Financial Crimes Enforcement Network (FinCEN)
Casino to pay $75 million civil money penalty.
FinCEN has announced a $75 million civil money penalty (CMP) against a casino in the Pacific islands for “willful and egregious violations of the Bank Secrecy Act (BSA). According to FinCEN, the casino failed to develop and implement an effective anti-money laundering (AML) program. Casino personnel were also not adequately trained in BSA recordkeeping requirements or in identifying, monitoring, and reporting suspicious activity. More information on the CMP can be found here.
West Virginia bank fined $4.5 million for willful structuring.
FinCEN announced that a West Virginia community bank is to pay $4.5 million for willfully violating federal anti-money laundering regulations and failing to report suspect transactions. The bank allegedly allowed a business client to structure $9 million through a branch as part of a tax evasion scheme. More information on the case can be found here.
MSB consents to $12,000 CMP following BSA violations.
At the beginning of June, FinCEN announced a CMP against a money services business (MSB) and its owner/compliance officer for willful and repeated violations of the Bank Secrecy Act (BSA). The MSB reportedly failed to maintain a required anti-money laundering (AML) program, and engaged in high-risk transactions including processing millions of dollars in international wire transactions without maintaining proper records or performing any due diligence on the individuals involved in the transactions. More information on the CMP can be found here.
Federal Deposit Insurance Corporation (FDIC)
Enforcement actions issued.
The FDIC released its list of administrative enforcement actions taken against banks and individuals in April 2015. According to the FDIC’s press release, the regulator issued 24 orders, one notice, and one decision and order. The full list of enforcement decisions and orders can be accessed here.
Final standards for diversity policies and practices issued.
Several agencies, including the FDIC and along with the Federal Reserve Board, CFPB, NCUA, OCC, and SEC, have issued a final interagency policy statement establishing joint standards for assessing the diversity policies and practices of the entities they regulate. The standards provide a framework for regulated entities to create and strengthen their diversity policies and practices. More information on the rule can be found here.
Comments sought on small bank assessment revisions.
The FDIC is seeking comment on a proposed rule that will revise the way small banks are assessed for deposit insurance. The rule will likely affect FDIC-insured banks with less than $10 billion in assets. The proposed rule was published on June 16, with a 60-day comment period. The announcement can be viewed here.
Office of the Comptroller of the Currency (OCC)
$30 million CMP issued for violations of law and unsafe practices.
The OCC assessed a $30 million civil money penalty against a bank and ordered remediation to over 73,000 affected consumer accounts. The bank is accused of violations of law and unsafe or unsound practices in connection with the bank’s non-home loan compliance with the Servicemembers Civil Relief Act (SCRA), and unsafe or unsound practices in connection with non-home debt collection litigation practices. More information on the action can be found here.
Enforcement actions issued.
Every month the OCC releases enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. As always, these include Cease and Desist Orders, Civil Money Penalty Orders, and Removal/Prohibition Orders. They can be viewed here.
Agencies issue flood insurance rule.
On June 22, five agencies – the Board of Governors of the Federal Reserve System, the Farm Credit Administration, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC) – approved a joint final rule modifying regulations that apply to loans secured by properties located in special flood hazard areas. The final rule implements provisions of an Act related to escrowing flood insurance payments. More information on the final rule can be found here.
Securities and Exchange Commission (SEC)
Trader to pay $2.8 million to settle charges.
The Securities and Exchange Commission (SEC) announced charges against a Swiss trader for insider trading. The trader agreed to pay more than $2.8 million to settle the charges after an SEC investigation found that the trader was being passed information from a friend concerning the possible purchase of a company. More information on the case can be found here.
36 firms charged with fraud.
On June 18th, the SEC announced enforcement actions against 36 municipal underwriting firms for violations in municipal bond offerings. It was alleged that the firms violated federal securities laws by selling bonds using offering documents containing materially false statements or omissions about the bond issuers’ compliance with disclosure obligations. More information on the case can be found here.
Company charged with defrauding investors.
The SEC announced charges against a Texas-based oil company for defrauding investors about reserve estimates and drilling plans. The SEC is seeking final judgments ordering permanent injunctions, the return of allegedly ill-gotten gains with interest, and other financial penalties. More information on the case can be found here.
Consumer Financial Protection Bureau (CFPB)
TRID rule effective date postponed to October.
The CFPB issued a statement that the Bureau is considering a proposed amendment to the TILA/RESPA Integrated Disclosures (TRID) Rule to delay the effective date until October 1, 2015, two months later than the proposed August 1 date. The delay is said to be in response to an administrative error. CFPB Director Richard Cordray’s remarks can be seen here.
Scammers to pay $27.7 million for foreclosure relief scam.
The CFPB announced a final judgement against a foreclosure relief scam company and its affiliates. The company is accused of using deceptive marketing practices and scamming distressed homeowners into paying illegal advance fees. The court found the corporate defendants liable for $11,730,579 – the full amount of illegal fees paid by consumers – and ordered them to pay a $10 million civil penalty, in addition to penalties to the State of Florida. More information on the case can be found here.
Mortgage lenders fined $19 million for illegal loan origination practices.
At the beginning of June, the CFPB filed a complaint against a mortgage company for illegally paying bonuses and higher commissions to loan originators to incentivize them to steer consumers into costlier mortgages. The CFPB filed a proposed order that would require the company to pay $18 million in redress to consumers, plus a $1 million CMP from both the company and its CEO. More information on the case can be found here.
