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10/01/2020

FinCEN seeks comments on CDD and EDD requirements

FinCEN published [85 FR 61104] in the September 29 Federal Register a 60-day notice to renew the Office of Management and Budget (OMB) control number assigned to the regulatory requirements to conduct due diligence and enhanced due diligence over foreign correspondent accounts and private banking accounts.

In the notice, FinCEN proposes for review and comment a methodology to expand the scope of future estimates of cost and time for purposes of the Paperwork Reduction Act to be more granular in the estimates of resources expended to comply with these regulatory requirements. The notice requests feedback from the industry on or before November 30, 2020.

10/01/2020

Fed extending capital resilience measures

The Federal Reserve Board announced yesterday it will extend for an additional quarter several measures to ensure that large banks maintain a high level of capital resilience in this period of continued economic uncertainty during the pandemic. For the fourth quarter of this year, large banks—those with more than $100 billion in total assets—will be prohibited from making share repurchases. Additionally, dividend payments will be capped and tied to a formula based on recent income.

10/01/2020

NCUA Issues one prohibition notice

The NCUA issued one prohibition notice in September to a former employee of Members 1st Federal Credit Union in Mechanicsburg, Pennsylvania, who had been sentenced on the charge of theft in connection with her employment. She is prohibited from participating in the affairs of any federally insured financial institution.

10/01/2020

OCC updates TILA exam procedures booklet

The OCC has issued Bulletin 2020-84 announcing its issuance of a revised "Truth in Lending Act" booklet of the Comptroller's Handbook to reflect revised interagency examination procedures adopted by the Task Force on Consumer Compliance of the Federal Financial Institutions Examination Council (FFIEC). The Bulletin rescinds OCC Bulletin 2018-31, “Truth in Lending Act: Revised Comptroller's Handbook Booklet and Rescissions.”

10/01/2020

Morgan Stanley pays $5M for SHO violations

The SEC announced yesterday it had settled charges against Morgan Stanley & Co. LLC for violations of Regulation SHO, the regulatory framework governing short sales. According to the SEC’s order, the structure of Morgan Stanley’s prime brokerage swaps business resulted in violations of teh regulation. As set forth in the SEC Administrative Order, Morgan Stanley hedged synthetic exposure to swaps by purchasing or selling the securities referenced in the swaps, and it separated its hedges into two aggregation units – one holding only long positions, and the other holding only short positions. According to the order, Morgan Stanley was able to sell its hedges on the long swaps and mark them as “long” sales without concern for Reg SHO’s short sale requirements.

10/01/2020

New and amended OFAC sanctions regulations

OFAC has posted a notice of recent actions announcing it is adding new Part 520 to 31 CFR Chapter V regulations [85 FR 61816] to implement Executive Order 13928 of June 11, 2020 (“Blocking Property of Certain Persons Associated With the International Criminal Court”).

In addition, OFAC is amending the Weapons of Mass Destruction Proliferators Sanctions Regulations and Iranian Transactions and Sanctions Regulations at 31 CFR Parts 544 and 560 [85 FR 61823].

The new regulation and the amendments to Parts 544 and 560 are effective upon publication today in the Federal Register,

09/30/2020

Supplemental September 2020 SLOOS

The Federal Reserve has released the results of a supplementary Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) that was conducted to understand the experiences of domestically chartered banks with the Main Street Lending Program (MSLP). The survey consisted of a set of questions that focused on four areas:

  • commercial and industrial (C&I) loan inquiries and banks’ participation in the MSLP since mid-June, when lender registration started
  • banks’ outlook regarding their participation in the program
  • factors that may have shaped banks’ willingness to participate
  • characteristics of borrowers inquiring and receiving MSLP loans

09/30/2020

J. P. Morgan Securities sub admits fraudulent trading

The Securities and Exchange Commission has announced charges against J.P. Morgan Securities LLC, a broker-dealer subsidiary of JPMorgan Chase & Co., for fraudulently engaging in manipulative trading of U.S. Treasury securities. J.P. Morgan Securities admitted the findings in the SEC's order, and agreed to pay disgorgement of $10 million and a civil penalty of $25 million to settle the action.

