Call Now : 888.433.2666 or Contact Us

June 2018 - Compliance Alert

Financial Crimes Enforcement Network (FinCEN)

FinCEN Issues Advisory on Human Rights Abuses Enabled by Corrupt Senior Foreign Political Figures and Their Financial Facilitators

The Financial Crimes Enforcement Network (FinCEN) issued an advisory to U.S. financial institutions, warning of the connection between corrupt senior foreign political figures and their enabling of human rights abuses.

The use of financial facilitators is one way that corrupt senior foreign political figures

By gaining access to the U.S. and international financial systems through the use of financial institutions, corrupt senior foreign political figures are able to move or hide illicit proceeds while evading U.S. and global sanctions.

They directly or indirectly participate in human rights abuses, devastating citizens, societies, and economic development.

U.S. financial institutions that hold the accounts of these corrupt figures expose themselves to great risks, whether it is directly or indirectly via banking relationships.

Financial institutions, under the Bank Secrecy Act, are obligated to report suspected illicit activity by these facilitators.

 

The Federal Reserve

Federal Reserve Board releases results of supervisory bank stress tests

The Federal Reserve found that the largest bank holding companies in the U.S. are poised to lend to the nation’s households and businesses in case of a severe global recession.

In their supervisory stress test, one of eight since 2009, they found that under the most severe scenario losses would total in $578 billion for 35 of the participating banks with U.S. unemployment rising to 10 percent.

The Federal Reserve cited a few factors that affected the post-stress capital ratios:

  • Credit card balances are higher
  • Recent tax code changes
  • The elimination of some beneficial tax treatments

Roughly 80 percent of all banking assets operating in the U.S. are owned by the 35 firms who were tested.

 

The Office of the Comptroller of the Currency (OCC)

OCC Reports First Quarter 2018 Bank Trading Revenue

The Office of the Comptroller of the Currency (OCC) reported trading revenue of U.S. commercial banks and federal savings associations of $8.2 billion in the first quarter of 2018.

The report shows that the first quarter of 2018 was 62.8 percent higher than the fourth quarter in 2017, that’s an increase of $3.2 billion, and compared to the first quarter in 2017, it was an increase of 15 percent.

While four large banks held 89.8 percent of the total banking industry notional amount of derivatives, a total of 1,357 insured U.S. commercial banks and savings associations held derivatives at the end of the first quarter 2018.

Derivative contracts remained concentrated in interest rate products, which represented 76.3 percent of total derivative notional amounts.

The percentage of centrally cleared derivatives transactions increased slightly to 39.8 percent in the first quarter 2018.

  

The Department of Justice

FTC and DOJ Approve Procedural Changes to HSR Form Instructions

The Federal Trade Commission, with the concurrence of the Antitrust Division of the U.S. Department of Justice, has approved amendments to the Hart-Scott-Rodino Premerger Notification Rules.

The instructions for filling out the form used by companies to report a proposed merger, acquisition, or similar transaction under the Hart-Scott-Rodino Antitrust Improvements Act have also been changed.

To review the potential of any anticompetitive impact of these proposed transaction the FTC and the Antitrust Division of the DOJ created the Premerger Notification and Report Form, also referred to as the HSR Form.

The amendments have been introduced to clarify some language used in the Rules and the instructions and enable the use of email for specific instances, such as in granting early termination.

Enacted by Congress in 1976, the Hart-Scott-Rodino Antitrust Improvements Act gives the federal government the opportunity to investigate and challenge mergers that are likely to harm consumers before injury occurs.

 

Other Regulatory Bodies

U.S. Commodity Futures Trading Commission

CTFC Orders JPMorgan Chase Bank, N.A. to Pay $65 Million Penalty for Attempted Manipulation of U.S. Dollar ISDAFIX Benchmark Swap Rates

The Commodity Futures Trading Commission (CFTC) settled charges against JPMorgan Chase Bank, N.A. (JPMC) for attempted manipulation of the ISDAFIX benchmark and required JPMC to pay a $65 million civil monetary penalty.

Over a five-year period, beginning in January 2007 through January 2012, JPMC made false reports and attempted to manipulate the U.S. Dollar International Swaps and Derivatives Association Fix (USD ISDAFIX).

