Compliance Alert - September 2015

Financial Crimes Enforcement Network (FinCEN)

Geographic Target Orders renewed.

On August 7^th, FinCEN announced the renewal of a Geographic Targeting Order (GTO) in place for armored cars and other common carriers of currency at two border crossings in Southern California. A new, similar GTO was issued that applies to carriers crossing the border at eight major ports of entry in Texas. These were issued in coordination with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and U.S. Customs and Border Protection. For more information, please visit FinCEN’s website.

FinCEN offers ruling on bitcoin block chain.

In August, FinCEN ruled that companies using the bitcoin block chain to transfer precious metals are considered money transmitters as defined by the Bank Secrecy Act (BSA) and implementing regulations, and therefore subject to anti-money laundering (AML) restrictions. This was in response to an unnamed company in a letter that can be found on FinCEN’s website.

New FinCEN rule a "death sentence" for foreign bank.

After a rule issued by FinCEN in July naming a bank as a foreign financial institution of primary money laundering concern pursuant to Section 311 of the USA PATRIOT Act (Section 311), the financial institution has filed a complaint against the Department of the Treasury and FinCEN, citing the rule as a “death sentence.” According to the bank, the ruling would cut it off from the United States financial system without proof of money-laundering claims. The original ruling can be found here.

Federal Deposit Insurance Corporation (FDIC)

Company to pay $31.5 million for unadjusted deposit errors.

The CFPB, in conjunction with the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), has announced enforcement orders against a financial group and its two subsidiaries for failing to credit customers with the full amount of their deposited funds between 2008 and 2013. The company is also accused of misleading customers by implying that the bank would ensure that customers were credited with the correct deposit amount. The company and its subsidiaries have been ordered to pay $11 million in restitution and $20.5 million in civil money penalties. The details of the case can be found here.

FDIC issues list of state nonmember banks evaluated for CRA compliance.

The FDIC issued a list of state nonmember banks evaluated for compliance with the Community Reinvestment Act (CRA). The list of banks examined for CRA compliance can be found here. 

FDIC release June enforcement actions.

On July 31^st, the FDIC released a list of orders of administrative enforcement actions taken against banks and individuals in June. No administrative hearings are scheduled for August 2015. The full list can be found here.

Office of the Comptroller of the Currency (OCC)

CRA evaluations released.

On August 5^th, the Office of the Comptroller of the Currency (OCC) released a list of Community Reinvestment Act (CRA) performance evaluations that were public during the month of July 2015. The list is available here.

$10 million penalty assessed for unfair and deceptive practices.

On August 12^th, the OCC announced the assessment of a $10 million penalty against a Rhode Island bank that failed to notify customers when discrepancies in their deposits were found. The OCC alleges that the bank failed to resolve discrepancies between the amount of funds deposited by customers and the amount encoded from the accompanying deposit slip, among other deceptive practices. The consent order can be found on the OCC’s website here.

Deputy Comptroller for Capital and Regulatory Policy named.

On August 13^th, the OCC announced the appointment of Amrit Sekhon as the Deputy Comptroller for Capital and Regulatory Policy. Mr. Sekhon will serve as the key advisor to the Comptroller on current and emerging domestic and international policies related to bank capital and as the Comptroller’s representative for Basel Committee meetings. The OCC issued a press release on the news.

Securities and Exchange Commission (SEC)

SEC charges company with accounting fraud.

On August 6^th, the Securities and Exchange Commission (SEC) announced charges alleging that an energy company, its chief financial officer, and its current chief operating officer inflated values of oil and gas properties, resulting in fraudulent financial reports. The company is alleged to have violated anti-fraud provisions of U.S. securities laws and a related SEC anti-fraud rule.

Businessman charged with operating $114 million Ponzi scheme.

The SEC charged a businessman with a $114 million Ponzi scheme that defrauded more than 300 investors in multiple offerings of promissory notes issued by two partnerships owned by the businessman. The man agreed to settle the SEC’s complaint by consenting to permanent injunctions against committing these violations in the future.  They also agreed to asset freezes and other emergency relief, and to pay civil penalties and return allegedly ill-gotten gains with interest in amounts to be set later by the court.