The Justice Department and the Commodity Futures Trading Commission announced parallel actions against JPMorgan Chase & Co. and certain of its affiliates for engaging in manipulative trading in the precious metals and U.S. Treasuries futures and cash markets. A total of more than $920 million, including amounts for criminal restitution, forfeiture, disgorgement, penalties, and fines, is to be paid across the three actions. The DOJ entered into a three-year deferred prosecution agreement with JPMorgan Chase & Co., whereas the CFTC announced settlements with J.P. Morgan Chase & Co., JPMorgan Chase Bank, N.A., and JPMorgan Securities.

09/30/2020

Credit ratings agency pays $2M+ for lack of controls

The Securities and Exchange Commission announced yesterday that the credit ratings agency Kroll Bond Rating Agency Inc. (KBRA) has agreed to pay more than $2 million to settle separate charges relating to the rating of commercial mortgage-backed securities (CMBS) and of collateralized loan obligation combination notes (CLO Combo Notes). According to the order pertaining to CMBS ratings, KBRA permitted analysts to make adjustments that had material effects on the final ratings but did not require any analytical method for determining when and how those adjustments should be made. Further, the order finds that there was no requirement for recording the rationale for those adjustments. The order finds that KBRA’s internal control structure failed to prevent or detect the ambiguity in KBRA’s record of its methodology for determining the CMBS ratings, such as a comparison of the methodology to the analysis used for specific transactions.

The order relating to CLO Combo Notes finds that KBRA’s policies and procedures were not reasonably designed to ensure that it rated CLO Combo Notes in accordance with the terms of those securities. The CLO Combo Notes included a defined “Rated Balance” amount and also directed that noteholders were entitled to receive cash flows from the underlying components of the CLO Combo Note after the Rated Balance was reduced to zero. KBRA’s ratings of CLO Combo Notes were limited to repayment of the Rated Balance amount of each CLO Combo Note and did not reflect the risk associated with any cash flows payable to holders of the CLO Combo Note over and above the Rated Balance, even though such amounts could materialize, and would be payable to the holders of the CLO Combo Note.

09/30/2020

Operation Corrupt Collector announced

The Federal Trade Commission, along with more than 50 federal and state law enforcement partners, has announced a nationwide law enforcement and outreach initiative to protect consumers from phantom debt collection and abusive and threatening debt collection practices. This crackdown encompasses more than 50 enforcement actions against debt collectors engaged in these illegal practices brought by the FTC, three federal partners, and partners from 16 states. The initiative, called Operation Corrupt Collector, includes five FTC law enforcement actions, including two newly announced cases and settlements in three prior actions. The two new FTC cases allege that companies were trying to collect debts they cannot legally collect or that a consumer does not owe—a practice known as phantom debt collection.

10/01/2020

Fed proposes update to capital planning requirements

The Federal Reserve Board has invited public comment on a proposal that would update the Board's capital planning and stress testing requirements in Regulations Y, LL, and YY to be consistent with other Board rules that were recently modified.

The Board has finalized a framework that sorts large banks into different categories based on their risks, with rules that are tailored to the risks of each category. The current proposal updates the Board's capital planning requirements—which help ensure that firms plan for and determine their capital needs under a range of different scenarios—to reflect that new framework. In particular, firms in the lowest risk category are on a two-year stress test cycle and not subject to company-run stress test requirements and the proposal reflects those changes. The proposal also would seek comment on the Board's existing capital planning guidance applicable to all firms.

The proposed rule, which would not change firms' capital requirements, has a comment period that will end November 20, 2020.

PUBLICATION UPDATE: Published at 85 FR 63222 in the October 7, 2020, Federal Register

09/30/2020

Agencies finalize CECL phase-in rule

The Federal Reserve, OCC, and FDIC have published [85 FR 61577] a final rule that delays the estimated impact on regulatory capital stemming from the implementation of Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses, Topic 326, Measurement of Credit Losses on Financial Instruments (CECL). This final rule is consistent with the interim final rule published in the Federal Register on March 31, 2020, with certain clarifications and minor adjustments in response to public comments related to the mechanics of the transition and the eligibility criteria for applying the transition.

10/01/2020

Treasury continues targeting facilitators of Assad regime

On Wednesday, Treasury announced that it took action against key enablers of the Assad regime that are associated with the Fourth Division of the Syrian Arab Army, the Syrian General Intelligence Directorate, and the Central Bank of Syria. Specifically, Treasury's Office of Foreign Assets Control (OFAC) added three individuals and 13 entities to the Specially Designated Nationals and Blocked Persons List, pursuant to Syria sanctions authorities.

