Bankers Compliance Task Force Current News Archive - December 2005
December, 29, 2005 FinCEN announced the assessment of a $2.8 million civil penalty against Oppenheimer & Company, Inc., a securities broker-dealer based in New Your, for violations of the Bank Secrecy Act. http://www.fincen.gov/
December 29, 2005 The federal banking regulatory agencies are seeking comment on proposed guidance for nontraditional mortgage lending products. http://www.occ.treas.gov/
December 29, 2005 The FDIC has provided guidance on new requirements for filing notices of proposed class action settlements involving financial institutions for which the FDIC is the primary federal regulator. http://www.fdic.gov/
December 27, 2005 The OCC has issued a Bulletin which contains information on the process the OCC will follow for taking administrative enforcement actions against banks based on BSA violations. The OCC states that the intent of the guidance is to ensure that the process is measured, fair, and fully informed. See OCC Bulletin 2005-45 at http://www.occ.treas.gov/.
BSA/AML Violation Enforcement Action Process
The OCC has issued a Bulletin which contains information on the process the OCC will follow for taking administrative enforcement actions against banks based on BSA violations. The OCC states that the intent of the guidance is to ensure that the process is measured, fair, and fully informed. See OCC Bulletin 2005-45 at http://www.occ.treas.gov/.
December 20, 2005 The Department of Housing and Urban Development announced a legal settlement with eight Tennessee builders for violating the Real Estate Settlement Procedures Act. HUD claimed the eight, collectively known as "Title Group Builders," received payments from a Tennessee title company for settlement services that were never performed. Such "sham affiliated business arrangements" violate RESPA's anti-kickback and unearned fee provisions, HUD said. Title Group Builders agreed to make a $226,000 payment to the U.S. Treasury and cease any further business operations involving the sham business affiliations. http://www.hud.gov/
December 20, 2005 OFAC, the FRB, the New York State Banking Department, and the Illinois Department of Financial and Professional Regulation have issued a combined order of Assessment of a Civil Money Penalty and Monetary Payment against ABN AMRO Bank N.V and its New York City and Chicago branches. The bank has agreed to undertake remedial action in its worldwide banking operations and to pay $75 million in penalties to regulators for violations of OFAC sanctions regulations, AML, BSA and state laws, in addition to making a voluntary contribution of $5 million to the Illinois Bank Examiners' Education Foundation. http://www.federalreserve.gov/
December 20, 2005 The federal financial regulatory agencies have issued for comment proposed guidance on residential mortgage products that allow borrowers to defer repayment of principal and sometimes interest. The nontraditional mortgage products include "interest-only" mortgage loans where a borrower pays no principal for the first few years of the loan and "payment option" adjustable-rate mortgages where a borrower has flexible payment options including the potential for negative amortization. http://www.occ.treas.gov/
December 19, 2005 The Federal Reserve has posted the new reference rates which lenders must use to determine if loans for which applications are received in January 2006 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, you use the yield in effect on the 15th of the month that precedes the month you received the application. http://www.federalreserve.gov/ and http://www.federalreserve.gov/
December 16, 2005 The Federal Reserve published its annual notice of the asset-size exemption threshold for depository institutions under Regulation C, which implements the Home Mortgage Disclosure Act. The asset-size exemption will increase to $35 million based on the annual percentage change in the Consumer Price Index for urban wage earners and clerical workers for the 12-month period ending in November 2005. As a result, depository institutions with assets of $35 million or less as of Dec. 31 are exempt from data collection in 2006. An institution's exemption from collecting data in 2006 does not affect its responsibility to report the data it was required to collect in 2005. The adjustment is effective Jan. 1. http://www.federalreserve.gov/
December 16, 2005 The Financial Crimes Enforcement Network sent for publication in the Federal Register a final regulation implementing the foreign correspondent account provisions and the private banking provisions of section 312 of the USA PATRIOT Act. Simultaneously, the Financial Crimes Enforcement Network sent for publication a related notice of proposed rulemaking relating to one key provision of section 312 that requires enhanced due diligence for correspondent accounts maintained for certain foreign banks. The Federal Register will publish both regulations after January 1, 2006. The FinCEN announcement includes a Fact Sheet summarizing the rule and publicizing the effective dates. http://www.fincen.gov/
