Federal Deposit Insurance Corporation (FDIC)
FDIC releases October enforcement actions.
The FDIC released a list of orders of administrative enforcement actions taken against banks and individuals in October. The list included 15 orders of administrative enforcement actions taken against banks and individuals. The full list can be found here.
Swap margin rule finalized.
The Federal Reserve Board (FRB), the FDIC, the Office of the Comptroller of the Currency (OCC), the Federal Housing Finance Agency (FHFA), and the Farm Credit Administration (FCA) issued a final rule to establish capital and margin requirements for swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants regulated by one of the agencies. For more information, see here.
FDIC issues final rule concerning securitization safe harbor.
On November 24th, the FDIC issued a final rule revising certain provisions of it securitization safe harbor rule, which relates to the treatment of financial assets transferred in connection with a securitization or participation. The rule takes effect on January 25th, 2016. For more information, visit the Federal Register.
Office of the Comptroller of the Currency (OCC)
CRA evaluations released.
The Office of the Comptroller of the Currency (OCC) and the FDIC released their monthly lists of financial institutions recently evaluated for compliance with the Community Reinvestment Act (CRA). More information on these can be found here.
CRA enforcement actions and terminations released.
On November 20th, the OCC released recent enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. The full list can be found here.
OCC issues Disclosure Rule guidance.
On November 6th, the OCC issued guidance regarding the initial examinations of OCC-supervised institutions for compliance with the TILA-RESPA Integrated Disclosure Rule. The guidance applies to national banks and federal savings associations with $10 billion or less in total assets. More information can be found here.
Fees and assessments for 2016 announced.
The OCC issued a bulleting informing all relevant financial institutions of fees and assessments to be charged by the OCC for calendar year 2016, effective January 1st. There will be no inflation adjustment to assessment rates. For more information on the bullet, visit the OCC’s website here.
Securities and Exchange Commission (SEC)
Permanent injunctive relief sought against Bitcoin mining companies.
On December 1st, the SEC announced charges against two Bitcoin mining companies for conducting a Ponzi scheme in which the owner sold $20 million worth of purported shares in a digital mining contract that misled investors. For more information on the case, see the SEC’s website here.
Bank to pay $4.2 million to settle SEC charges.
On November 30th, the SEC announced charges against a financial institution for failing to disclose certain payments in connection with debt issued by the Government of Tanzania in 2013. The financial institution agreed to pay a $4.2 million penalty as well as to admit the facts underlying the charges. For more information on the case, visit the SEC’s website.
Audit firm to pay $4.5 million for ignoring red flags.
The SEC announced charges against a national audit firm and two of its partners. The firm was charged with ignoring red flags and fraud risks while conducting deficient audits of two publicly traded companies that wound up facing SEC enforcement actions for improper accounting and other violations. More information can be found here.
Traders accused of spoofing and mismarking.
On December 3rd, the SEC announced fraud charges against traders, accusing them of circumventing market structure rules during options trading schemes and engaging in manipulative trading known as spoofing to generate liquidity rebates from an options exchange. For more information on the case, visit the SEC’s website.
Consumer Financial Protection Bureau (CFPB)
Lender ordered to pay $3.28 million.
In late October, the CFPB ordered Security National Automotive Acceptance Company (SNAAC) to refund or credit $2.28 million to servicemembers and other consumers who were allegedly harmed by the lender’s illegal debt collection practices. The lender was also ordered to pay a penalty of $1 million. Thousands of people were victims of the company’s aggressive tactics.
Fall 2015 rulemaking agenda published.
The CFPB published a semiannual update of its rulemaking agenda as part of the government’s Unified Agenda of Regulatory and Deregulatory Actions. The agenda includes rulemaking actions in pre-rule, proposed rule, final rule, long-term, and completed stages. The CFPB published a blog detailing current initiatives and goals on November 20th.
Complaint filed against online lender for deceptive practices.
On November 18th, the CFPB announced that it had taken action against an online lender for deceiving consumers about the cost of short-term loans. The CFPB is seeking redress for harm consumers, as well as a civil money penalty and injunctive relief. Allegedly, the company unfairly used remotely created checks to debit consumers’ bank accounts.
Dollar thresholds announced for Regulations Z and M.
On November 25th, the Federal Reserve Board and the CFPB announced the dollar thresholds in Regulation Z and Regulation M, for Truth in Lending and Consumer Leasing respectively, that will apply for 2016. The protections that apply to both generally will apply to consumer credit transactions and consumer leases of $54,600 or less in 2016, the same thresholds that applied in 2015.
Thresholds announced for higher-priced mortgage loan appraisal requirements.
The CFPB, the Federal Reserve Board, and the OCC announced that the threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans during 2016 will remain $25,500, effective January 1, 2016.
National Credit Union Administration (NCUA)
NCUA offers resources on cybersecurity.
The NCUA have added another resource to help credit unions evaluate their ability to address cyber risks: a video that provides an overview of how the Federal Financial Institutions Examination Council’s cybersecurity assessment tool works. The tool can help credit unions pinpoint strengths and weaknesses in their cybersecurity programs, and is essential in today’s increasingly interconnected world.
NCUA launches redesigned website.
Early in November, the NCUA’s public website was relaunched with improved navigability and a mobile-responsive design. The hope is that users will be able to find critical information more easily. Some improvements include a new Small Credit Union Learning Center and a new consumer section.
Consumer Assistance Portal opens.
On November 12th, the NCUA announced the opening of the Consumer Assistance Center online portal, which the NCUA hopes can help resolve consumer complaints more efficiently. The portal can be used by credit unions to receive correspondence about complaints concerning them, to send responses and complaint information, and to check the status of complaints.
Federal Reserve Bank
Bank to pay $258 million for violating U.S. sanctions.
