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Banker's Toolbox Releases Innovative New Business Intelligence Solution  —
Banker's Toolbox, Inc., the leader in Bank Secrecy Act anti-money laundering compliance solutions, has launched innovative business intelligence software called Relationship Manager. Relationship Manager is a revolutionary tool that can utilize an institution's investment in BSA/AML transaction monitoring to address the challenges of cross-sell and retention. It scans an institution's transactional data to detect patterns that indicate cross-sell or retention opportunities as they occur, giving financial institutions a competitive advantage. (Read more.)

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Bureau fines Experian for deceptive marketing

The CFPB has announced an enforcement action taken against Experian Holdings, Inc., Experian Information Solutions, Inc., and, Inc. d/b/a Experian Consumer Services (collectively, Experian) following a review of Experian's marketing practices. The Bureau stated that Experian deceptively marketed credit scores by misrepresenting that those it provided to consumers were the same scores lenders use to determine creditworthiness. The CFPB also said that Experian illegally placed advertisements for its products on webpages that consumers accessed through before the consumers obtained their free annual file disclosures. Experian was ordered to pay a $3 million civil money penalty to the CFPB's Civil Penalty Fund, truthfully represent the usefulness of credit scores it sells, and put in place an effective compliance management system. See "Experian pays $3M for deceptively marketing scores," in our Penalty pages, for additional information.

TransUnion and Equifax were penalized by the Bureau in January for similar deceptive credit score marketing and other infractions.


CFPB complaint against Intercept dismissed

The U.S. District Court for the District of North Dakota on March 17 granted the defendants' motion to dismiss without prejudice the complaint filed by the CFPB against Intercept Corporation et al. on June 6, 2016. The court found that the CFPB complaint did not contain sufficient factual allegations to back up its statements regarding Intercept's allegedly unlawful acts or missions; failed to sufficiently allege facts tending to show that industry standards were violated; failed to plead facts sufficient to support a legal conclusion that consumers were injured or likely to be injured; and failed to include allegations to support a finding that Intercept interfered with consumers' ability to understand the terms of their dealing with Intercept's clients or to support a finding that Intercept took unlawful advantage of consumers.


Residential sales up 6 percent

HUD and the Census Bureau have jointly announced statistics on new residential sales for February 2017:

  • New home sales: Sales of new single-family houses in February 2017 were at a seasonally adjusted annual rate of 592,000. This is 6.1 percent above the revised January rate of 558,000 and is 12.8 percent above the February 2016 estimate of 525,000.
  • Sales price: The median sales price of new houses sold in February 2017 was $296,200. The average sales price was $390,400.
  • For sale inventory: The seasonally adjusted estimate of new houses for sale at the end of February was 266,000. This represents a supply of 5.4 months at the current sales rate.


FHFA report on foreclosure prevention

The Federal Housing Finance Agency (FHFA) has released its fourth quarter Foreclosure Prevention Report, which shows that Fannie Mae and Freddie Mac (the Enterprises) completed 189,911 foreclosure prevention actions in 2016, bringing the total number of troubled homeowners helped since the Enterprises were placed into conservatorships to more than 3.8 million. Of the total foreclosure prevention actions, 3.1 million have helped troubled homeowners stay in their homes, including more than 2 million permanent loan modifications. FHFA’s report includes data on the Enterprises’ home retention actions, delinquency data and real estate owned (REO) inventory. FHFA publishes the report data in an online, interactive Borrower Assistance Map.


FHFA schedules timing of CSP release 2

The Federal Housing Finance Agency (FHFA) has published an "Update on Implementation of the Single Security and the Common Securitization Platform." The Update includes the timeframe for Release 2 of the Common Securitization Platform (CSP), planned for the second quarter of 2019. Release 2 will allow Fannie Mae and Freddie Mac to use the CSP to issue a single, common security to be called the Uniform Mortgage-Backed Security or UMBS.


March Dealer Financing SCOOS released

The FRB has released the March 2017 Senior Credit Officer Opinion Survey on Dealer Financing Terms.


Santander in Written Agreement

The Federal Reserve Board has announced the execution of a written agreement with Santander Holdings USA, Inc., of Boston, Massachusetts, a bank holding company, and Santander Consumer USA, Inc., of Dallas, Texas, a non-bank subsidiary engaged in automobile financing for dealers and consumers.


