amounts.

• Complaint

Yesterday, the Federal Reserve Board reported it has issued a consent prohibition order against Andrew M. Ellison, formerly the Graves County market president at Community Financial Services Bank, Benton, Kentucky, after a finding that Ellison had, in or around May 2020 and September 2021, applied for and obtained an SBA economic injury disaster loan (EIDL) of $500,000 for a business in which he was the sole proprietor and used the funds for unauthorized expenses under the terms of the EIDL program. According to the order, Ellison repaid the loan to the SBA in full, with interest.

On Thursday, the Treasury Department reported that OFAC took its first oil price cap enforcement action of 2024, targeting a shipping company linked to a price cap violation.

United Arab Emirates-based shipping company Hennesea Holdings Limited (Hennesea) is the ultimate owner of 18 vessels, including the HS Atlantica, which OFAC previously identified as having engaged in the transport of crude oil of Russian Federation origin priced above the $60 per barrel price cap while using a covered U.S.-based provider after the price cap policy came into effect. On December 1, 2023, OFAC identified the HS Atlantica as property in which Hennesea’s subsidiary, U.S.-designated HS Atlantica Limited, has an interest. OFAC additionally re-identified the HS Atlantica as property in which Hennesea has an interest. OFAC also designated 17 other vessels in which Hennesea has an interest.

For identification information on Hennesea and the designated vessels, see this January 18, 2024, BankersOnline OFAC Update.

The Department of Defense has posted a notice on its Military Lending Act (MLA) website indicating that the MLA system is scheduled for maintenance from 6 pm PST Saturday, January 27 to 3 am PST on Sunday, January 28, 2023.

On Thursday, January 18, 2024, the National Credit Union Administration Board held its first open meeting of the year and unanimously approved the agency’s 2024 Annual Performance Plan and received a briefing on the Diversity, Equity, Inclusion, and Accessibility Strategic Plan, 2024–2026. The performance plan, which provides specific direction and guidance toward achieving the mission, was approved on a 3-0 vote.

“As I have often said, if you don’t measure it, you can’t manage it. That’s what makes this plan so important,” Chairman Todd M. Harper said. “The NCUA in 2024 will continue to address consumer financial protection on equal footing with safety and soundness, including by increasing the number of fair lending exams. Also, the NCUA will continue to focus on the rising and continuing challenges within the credit union system. Those risks include liquidity, interest rate, credit, and compliance risk, as well as the omnipresent cybersecurity risk.”

The FDIC, in FIL-2-2004, has announced steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Rhode Island affected by severe storms, flooding, and tornadoes that caused significant property damage in areas of the state September 10–13, 2023.

The Federal Trade Commission reported yesterday that is has issued an order postponing the effective date of the Combatting Auto Retail Scams (CARS) Rule while a legal challenge against the rule is pending.

Two industry groups have petitioned to overturn the rule, asserting that the rule should be stayed while the court challenge is pending. In its order, the Commission notes that these assertions rest on mischaracterizations of what the rule requires. Specifically, the Commission’s order points to the inaccurate argument that the rule will increase compliance costs for car dealers, which is not true for dealers who currently follow the law.

The rule was set to go into effect July 30, 2024.

• Publication info: Published at 89 FR 13267 in the 2/22/2024 Federal Register

Yesterday, Acting Comptroller of the Currency Michael J. Hsu issued remarks on bank liquidity risk at Columbia University Law School in New York. In his remarks, Mr. Hsu discussed the characteristics of recent bank runs and lessons learned from recent bank failures. He also discussed a targeted regulatory approach to better classify higher risk deposits, cover acute short-term outflows, and mitigate contagion risk.

He also highlighted how the adoption of faster payments and tokenization may impact liquidity risk management in the future.

The FDIC and Federal Reserve Board have jointly reported that they are extending the resolution plan submission deadline for certain large financial institutions. These companies will be required to submit their resolution plans by March 31, 2025, instead of July 1, 2024.

In August of last year, the agencies invited public comment on proposed guidance for how the resolution plans of certain large financial institutions could address key challenges in resolution. The agencies indicated that they were considering providing an extension of the next resolution plan submission date to provide reasonable time for the proposed guidance, once finalized, to be reflected in the plan submissions. The public comment period closed November 30, 2023, and the agencies continue to develop the final guidance.

The OCC has issued Bulletin 2024-3 reminding OCC-supervised financial institutions they should be preparing for a May 28, 2024, shortening of the standard securities settlement cycle for most U.S. securities transactions. The Securities and Exchange Commission (SEC) has adopted final rules that shorten the standard settlement cycle for most broker-dealer transactions from the second business day after the trade date (T+2) to the first business day after the trade date (T+1), beginning May 28.

The change will affect banks’ securities activities, including activities related to their investment and trading portfolios and securities settlement and servicing provided to banks’ custody and fiduciary accounts. Banks that offer nondeposit investment products through a third-party broker-dealer should assess the broker-dealer’s preparedness for the new settlement time frames.

