http://www.bankersonline.com/topstory/topstory.html - Dec 19, 2014 1:13:17 AM - Nov 30, 2004 5:07:27 PM
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September 29, 2014
- Defense proposes to expand Military Lending Act coverage The Department of Defense (DoD) has a proposal that would expand the scope of coverage of the Military Lending Act of 2006 (MLA). The proposal [79 FR 58601] would extend MLA protections to any type of credit covered by the Truth in Lending Act except loans secured by real estate and purchase-money loans. Comments on the proposal are due within 60 days, by November 28, 2014.
- NCUA says DoD proposal may reduce credit to servicemembers suggests that credit unions serving members of the military or their families could be affected by the proposed Department of Defense (DoD) rule that may reduce CUs' ability to offer certain kinds of credit, including payday loan alternatives. CFPB Director Cordray has also issued a on the proposed rule.
- FDIC enforcement orders a list of 37 order of administrative enforcement actions taken against banks and individuals in August. Of the 37 orders list, seven were consent orders, six were orders of removal and prohibition, and two orders for civil money penalties (CMPs).
- Georgia bank pays CMP for UDAP violations The August FDIC enforcement orders included one imposing a $10,000 civil money penalty (CMP) on First Covenant Bank, Commerce, Georgia, relating to the FDIC's determination that the bank committed multiple violations of section 5 of the Federal Trade Commission Act between June 2009 and September 2011.
- Updated Flood Insurance Manual available FEMA has updated its NFIP Flood Insurance Manual to reflect program changes that become effective October 1, 2014. BOL's Andy Zavoina has updated the links to the manual on our page. One of the links is to a PDF file that Andy assembled that includes all 566 pages of the manual in one searchable document.
- Treasury Direct Deposit glitch The Treasury Department's Bureau of the Fiscal Service sent out an email alert on Friday afternoon to say that a federal government payroll processing error generated a large number of direct deposits with a settlement date of 9/26/2014 that were incorrectly sent with savings codes for checking accounts and checking codes for savings accounts. The notice asked financial institutions to post the entries with the correct codes rather than return them, if they could do so. BOL sent out a special Compliance Briefing issue Friday afternoon to circulate Treasury's request.
- FTC fotonovela on income scams The Federal Trade Commission has issued two Spanish-language fotonovelas, Income ScamsFatima Says No to an Income Scam, about scams that promise one can make money selling high-end products or brand-name merchandise. The fotonovelas tell the story of Fatima, a consumer who is looking for a way to earn some extra money.
- Structuring earns 5-year prison term that a Texas businessman and his wife have pleaded guilty to conspiring to structure more than $1.8 million in cash withdrawals and eight counts of structuring cash withdrawals from bank accounts where his company received fraudulent payments from Medicare.
- FFIEC urges action on Shellshock vulnerabilityAlert have been issued by the FFIEC urging financial institutions to quickly address "Shellshock" vulnerability by applying patches to their Bash software. Bash, or Bourne-again Shell, is a common software tool found in many operating systems.
- Final rule revising calculation of total leverageBulletin 2014-47 has announced the adoption and publication in the by the OCC, FRB, and FDIC of a final rule that revises the calculation of total leverage exposure (the denominator of the supplementary leverage ratio) in a manner generally consistent with revisions to the international leverage ratio framework published by the Basel Committee on Banking Supervision in January 2014. This rule will become effective on January 1, 2015.
- Michigan severe storm and flooding reliefFIL-49-2014 announcing steps intended to provide regulatory relief to financial institutions and to facilitate recovery in areas of Michigan affected by severe storms and flooding.
September 26, 2014
- U.S. Bank paying CMPs and restitution Consent Orders for the assessment of a $4 million civil money penalty against U.S. Bank National Association, Cincinnati, Ohio, and restitution of $47.9 million to more than 420,000 consumer accounts. The OCC order also requires the bank to improve its governance of third-party vendors associated with "add-on" consumer products and to submit to the OCC a third-party management program plan for add-on consumer products marketed or sold by the bank or its vendors. The CFPB has issued a separate order against the bank based on unfair billing for identity theft protection products. The CFPB Order required the bank to pay a $5 million civil money penalty and ordered restitution to harmed consumers. Restitution payments made by the bank to those consumers pursuant to the OCC's order will also satisfy identical obligations required by the CFPB action. Consumers eligible for restitution include those who were unfairly billed for identity theft protection products marketed by the bank and sold by its vendor. The restitution ordered will benefit consumers who enrolled in and paid for identity theft protection products between February 2003 and August 2012, but did not receive the full benefit of the products. The restitution will include the full amount paid for these products, plus any associated over-limit fees and finance charges.