Bank trading revenue increases to $6B

The OCC has released its Quarterly Report on Bank Trading and Derivatives Activities for the fourth quarter 2016. The trading revenue of U.S. commercial banks and savings associations increased to $6 billion in the fourth quarter of 2016, $1.7 billion higher than the fourth quarter of 2015. The largest driver of the year-over-year increase in trading revenue was interest rate and foreign exchange trading. Trading in interest rate products benefited from significant market moves in interest rates during the quarter, including a rise in the U.S. Treasury rate over the course of the quarter.


NCUA posts field-of-membership rule webinar and Q&A

Credit union stakeholders wanting more information about the National Credit Union Administration's new field-of-membership rule can now watch the agency’s webinar online and review its questions and answers.


SEC to hold seminars for investment companies and advisers

The SEC has announced the opening of registration for its compliance outreach program seminars for investment companies and investment advisers. The seminars will be offered in Portland, New York City, Boston, and Chicago. They are intended to help Chief Compliance Officers and other senior personnel enhance compliance programs at investment companies and investment advisory firms.


FEMA suspends communities from NFIP

The Federal Emergency Management Agency has published [82 FR 14828] in today's Federal Register a list of communities in the states of Mississippi, New York and Pennsylvania that have been suspended from the National Flood Insurance Program (NFIP) for noncompliance with the floodplain management requirements of the program. The suspensions were all effective March 21, 2017:

  • Mississippi: portions of Bolivar County
  • New York: portions of Otsego County
  • Pennsylvania: portions of Berks, Bucks and Warren counties


Housing price index flat

U.S. house prices remained flat in January according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). The HPI has reflected positive monthly increases since early 2012, except for November 2013 and January 2017, when house prices were flat on a month-over-month basis. The previously reported 0.4 percent increase in December remains unrevised. The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. From January 2016 to January 2017, house prices were up 5.7 percent.


SEC shortens broker-dealer securities settlement cycle

The Securities and Exchange Commission has announced the adoption of an amendment to shorten by one business day the standard settlement cycle for most broker-dealer securities transactions. Currently, the standard settlement cycle for these transactions is three business days, known as T+3. The amended rule, effective September 5, 2017, shortens the settlement cycle to two business days, T+2.


New materials on security and design of FR notes

FRB Financial Services has reported that the U.S. Currency Education Program has designed two new materials to help you and your customers become familiar with the security and design features of Federal Reserve notes. Both materials are provided free of charge.


Agencies issue EGRPRA report to Congress

A joint press release has been issued by the member agencies of the FFIEC regarding their delivery to Congress of a joint report detailing their review of rules affecting financial institutions. The review was conducted as part of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA), which requires the federal banking agencies, along with the FFIEC, to conduct a review of their rules at least every 10 years to identify outdated or unnecessary regulations.


Gruenberg: projected DIF losses, income and reserve ratios

FDIC Chairman Gruenberg issued an update on projected losses, income and reserve ratios for the Deposit Insurance Fund restoration plan. The DIF balance rose to $83.2 billion at year-end 2016, an increase of $10.6 billion over the year. The fund's reserve ratio at December 31 stood at 1.20 percent, the highest ratio in nine years. The FDIC staff currently projects that the reserve ratio should reach a target of 1.35 percent in 2018, about two years ahead of the statutory deadline.


Fed conference focuses on kids and communities

The Federal Reserve System's 10th biennial Community Development Research Conference convenes on March 23 in Washington, D.C. The conference theme, Strong Foundations: The Economic Futures of Kids and Communities, will explore the relationship between the development of children and community conditions and the effect of early childhood investments on the economy. Chair Yellen will deliver opening remarks.


FTC report on combatting fraud

The Federal Trade Commission reported yesterday on testimony presented to a Senate subcommittee on the Commission's efforts to fight fraud.


New payment card working paper released

The Federal Reserve Bank of Philadelphia's Payment Cards Center has posted a new working paper, "How Data Breaches Affect Consumer Credit," on its webpage. The authors use the 2012 South Carolina Department of Revenue data breach as a natural experiment to study how data breaches and news coverage about them affect consumers' interactions with the credit market and their use of credit.


Board unveils new website design

The Federal Reserve Board has introduced a new website design and additional features to improve the experience of visitors seeking information about the Federal Reserve and its actions. Visitors will now find the site easier to view on mobile devices, and restructured navigation menus make information easier to find. The News & Events section now includes a comprehensive events and publications calendar and filters to search press releases, speeches, and testimony. The About the Fed section has been restructured to include updated information from the Board's Purposes & Functions publication.