December 14, 2005 The FBI along with the Housing and Urban Development, Internal Revenue Service, the U.S. Postal Inspection Service and DOJ announced a crackdown on mortgage fraud. Mortgage fraud "is defined as a material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan." Victims of mortgage fraud not only include investors and consumers, but lenders as well. Law enforcement officials noted that 21,994 SARs were filed in 2005 (up from last year's 17,127). There is also an increase in pending Mortgage Fraud cases as 721 cases are currently pending (up from 534 in 2004). http://www.fbi.gov/
December 14, 2005 Federal bank and thrift regulatory agencies published the Interagency Guidelines Establishing Information Security Standards (Security Guidelines), a compliance guide which "summarizes the obligations of financial institutions to protect customer information, and illustrates how certain provisions of the Security Guidelines apply to specific situations." The guide however, is not a substitute for the Security Guidelines and is meant to address "a financial institution's obligations under the Security Guidelines and does not address the applicability of any other federal or state laws or regulations that may pertain to policies or practices for protecting customer records and information." http://www.occ.treas.gov/
December 12, 2005 The HMDA FAQs have been updated by the FFIEC to include questions regarding Type of Purchaser. http://www.ffiec.gov/
December 12, 2005 The OCC recently announced the selection of E. Matthew Quigley as Director of Community Development. Mr. Quigley will be responsible for the Community Affairs department’s research and publications as well as the management of district community affairs officers. http://www.occ.treas.gov/
December 8, 2005 The OCC has published its Annual Report for Fiscal Year 2005. The report includes an introduction by Comptroller Dugan and the OCC's financial statements. Other sections describe the OCC, its accomplishments and operations, and its management initiatives. http://www.occ.treas.gov/
December 8, 2005 Additional guidance on HMDA reporting has been issued by the FFIEC to ensure that data is stated accurately pertaining to loans subject to HOEPA; rate spread; preapprovals and additional sources of guidance. http://www.ffiec.gov/
December 7, 2005 The Federal Reserve announced amendments to Appendix A of Regulation CC that reflect the restructuring of its check processing operations in the First District. Appendix A provides a routing number guide that helps depository institutions determine the maximum permissible hold periods for most deposited checks. http://www.federalreserve.gov/
December 6, 2005 The FRB Financial Services Policy Committee (FSPC) has announced that it will retain the Federal Reserve Bank of Atlanta’s New Orleans Branch check processing operation at the Atlanta Fed’s head office and will postpone the previously announced move of the Nashville Branch’s check processing operation into Atlanta until 2007. http://www.federalreserve.gov/
December 6, 2005 HUD has published a final rule that insured five-year hybrid ARMs with interest rates adjustable up to two percentage points annually. The final rule makes no changes to the interim rule. http://www.bankersonline.com/
December 6, 2005 On December 5, 2005, the 9/11 Public Discourse Project, made up of members from the 9-11 Commission, issued a final report on the status of the 9-11 Commission's recommendations made in July 22, 2004. Although quite critical of the status of many of the recommendations, the report gives the government an A- for vigorous effort against terrorist financing. http://www.9-11pdp.org/
December 6, 2005 Request for comments on proposed revisions to "2001 Interagency Questions and Answers Regarding Community Reinvestment" that would provide guidance on changes to CRA regulations was recently published by the federal regulatory agencies. http://www.occ.treas.gov/
December 6, 2005 FinCEN has updated its 314(a) Facts & Figures Sheet. http://www.fincen.gov/
December 6, 2005 The FDIC has issued the Winter 2005, Vo. 2, Issue 2 of the Supervisory Insights Journal. http://www.fdic.gov/
December 6, 2005 The OCC has published in the Federal Register an interim final rule, with a request for comment, amending part 8 of the OCC’s rules concerning the timing of payments of OCC assessments. The effective date of the interim rule is December 19, 2005. Comments are due by December 19, 2005. http://www.occ.treas.gov/
December 1, 2005 Comptroller of the Currency John C. Dugan expressed strong concern in a speech today about negative amortization in consumer loan products, particularly in the areas of credit cards and mortgages. http://www.occ.treas.gov/
December 1, 2005 FinCEN has announced the launch of a newly updated forms page that's easier to navigate and find forms required for filing by certain financial institutions under the Bank Secrecy Act. The new page can be accessed at http://www.fincen.gov/.
December 1, 2005 The FFIEC has updated the list of distressed or underserved nonmetropolitan middle-income geographies. The list can be found at http://www.ffiec.gov/.
December 1, 2005 The FRB has announced the issuance of an Order of Assessment of a Civil Money Penalty against County Bank, Merced, California, in connection with alleged violations of Reg H and the National Flood Insurance Act. The order can be accessed at http://www.federalreserve.gov/.