At the same time, the State Department acted against three Syrian persons pursuant to Section 2 of Executive Order (E.O.) 13894, “Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Syria.”

For identity information on the six individuals and 13 entities added to the SDN List, and another individual added under the Cuba sanctions, plus information on a new Syria General License, see BankersOnline's OFAC Update.

09/30/2020

Blanco encourages specificity in COVID-19-related SARs

In remarks delivered yesterday during a virtual AML conference, FinCEN Director Kenneth Blanco encouraged attendees to read FinCEN's advisories related to COVID-10 medical fraud, imposter scams, and cyber-related crime. He said that the most common trend FinCEN is seeing in COVID-19 related SARs involves fraudsters targeting multiple COVID-19 related government stimulus programs, employing money mules and cyber techniques. The largest share of COVID-19 SARs addresses fraud against federal or state COVID-19 stimulus programs. Stimulus programs intended to benefit both individual taxpayers and small businesses have been targeted for fraud, with multiple Automated Clearinghouse (ACH) payments disbursed to a single account representing the most common financial pattern reported in SARs.

Blanco recommended that SARs be specific in describing the activity being reported, to make them as useful as possible for law enforcement. Detailed information can help get SARs routed to the correct investigative team. For example, reports of medical scams like fake test kits, non-delivery of goods, and price gouging go to a specialized team of attorneys and investigators across the government. Specificity in the SAR about the fraudulent or suspicious medical aspects, both in the narrative and by checking box 34z, will get a SAR to this team more quickly.

For consumer related fraud, especially targeting the elderly or other vulnerable individuals with a COVID-19 related scam, such as a fake COVID relief charity or bogus person-in-need scam, specificity in SARs is also encouraged. Using the SAR check box 38d for elder financial exploitation will expedite getting the SAR to the right team.

Regarding SARs reporting suspected fraud in government programs, Blanco said vague references to “stimulus” or “CARES Act” or “benefit” in SARs hinder FinCEN's ability to get the information into the hands of the right team. The more specific filers are in their SAR narratives, the faster their reports will get to the right investigators. For example:

  • If the suspicious activity is related to an ACH payment from a state unemployment insurance program, filers should clearly mention COVID19 UNEMPLOYMENT INSURANCE FRAUD in field 2 of the SAR (Filing Institution Note to FinCEN) as well as in the narrative. This will make it much easier for the SAR to get to law enforcement teams working with the states on unemployment fraud.
  • If the activity involves a counterfeit check or ACH payment for the EIDL program, filers should clearly mention COVID19 EIDL FUNDS FRAUD in field 2 of the SAR and state this in the narrative, because there are specific prosecutorial teams working on EIDL fraud.

Blanco said that, from February 1 to September 12, banks and credit unions filed over 64,000, or about 71 percent, of all COVID-19-related SARs.

09/29/2020

FinCEN Aviso FIN-2020-A005

FinCEN has posted a Spanish language version of its July 30, 2020, FIN-2020-A005 Advisory on Cybercrime and Cyber-Enabled Crime Exploiting the COVID-19 Pandemic.

09/30/2020

Regulators issue two final temporary rules

The Federal Reserve, OCC, and FDIC have announced they have finalized two rules, which are either identical or substantially similar to interim final rules currently in effect and issued earlier this year.

The final rule temporarily deferring appraisal and evaluation requirements is substantially similar to the interim final rule issued in April. It will allow individuals and businesses to more quickly access real estate equity to help address needs for liquidity as a result of the coronavirus. In response to comments, the final rule clarifies which loans are subject to the deferral. The final rule is effective upon publication in the Federal Register and will expire on December 31, 2020.
PUBLICATION UPDATE: Published October 16, 2020, at 85 FR 65666.

The final rule pertaining to Federal Reserve liquidity facilities adopts without change three interim final rules issued in March, April, and May, 2020. Earlier this year, the Federal Reserve launched several lending facilities to support the economy in light of the coronavirus response. The final rule neutralizes the regulatory capital and liquidity coverage ratio effects of participating in the Money Market Mutual Fund Liquidity Facility and Paycheck Protection Program Liquidity Facility because there is no credit or market risk in association with exposures pledged to these facilities. It will be effective 60 days after publication in the Federal Register.
PUBLICATION AND EFFECTIVE DATE UPDATE: Published on 10/28/2020, with effective date of 12/28/2020.