Rule adopted for security-based swap dealers.

On August 5^th, the SEC announced that adoption of new rules to provide a comprehensive, efficient process for security-based swap dealers and major security-based swap participants to register with the SEC. The SEC posted the Fact Sheet online.

Rule adopted addressing pay ratio disclosure.

The SEC adopted a final rule requiring a public company to disclose the ratio of the compensation of its chief executive officer (CEO) to the median compensation of its employees.  The new rule, mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, provides companies with flexibility in calculating this pay ratio, and helps inform shareholders when voting on “say on pay.” The Fact Sheet detailing the ruling is posted online.

Citigroup to pay $180 million for hedge fund fraud.

On August 17^th, the SEC  announced a $180 million settlement for charges that a company defrauded investors in two hedge funds by claiming that they were safe, low-risk, and suitable for traditional bond investors. The press release detailing the administrative proceedings can be found on the SEC's website.

Consumer Financial Protection Bureau (CFPB)

Mortgage company to pay over $1.5 million for illegal practices.

Late last month, the Consumer Financial Protection Bureau (CFPB) announced charges against a mortgage company for blocking consumers’ attempts to save their homes. The servicer failed to honor modifications for loans transferred from other servicers, treated consumers as if they were in default when they were not, and other allegations. The company agreed to pay $1.5 million in restitution to victims and a $100,000 civil money penalty. More information can be found here.

CFPB gives guidance on PMI cancellation and termination.

On August 4^th, the CFPB issued guidance to mortgage servicers regarding the cancellation and termination of private mortgage insurance. The bulletin further clarifies Homeowners Protection Act (HPA) requirements. The announcement and its corresponding resources can be found on the CFPB’s website.

Complaint filed against offshore payday lender.

The CFPB announced the filing of a lawsuit against a group of commonly controlled companies for collecting money that consumers did not owe. According to the complaint, the defendants allegedly collected loan amounts and fees that were illegal and void, or that consumers had no obligations to repay, and falsely threatened consumers with lawsuits and imprisonment. More information on the suit can be found on the CFPB’s website.

National Credit Union Administration (NCUA)

$2 million in grants awarded.

On August 5th, the NCUA announced that grants totaling more than $2 million were awarded to 225 low-income credit unions to expand products and services, open branches or relocate offices, advance digital growth and provide greater security for their members. More information on the grants can be found on the NCUA’s website.

Prohibition orders issued.

The NCUA announced four prohibition orders issued at the end of July banning several individuals from participating in the affairs of any federally insured financial institution due to various charges, including elder theft, forgery, grand larceny, and grand theft. More information on these individuals can be found on the NCUA’s website.

Credit union closes.

On August 5th, the NCUA announced the voluntary liquidation of a credit union in Virginia after it was determined that the credit union would not be able to restore viable operations. The credit union had served 172 members and had assets of $101,630. More information can be found on the NCUA’s website here.

Federal Reserve Bank

Enforcement actions issued.

The Federal Reserve Board announced the execution of several enforcement actions and actions terminating enforcement for July and August. The 2015 Enforcement Actions can be found here.

Clarification issued on Regulation II.

On August 10th, the Federal Reserve issued clarification on Regulation II (Debit Card Interchange Fees and Routing) regarding the inclusion of transaction-monitoring costs in the interchange fee standard. More information on the regulatory policy can be found on the Federal Reserve’s website.

Federal Open Market Committee minutes released.

On August 19th, the Federal Reserve Board and the Federal Open Market Committee released minutes of the Committee meeting held on July 28th and 29th. The minutes can be read in their entirety here.

Department of Justice

Ohio man convicted of money laundering in telemarketing scheme.

On August 5th, the Department of Justice (DOJ) announced the conviction of an individual from Ohio for his role in a Costa Rican telemarketing scheme. He was charged with one count of conspiracy to commit money laundering and six counts of international money-laundering concealment. More information can be found on the DOJ’s archive. 

Swiss banks reach resolution under DOJ Swiss Bank Program.

The Swiss Bank Program provides a path for Swiss banks to resolve potential criminal liabilities in the United States. In August, three Swiss banks reach resolutions under the DOJ’s program. Details on the resolution can be found on the DOJ’s website.

