Bankers Compliance Task Force Current News Archive - July 2005

July 29, 2005   The Federal Banking Agencies have issued host state loan-to-deposit ratios for 2005.  These ratios update information published on August 26, 2004. FIL-70-2005 can be accessed at  http://www.fdic.gov/.

July 28, 2005   The OCC has issued a revised booklet - Home Mortgage Disclosure - from the Comptroller's Handbook for Consumer Compliance.  The booklet incorporates Federal Reserve Board changes to Regulation C (12 CFR 203) requiring lenders to include additional information on their HMDA loan application register.  To access a copy of the new booklet, go to: http://www.occ.treas.gov/.

July 27, 2005   The FDIC is providing guidance to financial institutions on the security risks associated with voice over Internet protocol (VoIP). VoIP refers to the delivery of traditional telephone voice communications over the Internet.  The guidance, issued as FIL-69-2005, can be found at http://www.fdic.gov/.

July 25, 2005   The FDIC is issuing the attached guidance to financial institutions recommending an effective spyware prevention and detection program based on an institution's risk profile. This guidance and the attached informational supplement discuss the risks associated with spyware from both a bank and consumer perspective and provide recommendations to mitigate these risks.  For more information, visit:  http://www.fdic.gov/.

July 25, 2005   The OTS  has announced three Outreach Meetings and Financial Management Seminars designed to benefit CEOs.  Please visit http://www.ots.treas.gov/ for more information.

July 20, 2005   The OCC has issued a warning concerning e-mails allegedly issued by the OCC regarding restricted funds supposedly under its control continuing to circulate.  Visit http://www.occ.treas.gov/ for more information.

July 20, 2005   The FDIC has approved a proposed amendment to the FDIC's annual audit and reporting requirements.  Under the proposal, the FDIC would amend Part 363 of its regulations by raising the asset-size threshold from $500 million to $1 billion for Internal control assessments by management and attestations by external auditors, and members of the audit committee, who must be outside directors, to be independent of management.  For more information, visit: http://www.fdic.gov/.

July 20, 2005   The FDIC has proposed a new rule on the insurability of funds subject to transfer or withdrawal through the use of stored value cards and other nontraditional access devices, such as computers.  The FDIC is requesting comments on the new proposed rule as well as comments on whether disclosures about the insured status of the funds should be mandated.  Comments will be accepted within a 90-day period following publication of the new proposed rule in the Federal Register.  For more information, visit: http://www.fdic.gov/.

July 19, 2005   The federal banking agencies have approved final Community Reinvestment Act (CRA) rules that are intended to reduce regulatory burden on community banks while making CRA evaluations more effective in encouraging banks to meet community development needs. The final rules raise the small bank asset size threshold to assets of less than $1 billion without regard to holding company affiliation. Accordingly, the new rules reduce data collection and reporting burden for "intermediate small banks" (banks with assets between $250 million and less than $1 billion ) and, at the same time, encourage meaningful community development lending, investment and services by these banks. The rules, which are being issued jointly by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, take effect on September 1, 2005. The agencies will have interim CRA examination procedures for intermediate small banks in place by August 1. For more information, visit: http://www.fdic.gov/.

July 19, 2005   HOEPA August 2005 Reference Rates have been published. The Federal Reserve has posted the new reference rates which lenders must use to determine if loans for which applications are received in June 2005 will be subject to HOEPA under the APR trigger test. Use the FRB H.15 to find applicable release which lists the Treasury Security with the same maturity term as your loan. To make the calculation, use the yield in effect on the 15th of the month prior to the month the application was received. To access the rates, go to: http://www.federalreserve.gov/.

July 19, 2005   The FDIC has issued FIL-64-2005 with guidance to financial institutions describing the practice of "pharming," how it occurs, and potential preventive approaches. Financial institutions offering Internet banking should assess potential threats posed by pharming attacks and protect Internet domain names, which – if compromised – can heighten risks to the institutions. The guidance can be accessed at:  http://www.fdic.gov/.

July 15, 2005    The Financial Crimes Enforcement Network (FinCEN) has issued five Administrative Letter Rulings that can be found under "What's New" on the FinCen website - www.fincen.gov:
FinCEN Ruling 2005-5 - Definition of Money Services Business (Casinos as Money Services Businesses) - 7/6/05
FinCEN Ruling 2005-4 - Definition of Money Services Business ("Doing Business" as a Money Services Business) - 7/1/05
FinCEN Ruling 2005-3 - Definition of Money Services Business (Ceasing to be a Money Services Business) - 6/24/05
FinCEN Ruling 2005-2 - Difficulties Encountered by Money Services Businesses in Obtaining Banking Services - 5/5/05
FinCEN Ruling 2005-1 - Currency Transaction Reporting: Aggregation by Casinos at Slot Machines - 2/7/05
Of these FinCEN Rulings, those that are relevant to Money Services Businesses can also be found on the MSB website at www.msb.gov.

