Top Stories

On Friday, the Treasury Department reported that OFAC had taken action against Hamas, targeting Gaza- and Lebanon-based leaders of the terrorist group’s offensive cyber and unmanned aerial vehicle (UAV) operations. Concurrent with this action, the European Union imposed sanctions targeting Hamas.

For the names and identification information of the designated parties, see the April 12, 2024, BankersOnline OFAC Update.

The Financial Stability Board yesterday reported that its Regional Consultative Group for Europe met Thursday in Dublin.

The group discussed global and regional macroeconomic developments and their implications for financial stability. The macro-financial environment continues to be shaped by the adjustment of the global economy to high interest rates, while geopolitical factors are weighing on the outlook. Despite tight financing conditions and subdued confidence, growth in the region is projected to gradually pick up, amid a recovery in real incomes. In global financial markets, certain asset valuations remain stretched and vulnerable to adjustment in the face of adverse shocks. Members discussed sectors which warranted close monitoring, specifically the outlook for – and risks associated with – commercial real estate markets, which have been undergoing a substantial adjustment recently, due to both cyclical and structural shocks.

Members received an update on the FSB’s work priorities for 2024, including its deliverables under Brazil’s G20 Presidency. The effective implementation of its global regulatory and supervisory framework for crypto-asset activities and markets is a key focus for the FSB. Members shared their experiences in addressing regulatory challenges stemming from the cross-border and cross-sectoral nature of crypto-asset activities. They also exchanged views on preparations for new crypto-asset regulations entering into force, such as the Regulation on Markets in Crypto-assets (MiCA) in the European Union and the proposed regulatory regime for crypto-assets in the United Kingdom.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The Department of Housing and Urban Development has published [89 FR 25644] a notice of its intention to competitively offer approximately 1,265 home equity conversion mortgages (HECM, or reverse mortgage loans) secured by vacant properties with an updated loan balance of approximately $346 million. The sale will consist of due and payable Secretary-held reverse mortgage loans. The mortgage loans consist of first liens secured by single family, vacant residential properties, where all borrowers are deceased, and no borrower is survived by a non-borrowing spouse.

The Secretary will prioritize up to 50 percent of the offered assets for award to nonprofit organizations or governmental entity bidders with a documented housing mission. The notice also generally describes the bidding process for the sale and certain entities who are ineligible to bid. This is the twelfth sale offering of its type and will be held on May 7, 2024.

The Federal Housing Finance Agency has reported that the agency and the Conference of State Bank Supervisors have entered into a formal agreement designed to facilitate information sharing with respect to nonbank mortgage companies.

The memorandum of understanding establishes substantive information sharing protocols between state financial regulators and FHFA, improving the ability to coordinate on market developments, identify and mitigate risks, and ultimately, further protect consumers, taxpayers, and the nation’s housing finance system.

State financial regulators are the primary regulators of nonbank mortgage companies. The FHFA is the regulator and conservator of two of the nonbank mortgage industry’s largest and most important counterparties, Fannie Mae and Freddie Mac. While each supervisory agency maintains specific authorities related to the mortgage industry, only state financial regulators have complete prudential authority over nonbank mortgage companies.

The Federal Reserve Board on Wednesday released the minutes of the Federal Open Market Committee meeting of March 19–20, 2024.

The FDIC on Wednesday released a comprehensive report on how the FDIC would manage the orderly resolution of a large, complex financial company under the Dodd-Frank Act.

In remarks to the Peterson Institute for International Economics in Washington, DC, FDIC Chairman Martin J. Gruenberg presented the Overview of Resolution Under Title II of the Dodd-Frank Act, the most detailed description to date of the FDIC’s preparedness to use its Title II resolution authority in a manner that promotes financial stability and prevents taxpayer bailouts.

The Overview explains how the FDIC would use authorities under Title II of the Act, with a particular focus on how it expects to resolve U.S.-headquartered Global Systemically Important Banking Organizations (GSIBs). In addition, the paper:

• Provides background of resolution-related authorities in the Dodd-Frank Act
• Highlights key measures that facilitate preparation and implementation of resolution under Title II authority
• Reviews strategic decision-making for the use of Title II authority
• Explains how the FDIC expects to carry out a Title II resolution of a U.S. GSIB using a Single Point of Entry resolution strategy

The OCC has announced it will extend until June 15, 2024, the comment period on its proposal to update its rules for business combinations to allow interested parties more time to provide comments.