The Bulletin includes detailed guidance on how banks should be preparing for the change.

Yesterday, the Treasury Department reported that OFAC had sanctioned former Guatemalan Minister of Energy and Mining Alberto Pimentel Mata for his role in exploiting the Guatemalan mining sector through widespread bribery schemes, including schemes related to government contracts and mining licenses. Pimentel was designated under the authority of Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world. Yesterday’s action follows the Department of State’s October 2023 announcement of visa restriction on Pimentel and other individuals for their involvement in significant corruption.

As a result of yesterday’s action, all property and interests in property of Pimentel that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or otherwise exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.

For identification information on Pimentel, see the January 17, 2024, BankersOnline OFAC Update.

The Federal Reserve Bank of Philadelphia has compiled the January 2024 edition of the Beige Book, a publication about current economic conditions across the 12 Federal Reserve Districts. It characterizes regional economic conditions and prospects based on a variety of mostly qualitative information, gathered directly from each District's sources. Reports are published eight times per year.

Outreach for the Beige Book is one of many ways the Federal Reserve System engages with businesses and other organizations about economic developments in their communities. Because this information is collected from a wide range of contacts through a variety of formal and informal methods, the Beige Book can complement other forms of regional information gathering. The Beige Book is not a commentary on the views of Federal Reserve officials.

The Office of the Comptroller of the Currency (OCC) yesterday released enforcement actions taken against national banks and federal savings associations (banks), and individuals currently and formerly affiliated with banks the OCC supervises.

• The previously announced $15 million civil money penalty against U.S. Bank, N.A., for violations of law relating to the bank’s administration of a prepaid card program to distribute public unemployment insurance benefit payments
• Notices of Charges seeking Cease and Desist Orders against three subsidiary banks of Industry Bancshares, Inc., Industry, Texas: The First National Bank of Shiner, Shiner, Texas; Bank of Brenham, N.A., Brenham, Texas; and The First National Bank of Bellville, Bellville, Texas. The Notices of Charges allege, among other things, that each bank engaged in unsafe or unsound practices relating to an investment strategy concentrated in long-term securities that exposed each bank to excessive interest rate risk without sufficient sources of contingency funding and contingency capital, and that each bank failed to timely mitigate such risk.
• A Formal Agreement against EH National Bank, Beverly Hills, California, for unsafe or unsound practices, including those relating to inadequate capital and strategic planning, inadequate interest rate risk management, and failure to maintain adequate levels of liquidity and satisfactory liquidity management practices.
• A Formal Agreement against Jackson Federal Savings and Loan Association, Jackson Minnesota, for unsafe or unsound practices, including those relating to inadequate strategic planning, dereliction of the obligation to maintain adequate levels of liquidity and satisfactory liquidity management practices, and lack of appropriate succession planning.
• A Formal Agreement against North Side Federal Savings and Loan Association of Chicago, Chicago, Illinois, for unsafe or unsound practices, including those relating to Board and management oversight, earnings, information technology management, sensitivity to market risk, consumer compliance, and violation of law, rule or regulation, including those relating to the Truth in Lending Act and the Flood Disaster Protection Act.

The FDIC has issued FIL-1-2024 with materials pertaining to the Call Report for the December 31, 2023, report data and guidance on certain reporting issues.

Supplemental instructions

The January 2024 update of the FDIC's Consumer Compliance Examination Manual affects two chapters of the Manual:

• Fair Lending Scope and Conclusions Memo (IV-3.1) was updated with technical and formatting changes related to the FDIC's shift from SOURCE to FOCUS.
• Expedited Funds Availability Act (VI-1.1) was updated with technical changes related to regulatory dollar-amount thresholds.

Editorial note: The $5,000 amount in the bullet list in the left column of page VI-1.6 was missed in the update. It should be $5,525. The update itself should have been made about four years ago when Regulation CC was updated. There is another threshold inflation adjustment that should be announced this year with an effective date of July 1, 2025.

The IRS has announced that businesses do not have to report the receipt of digital assets the same way as they must report the receipt of cash until Treasury and IRS issue regulations.

The Infrastructure Investment and Jobs Act revised the rules that require taxpayers that are engaged in a trade or business to report receiving cash of more than $10,000 by considering digital assets to be cash. Announcement 2024-4 provides transitional guidance as Treasury and the IRS implement the new provisions. This particular provision requires Treasury and the IRS to issue regulations before it goes into effect.

Businesses currently report their receipt of cash (and certain other) payments over $10,000 on Form 8300.

The CFPB on Jan. 17, 2024, announced a proposed rule to limit overdraft fees charged by insured financial institutions with more than $10 billion in assets. The proposal would amend Regulation Z to eliminate the exclusion of overdraft fees greater than required to recoup costs at an established benchmark or at a cost the banks calculate, if they show their cost data, from the definition of "finance charge."

