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Free Webinar: The State of Sanctions
Thursday, June 8th - 1:00 PM CT

The sanctions landscape is evolving - exposing institutions to greater sanctions risks, operational and oversight challenges, and obligations to comply with sanctions administered by OFAC and other agencies. OFAC expert, Tim White, will address these issues and what you need to be aware of moving forward. (Register here.)

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Gruenberg on connecting unbanked to mainstream financial services

In remarks at the Bank On 2017 conference in Washington, D.C., FDIC Chairman Gruenberg discussed the results of the FDIC's biennial National Survey of Unbanked and Underbanked Households. He noted that the most recent survey, published in October 2016, revealed that 7 percent of households were unbanked, lacking any account relationship at an insured institution. The survey also showed that an additional one-in-five (or 19.9 percent of) households were underbanked, defined as households in which a member had a bank account, but nevertheless turned to alternative financial services providers during the year to address one or more needs for transactional services such as check cashing or credit. Altogether, the survey reported that some 90 million Americans, or nearly 27 percent of households, are unbanked or underbanked. Gruenberg concluded, “Economic inclusion goes to the heart of the FDIC's mission of maintaining the public's confidence in the banking system. By working together to promote access to safe accounts and integrate financial services into important local initiatives, we expand opportunities for people to save, invest, meet basic financial goals, and more fully participate in our economy.”


OCC updates policies regarding violations

The OCC has issued Bulletin 2017-18 with an update of policies and procedures regarding violations of laws and regulations to become effective July 1, 2017. The updates are reflected in the “Bank Supervision Process,” “Community Bank Supervision,” “Federal Branches and Agencies,” and “Large Bank Supervision” booklets and other sections of the Comptroller’s Handbook and internal guidance. Among the changes will be a consistent format for communicating violations that includes legal citations and descriptions of the violation, a summary of relevant statutory or regulatory requirements, facts supporting the violation and root cause(s), corrective action(s) required, and the commitments of the bank's board and management to corrective action.


Labor's Fiduciary Rule effective June 9

The Department of Labor has issued Guidance FAQs on a phased-in implementation of its Fiduciary Conflict of Interest Rule and related exemptions beginning at midnight Friday, June 9, 2017, with certain provisions in the exemptions delayed to January 1, 2018. As a result, on June 9, investment advice providers to retirement savers will become fiduciaries, and the "impartial conduct standards" will become requirements of the exemptions. The Department will continue to examine the Fiduciary Rule in compliance with the president's February 3, 2017, memorandum.


Fed releases Reg II small issuer exemption lists

The Federal Reserve Board has published two lists of institutions intended to help payment card networks and others determine which card issuers qualify for the statutory exemption from the interchange fee standards in Regulation II (12 CFR Part 235). Section 920 of the Electronic Fund Transfer Act (added by the Dodd-Frank Act) required the Federal Reserve to establish interchange fee limits for debit card transactions. It exempts any debit card issuer that, together with its affiliates, has assets of less than $10 billion. The lists have been generated from the set of institutions in existence on December 31, 2016, according to the available data. The lists -- one of exempt institutions and the other of non-exempt institutions -- are available in three different formats.


Former Barclays trader fined and banned

The Federal Reserve Board has announced it has finalized administrative proceedings against Christopher Ashton, a former institution-affiliated party of Barclays Bank PLC, London, England, ordering that he pay a civil money penalty of $1.2 million and be permanently banned from employment in the banking industry. The enforcement proceedings against Ashton follow the Board's May 2015 enforcement actions against Barclays for unsafe and unsound practices related to its compliance and control failures concerning its practices in the FX markets. The Board at that time required Barclays to pay $342 million in penalties.


OCC announces enforcement actions

The Office of the Comptroller of the Currency has released enforcement actions taken in April 2017 against national banks, federal savings associations, and individuals currently and formerly affiliated with such institutions. .This month's list included the previously announced $15 million civil money penalty levied against U.S. Bank, N.A.. Also included was an $87,500 civil money penalty against a Texas bank for a pattern and practice of flood insurance regulation violations.

There was also an order that a former mortgage loan originator at a Chicago, Illinois, bank make restitution of $3,710, pay a penalty of $10,000, and accept a ban from employment or other involvement in the banking industry. Finally, a former Vice President and Financial Consultant of a Reno, Nevada, bank was banned from the industry for engaging in a check kiting scheme which at one time left his account at the bank overdrawn by $57,000 (which he covered before resigning from the bank).


OFAC targets al-Qa'ida in Arabian Peninsula

OFAC has announced that it has targeted al-Qa’ida in the Arabian Peninsula (AQAP) leaders and facilitators by imposing sanctions on two individuals. Specifically, OFAC designated Hashim Muhsin Aydarus al-Hamid (al-Hamid) and Khalid Ali Mabkhut al-Aradah (al-Aradah), both Yemen-based tribal leaders who facilitated the transfer of weapons and money and the movement of individuals in support of AQAP. Those actions were taken Friday in conjunction with the State Department's designation of Hashem Safieddine, a senior leader in Hizballah, and Muhammad al-Isawi, the leader of ISIS - Sinai. As a result of Friday’s actions, all property and interests in property of these persons subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. For more information, see our OFAC Update.


FDIC deposit insurance seminars

FIL-18-2017, issued yesterday by the FDIC, announced that the agency will conduct four live seminars on FDIC deposit insurance coverage [includes dates, times and registration information] for bank employees and bank officers between June 6, 2017, and December 4, 2017. In addition to a comprehensive overview of FDIC deposit insurance rules, the seminars now include deposit insurance coverage information for Prepaid Cards, Health Savings Accounts, 529 plan accounts and 529 Achieving a Better Life Experience (ABLE) plan accounts. The FDIC has also developed three separate Deposit Insurance Coverage Seminars for bank officers and employees that are available on the FDIC's YouTube channel.


OFAC sanctions Venezuelan judges

The Office of Foreign Assets Control has added the names of the eight members of Venezuela's Supreme Court of Justice (Tribunal Supremo de Justicia or TSJ} to its list of designated foreign nationals under Executive Order 13692. The eight officials are the President of Venezuela's TSJ, Maikel Jose Moreno Perez, and the seven principal members of the TSJ's Constitutional Chamber (La Sala Constitucional del TSJ or TSJ-C): Juan Jose Mendoza Jover (Second Vice President of the TSJ and President of the TSJ-C); Arcadio de Jesus Delgado Rosales (Vice President of the TSJ-C); Gladys Maria Gutierrez Alvarado (Magistrate of the TSJ-C and former President of the TSJ); Carmen Auxiliadora Zuleta de Merchan (Magistrate of the TSJ-C); Luis Fernando Damiani Bustillos (Magistrate of the TSJ-C); Lourdes Benicia Suarez Anderson (Magistrate of the TSJ-C); and Calixto Antonio Ortega Rios (Magistrate of the TSJ-C). As a result of today's actions, all of the designated individuals' assets within U.S. jurisdiction are frozen, and U.S. persons are generally prohibited from engaging in transactions with them. For further information and identification details, see our OFAC Update.


Counterfeit cashier's checks on Ohio bank

The OCC has issued Alert 2017-5 concerning counterfeit cashier's checks purporting to have been issued by Consumers National Bank, Minerva, Ohio. See our Alerts and Counterfeits page for details.


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