The proposal also includes a policy statement to clarify the OCC’s review of applications under the Bank Merger Act.

Comments were originally due by April 15, 2024.

• Federal Register extension notice

The Department of Veterans Affairs has published [89 FR 25142] a final rule to rename and clarify certain loss-mitigation terms used in the VA's regulations. The VA is making these changes to align the names and definitions with their general use in the housing finance industry and believes that these revisions will help avoid confusion and enable servicers and veterans to address loan defaults more quickly and effectively.

The rule, which amends the VA's “Loan Guaranty” regulation at 38 C.F.R. Part 36, will become effective on May 10, 2024.

The U.S. Senate Committee on Banking, Housing, and Urban Affairs yesterday announced that Ranking Member Tim Scott has introduced a measure (Senate Joint Resolution 70) under the Congressional Review Act to overturn the CFPB's rule capping credit card late penalties. The report said that Scott's resolution has the support of Republicans on the Senate Banking Committee and from members across the Republican conference.

The House of Representatives has a similar resolution (House Joint Resolution 122) under consideration.

If the resolutions pass in both houses of Congress and the surviving measure is signed by President Biden (or the president's veto is overturned by both houses), the CFPB's rule will be vacated and the Bureau would not be permitted to issue a similar rule affecting credit card late fees.

The CFPB's rule, which is also being challenged in the courts, carries an effective date of May 14, 2024.

The Federal Trade Commission reports it is sending $1.2 million in refunds to consumers who paid for the advice of supposed experts based on deceptive claims of substantial investment profits.

The FTC sued Wealthpress in January 2023 along with two of its owners, Roger Scott and Conor Lynch, alleging that the company used deceptive claims of likely profits to sell consumers investment advising services—often touting that the services’ recommendations were based on a specific “algorithm” or “strategy” created by a purported expert. The company charged consumers hundreds or even thousands of dollars for access to these services but could not show that services they offered purchasers were likely to reap substantial profits. However, many consumers lost substantial amounts of money in attempting to follow the services’ advice.

The CFPB has released the 32nd edition of its Supervisory Highlights, which covers select examinations in connection with credit reporting and furnishing completed from April 1, 2023, through December 31, 2023.

In its press release announcing the release of this edition, the Bureau said it found consumer reporting companies failed to ensure the accuracy of credit reports, including by failing to exclude information resulting from alleged identity theft or human trafficking. The CFPB also found furnishers – companies that provide information to consumer reporting companies – failed to correct false or fraudulent information sent to consumer reporting companies. Specifically, the CFPB found that—

• Consumer reporting companies failed to block or remove information related to identity theft and human trafficking
• Consumer reporting companies accepted information from unreliable furnishers
• Furnishers provided information to consumer reporting companies they knew was false
• Furnishers did not follow requirements for dispute investigations and identity theft

The FDIC has issued FIL-17-2024 with materials and guidance pertaining to the Consolidated Reports of Condition and Income (Call Report) for the March 31, 2024, report date. The FIL also carried attached Supplemental Instructions.

Except for certain institutions with foreign offices, completed Call Reports must be received by Tuesday, April 30, 2024, in accordance with the filing requirements discussed below. An institution with more than one foreign office, other than a “shell” branch or an International Banking Facility, is permitted an additional five calendar days to submit its Call Report data. Such an institution must electronically file its data to the Central Data Repository no later than Sunday, May 5, 2024.

The CFPB has issued a report, Trends in discount points amid rising interest rates, finding that more borrowers paid “discount points” upfront as overall interest rates rose. The percentage of homebuyers paying discount points roughly doubled from 2021 to 2023. The increase was even greater among borrowers with lower credit scores. In its press release releasing the report, the CFPB said that, “while discount points may provide advantages to some borrowers, the financial tradeoffs are complex.” The CFPB is monitoring these increases and potential risks to consumers.