- CFPB to study early intervention credit counseling The Bureau has announced Project Catalyst, a CFPB research pilot to assess the potential impact of early intervention credit counseling. Barclaycard (Barclays Bank Delaware) and Clarifi (Consumer Credit Counseling Service of Delaware Valley) have partnered on a pilot program in which Barclaycard will offer cardholders who may need help with managing their credit card debt the opportunity to get help from Clarifi. Cardholders can then choose to enroll in Clarifi's credit counseling services at no cost to them. The information obtained by Barclaycard and Clarifi will be shared with the CFPB. The data will be de-identified (appropriate precautions will be taken to ensure that individual consumers cannot be identified through the data).
- OCC Mortgage Metrics report releasedSecond Quarter 2014 Mortgage Metrics Report has been released by the OCC. The report indicates the performance of first-lien mortgages serviced by large national and federal savings banks experienced seasonal decline during the second quarter of 2014, but improved from a year earlier.
- Large banks final rules and guidelinesOCC Bulletin 2014-45 has been issued concerning previously announced enforceable that establish minimum standards for the design and implementation of a risk governance framework for large insured national banks, insured federal savings associations, and insured federal branches of foreign banks (collectively, banks). The heightened standards guidelines:
- apply to banks with average total consolidated assets (1) equal to or greater than $50 billion; (2) less than $50 billion, if the bank's parent company controls at least one other covered bank; or (3) less than $50 billion, if the OCC determines that the bank's operations are highly complex or otherwise present a heightened risk that warrants the application of the guidelines.
- set out the roles and responsibilities for front line units, independent risk management, and internal audit. These organizational units are fundamental to the design and implementation of the framework.
- provide that a covered bank should have a comprehensive written statement that articulates the covered bank's risk appetite and serves as a basis for the framework (i.e., a risk appetite statement).
- provide that the board should require management to establish and implement an effective framework that complies with the guidelines and approve any significant changes to the framework.
- provide that the board should actively oversee a covered bank's risk-taking activities and hold management accountable for adhering to the framework.
- provide that at least two members of a covered bank's board should be independent.
- In another in a series of Bureau Blog articles on success stories promoting its consumer assistance efforts, the CFPB has features "
September 25, 2014
- FinCEN issues Transportation of Currency ruling FinCEN Administrative Ruling FIN-2014-R010, issued yesterday, clarifies the application of FinCEN regulations to certain persons involved in transportation of currency. FinCEN summarized the effect of the ruling as follows:
- Where a Federal Reserve Bank or a federally regulated bank contracts for and directs the physical transportation of value by the currency transporter, the currency transporter is exempted from money transmitter status under FinCEN's regulations exclusively with respect to such physical transportation of value.
- Where a currency transporter, without the intervention of any third party such as a subcontractor and/or transshipper, picks up value from a person (or from a shipper acting at the direction of that person) and physically delivers the same value to the same person at another location, or to an account of that person at a Bank Secrecy Act ("BSA") regulated financial institution, such activity will not result in the currency transporter being a money transmitter under FinCEN's regulations.
- In all other scenarios (among them, where there exists transshipment — moving the same shipment from one currency transporter to another — or subcontracting, or where the currency transporter delivers value to a person different that the person from whom it picked up the value, or where the currency transporter takes more than a custodial interest in the value transported), the currency transporter will be deemed a money transmitter under FinCEN's regulation.
- Walmart launches checking account Walmart and Green Dot Corp. have announced the nationwide rollout of GoBank, a checking account product available exclusively at Walmart. The checking account, from Green Dot Bank, includes a linked MasterCard debit card and other consumer-oriented features. GoBank accounts will not be charged overdraft fees, minimum balance fees or monthly fees with qualifying direct deposits, and the monthly membership cost of $8.95 is waived for monthly direct deposits of $500 or more. GoBank also offers a network of 42,000 free ATMs. Neither a ChexSystems score nor credit bureau rating will be used as the basis for determining customer eligibility. Instead, GoBank uses proprietary underwriting techniques to allow almost any consumer who passes ID verification to open an account. The product will be available nationwide by the end of October. Green Dot Bank deposits are FDIC-insured.
- CFPB updates Reverse Mortgage Guide The Consumer Financial Protection Bureau has announced an update of its guide to reverse mortgages. The announcement also discussed a list of things that should be considered prior to entering into a reverse mortgage:
Two important recent changes to reverse mortgage programs were also noted in the announcement. First-year payout limits have been instituted, and protections have been added for non-borrowing spouses.