09/29/2020

HUD Section 3 Rule finalized after 26 years

HUD has announced a final rule [85 FR 61524] implementing the “Section 3” statute. Section 3 of the Housing and Urban Development Act of 1968 (as amended) requires that recipients of certain HUD funds make economic opportunities available for low- and very low-income individuals, especially recipients of government assistance for housing, living in the areas where HUD funds are spent. An “interim rule” has been in effect since 1994. The final rule is designed to improve a focus on economic opportunity outcomes while simultaneously reducing the regulatory burden on those entities that receive those funds.

The rule will become effective November 30, 2020. Public housing financial assistance recipients must implement their Section 3 activities pursuant to these regulations and comply with the reporting requirements starting with the recipient's first full fiscal year after July 1, 2021. These regulations are applicable to Section 3 projects for which assistance or funds are committed on or after July 1, 2021. Published with the rule were Section 3 benchmarks [85 FR 60907].

09/29/2020

Phony SBA lender settles FTC charges

The Federal Trade Commission has announced that a Rhode Island company and its owner will be permanently prohibited from misrepresenting they are affiliated with the SBA as part of a settlement resolving Commission charges they misled consumers in the early days of the coronavirus pandemic.

Ponte Investments, LLC, and its owner John C. Ponte were charged by the FTC in April with misleading small businesses to think they had an affiliation with the SBA and could offer companies access to the coronavirus relief programs administered by the agency.

The settlement prohibits defendants from misrepresenting that they are authorized to accept or process applications for SBA loans and misrepresenting that they are the SBA or are otherwise affiliated or associated with the SBA or the U.S. Government. The defendants will also no longer be able to use the trade name or domain name "SBA Loan Program."

09/29/2020

Fed releases family finance data

The September 2020 Federal Reserve Bulletin includes the results of the Federal Reserve Board's triennial Survey of Consumer Finances for 2019, which provides insights into the evolution of family income and net worth since the previous time the survey was conducted in 2016. The survey shows that over the 2016–19 period, the median value of real (inflation-adjusted) family income before taxes rose 5 percent, and mean income decreased 3 percent. Real median net worth increased 18 percent, and mean net worth rose 2 percent. This survey marks the first in the aftermath of the Great Recession in which between-survey changes in the median outpaced changes in the mean for either measure, indicating that families in large parts of both distributions enjoyed gains in economic well-being. And, while the data also reveal some disparities in the evolution of income and net worth since 2016 across families differentiated by economic characteristics, such as income or wealth, and demographic characteristics, such as age, education, or race and ethnicity, many groups with historically lower income and net worth saw relatively large gains.

The findings in the article do not reflect the effects of the COVID-19 pandemic on family finances, as almost all of the data in the 2019 survey were collected before the onset of the pandemic.

09/28/2020

Bank applications decline

The Federal Reserve has released its Semiannual Report on Banking Applications Activity. During the first half of 2020, 396 proposals were approved, 21 were withdrawn, 6 were mooted and 3 were returned. Total dispositions for the first half of 2020 decreased significantly from 499 in the first half of 2019. The majority of proposals were branch applications, merger and acquisition proposals, and Change in Bank Control Act notices.

09/28/2020

$165M to clean-up lead-based paint

HUD has announced the award of nearly $165 million to 44 state and local government agencies in 23 states to protect children and families from lead-based paint and home health hazards. The grants are available through HUD’s Lead Based Paint Hazard Reduction Grant Program (LBPHR) to identify and clean up dangerous lead in low-income families’ homes.

09/28/2020

FRB adjusts ACH implementation dates

The Federal Reserve Board has announced that it is amending the implementation date for modifications to the Federal Reserve Systems' payment services to facilitate adoption of a later same-day ACH processing and settlement window and for corresponding changes to the Federal Reserve Policy on Payment System Risk. The Board previously announced these modifications with an implementation date of March 19, 2021. The implementation date is being amended to March 8, 2021, with the exception of two changes to the PSR policy regarding posting times for settlement of same-day ACH transactions that will still be implemented on March 19, 2021.

The Fed's schedule changes will allow the Fed to test and implement changes to the National Settlement Service and Fedwire Funds Service in advance of the March 19, 2021, implementation of coordinated rules changes by Nacha.