According to the press release, discount points are a one-time fee paid at closing to a lender in exchange for a lower interest rate. Paying one discount point is the equivalent of paying a fee of one percent of the loan amount, but discount points have no fixed value in terms of the change in interest rate. Most borrowers only benefit from discount points if they keep their mortgage long enough that the cumulative monthly savings from the reduced interest rate outweigh the upfront costs.

The FDIC has posted a Federal Register notice [89 FR 24477] this morning that it has terminated the receiverships of Bank of Clark County (Vancouver, WA), Omni National Bank (Atlanta, GA), and Almena State Bank (Almena, KS), as of April 1, 2024.

Consumer Compliance Outlook's first issue for 2024 casts a Compliance Spotlight on resources to combat increased check fraud. The article describes resources from the Federal Reserve System, FinCEN, the U.S. Postal Inspection Service, the ABA, and check service providers.

The Treasury Department yesterday reported that OFAC has taken additional action against Iranian military revenue generation, targeting Oceanlink Maritime DMCC for facilitating the shipment of Iranian commodities on behalf of Iran’s Armed Forces General Staff and Ministry of Defense and Armed Forces Logistics. OFAC also identified 13 vessels managed by Oceanlink Maritime DMCC as blocked property.

For identification information on the designated company and vessels, see BankersOnline's April 4, 2024, OFAC Update.

The CFPB has issued a report examining the growth of financial transactions in online video games and virtual worlds. These platforms increasingly resemble traditional banking and payment systems that facilitate the storage and exchange of billions of dollars in assets, including virtual currencies. However, consumers report being harmed by scams or theft on gaming platforms and not receiving the protections they would expect under federal law. The CFPB reports it will be monitoring markets where financial products and services are offered, including video games and virtual worlds, to ensure compliance with federal consumer financial protection laws.

The report, Banking in Video Games and Virtual Worlds, looks at the growing use and scale of these assets across the gaming industry, the associated risks to consumers, and the evolution of games and virtual worlds into online marketplaces. American consumers spent nearly $57 billion on gaming in 2023, including on hardware, software, and in-game transactions such as converting dollars to virtual currencies or other gaming assets. These assets are often bought, sold, or traded in virtual markets that allow gaming companies to replicate everyday activities online, including financial payments.

The OCC has reported that Acting Comptroller of the Currency yesterday discussed the importance of fairness in remarks given at the National Community Reinvestment Coalition Just Economy Conference 2024.

Mr. Hsu highlighted bank progress in overdraft protection program reforms since the OCC issued guidance last April and provided an update on Project REACh accomplishments regarding credit invisibles, minority depository institutions and affordable housing. Additionally, he discussed the importance of ensuring fairness as it relates to artificial intelligence and fraud.

The Conference of State Bank Supervisors has posted an NMLS Blog article reporting the results of a November 2023 survey of over 1,400 NMLS users to measure their satisfaction with the system. The survey consisted of two parts: customer satisfaction and system usability. Survey results suggested that, on average, 85% of users are satisfied with their NMLS experience. However, survey comments indicated there are aspects of the system where the user experience can be improved. This feedback is driving upcoming NMLS enhancements, according to the article.

The overall Customer Satisfaction (“CSAT”) score was 85% for the NMLS experience survey. This suggests that, on average, 85% of customers surveyed expressed satisfaction with NMLS. The highest CSAT scores were from mortgage loan originators (MLOs), and the lowest were from company users. This is expected since MLOs generally spend less time completing tasks and activities in NMLS than company users. An analysis of qualitative feedback revealed users feel NMLS is not user friendly or intuitive, difficult to navigate, and the password process is frustrating.

After completing the CSAT survey, respondents were given the option to complete the System Usability Scale (“SUS”) Survey, a 10-question survey for measuring NMLS usability. There were 981 respondents who completed this section. The total SUS score for the surveyed group was 61.64. This score falls within the “OK to Good” range, suggesting that on average, users find the system to be reasonably usable, but there is room for improvement. The highest scores were recorded for federal MLOs, whose score of 71.71 is slightly above the industry average. There were several ratings below a 20, which, along with the average score itself, should be a key metric to improve in the new system.