Medical debt collector ordered to pay $5.9 million.
The CFPB announced an enforcement action against a medical debt collection company on June 18th. The company allegedly mishandled consumer credit reporting disputes and prevented consumers from exercising certain debt collection rights. The company is required to provide over $5.4 million in relief to harmed consumers, and pay a $500,000 penalty. More information on the action can be found here.
National Credit Union Administration (NCUA)
June issue of NCUA Report out.
On June 16th, the June issue of The NCUA Report was made available online. The report addresses such topics as cybersecurity risks at credit unions, member awareness, and managing lending. The report can be subscribed to online here.
NCUA data shows widespread loan growth.
The NCUA Quarterly U.S. Map Review tracks performance indicators for federally-insured credit unions. The most recent review showed that median loan growth in federally insured credit unions was 4.0 percent during the year ending March 31, 2015. More information on these statistics can be found here.
FinCEN cites credit unions vulnerable to money laundering.
News broke at the beginning of June citing a “confidential” report from the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) that cited the increased vulnerability of more than fifty credit unions under the NCUA’s supervision. According to one article, the report was based on data analysis and was meant to be admonitory rather than to accuse the credit unions of any wrongdoing. More information on this report can be viewed here.
Federal Reserve Bank
Consumer Affairs Letter issued.
On June 10th, the Board of Governors of the Federal Reserve System issued a Consumer Affairs Letter, CA 15-4, addressing the December 2014 expiration of the Protecting Tenants at Foreclosure Act of 2009 (PTFA). The letter reminded examiners that institutions’ compliance with the PTFA should no longer be evaluated during examinations. The letter can be read in its entirety here.
Volcker Rule FAQs updated.
On June 12th, the Federal Reserve Board updated the Volcker Rule FAQs to clarify foreign public fund “control” issues as well as to limit the use of the “joint venture” exemption. Specifically, two new FAQs were added to clarify the final regulations interpreting the rule. The FAQs can be read here.
Agencies address revisions to capital rules.
On June 16th, the Federal Reserve Board, along with the FDIC and OCC, finalized revisions to the regulatory capital rules adopted in July 2013. The final rule addresses large banking organizations that determine regulatory capital ratios under the advanced approaches rule. The rule is effected October 1, 2015. More information can be found here.
Department of Justice
President of financial services firm ordered to pay $22.34 million.
On June 4th, the president of an investment and financial services firm was sentenced to 120 months in prison for tax evasion and for fraudulent practices that robbed dozens of investors of over $5 million. In addition to his prison sentence, the president was ordered to pay restitution to the tune of $22.34 million. More information on the case can be found here.
Co-conspirators in Medicare fraud scheme to pay over $100 million.
The Department of Justice sentenced the former operator of a psychiatric facility, his son, and another co-conspirator to 45 years, 20 years, and 12 years in prison respectively. The co-conspirators allegedly defrauded Medicare of $158 million. Altogether they were ordered to pay over $100 million in restitution. More information on the case can be found here.
Woman faces 36 years in prison for $228,000 tax refund scheme.
A federal grand jury charged a woman with wire fraud, theft of public money, and aggravated identity theft. The defendant allegedly used false federal tax returns to acquire fraudulent refunds, after which she used another person’s identification without lawful authority to cash the fraudulent checks. If found guilty, the defendant faces 36 years in prison. More information on this case can be found here.
Loan sharkers sentenced to 168 months in prison.
On June 11th, the Department of Justice announced that the leaders of a violent loan sharking and illegal gambling ring were sentenced to serve 168 and 147 months in present respectively. The organization was thought to have collected over 125 usurious loans totaling $1.78 million between October 2011 and 2013 alone. More information on this case can be found here.
Two more resolutions reached under Swiss Bank Program.
On June 19th, the Department of Justice announced two more resolutions reached under the department’s Swiss Bank Program. The program provides a path for Swiss banks to resolve potential criminal liabilities in the United States. More information on the program and its efforts can be found here.
Other Regulatory Bodies
Woman to appear on $10 bill.
On June 17th, the US. Department of Treasury announced that a woman would be featured on the redesigned $10 bill in 2020, on the 100th anniversary of the Constitution’s 19th Amendment giving women the right to vote. According to several sources, the Treasury is launching a website and asking for input over social media with the hashtag #TheNew10. More information on this decision can be found here.
Treasury publishes 2015 NMLRA and NTFRA reports.
On June 12th, the U.S. Department of Treasury published the National Money Laundering Risk Assessment (NMLRA) and National Terrorist Financing Risk Assessment (NTFRA) reports in an effort to ensure the continued effectiveness of the U.S.'s collective anti-money laundering and countering the financing of terrorism (AML/CFT) framework. More information on these reports can be found here.
Egmonth Group issues statement on global fight against terrorist financing.
On June 12th, the Egmont Group, the international coalition of financial intelligence units (FIUs), issued a statement concerning the global fight against terrorist financing. The Egmont Group commended member FIUs for their roles in information exchange and anti-money laundering policies. The statement can be accessed here.
4 charged with money laundering by FBI, IRS, ICE.
On June 1st, three individuals were arrested on an indictment of conspiracy to commit money laundering stemming from a scheme to steal personal identifying information, use it fraudulently to obtain income tax refunds, and then launder those funds. More information on the case can be found here.