- The cost of homeowner's insurance and taxes
- Plans for staying in the home or leaving it to family members
- Plans for dependents or others living in the home
- Alternatives to reverse mortgage
- Appeals court upholds permanent bar of telemarketers A decision has been issued by the U.S. Circuit Court of Appeals for the Sixth Circuit upholding a district court ruling that several defendants based in the United States and Canada deceived consumers through a telemarketing scheme designed to sell them phony mortgage assistance and debt relief programs. The district court's order permanently bars the defendants from working in the debt relief or mortgage assistance industries, and enters judgment, jointly and severally, of $5,706,135.48 to be used for refunds to the injured consumers. The initial court action originated with a Complaint field by the FTC against E.M.A. Nationwide and several other defendants, alleging that since at least mid-2010 they operated a call center in Montreal that cold-called thousands of U.S. consumers, including those whose numbers were registered on the Do Not Call Registry, pitching programs that would supposedly help them pay, reduce, or restructure their mortgage and other debts.
- FTC stops abusive debt collection operation The Federal Trade Commission has issued a press release and Consumer Information Scam Alert to announce that a default judgment has been issued by a federal district halting the abusive debt collection practices of Pinnacle Payment Services, LLC, and related defendants. The accused were running an operation that used fictitious names and threatened consumers into paying debts they may not have owed. The Complaint filed by the FTC alleged the Pinnacle defendants, operating out of Atlanta and Cleveland, used fictitious business names that implied an affiliation with a law firm or a law enforcement agency, such as Global Legal Services, Allied Litigation Group, and Dockets Liens & Seizures. Using robocalls and voice messages that threatened legal action and arrest unless consumers responded within a few days, the defendants collected millions of dollars in payment for phantom debts — debts many of the consumers contacted did not owe. Their illegal practices generated nearly 3,000 complaints to the FTC's Consumer Sentinel database. The settlements with each defendant except one require them, jointly and severally, to pay judgments of $9,384,628, which represents the total consumer injury caused by their allegedly illegal conduct. The settlement with other individual includes a judgment of $1,558,657, which reflects the consumer injury caused during her tenure with the operation. Under the settlements, the monetary judgments against all individuals will be partially suspended due to their inability to pay.
- Counter terrorism designations Treasury has named 11 individuals and one entity as Specially Designated Global Terrorists (SDGTs) under Executive Order (E.O.) 13224. The designees have worked with a range of terrorist organizations — the Islamic State of Iraq and the Levant (ISIL), al Nusrah Front, al-Qaida and its affiliates, and Jemaah Islamiya — to send financial and material support and foreign terrorist fighters to Syria and elsewhere. This action freezes any assets the designees may have under U.S. jurisdiction and generally prohibits all financial and commercial transactions by any U.S. person with the designees. Further information is available in a BOL OFAC Update
- their annual "Joint Report: Differences in Accounting and Capital Standards Among the Federal Banking Agencies as of December 31, 2013," which has been submitted to the Committee on Financial Services of the U.S. House of Representatives and to the Committee on Banking, Housing, and Urban Affairs of the U.S. Senate. The report is required by section 37(c) of the Federal Deposit Insurance Act. The first such report was filed in 1990.
September 24, 2014
- Larger money transfer participants rule published The Consumer Financial Protection Bureau's previously announced final rule, "Defining Larger Participants of the International Money Transfer Market," has been published [79 FR 56631] in the Federal Register, with an effective date of December 1, 2014. The rule brings under Bureau supervision about 25 non-bank international money transfer providers, each of which completes more than one million aggregate annual international money transfers.
- OFAC issues Iranian flights payments FAQ An FAQ has been posted by OFAC on the facilitation of payments to Iranian civil aviation authorities for overflights of Iran or emergency landings in Iran by aircraft that are owned by a non-U.S. person and registered outside the United States.
- July FHFA house price index risesJuly 2014 Housing Price index (HPI) report has been released by the Federal Housing Finance Agency (FHFA). U.S. house prices rose in July, up 0.1 percent on a seasonally adjusted basis from the previous month. The previously reported 0.4 percent increase in June was revised to reflect a 0.3 percent increase.
- Federal Advisory Council meeting The Federal Reserve Board has released the record of the meeting on September 19, 2014, of the Federal Advisory Council and Board of Governors. The Council meets four times a year, is composed of twelve representatives of the banking industry, and consults with and advises the Board on all matters within the Board's jurisdiction.
