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MLA website problem revealed

The Department of Defense has posted a notice on its official Military Lending Act (MLA) website that between February 9 and February 15, 2017, there was a problem with MLA Multiple Record Requests that prevented 149 request files from processing. It was suggested that those who submitted a multiple record request file in between those dates, submit the file again for processing.


Full bench to consider Bureau's appeal of PHH case

In October 2016, a three-judge panel of the U.S. Court of Appeals in Washington found that the Bureau's structure is unconstitutional, and ordered that the Director of the CFPB be considered as appointed for five year but serving "at the pleasure of the president" rather than subject to removal only "for cause," as provided in § 1011(c)(3) of the Dodd-Frank Act (See "Court limits CFPB Director's independence," October 12, 2016). The CFPB appealed that ruling, suspending its effect pending the appeal. CNBC has reported that, on Thursday, February 16, the Bureau's request for a hearing by the full panel was granted. Oral arguments on the appeal are scheduled for May 24.


FEMA suspending communities from Flood Program

The Federal Emergency Management Agency has published a final rule at 82 FR 10962 in today's Federal Register identifying communities in Colorado, Illinois and Virginia where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension today, February 17, 2017, for noncompliance with the floodplain management requirements of the program.

  • Colorado—portions of Arapahoe County
  • Illinois—portions of Peoria, Tazewell and Whiteside counties
  • Virginia—the City of Norfolk and portions of Loudoun County


Two removed from OFAC list

OFAC has posted a notice that the names of two individuals linked to transnational criminal organizations have been deleted from the OFAC SDN List. See BankersOnline's OFAC update for the details.


Fed to continue testing of Term Deposit Facility

The Federal Reserve has confirmed plans to continue the previously announced periodic testing of its Term Deposit Facility (TDF). These operations are aimed at ensuring the operational readiness of the TDF and providing eligible institutions with an opportunity to maintain familiarity with term deposit procedures. The TDF test operations are a matter of prudent planning and have no implications for the near-term conduct of monetary policy. The Federal Reserve plans to conduct a routine TDF test operation each quarter in 2017, starting with one to be conducted on February 23, 2017, with a floating-rate offering of term deposits with an early withdrawal feature. The schedule and terms for future test operations will be announced later.


OCC revises Licensing Manual booklet

The OCC has issued Bulletin 2017-11 to announce the revision of the “Changes in Directors and Senior Executive Officers” booklet of the Comptroller’s Licensing Manual. The revised booklet updates procedures and requirements following the integration of the Office of Thrift Supervision into the OCC in 2011, and it incorporates revised regulations (12 CFR 5) that became effective July 1, 2015, addressing changes in directors and senior executive officers of national banks, federal savings associations, and federal branches.


NCUA funds receive clean audit opinions

The NCUA has announced that its four permanent funds have again received unmodified, or “clean,” audit opinions for 2016, according to audited financial statements released yesterday by the Office of the Inspector General.


Increasing transparency in student loan servicing

A CFPB Blog article requests comments on a new initiative that would take a closer look at the way consumers repay student debt and track the student loan industry activities that they depend on if they experience financial distress.


New residential construction activity

HUD and the Census Bureau have jointly announced new residential construction statistics for January 2017.


FDIC train-the-trainer webinar next week

The FDIC will present a three-hour Train-the-Trainer webinar on financial education, focusing on the FDIC's Money Smart Program, on Wednesday, February 22, 2017, at 1 p.m. ET.


Bureau exploring alternative data use for credit invisible

In a press release coordinated to coincide with the CFPB's Charleston, West Virginia, February 16 field hearing on Alternative Data, the Bureau announced this morning it has launched an inquiry into ways to expand access to credit for consumers who are credit invisible or who lack enough credit history to obtain a credit score. The Bureau is seeking public feedback on the benefits and risks of tapping alternative data sources such as bills for mobile phones and rent payments to make lending decisions about consumers whose lack of credit history might otherwise block opportunities. Specifically, the Bureau will explore these, and other, topics:

  • Access to credit
  • Complexity of the process
  • Impact on costs and service
  • Implications for privacy and security
  • Impact on specific groups


Miller named Chief of Staff at Treasury

Treasury Secretary Mnuchin has announced the appointment of Eli Miller to serve as the Chief of Staff of the Treasury Department. The Chief of Staff is responsible for managing the day-to-day operations of the Department generally and the office of the Secretary specifically. In this capacity, Miller will operate in direct support of the Secretary and play a key role in advising, coordinating and reviewing policy development within the Department, other agencies, and the White House as well as assisting and planning the overall strategic direction of the Department.