The Federal Reserve Board has announced the execution of:

• a cease and desist order issued with the consent of Mode Eleven Bancorp, the holding company of Summit National Bank, both located in Hulett, Wyoming, related to Bancorp's previous strategy focused on providing banking-related services to financial technology companies through certain nonbank subsidiaries
• a written agreement with Steele Bancshares, Inc., Tyler, Texas, and American State Bank, Arp, Texas, related to identified safety and soundness deficiencies at the bank.

The FDIC has released its April 2024 list of FDIC-supervised banks whose latest CRA evaluations have recently been made public. Of the 50 banks listed, two — in Moulton, Texas, and Parker, Colorado — were rated "Needs to Improve," 45 were rated "Satisfactory," and these three received "Outstanding" ratings:

• The Bank of New Glarus, New Glarus, Wisconsin
• First General Bank, Rowland Heights, California
• Rockland Trust Company, Rockland, Massachusetts

The Federal Housing Finance Agency yesterday provided an update on its implementation of the recommendations of the Federal Home Loan Bank (FHLBank) System at 100: Focusing on the Future report​​, which was published in November 2023 and followed the first comprehensive evaluation of the FHLBank System in decades. ​

A significant finding of the report is that the FHLBanks must appropriately support housing and community development in their districts, in addition to providing liquidity to members.

The FHFA has published a regulatory interpretation that clarifies how cooperativas in Puerto Rico can pursue membership in the FHLBank System. Cooperativas are a critical part of the financial system in Puerto Rico, and many are Treasury-certified Community Development Financial Institutions (CDFIs). To date, no cooperativa has become a member of the FHLBank System.

The NCUA has announced that low-income-designated credit unions can apply for 2024 Community Development Revolving Loan Fund grants between May 1 and July 1, 2024.

The 2024 CDRLF grant round is open to credit unions with a low-income designation. Minority depository institution credit unions are not eligible for funding in this year’s grant round if they do not have the low-income designation. Credit unions with questions about the low-income designation should contact the NCUA’s Office of Credit Union Resources and Expansion.

The NCUA will host a webinar in May to explain the grants process. The 2024 Notice of Funding Opportunity has been published in the Federal Register.

The OCC has announced its support of National Financial Capability Month in April, and encouraged national banks and federal savings associations to support this annual commemoration by recommitting their focus on improving the financial capability and financial health of their customers.

Banks and FSAs can promote financial capability through high-quality financial literacy education, as well as through improved access to financial services for all consumers, especially those who are underserved.

The OCC is dedicated to making resources available to help banks deliver top-tier financial literacy education and services. The OCC’s Community Affairs office issues publications and provides resources to banks on financial capability and financial literacy topics including the recently updated Community Developments Fact Sheet on Financial Capability, the quarterly Financial Literacy Update and the Financial Literacy Resource Directory.

The U.S. Department of Housing and Urban Development yesterday announced the award of over $30 million to fair housing organizations across the country under its Fair Housing Initiatives Program (FHIP). The grants will support the efforts of national, state, and local fair housing entities working to address violations of the Fair Housing Act and to end discrimination in housing.

The grant funding will allow the grantees to provide fair housing enforcement by conducting investigations, testing to identify discrimination in the rental and sales markets, and filing fair housing complaints with HUD or substantially equivalent state and local agencies. In addition, grantees will conduct education and outreach activities to inform the public, housing providers, and local governments about rights and responsibilities that exist under the Fair Housing Act.

Our monthly review of the Federal Reserve Board's archive of Community Reinvestment Act evaluations has revealed that the Reserve Banks released 23 evaluations in March 2024. Of those evaluations, 21 received "Satisfactory" ratings. Two banks — First State Bank Southwest, Pipestone, Minnesota; and FirstBank, Lakewood, Colorado — received "Outstanding" ratings.