It is a leading global benchmark referenced in a range of interest rate products, to benefit its derivatives positions, including positions involving cash-settled options on interest rate swaps.

The CFTC found that certain JPMC traders understood and employed two primary means in their attempts to manipulate USD ISDAFIX rates:

  1. trading attempted manipulation
  2. submission attempted manipulation

 

 

 

 

 

 

The Federal Reserve Eases Volcker Rule Regulation

 

There are big changes coming out of the Federal Reserve for financial institutions. The Federal Reserve will be easing the Volcker Rule in an upcoming decision.

The rule was created almost five years ago as a part of the Dodd-Frank financial regulation law that reduced the risk-taking on Wall Street. A major contributor to the 2008 financial crisis was how financial institutions used customers’ funds in high risk trades. 

The aim of the Volcker Rule was to reduce that kind of behavior and ideally, prevent another financial crisis and bank bailouts funded by taxpayers. 

The Federal Reserve is preparing to ease a rule aimed at defusing the kind of risk-taking on Wall Street that played a role in triggering the 2008 financial meltdown.

The Federal Reserve is instituting a series of changes to the rule in the hope that it will make complying for financial institutions easier and simpler.

The majority of the rule will remain, and continue to stop the trading of depository funds of customers.

Some critics fear the changes will go too far and we’ll end up in a similar situation as 2008. They worry the checks placed on Wall Street for their questionable trading practices will be watered down to the point they are no longer effective or will work as intended.

Regulation of Wall Street is a highly politicized issue, and with Republicans in control of Congress and the White House, these kinds of deregulatory changes will be a talking point for Democrats for the upcoming mid-term elections.

Many voters are still recovering from the losses they suffered in 2008, despite the economic gains of the last few years.

However, it seems the major change is the omission of a word from a part of the Volcker Rule. The removal of the word – “demonstrably” -- from the section is intended to ease the burden on financial institutions to show regulators how their trades act as hedges.

Under the current iteration of the rule, financial institutions can only count complex trades as hedges if they can “reasonably be expected to demonstrably reduce or otherwise significantly mitigate the specific, identifiable risk(s).”

Furthermore, it is expected that the Federal Reserve will allow foreign banks to practice higher risk trades, as long as, that any trading done in the U.S. is in compliance with the Volcker Rule.

 

 

 

 

May 2018 - Compliance Alert

Financial Crimes Enforcement Network (FinCEN)

Beneficial Ownership Requirements for Legal Entity Customers of Certain Financial Products and Services with Automatic Rollovers or Renewals

The Financial Crimes Enforcement Network (FinCEN) issued a ruling to provide limited exceptive relief to covered financial institutions from the requirements of the Beneficial Ownership Requirements for Legal Entity Customers aka the Beneficial Ownership Rule. It will be a 90-day period that covers some financial products and services, like a CD or a loan, that were created before the rule’s applicability date, May 11, 2018.

This exception begins, retroactively, on May 11, 2018, and will expire on August 9, 2018.

 

The Federal Reserve

Federal Reserve Board issues a Report on the Economic Well-Being of U.S. Households

The Federal Reserve Board's latest Report on the Economic Well-Being of U.S. Households finds that economic well-being has improved 10 percentage points from its first survey in 2013. 

The Fed reports that 74 percent of adults surveyed said they were doing OK financially in 2017.
However, there are still noticeable differences in economic well-being across race, ethnicity, education groups, and locations.

Many Americans are still struggling to repay college loans, small emergency expenses, and manage retirement savings.

 

Other Regulatory Bodies

Federal Financial Institutions Examination Council

FFIEC Issues New Customer Due Diligence and Beneficial Ownership Examination Procedures

The Federal Financial Institutions Examination Council (FFIEC) issued new examination procedures on the final rule, “Customer Due Diligence Requirements for Financial Institutions,” issued by the Financial Crimes Enforcement Network (FinCEN) on May 11, 2016.

The new examination procedures replace those in the current “Customer Due Diligence — Overview and Examination Procedures” section of the FFIEC’s Bank Secrecy Act/Anti-Money Laundering Examination Manual. In addition, a new overview and examination procedures were developed for the beneficial ownership requirements for legal entity customers.

These examination procedures apply to banks, savings and loan associations, savings associations, credit unions, and branches, agencies, and representative offices of foreign banks.