09/28/2020

OFAC issues General License and FAQs

09/28/2020

FSOC statement on secondary mortgage market review

The Treasury Department announced on Friday that the Financial Stability Oversight Council had voted unanimously to approve a statement summarizing its review of the secondary mortgage market. The Council’s review focused in particular on the activities of Fannie Mae and Freddie Mac. In conducting the review, the Council applied the framework for an activities-based approach described in the interpretive guidance on nonbank financial company determinations issued by the Council in December 2019.

The Council’s review noted the central role the Enterprises continue to play in the national housing finance markets, and found any distress at the Enterprises that affected their secondary mortgage market activities, including their ability to perform their guarantee and other obligations on their mortgage-backed securities (MBS) and other liabilities, could pose a risk to financial stability, if risks are not properly mitigated. The Council’s review also considered whether the regulatory framework of the Federal Housing Finance Agency (FHFA) would adequately mitigate this potential risk posed by the Enterprises.

The council encouraged—

  • the FHFA and other regulatory agencies to coordinate and take other appropriate action to avoid market distortions that could increase risks to financial stability
  • the FHFA to consider he relative merits of alternative approaches for more dynamically calibrating the capital buffers
  • the FHFA to ensure high-quality capital by implementing regulatory capital definitions that are similar to those in the U.S. banking framework and to require the Enterprises to be sufficiently capitalized to remain viable as going concerns during and after a severe economic downturn

09/28/2020

FDIC proposes to consolidate PCA regs

The FDIC has published a proposed rule [85 FR 60738] that would rescind and remove the "Prompt Corrective Action" regulations that were transferred to the FDIC from the Office of Thrift Supervision in 2011 as part of the implementation of the Dodd-Frank Act, and amend certain sections of existing FDIC regulations governing the issuance and review of orders pursuant to the prompt corrective action provisions of the Federal Deposit Insurance Act to make it clear that such rules apply to all insured depository institutions for which the FDIC is the appropriate Federal banking agency.

Comments on the proposal are due by October 28, 2020.

09/28/2020

FDIC August enforcement actions

The FDIC has released a list of 13 orders of administrative enforcement actions taken against banks and individuals in August 2020. The administrative enforcement actions in those orders consisted of one cease and desist order, four consent orders of prohibition, and eight Section 19 orders.

CBW Bank, Weir, Kansas, was issued a consent cease and desist order related to findings that the bank's BSA/AML program was deficient. In the order, the bank was directed to cease all activity pertaining to foreign financial institution customers, including funds transfers, remote deposit capture, U.S. dollar repatriation, MSB remittances, ACH transfers, etc., until the FDIC determines the bank has taken sufficient corrective action and can be permitted to resume some or all of those activities.

The prohibition orders were issued to—

  • a former loan teller at Arrowhead Bank, Llano, Texas, for using fraudulent general ledger tickets to conceal unauthorized withdrawals from bank customers' accounts, using the funds for her personal benefit
  • the former president of PrimeSouth Bank (now CB&S Bank, Inc.), Tallassee, Alabama, for obtaining unauthorized advances from a loan to a bank customer and applying the proceeds to unrelated loans of other persons
  • the former CEO of Border State Bank (now Border Bank), Roseau, Minnesota, for arranging for bank customers to obtain loans from the bank and transfer the loan proceeds to himself in violation of Regulation O, and for issuing unauthorized letters of credit in furtherance of a personal investment
  • a former teller at BancorpSouth Bank, Tupelo, Mississippi, for embezzling funds from her teller drawer and the bank's vault for her personal use

09/25/2020

Tax relief for Hurricane Sally victims

The Internal Revenie Service has announced that victims of Hurricane Sally now have until January 15, 2021, to file various individual and business tax returns and make tax payments.

09/25/2020

Enterprises: 2nd quarter foreclosure prevention report

The FHFA has released its Second Quarter 2020 Foreclosure Prevention and Refinance Report. The report shows that Fannie Mae and Freddie Mac (the Enterprises) completed 252,014 foreclosure prevention actions in the second quarter of 2020, bringing to 4.68 million the number of troubled homeowners who have been helped during conservatorships. Of these actions, 3.98 million of the foreclosure prevention actions have helped troubled homeowners stay in their homes.