The OCC has released a list of 19 Community Reinvestment Act performance evaluations that became public during the month of March 2024. Two of the listed evaluations are rated "Needs to Improve," 13 are rated "Satisfactory," and the following four are rate "Outstanding":

• The Clinton National Bank, Clinton, IA
• Native American Bank, National Association, Denver, CO
• Rosedale FS & LA, Baltimore, MD
• TD Bank USA, National Association, Wilmington, DE

The FDIC has updated the following sections of its Consumer Compliance Examination Manual (CEM):

• Communicating Findings (II-6.1): Updated to clarify when the self-identification of violations is considered a strength of a bank’s Compliance Management System
• Expedited Funds Availability Act (VI-1.1): Updated with technical changes related to regulatory dollar-amount thresholds and large deposit hold times
• FTC Rule - Preservation of Claims and Defenses (VII-2.1): Removed an invalid exception in a chart

Bloomberg Law has reported that a federal judge in Texas has blocked banking regulators’ rewrite of their Community Reinvestment Act rules, giving banks a reprieve from new regulations that had been set to take effect today.

The Federal Reserve, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency went beyond the bounds of the 1977 Community Reinvestment Act in their final rules issued last October, Judge Matthew J. Kacsmaryk of the U.S. District Court for the Northern District of Texas said in a ruling on Friday.

The court enjoined the agencies from enforcing the regulations pending the resolution of a lawsuit brought in February by the ABA, the U.S. Chamber of Commerce and five national and state associations, and pushed back the April 1, 2024, effective date, along with all other implementation dates, day for day, for each day the court's injunction remains in place.

The CFPB has released its 2023 Consumer Response Annual Report. The report indicates that during 2023, the Bureau sent more than 1.3 million complaints to over 3,400 companies for review and response.

The report shows a continued increase in credit or consumer reporting complaints, with more than one million of them sent to the three nationwide consumer reporting companies — Equifax, Experian, and TransUnion.

Consumers also raised issues about fraudulent activity in nearly every product category, including credit or consumer reporting, debt collection, checking or savings accounts, and credit cards.

The NCUA has announced it issued two prohibition notices and one consent order in March 2024, permanently prohibiting individuals from participating in the affairs of any federally insured depository institution.

• Sarah C. Conley, a former employee of Summit Federal Credit Union, Rochester, New York, received a notice of prohibition, having been convicted of grand larceny in connection with illegal activities at the credit union
• Carlene Bartley, formerly employed by Municipal Credit Union, New York, New York, was issued a notice of prohibition, having pleaded guilty to, and having been convicted on, charges of grand larceny
• Esther A. Olson, a former assistant branch manager of Educational Employees Credit Union, Fresno, California, received a consent order of prohibition, after a finding that she had embezzled funds from member accounts, including the withdrawal of over $60,000 from four different members' share accounts

The FDIC has released a list of enforcement actions it took in February 2024.

• Guaranty Bank and Trust Company, Belzoni, Mississippi, was assessed an $80,500 civil money penalty for a pattern or practice of flood insurance-related violations
• Robert Christopher Rodgers, former president of The Citizens Bank, Hickman, Kentucky, received a Removal/Prohibition Order with assessment of a $7,000 civil money penalty after a finding that he exceeded his lending authority by originating unsecured loans and approving overdrafts for a customer of the bank; continuing to approve overdrafts despite the customer's failure to pay loans and existing overdrafts, and failing to inform the bank's board of the extent of the overdrafts, resulting in a loss to the bank of over $800,000.
• Rhenae K. Risher, a former employee of Bank of Morton, Morton, Mississippi, was issued a Removal/Prohibition order after a finding that she manipulated the bank's general ledger accounts to cash and pay checks of her son's trucking company to avoid overdrawing his business checking account, causing a loss to the bank of over $255,000.

FDIC Financial Institution Letter FIL-15-2024, issued yesterday in coordination with today's FinCEN Federal Register request for information and comment, is an advisory to reemphasize the requirements under the Customer Identification Program (CIP) Rule as it relates to collecting identifying information from customers. The advisory reminds institutions of the information required to be collected from the customer prior to account opening. The CIP rule has been in effect for more than 20 years (since October 1, 2003).