 

Federal Trade Commission

FTC Obtains Preliminary Injunction Against Mortgage Relief Operation That Deceived Homeowners

A mortgage relief operation has been charged by the Federal Trade Commission (FTC) with deceiving homeowners by claiming to make their mortgages more affordable and prevent foreclosure.

Those in the operation claimed a 99 percent success rate and promised results no matter a homeowner’s predicament. Moreover, they falsely stated they worked with certain lenders and government mortgage assistance programs.

A federal court froze the mortgage relief operation’s assets and temporarily halted their scheme at the request of the FTC.

 

U.S. Commodity Futures Trading Commission

CTFC Staff Issues Advisory for Virtual Currency Products

Exchanges and clearinghouses registered with the U.S. Commodity Futures Trading Commission (CFTC) issued an advisory on listing virtual currency derivative products by its Division of Market Oversight and its Division of Clearing and Risk.

The advisory gives guidance on improvements when listing derivative contracts based on virtual currencies. Furthermore, it clarifies the CTFC’s expectations in its review of new virtual currency derivatives.

 

 

 

 

 

 

 

April 2018 - Compliance Alert

Office of the Comptroller of the Currency

Agencies Propose Transition of New Current Expected Credit Losses (CECL) Accounting Standard into Regulatory Capital Framework

Federal Banking Agencies proposed a revision to their regulatory capital rules to provide an option to phase in the “Current Expected Credit Losses,” (CECL) methodology.

The proposal would allow banking organization to have the day-one regulatory capital effects of the CECL adoption over three years. It would revise the agencies’ rules to account for the differences between the new accounting standard and the existing U.S. generally accepted accounting principles.

 

Other Regulatory Bodies

FTC Launches Campaign to Help Small Businesses Strengthen their Cyber Defenses

The Federal Trade Commission (FTC) launches a national education campaign to help small businesses protect their sensitive data from cyber threats.

The FTC will be distributing educational materials about cybersecurity geared towards small businesses. The initiative stems from the Small Business & Cybersecurity Roundtables that the FTC hosted last year.

The material will be focused on teaching cybersecurity basics to small business owners, so they can identify and avoid phishing schemes, ransomware attacks, and tech support scams.

The FTC is also addressing owners’ concerns on company mobile devices and vendors’ system security.  

The FTC will be producing a website, dozens of training modules and videos to help strengthen small businesses’ cybersecurity.

 

Consumer Financial Protection Bureau (CFPB)

CFPB Finalizes Amendment to "Know Before You Owe" Mortgage Disclosure Rule

The Consumer Financial Protection Bureau finalized an amendment to its “Know Before You Owe” mortgage disclosure rule.

They intend for the update to provide greater clarity and certainty to the mortgage industry. Under the rule mortgage lenders, with a valid justification, may pass on increases in closing costs to consumers and disclose them on a “Closing Disclosure.”

 

 

U.S Department of Justice

Former Procurement Officer at Federally Funded Nuclear Research and Development Facility Sentenced to Prison for Wire Fraud and Money Laundering

A former procurement officer of the Sandia National Laboratories (SNL) was sentenced to three years in prison for defrauding the U.S. government of $2.3 million in federal funds and laundering it through her father’s company.

Carla Sena, 56, of Santa Rosa, New Mexico, used her position at the SNL, a nuclear research and development facility of the U.S. Department of Energy (DOE), to hide her illicit actions.

Sena was assigned to manage the bidding process for a multi-million-dollar contract for moving services at SNL. Then, she created an LLC called Express Movers LLC, and under an acquaintance’s name submitted a bid for the contract.

After making multiple fraudulent misrepresentations in the bid, she used her position at SNL to bury them. As a result of her fraudulent actions, Express Movers LLC was awarded the $2.3 million contract. Sena transferred roughly $643,000 of the awarded funds to legitimate businesses owned by her father to hide her use of the proceeds for personal gain.

 

 

 

 

5 Must Have LMS Features

September 22, 2017 - You have received the green light from management to change your LMS and training approach. Excellent! This is your chance to make a mark and to have a positive impact on your company’s culture and growth.

So where do you start? What should you look for in a new LMS? We recommend putting together a list of training elements which are essential to your training goals and execution. If you know what you are looking for, it will be easier to find. Here are 5 must have LMS features we recommend securing for your company.