Very large financial institutions would be required to treat overdraft loans like credit cards and other loans and to provide clear disclosures and other protections, using a credit account separate from the consumer's deposit account. It would also amend Regulation E to prohibit very large financial institutions from conditioning an extension of overdraft credit to a consumer on the consumer's repayment by preauthorized electronic fund transfers.

Comments on the CFPB’s proposal will be accepted through April 1, 2024. The CFPB proposes that a final rule relating to the proposal would have an October 1 effective date at least 6 months after the final rule is published in the Federal Register.

• Proposed rule
• Unofficial redline of proposed amendments to Regulations E and Z
• Fact Sheet on the proposed rule
• CFPB Director Rohit Chopra’s prepared remarks on the press call for this announcement
• Publication and comment period update: Published at 89 FR 13852 in the Feb. 23, 2024, Federal Register. Comments are due by Apr. 1, 2024.

FinCEN has issued Paycheck Protection Program FAQs to re-publish a series of FAQs issued by the U.S. Small Business Administration.

The Federal Housing Finance Agency has published [89 FR 2225] a Notice in the January 12, 2024, Federal Register that it has adjusted the cap on average total assets that is used in determining whether a Federal Home Loan Bank (Bank) member qualifies as a “community financial institution” (CFI) to $1,461,000,000, based on the annual percentage increase in the Consumer Price Index for all urban consumers (CPI–U), as published by the Department of Labor (DOL). These changes are effective as of January 1, 2024.

The Federal Home Loan Bank Act (Bank Act) confers upon insured depository institutions that meet the statutory definition of a CFI certain advantages over non-CFI insured depository institutions in qualifying for Bank membership, and in the purposes for which they may receive long-term advances and the collateral they may pledge to secure advances.

FinCEN has updated its FAQs on Beneficial Ownership Information Reporting. New or updated information dated January 12, 2024, can be found in these sections:

• C (Reporting Company)
• D (Beneficial Owner)
• E (Company Applicant)
• F (Reporting Requirements)
• L (Reporting Company Exemptions)
• M (FinCEN Identifier)

On Friday, the Treasury Department reported that OFAC designated two companies in Hong Kong and the United Arab Emirates for shipping Iranian commodities on behalf of the network of Iran-based, Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF)-backed Houthi financial facilitator Sa’id al-Jamal. OFAC also identified four vessels as blocked property in which these companies have an interest. The revenue from the commodity sales supports the Houthis and their continued attacks against international shipping in the Red Sea and the Gulf of Aden.

For the names and identification information of the designated entities and vessels, see the January 12, 2024, BankersOnline OFAC Update.

The FFIEC yesterday announced that its member agencies are making changes to the Uniform Bank Performance Report’s Balance Sheet dollar page on or shortly after January 15, 2024. These changes, being led by the Task Force on Surveillance Systems, are part of a previously announced ongoing multiyear review of Uniform Bank Performance Report content.

More information on the changes to the UBPR Balance Sheet dollar page is available HERE.

On Thursday, the CFPB announced guidance to consumer reporting companies to address inaccurate background check reports, as well as “sloppy credit file sharing practices.” The two advisory opinions seek to ensure that the consumer reporting system produces accurate and reliable information and does not keep people from accessing their personal data.

• An advisory opinion on Fair Credit Reporting; Background Screening highlights that those reports must be complete, accurate, and free of information that is duplicative, outdated, expunged, sealed, or otherwise legally restricted from public access.
• An advisory opinion on Fair Credit Reporting; File Disclosure highlights that people are entitled to receive all information contained in their consumer file at the time they request it, along with the source or sources of the information contained within, including both the original and any intermediary or vendor source.

The advisory opinions will become effective on publication in the Federal Register.

Publication update: The advisory opinions were published at 89 FR 4171 (Background Screening) and 89 FR 4167 (File Disclosure) in the January 23, 2023, Federal Register.

The Federal Reserve Board has published its civil money penalty inflation adjustments for 2024 in the January 12, 2024, Federal Register.

Yesterday, the Federal Reserve Board announced four consent enforcement orders:

• John Freeze, former chief financial officer for Bank of Jackson Hole, Jackson, Wyoming, received an order of prohibition for misappropriation of documents, including confidential supervisory information
• Three former officers of Farmers and Merchants Savings Bank, Manchester, Iowa, received orders to cease and desist and to pay civil money penalties of $50,000 each, for misappropriation of confidential bank records:
  • Randy Johnson, former executive vice president
  • Chad Kellogg, former senior vice president for commercial lending
  • Jeffrey Hines, former senior vice president for commercial banking

The FDIC has updated its Risk Management Manual of Examination Policies (RMS Manual). The RMS Manual provides FDIC examiners information relating to examination activities and supervisory practices and promotes consistency in examination activities, which center on evaluating an institution’s capital, assets, management, earnings, liquidity, sensitivity to market risk, and adherence to laws and regulations.

The January 2024 update reorganized section 3.1 (Asset Quality) to separate FDIC-only explanatory instructions from the specific Uniform Financial Institutions Rating System (UFIRS) Asset Quality component rating language.