December TIC data released

Treasury has released Treasury International Capital (TIC) data for December 2016. The sum total in December of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC outflow of $42.8 billion. Of this, net foreign private outflows were $57.1 billion, and net foreign official inflows were $14.3 billion. Foreign residents decreased their holdings of long-term U.S. securities in December; net sales were $13.9 billion. Net sales by private foreign investors were $32.0 billion, while net purchases by foreign official institutions were $18.1 billion. U.S. residents decreased their holdings of long-term foreign securities, with net sales of $1.1 billion.


Industrial production decreases

The FRB has released its January 2017 G.17 industrial production and capacity utilization report. Industrial production decreased 0.3 percent in January following a 0.6 percent increase in December. In January, manufacturing output moved up 0.2 percent, and mining output jumped 2.8 percent. The index for utilities fell 5.7 percent, largely because unseasonably warm weather reduced the demand for heating. At 104.6 percent of its 2012 average, total industrial production in January was at about the same level as it was a year earlier. Capacity utilization for the industrial sector fell 0.3 percentage point in January to 75.3 percent, a rate that is 4.6 percentage points below its long-run (1972–2016) average.


February FedFlash posted

Federal Reserve Financial Services has posted the February 2017 issue of FedFlash, featuring articles on:

  • Changes to check adjustment case requirements and edits
  • Effective date (9/15/17) of Phase 2 of the NACHA Same Day ACH program
  • Reminder that revisions to contaminated current guidance are effective immediately
  • Enhancement of Fedwire Securities Service Automated Claim Adjustment process to occur in 2018


Refinance volume slowdown continues

The Federal Housing Finance Agency (FHFA) has reported that 13,220 borrowers refinanced their mortgages through the Home Affordable Refinance Program (HARP) from October through December. FHFA's fourth quarter Refinance Report also shows that total refinance volume fell in December, as mortgage interest rates increased. Total HARP refinances now stand at 3,447,671 since the inception of the program in 2009.


FTC reins in money mule

The Federal Trade Commission has announced that a Florida man charged with helping telemarketers in India defraud cash-strapped American consumers will be banned from aiding any telemarketers in a settlement with the Commission. The proposed settlement resolves an FTC complaint against Joel S. Treuhaft and his company, PHLG Enterprises, LLC, who collected more than $1.5 million from about 3,000 consumers in a scheme that helped Indian call centers collect money from victims of IRS tax scams, government grant scams and advance-fee loan scams, among others.


FinCEN proposing SAR data fields revisions

FinCEN has published at 82 FR 9109 in the Federal Register a notice and request for comments on a proposed update and revisions to the collection of information filings by financial institutions required to file such reports under the Bank Secrecy Act (“BSA”). This notice does not propose any new regulatory requirements or changes to the requirements related to suspicious activity reporting. The data fields reflect the filing requirement for all filers of SARs under the BSA. Most of the proposed changes would alter the "checklist" of violations in Part II of the filings, including the addition of several fields related to cyber events. Comments are due by April 3, 2017.


Monetary Policy Report to Congress

Federal Reserve Board Chair Yellen has presented the Board’s semiannual Monetary Policy Report to the Congress. In remarks before the Senate Committee on Banking, Housing, and Urban Affairs, Dr. Yellen discussed the report along with the current economic situation and outlook. Yellen stated, “My colleagues on the FOMC and I expect the economy to continue to expand at a moderate pace, with the job market strengthening somewhat further and inflation gradually rising to 2 percent.” In regard to the monetary policy, the Chair noted, “the economic outlook is uncertain, and monetary policy is not on a preset course. FOMC participants will adjust their assessments of the appropriate path for the federal funds rate in response to changes to the economic outlook and associated risks as informed by incoming data. Also, changes in fiscal policy or other economic policies could potentially affect the economic outlook.”


FDIC regulatory relief for Louisiana

The FDIC has issued FIL-9-2017 announcing steps intended to provide regulatory relief to financial institutions and to facilitate recovery in areas of Louisiana affected by severe weather.