Video of February NCUA meeting available

The NCUA has made available online the video of the February 23, 2017 meeting of its board.


OCC enforcement actions

The Office of the Comptroller of the Currency has released a list of enforcement actions taken from late January through the end of February 2017 against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. Among those actions were:

  • the $1 million CMP (combined with a $7 million penalty ordered by FinCEN) announced earlier against Merchants Bank of California, N.A.
  • a cease and desist order and a $1 million CMP for UDAP violations of Section 5 of the Federal Trade Commission Act against First Tennessee Bank, N.A., in connection with billing and marketing, with a third party vendor, of an identity protection product
  • a $5,000 CMP and prohibition order issued to a former Tulsa, Oklahoma, banker for misconduct with regard to 15 municipal bond accounts for which the banker's employer served as trustee
  • a $5,000 CMP and cease and desist order issued to a former Ohio loan officer for providing false documents and making false or misleading statement in connection with a fraudulent loan, and for misrepresenting to a potential borrower that the Ohio bank had approved a $500,000 line of credit


Florida CU closed

The NCUA has announced the closing of Florida Conference AME Church Federal Credit Union of Tallahassee, Florida (FCAMEC), which served 560 members. Gulf Winds Federal Credit Union, of Pensacola, Florida, has assumed its members and deposits. FCAMEC is the first federally insured credit union liquidation in 2017.


CFPB to assess Remittance Rule

The Consumer Financial Protection Bureau has announced the release of a plan to assess the effectiveness of the Remittance Rule. The CFPB is requesting public comment, including information that would help the assessment. Comments on the plan will be due 60 days after it is published in the Federal Register.

Update: The Bureau's request for public comments is scheduled for publication on 3/24/17. Comments will be accepted through Tuesday, 5/23/17.


G.17 report posted

The FRB has posted the February G-17 Industrial Production and Capacity Utilization Report. Industrial production was unchanged in February following a 0.1 percent decrease in January. In February, manufacturing output moved up 0.5 percent for its sixth consecutive monthly increase. Mining output jumped 2.7 percent, but the index for utilities fell 5.7 percent, as continued unseasonably warm weather further reduced demand for heating. At 104.7 percent of its 2012 average, total industrial production in February was 0.3 percent above its level of a year earlier. Capacity utilization for the industrial sector declined 0.1 percentage point in February to 75.4 percent, a rate that is 4.5 percentage points below its long-run (1972–2016) average.


SDGTs added to OFAC list

Treasury’s Office of Foreign Assets Control (OFAC) has added the names of two individuals designated as SDGTs to the OFAC List. See BOL's OFAC Update for the details.


New residential construction activity mixed

HUD and the Census Bureau have announced residential construction statistics for February 2017:

  • Building permits: Privately owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,213,000. This is 6.2 percent below the revised January rate of 1,293,000, but is 4.4 percent above the February 2016 rate of 1,162,000. Single-family authorizations in February were at a rate of 832,000; this is 3.1 percent above the revised January figure of 807,000. Authorizations of units in buildings with five units or more were at a rate of 334,000 in February.
  • Housing starts: Privately owned housing starts in February were at a seasonally adjusted annual rate of 1,288,000. This is 3.0 percent above the revised January estimate of 1,251,000 and is 6.2 percent above the February 2016 rate of 1,213,000. Single-family housing starts in February were at a rate of 872,000; this is 6.5 percent above the revised January figure of 819,000. The February rate for units in buildings with five units or more was 396,000.
  • Housing completions: Privately owned housing completions in February were at a seasonally adjusted annual rate of 1,114,000. This is 5.4 percent above the revised January estimate of 1,057,000 and is 8.7 percent above the February 2016 rate of 1,025,000. Single-family housing completions in February were at a rate of 754,000; this is 6.5 percent below the revised January rate of 806,000. The February rate for units in buildings with five units or more was 344,000.

New Residential Construction data for March 2017 are scheduled for release on April 18, 2017.


Fed Board approves Minneapolis discount rate change

The Federal Reserve Board has approved action by the Board of Directors of the Federal Reserve Bank of Minneapolis increasing the discount rate (the primary credit rate) at the Bank from 1-1/4 percent to 1-1/2 percent, effective immediately.


FDIC Q4 state profiles

The FDIC has posted the fourth quarter 2016 State Profiles, a summary of the banking and economic conditions in each state.