  • Forbearance: newly initiated forbearance increased significantly to 1.5 million in the second quarter from 170,533 in the first quarter of 2020. The total number of loans in forbearance plans at the end of the quarter was 1.39 million, representing approximately 4.95 percent of the total loans serviced. A majority of the forbearance actions occurred as a result of the Enterprises' response to COVID-19 impacts.
  • Loan Modifications: of the 13,991 loan modifications completed, 41 percent reduced borrowers' monthly payments by more than 20 percent; 66 percent were extend-term only; and 19 percent were modifications with principal forbearance.
  • Foreclose starts and sales: 1,028 third-party and foreclosure sales were completed, down 87 percent compared with the first quarter. Foreclosure starts decreased 74 percent from 28,978 in the first quarter to 7,551 in the second quarter of 2020.
  • Refinances: increased to 1.5 million in the second quarter, from 747,463 in the first quarter of 2020.

09/25/2020

September SCOOS posted

The Federal Reserve Board has posted its September 2020 Senior Credit Officer Opinion Survey (SCOOS), which collected qualitative information on changes in credit terms and conditions in securities financing and over-the-counter (OTC) derivatives markets. In addition to the core questions, the survey included two sets of special questions. The first set asked about market functioning, funding terms, and demand for funding for commercial mortgage-backed securities (CMBS), and the second set asked about dealer funding terms for commercial mortgage real estate investment trusts (commercial mREITs). The 23 institutions participating in the survey account for almost all dealer financing of dollar-denominated securities to non-dealers and are the most active intermediaries in OTC derivatives markets.

09/25/2020

OFAC issues CAATSA designations and updates an SDN

OFAC has added two individuals and four entities to its SDN List under its CAATSA-IRAN sanctions program, and updated a listing for Nicolas Maduro Moros. For details, see BankersOnline's OFAC Update.

09/25/2020

FHFA again extends loan processing flexibilities

The Federal Housing Finance Agency has announced a further extension of Fannie Mae's and Freddie Mac's purchase of qualified loans in forbearance and several loan origination flexibilities through October 31, 2020. As before, the changes are to ensure continued support for borrowers during the COVID-19 national emergency.

The extended flexibilities include:

09/24/2020

FDIC regulatory relief for Alabama banks

FDIC FIL-92-2020, issued yesterday, announces steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Alabama affected by Hurricane Sally.

09/24/2020

Mortgage performance declines

The OCC reported yesterday that the performance of first-lien mortgages in the federal banking system declined during the second quarter of 2020.

The OCC Mortgage Metrics Report, Second Quarter 2020 showed 91.1 percent of mortgages included in the report were current and performing at the end of the quarter, compared to 96.1 percent a year earlier. The percentage of seriously delinquent mortgages — mortgages that are 60 or more days past due and all mortgages held by bankrupt borrowers whose payments are 30 or more days past due — increased 5.4 percent from the previous quarter and 5.3 percent from a year ago.

Servicers initiated 249 new foreclosures during the second quarter of 2020, a 98.7 percent decrease from the previous quarter and a 98.8 percent decrease from a year ago. Events associated with COVID-19, including foreclosure moratoriums during the second quarter of 2020, caused significant decreases in these metrics. Servicers completed 10,984 mortgage modifications in the second quarter of 2020, and 89.0 percent of the modifications reduced borrowers' monthly payments.

The first-lien mortgages included in the OCC's quarterly report comprise 28 percent of all residential mortgages outstanding in the United States or approximately 15 million loans totaling $2.97 trillion in principal balances.

09/24/2020

Fannie and Freddie databases updated

The Federal Housing Finance Agency has released new and revised datasets for the Public Use Databases (PUDBs) of single-family and multifamily mortgage acquisitions by Fannie Mae and Freddie Mac. New data for 2019 are now available, as well as final versions of data for 2018 that replace the interim files uploaded last September. The PUDBs contain additional loan-level data that increases their alignment with information reported under the Home Mortgage Disclosure Act (HMDA), enhances transparency about the Enterprises’ effects on local economies, and provides more information to the public about the secondary mortgage market.

09/24/2020

Western Union refunds on the way

The Federal Trade Commission reported yesterday that $147 million is being mailed to 33,000 consumers in the second distribution of refunds resulting from the law enforcement actions brought against Western Union in 2017 by the FTC, the Department of Justice, and the Postal Inspection Service. Affected consumers are receiving compensation for 100 percent of their verified losses.