FTC reports on combatting illegal debt collection practices

The Federal Trade Commission has sent to the CFPB a summary and the full text of its report of 2016 work on debt collection practices for inclusion in the CFPB’s annual report to Congress on the Fair Debt Collection Practices Act (FDCPA), as required by the Dodd-Frank Act. The FTC and the CFPB share FDCPA enforcement responsibilities. In 2016, the Commission:

  • filed or resolved 12 cases against 61 defendants, and obtained nearly $70 million in judgments
  • banned 44 companies and individuals that engaged in serious and repeated violations of law from ever working in debt collection again
  • secured successful summary judgment decisions in three litigated matters, resulting in orders banning defendants from the debt collection industry


Debt collector settles with FTC for $700K

The Federal Trade Commission has reported that GC Services Limited Partnership, a large debt collector based in Houston, Texas, that has been charged with using unlawful tactics to collect on federal student loans and other debts, will pay a $700,000 civil penalty under a settlement with the Commission. The complaint filed by the Justice Department on behalf of the Commission alleged that the company’s collectors left phone messages that illegally disclosed purported debts to others without their permission. GC Services employees also called consumers multiple times after being told that the person who answered did not owe the debt, that they had called the wrong person, or that the person they wanted could not be reached there. According to the Commission, GC Services also falsely claimed that it would take steps to prevent its employees from making unlawful calls to third parties to find a debtor. See our Penalty page for further information.


Morgan Stanley pays $8M to settle SEC charges

The Securities and Exchange Commission has announced that Morgan Stanley Smith Barney has agreed to pay an $8 million penalty and admit wrongdoing to settle charges related to single inverse ETF [exchange-traded funds] investments it recommended to advisory clients. The SEC’s order found that Morgan Stanley did not adequately implement its policies and procedures to ensure that clients understood the risks involved with purchasing inverse ETFs. Among the order’s findings, Morgan Stanley failed to obtain from several hundred clients a signed client disclosure notice, which stated that single inverse ETFs were typically unsuitable for investors planning to hold them longer than one trading session unless used as part of a trading or hedging strategy. Morgan Stanley solicited clients to purchase single inverse ETFs in retirement and other accounts, the securities were held long-term, and many of the clients experienced losses.


Bureau adds HMDA resources

The CFPB has updated the compliance resources available on HMDA filing requirements. Added resources include a webinar discussing identifiers and other data points, and a chart that illustrates banks' options for collecting and reporting ethnicity and race information required under Regulation C.


HUD disaster assistance for Louisiana tornado victims

HUD has announced it will speed federal disaster assistance to the State of Louisiana and provide support to homeowners and low-income renters forced from their homes due to severe storms, tornadoes, and straight-line winds.


Early bond redemptions for parts of Louisiana

Federal Reserve Bank Services has reported that Treasury has authorized early savings bond redemptions in areas of Louisiana recently affected by severe weather.


OCC EGRPRA final rule

The OCC has issued Bulletin 2017-10 on its publication on January 23, 2017, of a final rule that removes outdated or otherwise unnecessary provisions in certain rules, reducing the regulatory burden on national banks and federal savings associations. The rule, which becomes effective April 1, 2017, also integrates the OCC’s national bank and FSA rules relating to fidelity bonds, Securities Exchange Act of 1934 disclosures, securities offering disclosures, and insider and affiliate lending. The rule is part of the results of the OCC's review under the Economic Growth and Regulatory Paperwork Reduction Act of 1996.


CDFI certification open

The NCUA has announced that federally insured low-income credit unions can now apply for certification as community development financial institutions through the streamlined application process developed by the regulator and the Community Development Financial Institutions Fund. The NCUA will host three streamlined CDFI-certification application rounds in 2017, the first beginning today and running through March 17. The second round runs from May 1 through May 26, and the third round runs from August 7 through September 1.


Venezuelan drug traffickers targeted

OFAC has designated Venezuelan national Tareck Zaidan El Aissami Maddah (El Aissami) as a Specially Designated Narcotics Trafficker (SDNT) pursuant to the Kingpin Act for playing a significant role in international narcotics trafficking. El Aissami is the Executive Vice President of Venezuela. El Aissami's primary frontman, Venezuelan national Samark Jose Lopez Bello (Lopez Bello), was also designated. OFAC further designated or identified as blocked property 13 companies owned or controlled by Lopez Bello or other designated parties that comprise an international network spanning the British Virgin Islands, Panama, the United Kingdom, the United States, and Venezuela. Five of those entities are LLCs registered in Florida. See our OFAC Update for additional information.


FRB branches updating cash processing

The Federal Reserve Bank of Cleveland has announced that the Cincinnati Branch will upgrade its cash processing systems over the weekend starting at the close of business on Friday, February 17. The Federal Reserve Bank of Richmond has announced that the Baltimore Branch will make the same upgrade over the weekend starting at the close of business on Friday, February 24. Financial institutions served by the Cincinnati and Baltimore branches will experience a new look and feel to the Federal Reserve's cash order paperwork beginning the Monday following those upgrades.