Three men charged in $17 million conspiracy.

On August 6th, the DOJ announced charged against three men from the Virgin Islands based on their participation in a bribery scheme involving over $17 million in construction contracts awarded by the Virgin Islands Public Finance Authority. The case is under consideration by the court; details can be found here.

Eight sentenced in $24 million fraud ring.

The DOJ sentenced eight defendants to more than 31 years in prison, collectively, for their roles in a $24 million stolen identity refund fraud (SIRF) conspiracy. The scheme involved a complex money laundering operation through which almost $10 million in fraudulent tax refund checks were cashed at various businesses in Alabama, Georgia, and Kentucky. More information can be found on the DOJ’s website.

Other Regulatory Bodies

Defendants to pay $76 million for Ponzi scheme.

On July 31st, the U.S. Commodity Futures Trading Commission (CFTC) charged two individuals and their companies for their connections with a foreign currency exchange (forex) scheme in violation of the Commodity Exchange Act (CEA). The Orders also impose permanent trading and registration bans on the Defendants and prohibit them from further violations of the anti-fraud provisions of the CEA, as charged. The defendants were sentenced to a collective 44.5 years in prison. More information on the case can be found here.

Futures Commission Merchant ordered to pay $300,000 CMP.

On August 6th, the CFTC ordered a registered Futures Commission Merchant and provisionally registered swap dealer to pay a $300,000 civil monetary penalty for failing to hold sufficient U.S. Dollars in segregated accounts in the United States to meet all of its U.S. Dollar obligations to cleared swaps customers. More information on the case can be found here. 

OFAC settles $270,000 Foreign Assets Control Regulations violations.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with an insurance company for violations of the Foreign Assets Control Regulations. The company allegedly issued global protection and indemnity insurance policies providing coverage to certain flagged vessels. More information can be found here.

Mortgage companies to pay $300,000 CMP and more.

On August 10th, the U.S. Department of Housing and Urban Development (HUD) settled with two mortgage companies on violations of mortgage regulations. Allegedly, one company artificially increased mortgage costs and agreed wot pay a $169,419 civil money penalty, although it did not admit fault. The second lender agreed to a $300,000 CMP. More information on the allegations can be found here.

$7.1 million judgment imposed for data brokers scam.

The Federal Trade Commission (FTC) charged a data broker operation with illegally selling payday loan applicants’ financial information to a scam operation that took millions of dollars from consumers. The order against two individuals imposes a judgment of $7.1 million while an order against another imposes a judgment of more than $3.7 million. More information can be found here.

Compliance Alert - August 2015

Financial Crimes Enforcement Network (FinCEN)

FinCEN combats stolen identity tax refund fraud.

In July, FinCEN issued a Geographic Targeting Order (GTO) for South Florida check cashers in order to temporarily enhance customer identification requirements. In recent years check cashers in South Florida have become more susceptible to stolen identity tax refund fraud. According to the GTO, check-cashers in Miami-Dade and Broward counties will be required to obtain and record additional identifying information about customers cashing tax refund checks over $1,000. More information can be found here.

FinCEN fines $60,000 for AML failures.

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.

International AML/CFT Advisory issued.

On July 20, FinCEN issued an Advisory on the Financial Action Task Force (FATF)-identified jurisdictions with Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) deficiencies. The Advisory included guidance regarding the listed jurisdictions as well as general guidance. The Advisory can be found here.

Federal Deposit Insurance Corporation (FDIC)

$31.7 million bank closes.

In July, a Colorado bank with approximately $31.7 million in total assets and $29.6 million in total deposits was closed. To protect the depositors, the FDIC entered into a purchase and assumption agreement with an Indiana bank to assume all of the deposits of the Colorado bank. More information on the merger can be found here.

FDIC issues list of state nonmember banks evaluated for CRA compliance.

At the beginning of July, the FDIC issued a list of state nonmember banks evaluated for compliance with the Community Reinvestment Act (CRA). The July 2015 list of banks examined for CRA compliance can be found here. 

$140 million civil money penalty assessed.