• The CIP Rule requires a bank to implement a program that includes risk-based verification procedures that enable the bank to form a reasonable belief that it knows the true identity of its customers. These requirements exist regardless of whether the bank establishes this relationship directly with the customer or through an intermediary.
• These procedures must include collecting, at a minimum, the customer’s name, date of birth (for an individual), address, and identification number.
• A bank is required to collect the taxpayer identification number (TIN) from a customer that is a U.S. person prior to account opening or another approved identification from a non-U.S. person. This applies to all accounts with the exception of credit card accounts.

The FDIC yesterday issued FIL-16-2024 to publish its Spring 2024 issue of Consumer Compliance Supervisory Highlights to provide an overview of consumer compliance issues identified through the FDIC’s supervision of state non-member banks and thrifts in 2023. It includes:

• A description of the most frequently cited violations and other consumer compliance examination observations;
• Information on regulatory developments;
• A summary of consumer compliance resources and information available to financial institutions; and
• An overview of consumer complaint trends.

The most frequently cited violations (representing approximately 74 percent of the total violations cited in 2023) involved:

• the Truth in Lending Act (TILA) and Regulation Z;
• the Flood Disaster Protection Act (FDPA) and Part 339;
• the Electronic Fund Transfers Act (EFTA) and Regulation E;
• the Truth in Savings Act (TISA) and Regulation DD; and
• Section 5 of the Federal Trade Commission Act.

While this list contains the same laws and regulations from the 2022 Highlights, Section 5 of the FTC Act violations dropped from the second most frequently cited violation to the fifth most frequently cited violation.

FinCEN has published [89 FR 22231] in this morning's Federal Register a notice and request for information and comment regarding the Customer Identification Program (CIP) Rule requirement for banks to collect a taxpayer identification number (TIN), among other information, from a customer who is a U.S. person, prior to opening an account (the “TIN collection requirement”).

Generally, for a customer who is an individual and a U.S. person (“U.S. individual”), the TIN is a Social Security number (SSN). FinCEN specifically seeks information to understand the potential risks and benefits, as well as safeguards that could be established, if banks were permitted to collect partial SSN information directly from the customer for U.S. individuals and subsequently use reputable third-party sources to obtain the full SSN prior to account opening. FinCEN seeks this information to evaluate and enhance its understanding of current industry practices and perspectives related to the CIP Rule's TIN collection requirement, and to assess the potential risks and benefits associated with a change to that requirement.

The notice also serves as a reminder from FinCEN, and staff at the Agencies, that banks must continue to comply with the current CIP Rule requirement to collect a full SSN for U.S. individuals from the customer prior to opening an account (“SSN collection requirement”).

Comments will be accepted for 60 days, through May 28, 2024.

Yesterday, the Treasury Department announced that OFAC, in coordination with the Republic of Korea (ROK), has sanctioned six individuals and two entities based in Russia, China, and the United Arab Emirates that generate revenue and facilitate financial transactions for the Democratic People’s Republic of Korea (DPRK). Funds generated through these actors are ultimately funneled to support the DPRK’s weapons of mass destruction (WMD) programs.

The Department also reported OFAC has designated two individuals and three entities as key financial facilitators involved in fundraising for Hamas.

For the names and identification information of the designated parties, see ourMarch 27, 2024, BankersOnline OFAC Update.

The OCC has reported cumulative trading revenue of U.S. commercial banks and savings associations of $11.6 billion in the fourth quarter of 2023. The fourth quarter trading revenue was $1.6 billion, or 11.8 percent, less than in the previous quarter and $2 billion, or 20.4 percent, more than a year earlier.

According to the Quarterly Report on Bank Trading and Derivatives Activities—

• a total of 1,185 insured U.S. national and state commercial banks and savings associations held derivatives
• four large banks held 87.4 percent of the total banking industry notional amount of derivatives
• credit exposure from derivatives decreased in the fourth quarter of 2023 compared with the third quarter of 2023. Net current credit exposure decreased $68.0 billion, or 22.0 percent, to $240.0 billion
• derivative notional amounts decreased in the fourth quarter of 2023 by $11.7 trillion, or 5.7 percent, to $192.5 trillion
• derivative contracts remained concentrated in interest rate products, which totaled $136.3 trillion or 40.8 percent of total derivative notional amounts

A Ballard Spahr Consumer Finance Monitor article published Tuesday reports that the U.S. District Court for the Northern District of Texas has set April 2, 2024, as the date for a hearing on the plaintiffs' motion for a preliminary injunction against the CFPB's enforcement of its recent credit card late fee rule. According to the article, the CFPB last week filed a motion with the district court to transfer the case (Chamber of Commerce et al v. CFPB) to the U.S. District Court of the District of Columbia.