On November 4th, the Federal Reserve Board announced a $58 million penalty and consent cease and desist order against a Germany-based bank for violating U.S. sanctions. New York’s Department of Financial Services is levying a $200 million penalty on the lender for similar allegations. The German bank allegedly used “nontransparent methods and practices” to process over $10.8 billion for financial institutions in countries subject to U.S. economic sanctions.
Written Agreement enforcement action entered.
In November, the Federal Reserve Board announced that the Federal Reserve Bank of New York and the New York State Department of Financial Services (NYSDFS) had entered into a November 5, 2015, Written Agreement enforcement action with the Bank of Nova Scotia, Toronto, Canada and Bank of Nova Scotia New York Agency. This agreement is to address deficiencies relating to risk management and compliance with applicable laws.
Proposed rule issued to strengthen banks in the U.S.
In later October, the Federal Reserve proposed a new rule that would strengthen the ability of the largest domestic and foreign banks operating in the United States to be resolved without extraordinary government support or taxpayer assistance. The proposed rule would apply to domestic firms identified by the Board as global systemically important banks (GSIBs) and to the U.S. operations of foreign GSIBs.
Regulation D updated for 2016.
The Federal Reserve announced its annual indexing of two amounts used to determine reserve requirements of depository institutions. According to the final rule issued, the new low reserve tranche and reserve requirement exemption amount will apply to the fourteen-day reserve maintenance period that begins January 21, 2016.
Board updates Volcker Rule FAQs.
In November, the Federal Reserve Board posted an update of its Frequently Asked Questions concerning the Volcker Rule. The Rule generally prohibits insured depository institutions and any company affiliated with an insured depository institution from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge fund or private equity fund.
Department of Justice
Wells Fargo to pay $81.6 million.
On November 5th, the Department of Justice (DOJ) entered into a national settlement agreement with Wells Fargo Bank requiring millions in remediation for the bank’s repeated failure to provide homeowners with legally required notices. The bank acknowledged that it failed to timely file more than 100,000 payment change notices (PCNs) and failed to timely perform more than 18,000 escrow analyses.
Attorneys sentenced and ordered to pay $14 million for fraud scheme.
The DOJ announced that the manager of a home health company responsible for a $50 million fraud scheme in New Orleans was sentenced to prison and ordered to pay $14,147,275 in restitution. Allegedly the manager assisted with the payment of illegal kickbacks to patient recruiters and submitted false claims to Medicare to the tune of over $50 million.
University to pay almost $20 million to settle allegations.
On November 20th, the DOJ announced that the University of Florida agreed to a $19.875 million settlement after allegations that the university improperly charged the U.S. Department of Health and Human Services (HHS) arose. Allegedly, the university misused grant funds awarded by the HHS as well as inflated costs charged to HHS grants awarded.
Medical equipment company ordered to pay $1.96 million in restitution.
The DOJ sentenced a Texas man to 63 months in prison for his role in a $3.4 million scheme to defraud Medicare. The man was also ordered to pay $1.96 million in restitution. The man allegedly oversaw a scheme to defraud Medicare by submitting millions in false and fraudulent durable medical equipment (DME) claims.
Alabama woman to pay over $7 million in restitution.
A woman from Alabama was sentenced to over seven years in prison for her role in a stolen identity refund fraud (SIRF) conspiracy. The woman was also ordered to pay restitution in the amount of $7,173,704. Allegedly, in the scheme, participants filed more than 8,000 false tax returns fraudulently claiming more than $20 million in federal income tax refunds.
Other Regulatory Bodies
OFAC adds to SDN lists.
In November, the Office of Foreign Assets Control (OFAC) announced that it had designated four individuals and one entity with connections with the North Korean Government and North Korea’s weapons proliferation efforts. As part of its enforcement efforts, OFAC publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific.
HUD issues final rule concerning Section 108 fee.
On November 3rd the Department of Housing and Urban Development (HUD) published a final rule to permit HUD to collect fees from Section 108 borrowers to offset the credit subsidy costs of Section 108 loan guarantees. The rule was effective on December 3.
Bank to pay $139,500 in OFAC penalties.
The Department of the Treasury announced a $139,500 settlement with Banco do Brasil, S.A., New York Branch ("BBNY") for seven apparent violations of § 560.204 of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR).
NYDFS considering new cybersecurity regulations.
In light of recent breaches of cybersecurity measures, the acting Superintendent of Financial Services for the State of New York has sent regulators a notice that the New York State Department of Financial Services is considering potential new cybersecurity regulations for the financial center.
OFAC ends Liberia program, adds TCO and Burundi sanctions.
The U.S. Department of the Treasury announced that an Executive Order (EO) has been signed closing OFAC’s Liberia Sanctions Program as of November 12th. The EO also announced the designation of two money laundering organizations under its Transnational Criminal Organizations program. Then, on the 23rd, the President signed an EO “Blocking Property of Certain Persons Contributing to the Situation in Burundi.” OFAC lists all recent enforcement actions in its Resource Center which is available online.
Telemarketing Rule amended.
On November 18th, the Federal Trade Commission (FTC) announced final amendments to its Telemarketing Sales Rule (TSR) to ban payment methods used by scammers. The change will help protect consumers from fraud by prohibiting four types of payment methods. The TSR changes will hopefully stop telemarketers from “dipping directly into consumer bank accounts.”
Gender Identity Rule proposed.
The Department of Housing and Urban Development announced a proposed rule, the “Equal Access in Accordance with an Individual’s Gender Identity in Community Planning and Development Programs Rule (Gender Identity Rule).” This was created after HUD reviewed the Equal Access Rule published in 2012, which ensures that housing assisted or insured by HUD is open to all eligible individuals and families without regard to actual or perceived sexual orientation, gender identity or marital status.