The FDIC announced the assessment of a $140 million civil money penalty against a California bank for Bank Secrecy Act (BSA) and anti-money laundering (AML) violations. It was determined that the bank failed to implement an effective BSA/AML Compliance Program over an extended period of time. More information on the enforcement can be found here.

Office of the Comptroller of the Currency (OCC)

Final rule clarifying regulatory capital framework published.

On July 15th, the OCC, the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) published a final rule concerning certain aspects of the regulatory capital framework for certain large, internationally active banking organizations. More information on the final rule can be found in the Federal Register 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.

Citibank to pay $700 million for FTC Act violations.

The OCC announced a $35 million penalty assessment against Citigroup Inc., as well as the order to identify and make restitution to harmed customers for billing and marketing practices that violate the Federal Trade Commission Act prohibiting unfair and deceptive acts or practices. The action was taken in collaboration with the CFPB. The bank was also ordered to pay $700 million in restitution to harmed consumers. More information on the action can be found here.

Securities and Exchange Commission (SEC)

Investment advisory firms to pay $5 million for antifraud violations.

In July, the SEC charged a Connecticut-based investment advisory firm for fraudulently inflating the prices of securities in hedge fund portfolios. The firm agreed to pay $5 million to settle the charges. More information on the action can be found here.

Permanent injunction sought against stockbroker for Ponzi scheme.

The SEC announced charges against a former Pennsylvania stockbroker for conducting a Ponzi scheme that resulted in the theft of over $15 million from at least 50 different investors. The stockbroker allegedly fraudulently sold certificates of deposits (CDs) by falsely claiming that he could get them higher interest rates of return on FDIC-insured CDs. More information on the charges can be found here.

Company to pay over $1 million to settle auditor independence rules violations.

The SEC charged an LLP with violating auditor independence rules when a consulting affiliate maintained a business relationship with a trustee serving on the boards and audit committees of three funds that were audited. More information on the case can be found at the SEC’s website here.

Consumer Financial Protection Bureau (CFPB)

TRID Postponed to October 3.

In July, the CFPB announced a final rule postponing the effective date of the TILA-RESPA Integrated Disclosures (Know Before You Owe, or TRID) Rule, from August 1 to October 3, 2015. The final rule includes two technical corrections in addition to this change. More information on the ruling can be found here.

Vendors to pay almost $10 million for unfair charges.

In July, the CFPB took action against two credit card add-on product vendors for unfairly charging consumers for benefits that they did not receive. Under the proposed consent orders, one group would pay approximately $6.8 million in monetary relief for eligible consumers and a $1.9 million civil money penalty, while another group would pay approximately $55,000 in monetary relief and $1.2 million in civil money penalties. More information can be found here.

Chase to pay $216 million for selling bad credit card debt.

On July 8th, the CFPB and Attorneys General in 47 states as well as the District of Columbia took action against JPMorgan Chase for selling bad credit card debt and illegally robo-signing court documents. Chase has been ordered to pay $50 million in consumer refunds, $136 million in penalties and payments to the CFPB and states, and a $30 million penalty to the Office of the Comptroller of the Currency (OCC). More information can be found here.

$24 million to be paid to borrowers for discriminatory auto loan pricing.

On July 14th, the CFPB and Department of Justice (DOJ) announced consent orders filed against the American Honda Finance Corporation for discretionary auto loan pricing and compensation practices. Honda was ordered to change its pricing and compensation system to reduce dealer discretion and minimize the risks of discrimination. In addition, Honda was ordered to pay $24 million in restitution to affected borrowers. More information can be found here.

National Credit Union Administration (NCUA)

New charter granted to federal credit union.

At the beginning of July, the NCUA granted a charter to the ELCA Federal Credit Union in Illinois, the first new consumer federal credit union in the state since 2006. It is the third new federally chartered credit union of 2015. More information on the financial institution can be found here.

$131.5 million credit union liquidated.

On July 10th, the NCUA liquidated a Pennsylvania credit union with holding assets of $131.5 million after the credit union was found to be insolvent with no prospect for restoring viable operations. To protect the interests of its consumers, the credit union’s members and deposits were assumed by another credit Pennsylvania credit union. More information on the proceedings can be found here. 