On March 20, the Texas district court denied the plaintiffs' motion for expedited consideration of their preliminary injunction motion [the CFPB's final rule has a May 14, 2024, effective date].

The CFPB yesterday announced it has issued a new circular warning remittance transfer providers that false advertising about the cost or speed of sending a remittance transfer can violate federal law. The Bureau said that companies in the marketplace are charging junk fees on international money transfers and making false claims about the speed of transfers. The circular highlights several marketing practices relating to sending international money transfers that may violate the Consumer Financial Protection Act’s (CFPA) prohibition on deceptive acts or practices. This prohibition is enforced by the CFPB, states, and other regulators. Guidance in the circular applies both to traditional providers of international money transfers and to “digital wallets” that offer the capability to send money internationally from the United States.

Specifically, today’s circular addresses the following practices by remittance providers, including digital wallet providers that offer remittance services, that consumers have complained to the CFPB about and that the CFPB has observed in its market monitoring:

• Falsely marketing “no fee” or “free” services
• Burying promotional conditions in fine print
• Deceptively advertising how long transfers will take

Yesterday, the FDIC issued Financial Institution Letters FIL-13-2024 and FIL-14-2024 to provide guidance the help financial institutions and facilitate recovering in areas of Maine and Rhode Island, respectively, affected by severe storms and flooding December 17–19, 2023 (Rhode Island) and January 9–13, 2024 (Maine and Rhode Island).

The Federal Housing Finance Agency yesterday reported U.S> house prices fell in January, down 0.1 percent from December, according to the FHFA seasonally adjusted monthly House Price Index.

House prices rose 6.3 percent from January 2023 to January 2024. The previously reported 0.1 percent price increase in December remained unchanged.

For the nine census divisions, seasonally adjusted monthly price changes from December 2023 to January 2024 ranged from -0.6 percent in the South Atlantic division to +1.5 percent in the West North Central division. The 12-month changes were all positive, ranging from +3.8 percent in the West South Central division to +8.7 percent in the East North Central division.

The Treasury Department has reported that the Financial Action Task Force—the global standard-setting body for anti-money laundering, countering the financing of terrorism, and countering proliferation financing (AML/CFT/CPF)—announced that the United States has been upgraded to “largely compliant” with FATF Recommendation 24, which relates to beneficial ownership transparency for legal persons.

The FATF published the updated rating in the Seventh Enhanced Follow-Up Report of the United States, recognizing Treasury’s historic efforts to increase beneficial ownership transparency and address key vulnerabilities in the U.S. AML/CFT framework.

The CFPB on Tuesday reported it has joined federal and state agencies in releasing agency-specific action statements on tech capacity. These statements reflect concrete actions to increase tech capacity, including actively hiring technologists, that will help enforce the laws on the book and design remedies that work for consumers, workers, small businesses, and others in the digital era.

The Bureau released a statement from CFPB Director Rohit Chopra and Chief Technologist Eric Meyer and a statement from the Federal Trade Commission.

Yesterday, the Treasury Department reported that OFAC had sanctioned six entities, one individual and two tankers that are based or registered in Liberia, India, Vietnam, Lebanon, and Kuwait that have engaged in facilitating commodity shipments and financial transactions for the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), the Houthis, and Hizballah.

Treasury also reported that OFAC had sanctioned 11 individuals and entities supporting the regime of Syrian President Bashar Al-Assad through the facilitation of illicit financial transfers and trafficking of illegal drugs, as well as the extraction and export of Syrian commodities.

For the names and identification information of the designated individuals, entities, and vessels, see our March 26, 2024, BankersOnline OFAC Update.

