Financial Crimes Enforcement Network (FinCEN)
Caesars Palace to pay \$8 million penalty for BSA infractions.
On September 8, 2015, the Financial Crimes Enforcement Network (FinCEN) announced that Caesars Palace had agreed to pay an $8 million civil money penalty for its willful and repeated violations of the Bank Secrecy Act (BSA). The casino is also required to conduct periodic external audits and independent testing of its anti-money laundering (AML) compliance program, report to FinCEN on mandated improvements, adopt a rigorous training regime, and engage in a "look-back" for suspicious transactions. For more information visit Fincen’s website here.
Federal Deposit Insurance Corporation (FDIC)
Comenity banks to pay \$61.5 million to consumers and $2.5 million in CMPs.
On September 8, the Federal Deposit Insurance Corporation (FDIC) announced a settlement with two wholly-owned subsidiaries of Comentiy, LLC for deceptive practices related to the marketing and servicing of cred card add-on products. One bank will pay a civil money penalty (CMP) of $2 million and provide restitution of approximately $53 million to harmed consumers, while the second bank will pay at $450,000 CMP and provide restitution of $8.5 million. More information on the story can be found here.
FDIC reports $43 billion in second quarter earnings.
The FDIC released its Quarterly Banking Profile for 2015’s Second Quarter on September 2nd. The profile reported aggregate net income of $43 billion from insured commercial banks and savings institutions. You can find more information on the report here.
CRA evaluations released.
The FDIC released its September list of state nonmember banks evaluated for Community Reinvestment Act (CRA) compliance, as well as the ratings they received on recent reexaminations. More information on these can be found here.
Call report due date announced.
Institutions have been alerted to materials pertaining to the Consolidated Reports of Condition and Income (Call Reports) for the Sept. 30, 2015, report date. Except for certain institutions with foreign offices, completed Call Reports must be received by Oct. 30, 2015. Institutions are encouraged to complete the preparation, editing, and review of Call Report data and submission to the Central Data Repository as early as possible. (FIL-42-2015 at 2015 No. 3774; Supplemental Instructions at 2015 No. 3775)
Office of the Comptroller of the Currency (OCC)
Enforcement Actions issued.
On September 18th, the Office of the Comptroller of the Currency (OCC) released new enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. They can be found here.
August CRA evaluations released.
At the beginning of September, the OCC released a list of CRA performance evaluations from August. The list contains national banks, federal savings associations, and insured federal branches of foreign banks that have received ratings. More information on this can be found here.
Advanced approaches capital framework to begin use.
On September 3rd, the Federal Reserve Board and the OCC approved the use of the “advanced approaches” capital framework for Bank of America and its subsidiaries. Under this framework, firms must meet specific risk-measurement and risk-management criteria when calculating their risk-based capital requirements. More information on this undertaking can be found here.
Securities and Exchange Commission (SEC)
Hackers to pay $30 million for profiting on hacked news releases.
On September 14th, the Securities and Exchange Commission (SEC) announced that a Ukrainian-based trader and its CEO agreed to pay $30 million to settle allegations that they profited from trading on non-public corporate information hacked from newswire service. There are 32 other defendants being charged in the case.
SEC charges business associates in $14 million scam.
The SEC announced fraud charges and an asset freeze obtained to halt a real estate investment scheme being conducted by businessmen in California. The SEC alleges that the men stole investor proceeds for their own use and diverted money to unrelated businesses, raising more than $14 million from over 100 investors.
Florida-based CPA charged with fraud.
On September 17th, the SEC imposed sanctions against a Florida-based certified public accountant for performing deficient and fraudulent audits and quarterly reviews for eight publicly traded companies, and issuing false and misleading audit opinions on the companies’ annual financial statements. The CPA was ordered to disgorge his audit fees of $96,000 and pay a CMP of $50,000.
Bank to pay $1.5 million to settle accounting fraud charges.
Late last month, the SEC announced that a corporation and its wholly-owned subsidiary have agreed to pay a $1.5 million settlement for accounting fraud charges after the company understated its reported 2011 net loss by over $30 million. The SEC’s complaint can be further explored here.
Consumer Financial Protection Bureau (CFPB)
Monthly Complaint Snapshot spotlights mortgage complaints.
On September 22nd, the Consumer Financial Protection Bureau (CFPB) released its latest monthly consumer complaints report, which highlights mortgage complaints. The report emphasized that consumers continue to face issues with mortgage servicing, particularly when they apply for a loan modification to avoid foreclosure.
New tools available for "Know Before You Owe."
The CFPB released new online resources to help consumers and institutions alike navigate the mortgage process. The tools provide an interactive, step-by-step overview of the process, helping homebuyers decide how much they can afford to spend, and so much more. The tools can be found on the CFPB’s website.
Debt buyers to pay $79 million in penalties and restitution.
On September 9th, the CFPB took action against the nation’s two largest debt buyers and collectors for using deceptive tactics to collect bad debts. The debt collectors were ordered to overhaul their debt collection and litigation practices, and to pay $61 million in consumer refunds and $18 million in penalties. More information on the case can be found here.
Preliminary injunction taken against company charging $67 million in illegal fees.
On September 15th, the CFPB announced that it obtained a preliminary injunction against a law group and its senior leaders for running a debt-relief scheme that charged consumes upwards of $67 million in illegal upfront fees.
Final rules published for credit access in rural and underserved areas.
The CFPB finalized several changes to its mortgage rules to facilitate responsible lending by small creditors in rural and underserved areas. This will increase the number of financial institutions able to offer certain types of mortgages in these areas, among other things. More details can be found here.