Fixed-asset rule issued to provide relief to over 3,000 credit unions.

On July 23rd, the NCUA approved a final rule providing regulatory relief to more than 3,900 federal credit unions by removing the 5% aggregate limit on fixed-asset investments, among other things. The Board Action Bulletin discussing other proceedings from the NCUA Board meeting can be found here. 

Federal Reserve Bank

Enforcement actions issued.

On July 2nd, the Federal Reserve Board announced the execution of several enforcement actions and actions terminating enforcement for late June. The 2015 Enforcement Actions can be found here. 

Board proposes modifying capital planning and stress testing regulations.

The Federal Reserve Board proposed a rule to modify its capital planning and stress testing regulations, which would take effect for the 2016 capital plan and stress testing cycles. The proposed rule would modify the timing for several requirements, among other things. Comments on the changes are being accepted through September 24, 2015. More information can be found here.

Final rule passed to strengthen capital positions of largest bank holding companies.

On July 20th, the Federal Reserve Board approved a final rule requiring the largest, most systemically important U.S. bank holding companies to further strengthen their capital positions. The rule establish criteria for identifying a GSIB and the methods that those firms will use to calculate a risk-based capital surcharge. More information on the final rule can be found here.

Department of Justice

Former DEA agent pleads guilty to money laundering and extortion.

The Department of Justice charged a former DEA agent with money laundering, extortion, and obstruction of justice, which were committed while working as an undercover agent investigating the Silk Road, an illegal online marketplace for narcotics and other contraband. More information on the case can be found here.

Organization to pay $7.8 million for alleged false claims.

The DOJ announced charges against a corporation for making false statements to obtain contracts through the Small Business Administration’s (SBA’s) 8(a) Business Development Program for Small Disadvantaged Businesses. More information on the case can be found here.

Real estate developers sentenced for roles in $27.8 million mortgage fraud scheme.

On July 8th, the DOJ sentenced three Miami real estate developers to prison for their roles in a $27.8 million mortgage fraud scheme. In addition, they were ordered to forfeit $35,252,331 in fraudulent proceeds and to pay $21,240,064 in restitution after being convicted of wire fraud, bank fraud, and conspiracy. More information on the case can be found here.

Michigan resident to pay $14.1 million for fraud scheme.

A Michigan resident was ordered to pay $14.1 million in restitution and entered a forfeiture judgment for the same amount for his leading role in a $12.6 million Medicare fraud and tax fraud scheme. He was also sentenced to 80 months in prison. More information on this case can be found here.

Other Regulatory Bodies

Consumers to receive $4 million from debt collection scheme.

On June 30th, the Federal Trade Commission (FTC) mailed almost 95,000 checks totaling $4 million to consumers who lost money to a debt collection operation that was prosecuted in May 2014. More information on the settlement can be found here.

Individuals indicted for smuggling counterfeit products from China into U.S.

On July 1st, the United States Immigration and Custom Enforcement (ICE) announced an indictment against four individuals for allegedly smuggling counterfeit Sony and Apply products from China for sale into the United States, with an estimated value of $15 million. More information on the case can be found here.

Final Military Lending Act Rule published.

The Department of Defense issued the final Military Lending Act (MLA) rule on July 21st which works toward protecting servicemen and servicewoman from predatory credit practices by expanding financial protections provided to servicemembers, and helping ensure military families receive the consumer protections they deserve. More information on the final rule can be found here.

FATF talks money laundering risks with gold.

On July 20th, the Financial Action Task Force (FATF) issued a money laundering report on the terrorist financing vulnerabilities associated with gold. The report notes that, “Gold provides an alternative means for criminals to store or move their assets as regulators implement stronger anti-money laundering and counter terrorist financing measures to protect the formal financial sector from abuse.” More information can be found here.

Compliance Alert - July 2015

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 18^th, 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 18^th. 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 16^th, 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 10^th, 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 12^th, 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 16^th, 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 4^th, 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 11^th, 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 19^th, 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 17^th, the US. Department of Treasury announced that a woman would be featured on the redesigned $10 bill in 2020, on the 100^th anniversary of the Constitution’s 19^th 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 12^th, 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 12^th, 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 1^st, 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.