- Cordray announces Public Service and Student Debt initiative at the announcement of the Consumer Financial Protection Bureau's Public Service and Student Debt initiative, Director Cordray discussed the burden of student debt and a pledge by AmeriCorps and the Peace Corps to join with the Bureau to help people tackle their student debt. A Bureau Blog article announced the release of new resources for employees, volunteers, and recent graduates with student loan debt including guides for:
- CFPB helps fight improper actions by debt collectors In another in a series of Bureau Blog articles on success stories promoting the its consumer assistance efforts, the CFPB has features "Venida's story," which relates how the CFPB helped a Houston, Texas, registered nurse get inaccurate information removed from her credit report.
- Bitcoin Breakdown scam alert The Federal Trade Commission has posted a scam alert with a summary of a "bitcoin breakdown," which discusses a scam involving a company that made promises that it did not deliver.
- Agencies publish accounting differences report The Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation have published their annual "Joint Report: Differences in Accounting and Capital Standards Among the Federal Banking Agencies as of December 31, 2013, which has been submitted to the Committee on Financial Services of the U.S. House of Representatives and to the Committee on Banking, Housing, and Urban Affairs of the U.S. Senate. The report is required by section 37(c) of the Federal Deposit Insurance Act. The first such report was filed in 1990.
September 23, 2014
- Wells Fargo Advisors settles SEC charges The Securities and Exchange Commission has announced that Wells Fargo Advisors LLC has been charged with:
A Wells Fargo broker learned confidentially from his customer that Burger King was being acquired by a New York-based private equity firm. The broker then traded on that nonpublic information ahead of the public announcement. When SEC investigators sought all documents related to the firm's compliance reviews of the broker's trading, Wells Fargo's document production omitted documents related to the broker's trading in Burger King stock. Wells Fargo, which admits wrongdoing, agreed to pay a $5 million civil money penalty (CMP) to settle the SEC's charges, which are the first-ever against a broker-dealer for failing to protect a customer's material nonpublic information.
- failing to maintain adequate controls to prevent one of its employees from insider trading based on a customer's nonpublic information, and
- unreasonably delaying its production of documents during the SEC's investigation and providing an altered internal document related to a compliance review of the broker's trading.
- 2013 HMDA data available The Federal Financial Institutions Examination Council (FFIEC) has announced the availability of data on mortgage lending transactions at 7,190 U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA) regarding 2013 lending activity, including applications, originations, purchases and sales of loans, denials, and other actions related to applications. The CFPB has also announced via its Blog and a News Release that it has updated its HMDA database with the 2013 information.
- Federal Reserve Bulletin: HMDA A draft of an article to be included in a forthcoming issue of the Federal Reserve Bulletin has been released. The article features an overview of the 2013 data reported under the Home Mortgage Disclosure Act of 1975 (HMDA), mortgage market activity over time, and lending patterns across different demographic groups and lender types. In addition, a unique data set composed of HMDA records is matched to borrowers' credit records to reexamine the factors that might help explain the large differences in the incidence of higher-priced lending across borrowers of different races and ethnicities during the housing boom.
- Gruenberg on FDIC supervisory focus Speaking at the American Regulatory Symposium in Arlington, Virginia, FDIC Chairman Gruenberg discussed these three areas of ongoing supervisory focus for the FDIC:
- Interest rate risk,
- Managing credit risks as loan demand grows, and
- Reduction of corporate inversion tax benefits A notice has been issued by Treasury and the IRS reporting targeted action to reduce the benefits of corporate tax inversions. An inversion occurs when a U.S. based multinational restructures so that the U.S. parent is replaced by a foreign corporation, in order to avoid U.S. taxes. A fact sheet was released by Treasury and Secretary Lew commented on the action.
- Lew on economics of climate change
In remarks delivered at a conference hosted by the Hamilton Project at Brookings, Secretary Lew discussed the current state of the economy and implications of a changing climate. He noted, "As an economic matter, the cost of inaction or delay is far greater than the cost of action. Costs associated with extreme weather events like rising sea levels, drought, heat waves, wildfires, floods, and severe storms demonstrate the scope of economic exposure." He also indicated the National Flood Insurance Program has had to borrow $24 billion from the Treasury Department because of payouts resulting from Hurricanes Katrina, Rita, Wilma, and Sandy, all of which occurred over the past nine years. He concluded, "climate change is one of the most important challenges of our time. What we do in the next few months and years to address this challenge will determine our nation's future, and if we take the right steps, we will leave the next generation with a stronger country, a better economy, and a brighter future."
- CRA ratings
The ratings received by 26 national banks and federal savings associations recently evaluated by the Office of the Comptroller of the Currency for Community Reinvestment Act compliance have been released. Four of institutions were rated outstanding, and 22 rated satisfactory.
- Finance companies report
The July 2014 G.20 Finance Companies Report of Owned and Managed Receivables Outstanding and Auto Loans: Terms of Credit has been released by the Federal Reserve.