Treasury International Capital data

The Treasury Department has released Treasury International Capital (TIC) data for January 2017. The sum total in January of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $110.4 billion. Of this, net foreign private inflows were $144.1 billion, and net foreign official outflows were $33.6 billion. Complete TIC data are available on Treasury's website.


Bureau levies $1.75M HMDA penalty

The Consumer Financial Protection Bureau announced Wednesday that it has ordered Nationstar Mortgage LLC, of Coppell, Texas, to pay a $1.75 million civil penalty for violating the Home Mortgage Disclosure Act (HMDA) by consistently failing to report accurate data about mortgage transactions for 2012 through 2014, and to take the necessary steps to improve its compliance management and prevent future violations. According to 2014 data, Nationstar was the ninth-largest HMDA reporter by total mortgage originations, the sixth largest by applications received, and the 13th largest by money lent. From 2010 to 2014, Nationstar’s number of HMDA mortgage loans increased by nearly 900 percent.

The Bureau reported that, in its supervision process, it found that Nationstar’s HMDA compliance systems were flawed, and generated mortgage lending data with significant, preventable errors. Nationstar also failed to maintain detailed HMDA data collection and validation procedures, and failed to implement adequate compliance procedures. It also produced discrepancies by failing to consistently define data among its various lines of business. The Nationstar reporting samples reviewed by the CFPB showed substantial error rates in three consecutive reporting years, even after a settlement with the Massachusetts Division of Banks over faulty HMDA reporting was reached in 2011. In the samples reviewed, the CFPB found error rates of 13 percent in 2012, 33 percent in 2013, and 21 percent in 2014.

See "Nationstar Mortgage pays $1.75M HMDA penalty" in our Penalties section, for additional information.


NMLS maintenance schedule this weekend

NMLS Federal Registry Sources has announced that the NMLS and Consumer Access will be unavailable, due to system maintenance, from 9:00 p.m. March 17 to 10:00 a.m. March 18. The maintenance is in preparation for making Release 2017.1 available Monday morning.


FOMC statement and projections

The Federal Reserve Board has issued the Federal Open Market Committee statement and the economic projections from the March 14-15, 2017, FOMC meeting. The Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent


Discount rate increase approved by Fed Board

The Federal Reserve Board has announced its approval of actions taken by the Boards of Directors of the Federal Reserve Banks of New York and St. Louis increasing the discount rate (the primary credit rate) at the Banks from 1-1/4 percent to 1-1/2 percent, effective March 16, 2017.


March FedFlash

Federal Reserve Bank Services has posted the March 2017 issue of FedFlash. Articles discuss Same Day ACH debits and credits on the Same Day Originated Batch Report, and the fee to be charged for stale-dated ACH debits (because they will be treated as Same Day entries beginning in September).


OCC proposes licensing manual supplement

The Office of the Comptroller of the Currency has released a draft Licensing Manual supplement for evaluating charter applications form financial technology companies. A summary of comments and explanatory statement were also released. Comments will be accepted through April 14, 2017.


CU growth trends continue

The NCUA Quarterly U.S. Map Review for the fourth quarter 2016 has been posted, and indicates federally insured credit unions saw continued improvement in nearly every category during the fourth quarter of 2016, according to state-level data compiled by the NCUA.


FTC mails checks to victims of debt relief scheme

The FTC has announced that 561 checks totaling more than $148,000 have been mailed to individuals who lost money to Payday Support Center, a debt relief scheme that targeted people with outstanding payday loans. The defendants were banned from promoting or selling debt relief services under a federal court order. Recipients should deposit or cash their checks within 60 days.


OFAC sanctions Kuwait-based terrorist financier

OFAC has announced it has taken action against al-Nusrah Front (ANF) and al-Qa'ida (AQ) facilitator Muhammad Hadi al-'Anizi (al-'Anizi). The Kuwaiti-based terrorist financier is being designated as a Specially Designated Global Terrorist (SDGT) pursuant to Executive Order 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. As a result of today’s action, all property and interests in property of al-'Anizi subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with him. See our OFAC Update for additional information.


SEC and Belgian bank to share information

The Securities and Exchange Commission has announced that it has agreed with the National Bank of Belgium to enhance cooperation and information sharing regarding expanded services by Euroclear Bank, which provides clearance and settlement through its operation of the Euroclear System.