The CFPB has announced that the modified HMDA LARs with 2023 data are now available for each institution that filed HMDA data collected in 2023. The modified LARs provide each financial institution's loan-level HMDA data, as modified to protect applicant and borrower privacy in accordance with the Consumer Financial Protection Bureau’s final policy guidance on the disclosure of HMDA data. Users also have the ability to download one combined file that contains all institutions’ modified LAR data.

The modified LARs can be accessed HERE.

Yesterday, the Treasury Department reported that OFAC had sanctioned thirteen entities and two individuals for operating in the financial services and technology sectors of the Russian Federation economy including persons developing or offering services in virtual assets that enable the evasion of U.S. sanctions. Five entities were designated for being owned or controlled by OFAC-designated persons.

Treasury also reported that OFAC had sanctioned Wuhan Xiaoruizhi Science and Technology Company, Limited (Wuhan XRZ), a Wuhan, China-based Ministry of State Security (MSS) front company that has served as cover for multiple malicious cyber operations. OFAC also designated Zhao Guangzong and Ni Gaobin, two Chinese nationals affiliated with Wuhan XRZ, for their roles in malicious cyber operations targeting U.S. entities that operate within U.S. critical infrastructure sectors, directly endangering U.S. national security.

For the names and identification information of all the designated parties, see the March 25, 2024, BankersOnline OFAC Update.

The Federal Housing Finance Agency (FHFA) has released its fourth quarter 2023 Foreclosure Prevention and Refinance Report. The report shows that Fannie Mae and Freddie Mac (the Enterprises) completed 43,903 foreclosure prevention actions during the quarter, raising the total number of homeowners who have been helped to 6,905,703 since the start of conservatorships in September 2008.

The report also shows that 31 percent of loan modifications completed in the fourth quarter reduced borrowers’ monthly payments by more than 20 percent. The number of refinances decreased from 83,522 in the third quarter of 2023 to 71,378 in the fourth quarter of 2023.

The Enterprises’ serious delinquency rate increased slightly from 0.54 percent to 0.55 percent at the end of the fourth quarter. This compares with 3.42 percent for Federal Housing Administration (FHA) loans, 2.01 percent for Veterans Affairs (VA) loans, and 1.52 percent for all loans (industry average).

The OCC has reported that Acting Comptroller of the Currency Michael J. Hsu yesterday discussed fairness and effective compliance risk management in remarks at CBA LIVE 2024, hosted by the Consumer Bankers Association. Mr. Hsu discussed how banks can improve their ability to anticipate and adapt to emerging compliance risk issues by elevating and developing a strong internal sense of fairness.

The U.S. Department of Housing and Urban Development announced yesterday that the agency has charged the Grapevine Housing Authority (“GHA”); Jane Everett, Executive Director of GHA; and Bonnie McHugh, Vice-Chair of the GHA Housing Commission, with discriminating against, and failure to provide a reasonable accommodation for a tenant with a disability.

HUD’s Charge of Discrimination alleges that the Grapevine Housing Authority, Ms. Everett, and Ms. McHugh terminated the lease of a tenant with diabetes following a medical episode caused by his blood sugar levels. They subsequently denied his reasonable accommodation request and continued eviction proceedings against him even after his doctor had provided evidence that his symptoms were managed following a change in medication and purchase of a medical alert bracelet.

A United States Administrative Law Judge will hear HUD’s charge unless any party to the charge elects to have the case heard in federal district court.

On Friday, Deputy Secretary of the Treasury Wally Adeyemo announced, alongside local leaders and law enforcement in Arizona, that OFAC had sanctioned operatives in a Black Market Peso Exchange scheme to launder millions in illicit fentanyl proceeds for the Sinaloa Cartel. OFAC designated 15 Sinaloa Cartel members—several of whom are fugitives—and six Mexico-based businesses pursuant to Executive Order (E.O.) 14059. The Sinaloa Cartel, which is one of the most notorious and pervasive drug trafficking organizations in the world, is responsible for a significant portion of the illicit fentanyl and other deadly drugs trafficked into the United States.

For the names and identification information of the designated parties, see the March 22, 2024, BankersOnline OFAC Update.