Tarullo to leave Federal Reserve Board

The Federal Reserve Board has announced that Daniel K. Tarullo has submitted his resignation as a member of the Board of Governors of the Federal Reserve System, effective on or around April 5, 2017. He has been a member of the Board since January 28, 2009.


Regulators revise stress test scenario data

The Federal Reserve, OCC, and FDIC have issued revised macroeconomic scenarios for their 2017 stress testing program to correct a data series error. The scenarios previously released contained incorrect historical values for the BBB corporate yield in 2016. As a result of the correction, BBB corporate yields peak at slightly lower levels in the severely adverse and adverse scenarios. The correction also lowered yields in the baseline scenario, but the revision is more modest than for the other scenarios.


New York CU in conservatorship

The NCUA has announced that the New York State Department of Financial Services has taken possession of Melrose Credit Union, located in Briarwood, New York, and appointed the National Credit Union Administration as conservator. The action was taken because of unsafe and unsound practices at the credit union. While continuing normal member services, NCUA will work to resolve issues affecting the credit union’s operations. Melrose Credit Union is a federally insured, state-chartered credit union with 23,462 members and assets of $1.78 billion, according to the credit union’s most recent Call Report. The NCUA posted FAQs concerning the credit union's status.


OFAC CMP caps adjusted for inflation

The Treasury Department has published, in today's Federal Ledger, a final rule to adjust OFAC-enforced civil monetary penalties (“CMPs”) for inflation as mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (collectively referred to herein as “the Act”). This rule adjusts CMPs within the jurisdiction of OFAC to the maximum amount required by the Act. The rule is effective upon publication, and can be applied retroactively to violations since January 15, 2017.

As of January 15, the applicable statutory maximum civil penalty per violation for each statute enforced by OFAC is as follows:

  • International Emergency Economic Powers Act (IEEPA) — greater of $289,238 or twice the amount of the underlying transaction;
  • Trading with the Enemy Act (TWEA) — $85,236;
  • Foreign Narcotics Kingpin Designation Act (FNKDA) — $1,437,153;
  • Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA) — greater of $76,351 or twice the amount of which a financial institution was required to retain possession or control; and
  • Clean Diamond Trade Act (CDTA) — $13,066.


FinCEN CMP caps adjusted

The Treasury Department's final rule adjusting maximum civil money penalties for inflation (see "OFAC CMP caps adjusted for inflation") also included adjustments to maximum CMP amounts for Bank Secrecy Act violations. The new maximum penalties are found in revised Table 1 of § 1010.821 of FinCEN's regulations at 31 CFR Part 1010, amended on publication, and applicable retroactively to penalty assessments since January 15, 2017.


OCC schedules bank directors workshop in Oklahoma

The OCC has announced that it will host a "Building Blocks for Directors" workshop in Tulsa, Oklahoma, at the Renaissance Tulsa Hotel & Convention Center, March 27-29, for directors of national community banks and federal savings associations supervised by the OCC. The workshop combines lectures, discussion, and exercises to provide practical information on the roles and responsibilities of board participation for both new and experienced directors.


OCC permits severe weather closings in Northeast

The OCC has issued a proclamation allowing national banks and federal savings associations affected by severe winter weather in the northeastern United States to close, "for as long as deemed necessary for bank operation or public safety."


FTC sends annual ECOA letter to CFPB

The Federal Trade Commission has provided the Consumer Financial Protection Bureau with an annual summary of its activities enforcing the Equal Credit Opportunity Act (ECOA).


Tax saving tips from the Bureau

The CFPB has posted an article with tax-time saving tips. Among the suggestions:

  • Plan in advance to save some part of your tax refund.
  • Have a separate account you use to save.
  • Automatically deposit some of your refund into a separate account when you file your return.


NACHA reports strong Same Day ACH volume

Same Day ACH usage is strong, according to survey results announced by NACHA. The survey shows that the faster payment solution is being implemented by businesses of all sizes. Of the financial institutions surveyed, 84 percent of respondents report they originated Same Day ACH transactions for middle market sized companies, 58 percent originated transactions for large companies and 37 percent say their small business clients are taking advantage of this faster payment option. Same Day ACH is being used for emergency payments, for one-time payments, and for payroll. No increases in fraud have been reported.