Mobile Learning

Are you losing the battle to keep your employees off their smartphones? Try changing tactics. Give them something constructive to do on their iPhones and androids. Make their compliance training accessible via phone and tablet. At Edcomm Banker’s Academy, we offer HTML5 mobile-friendly training. That means training is at your fingertips every second of the day.

An employee can take their training while they take the bus to work, or when they wait in an airport to catch their next business flight. You may find that if you increase accessibility to the training material, learners will be motivated to take their training in a timely manner. This is especially true for your busy, board of directors and senior management staff. When company demands are pulling them in different directions, increased accessibility makes it easier to meet company deadlines. You can study up on human resources policies while polishing off your peanut butter and jelly sandwich. Even your employees who are out on leave can brush up on corporate policies from the comfort of their own home.

Social Collaboration

The best Learning Management Systems are built to encourage social collaboration. Virtual interaction gives an instant sense of gratification and communication. This is why the content marketers on your team keep a close eye on the number of Facebook likes and Twitter impressions. It can be addicting, but in a good way.

Our Edcomm LMS platform features a My LMS Twitter. With it, you can share your impressions regarding your training experience. For example, a learner can comment on how much they enjoyed the Project Management curriculum, which expanded their time management skills and strategies. You can also use this tool to build hype and excitement for the annual or quarterly training release. It is pretty neat to see your coworkers follow you and value what you have to say. This collaborative tool also enables you to have a dialogue with your coworkers. Learning can be more meaningful and retained longer when shared and actively discussed within the team.

Virtual Classroom

Not everyone can make it to the corporate office for the meeting? No worries. As long as your training platform integrates a virtual classroom element, your team can be at different branches but still be on the same page and on the same phone call.

Edcomm LMS offers a Virtual Classroom tool. This tool enables you to sync your GotoMeeting, WebEx, or DimDim video conference account on the Learning Management Platform. It simplifies the meeting process as a learner does not have to root through old emails to find the call details. Instead, they can log on to the LMS and see meeting information on their home page on the Virtual Classroom widget. The LMS becomes a one stop shop, as you can plan the meeting as an admin and have a record of this training instance preserved.

Video Training

Tired of needing to click through training slide by slide? Consider swapping out traditional training for video training. It appeals to employees of all learning types. Your visual and auditory learners will be especially pleased to see training that is designed to help them succeed.

We have recently released the Edcomm Video Library Series. It cultivates your employee’s potential through professional skills focused videos. Our Edcomm Video Library Series offers a little bit of everything. For your content marketers, there is Social Media training material that helps fine tune their techniques and learn how to more effectively engage their audience. For your management team, there are Leadership, Meeting Skills, and Interviewing Skills focused training. Your Technology team may be excited to know that there is even training on how to secure data and respond to a computer security threat.

We give you the freedom to narrate your own story. Edcomm LMS makes it easy to stream or download your own videos. You can film a video in house, and then add it to your annual compliance training. Alternatively, if you do not have the resources or time to film your own video, you can grab the hyperlink of an informative YouTube video and make it available to learners.

Offline Classroom Feature

For a full learning experience, we also recommend finding a tool that creates a space for you to track in-house training. This way when your auditors come to check in with your state of compliance, you can pull an attendance report on who went to the Tellers basic training session. A face-to-face component can help ingrain the online training you assign on annual basis. It can also be handy in the case of keep track of the New Hire training.

Edcomm LMS hosts a state-of-the-art Offline Classroom Feature. With it, you can keep tabs on everything from what materials need to be prepared for the in-house training session, to what vendor is hosting the training, to key note speakers. It is a fantastic tool for communication as you can schedule email notifications to go out to learners upon being invited to a training session and reminders before the session starts. Many clients prefer using this tool, as opposed to maintaining a personal spreadsheet because it can be attendance records are delivered in a report format, and are easily able to be shared and edited by other administrators.

Please feel free to contact the Edcomm Team directly to discuss your training goals and how we can rise to make them a reality.

By: Madelyn Fagan

 

  • We switched to Banker’s Academy over a year ago from a different online training program. The cost savings was tremendous - which has been very helpful in this time of budget cuts. We found that the training content is precise, to the point, and always current. It doesn't have a lot Read More
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129