The FTC’s 2017 complaint against Western Union alleged that for many years, Western Union was aware that fraudsters around the world used the company’s money transfer system to bilk consumers, and that some Western Union agents were complicit in the frauds. The complaint alleged that Western Union failed to put in place effective anti-fraud policies and procedures and to act promptly against problem agents.

09/24/2020

Cuban Assets Control Regs amended

OFAC has amended [85 FR 60068] the Cuban Assets Control Regulations (CACR) and published new and updated FAQs.

In a Treasury Department press release, the revisions were said to further implement the President’s foreign policy to deny the Cuban regime sources of revenue. They will restrict:

  • lodging at certain properties in Cuba
  • importing Cuban-origin alcohol and tobacco products
  • attending or organizing professional meetings or conferences in Cuba
  • participating in and organizing certain public performances, clinics, workshops, competitions, and exhibitions in Cuba

The changes are effective today.

09/24/2020

House Price Index rises nationwide

The FHFA has released the House Price Index (HPI) for July 2020, which was up 1.0 percent from June 2020. House prices rose 6.5 percent from July 2019 to July 2020. FHFA also revised its previously reported 0.9 percent price change for June 2020 to 1.0 percent.

For the nine census divisions, seasonally adjusted monthly house price changes from June 2020 to July 2020 ranged from +0.6 percent in the West North Central division to +2.0 percent in the New England division. The 12-month changes ranged from +5.4 percent in the West South Central division to +7.7 percent in both the Mountain and the East South Central divisions.

09/24/2020

More OFAC pressure on Russian financier

On Wednesday, Treasury reported that OFAC had taken further action against the network of Kremlin-connected Russian operative Yevgeniy Prigozhin by targeting entities and individuals working on behalf of Prigozhin to advance Russia’s influence in the Central African Republic (CAR). Concurrently, OFAC is targeting those that have supported the Russian Federal Security Service directly, as well as those that assist persons helping designated Russian actors to evade U.S. sanctions.

See BankersOnline's OFAC Update for the names and identification information of the individuals and entities that OFAC has added to its SDN List.

09/23/2020

SBA announces $5.5M in PRIME grants

The SBA has announced that 30 organizations across the country that assist disadvantaged entrepreneurs are set to receive nearly $5.5 million in grants from its Program for Investment in Micro-Entrepreneurs (PRIME). The SBA has placed emphasis on projects that will offer training and technical assistance to strengthen economically disadvantaged businesses, particularly those that service entrepreneurs in Opportunity Zones, rural areas, and HUBZones. The PRIME grants range from $75,000 to $250,000, and typically require at least 50 percent in matching funds or in-kind contributions. In total, over 120 organizations applied for PRIME grants for 2020.

09/23/2020

IRS gives additional time for replacement of livestock

Farmers and ranchers who were forced to sell livestock due to drought may have an additional year to replace the livestock and defer tax on any gains from the forced sales, according to the Internal Revenue Service. To qualify for relief, the farm or ranch must be in an applicable region. This is a county or other jurisdiction designated as eligible for federal assistance plus counties contiguous to it. The relief generally applies to capital gains realized by eligible farmers and ranchers on sales of livestock held for draft, dairy or breeding purposes.

09/23/2020

Telecom firm to pay $1.9M for facilitating credit card relief scheme

The Federal Trade Commission has announced that Globex Telecom, Inc. and an affiliated company will pay a total of $1.9 million to settle charges that they facilitated a scheme that peddled bogus credit card interest rate relief, illegally charging consumers millions of dollars. The settlement marks the end of the FTC's first consumer protection case against a Voice over Internet Protocol service provider. The FTC and Ohio alleged that Globex provided a company called Educare Centre Services with the means to make calls to U.S. consumers, including illegal robocalls, to market Educare’s phony credit card interest rate reduction services.

09/22/2020

Blocked property report reminder

OFAC has posted a Treasury Department Bulletin with a reminder that holders of property blocked in accordance with OFAC regulations have a mandatory annual reporting requirement on that blocked property. That report, of all blocked property held as of June 30 is due by September 30 (one week from today).

09/22/2020

CARES Act funds for 12 states

HUD has announced over half a million dollars in additional funding to HUD Fair Housing Assistance Program (FHAP) agencies in 12 states to support activities related to COVID-19.