Phase 2 of the three-part rollout of Same Day ACH -- which adds ACH debits to the eligibility list -- is scheduled to begin on September 15, 2017. NACHA forecasts that Same Day debits will support significant industry uses such as consumer bill payments and account-to-account transfers. Receiving depository financial institutions (RDFIs) have been encouraged to inform their depositors of the Phase 2 change, since debits for bill payments, in particular, will likely post to their accounts sooner than they do now.


OFAC publishes cyber-related FAQs

OFAC has provided four frequently asked questions (FAQS) related to the recently imposed sanctions on the Russian Federation's Federal Security Service and the issuance of General License 1 authorizing certain transactions otherwise prohibited under Executive Order (E.O.) 13694 of April 1, 2015 ("Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities"), as amended by E.O. 13757 of December 28, 2016 ("Taking Additional Steps to Address the National Emergency With Respect to Significant Malicious Cyber-Enabled Activities").


FHFA extends comment period on potential chattel loan pilot

The Federal Housing Finance Agency (FHFA) has extended the deadline, from February 17 to March 21, 2017, for stakeholders to respond to a request for input on potential manufactured home chattel loans pilot initiatives for Fannie Mae and Freddie Mac as part of the Duty to Serve underserved markets. FHFA now requests input through its dedicated webpage on potential manufactured home chattel loans pilot initiatives.


Board posts model package update

The Federal Reserve Board has posted an update of the FRB/US model packages. The main FRB/US model package is a self-contained set of equations, data, programs and documentation that enables various types of simulations and provides information about the model's structure.


Late-filing CUs pay CMPs

The NCUA has announced that the twenty-eight credit unions subject to civil monetary penalties for filing late Call Reports in the third quarter of 2016 have consented to penalties totaling $17,485.


CFPB complaints report focuses on mortgage loans

The CFPB has posted its January 2017 monthly complaint report. Each edition includes spotlight reports on a product or service and on a geographic area. The January report focuses on mortgage complaints and on complaints from Tennessee.


Fed releases G.19 consumer credit data

The Federal Reserve System has released December 2016 G.19 Consumer Credit data. Consumer credit increased at a seasonally adjusted annual rate of 6 percent during the fourth quarter. Revolving credit increased at an annual rate of 6-3/4 percent, while nonrevolving credit increased at an annual rate of 5-3/4 percent. In December, consumer credit increased at an annual rate of 4-1/2 percent.


Scammers of 9/11 first responders sued by CFPB and NY

The CFPB and the New York Attorney General have announced they have filed a complaint in the U.S. District Court for the Southern District of New York against RD Legal Funding, LLC, two related entities, and Roni Dersovitz, the companies’ founder and owner, for allegedly scamming 9/11 heroes out of money intended to cover medical costs, lost income, and other critical needs. RD Legal also allegedly conned National Football League (NFL) concussion victims. The complaint also asserts that the transactions are loans at usurious rates under New York law, and therefore void. CFPB Director Cordray also delivered prepared remarks in a press call regarding the complaint.


Impact analysis of executive order on regulation of financial system

The White House has released a statement by Acting OMB Director Mark Sandy regarding the recent executive order directing the Secretary of the Treasury to take steps to review the authorities and policies governing the regulation of the U.S. financial system and to report to the President regarding the reform of such regulation: "Implementing this executive order would have a de minimis impact on costs and revenues to the Federal Government. It would have a de minimis impact on mandatory and discretionary obligations and outlays, as well as on revenues to the Federal Government, in the 5-fiscal year period beginning in fiscal year 2017. The agencies anticipated to be impacted by this executive order include the Department of the Treasury and member agencies of the Financial Stability Oversight Council."


Landlords charged with discrimination against disabled vets

HUD has announced that it is charging the landlords of a Moore, Oklahoma, rental home with violating the Fair Housing Act by denying the reasonable accommodation requests of their tenant, a veteran with disabilities, for waiver of pet fees for his dog, an emotional support animal. The Fair Housing Act prohibits housing providers from denying or limiting housing to persons with disabilities, or from refusing to make reasonable accommodations in policies or practices for people with disabilities. This includes waiving pet fees for persons with disabilities who use assistance animals.


NCUA ANPR on alternative capital

The Board of Directors of the National Credit Union Administration has published [82 FR 9691] in this morning's Federal Register an "advanced [sic] notice of proposed rulemaking" (ANPR) to solicit comments on alternative forms of capital federally insured credit unions could use in meeting capital standards required by statute and regulation. Comments on the ANPR close on May 9, 2017.


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