Bank to pay $32.75 million to settle discriminatory lending charges.
On September 24th, the CFPB announced a settlement with a New Jersey bank to settle claims that for four years it engaged in discriminatory redlining practices denying residents in black and Hispanic neighborhoods fair access to residential mortgage loans. The complaint filed by the CFPB can be found here.
Bank ordered to pay $21.5 million for discrimination and illegal credit card practices.
Late last month, the CFPB announced two separate actions against a bank for discriminatory auto loan pricing and illegal credit card practices. The bank was ordered to amend its pricing and compensation system as well as to pay a total of $21 million to harmed borrowers and to pay a $500,000 penalty. More information on the case can be found here.
National Credit Union Administration (NCUA)
Prohibition orders issued.
The National Credit Union Administration (NCUA) issues enforcement and prohibition orders on a regular basis, and posts them on its site. Violation of prohibition orders is a felony offense punishable by imprisonment and a fine of up to $1 million. For more information on the NCUA's most recent orders, please visit the NCUA website.
NCUA retrieves $129.6 million in investment losses.
On September 16th, the NCUA announced the acceptance of an offer of judgment for $129.6 million from the Royal Bank of Scotland. This act resolved claims arising from losses related to purchases of residential mortgage-backed securities by other credit unions. More information on the pending litigation can be found here.
Rules published by NCUA.
In September, the NCUA published two final rules, one to make civil money penalty inflation adjustments and another rule amending its regulations to exclude Central Liquidity Facility-related bridge loans from the aggregate unsecured lending cap to one borrower. The details on these rules can be found here and here.
Federal Reserve Bank
FRB to offer an Accelerated Imaged Returns service.
On September 15th, the Federal Reserve announced that it will begin offering an Accelerated Imaged Returns Delivery Service to all FedReceipt® Plus Returns customers. According to FedFlash, this service “provides the opportunity for a bank of first deposit (BOFD) to receive some of its incoming returns earlier than they do today, which may help address the risk of releasing funds before a returned item is received.” For more information, visit the FRB’s website here.
Bank to pay over $56,000 in civil money penalties.
The FRB announced an Order of Assessment against a bank in Michigan for violations of Regulation H. The bank allegedly violated provisions of the National Flood Insurance Act. More information on this order can be found here.
Bank to pay almost $410,000 in civil money penalties.
The FRB ordered an assessment of $9,285 in civil money penalties against a Colorado bank for violations of Regulation H and provisions of the National Flood Insurance Act. More information on this order can be found here.
Department of Justice
KMART pays $1.4 million for False Claims Act Allegations.
On September 1st, the Department of Justice (DOJ) announced that KMART Corporation paid $1.4 million to resolve allegations that it violated the False Claims Act by using drug manufacturer coupons and gasoline discounts as improper Medicare beneficiary inducements. More information on the claim can be found here.
Swiss bank to pay $10.3 million penalty.
According to a press release on the DOJ’s site, Schroder & Co. Bank AG reached a resolution in early September under the DOJ’s Swiss Bank Program, which continues to help lift the veil of secrecy surrounding bank accounts opened and maintained for U.S. individuals. According to the DOJ, since August of 2008, Schroder Bank had 243 U.S.-related accounts with approximately $506 million in assets under management. The institution will pay a $10.354 million penalty.
Corporation to pay over $29 million for alleged false claims related to mortgage loan servicing.
On September 4th, the DOJ announced that an investment management company agreed to pay $29.63 million to resolve allegations that the company, through its subsidiaries, violated the False Claims Act in connection with their participation in the Department of Housing and Urban Development’s Home Equity Conversation Mortgages (HECM) program.
Tax evader sentenced to five years in prison and $250,000 per count of tax evasion.
The DOJ announced that a Colorado man was convicted of two counts of tax evasion, three counts of willful failure to file an individual federal income tax return, and three counts of willful failure to file a corporate income tax return. The man faces a statutory maximum sentence of five years in prison and a maximum fine of $250,000 for each count of tax evasion and a statutory maximum sentence of one year in prison and a maximum fine of $100,000 for each count of failure to file an income tax return.
Other Regulatory Bodies
Scammer to pay almost $900,000 judgement.
On September 3rd, the Federal Trade Commission (FTC) settled allegations that a mortgage relief services company illegally charged homeowners an up-front fee for help they promised by never provided. The company was ordered to pay $885,677 representing the total amount of fees taken by the scheme. More information can be found here on the FTC’s site.
HUD issues final rule for on-site completion of construction of manufactured homes.
On September 8th, the Department of Housing and Urban Development (HUD) published a final rule establishing a procedure whereby construction of new manufactured housing that is substantially completed in the factor can be completed at the installation site, rather than in the plant. This rule is effective March 7, 2016, and can be read in its entirety on the Federal Register’s website here.
Texas auto dealer to pay over $82,000 for FCRA violations.
The Federal Trade Commission (FTC) announced that the loan-servicing arm of a Texas-based auto dealer must pay $82,777 in civil penalties for violations of the Fair Credit Reporting Act. Allegedly, the dealer failed to have written policies and procedures regarding the accuracy of reported credit information, and failed to properly investigate disputed consumer credit information. The FTC press release on the issue can be found here.
FATCA deadlines extended.
On September 18th, the Department of the Treasury and the Internal Revenue Service (IRS) issued Notice 2015-66, extended deadlines for certain transitional rules related to the Foreign Account Tax Compliance Act (FATCA). Certain deadlines were extended from to 2019. The Notice can be read here.