July 15, 2005     The Department of Housing and Urban Development announced a $680,000 settlement on Wednesday with a Tennessee title company for violating the Real Estate Settlement Procedures Act. HUD claimed First American Title Insurance Company, doing business as Memphis Title Company, made payments through sham affiliated businesses in the Memphis area in violation of RESPA’s anti-kickback and unearned fee provisions. HUD said First American created or acquired eight affiliated title companies with various builders, real estate agents and mortgage brokers that were paid for certain title and settlement work they did not perform, which was essentially provided by First American. Additional information about the case may be found at http://sdm3.rm04.net/.

July 13, 2005     The Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation recently issued updated host-state loan-to-deposit ratios that the banking agencies will use to determine compliance with section 109 of the Riegle–Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act).   These ratios, which update data released August 2004, can be accessed at:   http://www.occ.treas.gov/.

July 13, 2005     FinCEN recent assessed a Civil Money Penalty in the amount of $700,000 against Gulf Corporation for willful violations of the Bank Secrecy Act.  The violations primarily involved the failure to timely file 2,434 CTRs and 47 SARs.  You can read the order at: http://www.fincen.gov/gulf070505.pdf.

July 12, 2005    The Department of Justice has amended the US Attorneys' Manual to require Criminal Division approval before any indictment, complaint, information, or Deferred Prosecution Agreement is filed against a bank with respect to a money laundering case.  This change is the result of banking agency discussions with Justice Department officials over the last several months--spurred by different enforcement approaches evident in the AmSouth settlement.  As Fed Governor Bies said in March of this year, "The Federal Reserve is also working with senior Justice and Treasury officials to ensure they understand the efforts of banks and the regulators to ensure compliance with the Bank Secrecy Act. We want awareness of these compliance efforts to be consistent throughout the criminal justice system so that the industry and its regulators can continue building partnerships with law enforcement authorities. To view the changes, visit:  http://www.aba.com/.

July 7, 2005    The Defense Department's Defense Manpower Data Center has set up a new, free and more-convenient online system that can help banks comply with the Service members Civil Relief Act, which provides specific financial protections for people called to active duty. The new system enables institutions to access the DMDC database to look up who is, and who isn't, on active duty military service at the current moment — without having to request an application form or obtain a password. The new public access system and the original system, which required password access, are now running concurrently. Banks who signed up for the original look-up system can continue to use it, but when it is phased out in the near future, they can switch to the new set-up with a click of the mouse. You may access the new system through the following link:   https://www.dmdc.osd.mil/scra/owa/home.

July 5, 2005    FinCEN has updated the 314a Facts and Figures Report to include data as of July 5, 2005. To access the updated report, visit:  http://www.fincen.gov/.

July 5, 2005    The OCC has released its Community Developments Insights Paper for June 2005.  This Edition examines the growth of payroll cards and their potential for use by national banks to attract the nearly 10 million unbanked households into the financial mainstream. Insights can be accessed at http://www.occ.treas.gov/.

July 5, 2005    The FDIC has published FIL-59-2005.  This publication is a supplement to its December 14, 2004, study Putting an End to Account-Hijacking Identity Theft (see FIL-132-2004). The supplement was published to review and respond to public comments received about the original study, to survey the most recent trends in identity theft, to discuss authentication technologies that were not discussed in the original study, and to present two updated findings.  For more information, visit: http://www.fdic.gov/.

July 1, 2005    The OCC issued Bulletin 2005-24 concerning threats from fraudulent bank web sites.  This bulletin provides banks with guidance on how to respond to incidents of Web-site spoofing and addresses procedures banks can implement to mitigate the risks to themselves and their customers by detecting and responding to Web-site spoofing.  It also identifies the types of information banks can provide to law enforcement authorities to assist in investigating illegal activities.  This bulletin expands on OCC Alert 2003-11, "Customer Identity Theft: E-mail Related Fraud Threats," September 12, 2003.  For more information, visit: http://www.occ.treas.gov/.

July 1, 2005    On March 1, 2005, the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) released the Secure Information Sharing System (SISS) for Section 314(a) information. Financial institutions should be receiving biweekly e-mail notifications about new information that has been posted on the SISS Web site for their review. Beginning with the June 30, 2005, Federal Financial Institutions Examination Council (FFIEC) Call Report, institutions will be allowed to include up to four points of contact – an increase from the previous limit of two – for USA PATRIOT Act Section 314(a) reviews.  Financial institutions are responsible for ensuring that staff working on 314(a) issues are listed as points of contact. FinCEN will use the contact names to verify users before beginning discussions about 314(a) data or other issues. The additional contacts on the Call Report increase the number of employees that an institution may use to work with FinCEN on 314(a) matters.  For more information, you can access FDIC FIL-57-2005 at http://www.fdic.gov/.

July 1, 2005    The OCC has released its Quarterly Journal, Vol. 24, No. 1 (March 2005) on the Web.  This volume includes organizational charts, 4th quarter 2004 condition of banks, household debt study, special supervision and enforcement, licensing decisions, appeals, speeches, interpretation, and corporate structure data.  The Quarterly Journal can be accessed at http://www.occ.treas.gov/.

July 1, 2005    The FDIC recently release its Summer 2005 State Profiles.  The State Profiles provide a quarterly summary of state banking and economic conditions.  To retrieve a profile, visit http://www.fdic.gov/  and select a state from either the map.