09/22/2020

CFPB settles with auto lender over unfair loss damage waiver practices

The CFPB reports it has settled with Lobel Financial Corporation, an auto-loan service based in Anaheim, California. The Bureau found that Lobel engaged in unfair practices with respect to its Loss Damage Waiver (LDW) product, in violation of the Consumer Financial Protection Act (CFPA). When a borrower has insufficient insurance, rather than force-placing collateral-protection insurance, Lobel places the LDW product, which is not itself insurance, on borrower accounts and charges a monthly premium of approximately $70 for the LDW coverage.

The LDW product provides that Lobel will pay for the cost of covered repairs and, in the event of a total vehicle loss, cancel the borrower’s debt. The Bureau found that Lobel continued to bill certain consumers for LDW coverage but then failed to provide it, and assessed fees from consumers that they were not obligated to pay.

The Bureau's consent order requires Lobel to pay $1,345,224 in consumer redress to approximately 4,000 harmed consumers and a $100,000 civil money penalty. The order also prohibits Lobel from failing to provide consumers with LDW coverage or similar products or services for which it has charged consumers or from charging consumers fees that are not authorized by its LDW contracts.

09/22/2020

Former Wells Fargo execs settle with OCC

The OCC has announced settlements with three former senior executives of Wells Fargo Bank, N.A., Sioux Falls, South Dakota, for their roles in the bank’s systemic sales practices misconduct.

  • a prohibition order with a $925,000 civil money penalty to former Community Bank Group Finance Officer Matthew Raphaelson
  • a cease and desist order with a $400,000 civil money penalty to the former Head of Community Bank Deposit Products Group Kenneth Zimmerman
  • a cease and desist order with a $350,000 civil money penalty to the former Head of Community Bank Human Resources Tracy Kidd

09/22/2020

OCC clarifies stablecoin-related activities

The OCC yesterday published an interpretive letter clarifying national banks' and federal savings associations' authority to hold "reserves" on behalf of customers who issue certain stablecoins. The term "stablecoins" refers to cryptocurrency backed by an asset such as a fiat currency, including U.S. dollars or other foreign currency.

The letter responds to questions regarding the application of stablecoin-related bank activities. It concludes that national banks and federal savings associations may hold "reserves" on behalf of customers who issue stablecoins, in situations where the coins are held in hosted wallets. The letter addresses the use of stablecoins backed by a single fiat currency on a one-to-one basis where the bank verifies at least daily that reserve account balances meet or exceed the number of the issuer's outstanding stablecoins.

09/22/2020

FTC review of Affiliate Marketing Rule

The Federal Trade Commission has published [85 FR 59466] in today's Federal Register a notice of proposed rulemaking and request for public comment on its Affiliate Marketing Rule as part of the agency's systematic review of Commission regulations and guides. Included is a proposal to amend the Rule to correspond to changes made to the FCRA by the Dodd-Frank Act.

Comments are due by December 7, 2020.

09/23/2020

OFAC targets more Maduro regime officials

The Treasury Department has announced that OFAC has designated five key figures that have facilitated the illegitimate Maduro regime’s efforts to undermine democracy in Venezuela. The designations were made under Executive Order 13692. For names and other identification information, see BankersOnline's OFAC Update.

09/21/2020

SBA awards $3M in small business support

The SBA has announced it has awarded 24 grants of up to $125,000 each for specialized training, mentoring, and technical assistance for R&D-focused small businesses under the Federal and State Technology (FAST) Partnership Program administered by the SBA’s Office of Innovation and Technology. FAST seeks to improve outcomes in the Small Business Innovation Research and Small Business Technology Transfer programs for underserved communities by increasing participation from women-owned, rural-based, and socially economically disadvantaged small businesses.

09/22/2020

FDIC Summary of Deposits

The FDIC has released results of its annual survey of branch office deposits for all FDIC-insured institutions as of June 30, 2020. The Summary of Deposits provides deposit totals for each of the more than 85,000 domestic offices operated by more than 5,000 FDIC-insured commercial and savings banks, savings associations, and U.S. branches of foreign banks.

The "SOD" includes historical data going back to 1994 that can be analyzed using online reports, tables, and downloads. SOD users can locate bank offices in a particular geographic area and create custom market share reports for areas such as state, county, and metropolitan statistical area. Market share reports have been expanded to allow users to see market growth and market presence for specific institutions.

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