Prepaid Accounts rule delay proposal published

The CFPB's previously announced proposal to delay for six months the effective date of its Prepaid Accounts rule was published in this morning's Federal Register. The 21-day comment period ends on April 5, 2017.


Atlanta Fed names new president/CEO

Thomas A. Fanning, chairman of the board of the Federal Reserve Bank of Atlanta, has announced that Raphael W. Bostic will become the 15th president and chief executive officer of the Federal Reserve Bank of Atlanta, effective June 5, 2017. Bostic is currently the Judith and John Bedrosian Chair in Governance and the Public Enterprise at the Sol Price School of Public Policy at the University of Southern California (USC), a position he has held since 2012. He succeeds Dennis Lockhart, who retired from the Atlanta Fed on February 28, 2017.


Curry on value of international collaboration and bank supervision

In remarks at the Institute of International Bankers’ Annual Washington Conference, Comptroller Curry discussed the value of international collaboration and professional bank supervision. He also stressed the importance of maintaining safeguards that have helped restore health and confidence to the federal banking system since the crisis of 2008.


Enhancements to Money Smart for Older Adults curriculum

The FDIC has announced enhancements to its Money Smart for Older Adults curriculum that provide new information and resources to help older adults and their caregivers avoid financial exploitation through fraud and scams. Money Smart for Older Adults identifies common types of elder financial exploitation, such as imposter scams and identity theft, and is designed to inform adults age 62 or older and their caregivers about ways to prevent, identify, and respond to financial exploitation. Also included is information on how older adults can plan for a secure financial future and make informed financial decisions. Money Smart for Older Adults was developed jointly by the FDIC and the Consumer Financial Protection Bureau (CFPB) in response to the financial exploitation of senior citizens.


FDIC board meeting

The FDIC has posted the public notice for the March 21, 2017, open meeting of its Board.


NCUA issues 2016 annual report

The NCUA has released its 2016 Annual Report, which highlights the agency’s activities, policy initiatives and accomplishments for 2016.


Fed Board seeks to fine and ban two former bankers

The Federal Reserve Board announced on Friday it will seek to fine and prohibit Fang Fang and Timothy Fletcher, two former managing directors at J.P. Morgan Securities (Asia Pacific) Limited, from working in the banking industry for their participation in a referral hiring program that violated anti-bribery law. In addition to permanently prohibiting them from the banking industry, the Board seeks to impose a $1 million fine against Fang and a $500,000 fine against Fletcher.

The enforcement proceedings against Fang and Fletcher follow the Board's November 2016 enforcement actions against JPMorgan Chase & Co. for unsafe and unsound practices related to the firm's referral hiring program. The Board required JPMorgan Chase & Co. to pay $61.9 million in penalties for control deficiencies related to the firm's referral hiring practices and anti-bribery policies.


Washington communities suspended from flood program

The Federal Emergency Management Agency has suspended several communities in the State of Washington from the National Flood Insurance Program, effective March 7, 2017, as announced in a final rule published at 82 FR 13399 in this morning's Federal Register. The communities are portions of Island, King, and Pierce Counties.


SEC charges former credit card executives with scheme to steal millions

The Securities and Exchange Commission has announced it has filed a complaint charging two former executives at a credit card processing company with masterminding a fraudulent scheme to steal millions of dollars through phony expense reimbursements, inflated invoices, and other improper accounting tactics. The complaint alleges that iPayment’s then-senior vice president of sales and marketing Nasir N. Shakouri and then-executive vice president and chief operating officer Robert S. Torino routinely reimbursed themselves for payments that were never actually made to third-party vendors using their personal credit cards. They also allegedly conspired with vendors to inflate invoices and receive kickbacks from the overpayments, and claimed improper commissions and bonuses related to other corporate funds they improperly diverted in various way. Three other executives were also charge with participating in the scheme.


CFPB selects Your Money, Your Goals cohort

The CFPB has announced the selection of thirty organizations to join the Your Money, Your Goals cohort. These organizations will receive training and technical assistance on how to use the Bureau's Your Money, Your Goals financial empowerment materials. The new cohort includes federal, state, and local government agencies, organizations working in native communities, social services, legal aid, faith-based, and worker organizations, as well as organizations serving people with disabilities.


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UDAAP Reality Check

We will explore what makes a practice unfair or deceptive by digging into what regulators and the courts have had to say.

Stop That Payment!

Bankers must understand the differences between the use of their systems' stop payment functionality and the actual right to stop payment

Penalties View All

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