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OFAC has announced a $178,421 settlement with American Life Insurance Company (ALICO), a subsidiary of MetLife, Inc. ALICO agreed to settle its potential civil liability for 2,331 apparent violations of OFAC sanctions on Iran. The apparent violations related to insurance policies provided to entities in the United Arab Emirates that were owned or controlled by the Government of Iran. The settlement amount reflects OFAC's determination that the apparent violations were voluntarily self-disclosed and were not egregious.

The Consumer Financial Protection Bureau has announced it has taken action against Global Tel Link Corporation (GTL) for illegally taking millions of dollars from more than a half million accounts and blocking money transfers to consumers who are incarcerated, which the consumers relied on for goods such as food, medicine, and clothing. The CFPB is ordering GTL and its subsidiaries to stop their illegal practices, pay at least $2 million in redress to victims, and pay a $1 million penalty to the CFPB’s victims relief fund.

GTL is a Virginia-based corporation doing business as ViaPath Technologies. Its wholly owned subsidiaries include limited liability companies Telmate, LLC, based in California, and TouchPay Holdings, LLC, based in Texas. The companies contract with correctional facilities across the United States to provide various products and services, including money transfer services, to incarcerated people and their family and friends. Friends and family use the services to deposit money into an incarcerated person’s account, and these funds may then be used to pay for items in the correctional facility’s commissary. GTL and Telmate also provide accounts to pay for telephone services, online messaging, and video visitation.

The CFPB found that Global Tel Link and its subsidiaries violated federal law by:

• Blocking consumer accounts and preventing money transfers
• Taking funds from inactive accounts unlawfully
• Hiding fees from consumers

FRBServices has announced the expansion of FedDetect Duplicate Notification for Check Services to include commercial checks, alongside its existing Treasury check notification service. Financial institutions can now see deposit information and images of potential duplicate items for commercial checks, supplementing their existing check fraud mitigation tools.

“Commercial checks remain a critically important form of payment, but they’re also vulnerable to fraud,” said Shonda Clay, FRFS executive vice president and chief of product and relationship management. “With the expansion of our FedDetect service, we are providing financial institutions of all sizes another powerful tool in their risk mitigation toolkit. Even better, we are now offering this service at no cost as part of our commitment to supporting depository institutions in the collective, industry-wide mission to combat fraud.”

The FedDetect service helps financial institutions mitigate loss of funds due to fraud or deposit capture errors by sending notices of potential duplicate Treasury or commercial checks across multiple payment channels and financial institutions.

Yesterday, the Treasury Department reported that OFAC has sanctioned 26 companies, individuals, and vessels associated with the Al-Qatirji Company, a Syrian conglomerate responsible for generating hundreds of millions of dollars in revenue for Iran’s Islamic Revolutionary Guard Corps-Qods Force and the Houthis through the sale of Iranian oil to Syria and the People’s Republic of China.

For the names and identification information of the designated persons and vessels, see yesterday's BankersOnline OFAC Update.

The Financial Stability Board, an international organization that coordinates the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability, has issued a report, "The Financial Stability Implications of Artificial Intelligence," which outlines recent developments in the adoption of artificial intelligence (AI) in finance and their potential implications for financial stability.

The FSB stated that widespread adoption and more diverse use cases of AI have prompted the FSB to revisit its 2017 report on AI and machine learning in financial services. Financial firms currently use AI mainly to enhance internal operations and improve regulatory compliance, but generative AI (GenAI) and large language models have given rise to new use cases, such as document summation, information retrieval, and code generation. While many financial institutions appear to be taking a cautious approach to using GenAI, interest remains high and the technology’s accessibility could facilitate more rapid integration in financial services.

The report notes that—

• The rapid adoption of AI offers several benefits but may also amplify certain financial sector vulnerabilities, such as third-party dependencies, market correlations, cyber risk and model risk, potentially increasing systemic risk.
• While existing financial policy frameworks address many of the vulnerabilities associated with use of AI by financial institutions, more work may be needed to ensure that these frameworks are sufficiently comprehensive.
• Financial authorities should enhance monitoring of AI developments, assess whether financial policy frameworks are adequate, and enhance their regulatory and supervisory capabilities including by using AI-powered tools.

The CFPB has released a study revealing significant disparities in how lenders treat Black and white small business owners seeking loans. The research found that Black entrepreneurs received less encouragement to apply for a loan and were more frequently steered toward alternative loan products compared to white shoppers with similar or weaker business credit profiles. The Bureau said that, while focused on specific testing sites, this research provides insights into potential lending disparities that warrant further exploration.

The CFPB conducted matched-pair testing using trained individuals who posed as small business owners seeking credit. Testers visited 25 unique bank branches in Fairfax County, Virginia and 25 branches in Nassau County, New York, resulting in a total of 100 in-person test visits. Each visit was audio recorded and participants completed a survey after the bank interaction that documented their experience. Black participants were assigned slightly more favorable financial profiles compared to their white counterparts. In many tests, the Black and white participant each met with the same bank representative.

The study revealed statistically significant disparities in two key areas:

• Black participants received less encouragement to apply for a loan.
• Lenders were more likely to suggest credit cards and home equity loans to Black business owners.

The CFPB noted it finalized its Small Business Lending Collection and Reporting ("Section 1071") Rule in March. The largest lenders will be required to collection and report data on their lending decisions beginning in July 2025, and the CFPB will review their lending data starting in July 2026.

• Matched-Pair Testing in Small Business Lending Markets

The Federal Reserve Board is inviting comment on a report, as required by law, that discusses the impact of a proposed international capital standard for large, internationally active insurance groups on U.S. consumers and markets. The joint report was completed with the U.S. Department of the Treasury's Federal Insurance Office.

Comments on the report are due by January 12, 2025.

• Federal Register notice: Study and Report to Congress on the Impact on Consumers and Markets in the United States of a Final International Insurance Capital Standard

FinCEN has issued FIN-2024-Alert004 to help financial institutions identify fraud schemes associated with the use of deepfake media created with generative artificial intelligence (GenAI) tools. The alert explains typologies associated with these schemes, provides red flag indicators to assist with identifying and reporting related suspicious activity, and reminds financial institutions of their reporting requirements under the Bank Secrecy Act (BSA). This alert is also part of the U.S. Department of the Treasury’s broader effort to provide financial institutions with information on the opportunities and challenges that may arise from the use of AI.

The Treasury Department yesterday announced that OFAC has sanctioned Abdel Rahman Joma’a Barakallah for his leadership role in the Rapid Support Forces (RSF), a primary party responsible for the ongoing violence against civilians in Sudan since April 2023.

For identification information on Barakallah and a notice on amendments to OFAC's Sudan Sanctions Regulations, see yesterday's BankersOnline OFAC Update.

Today, FinCEN published [89 FR 89700] a 61-day notice in the Federal Register concerning the form that select real estate professionals will use to report information about certain residential real estate transfers under the Residential Real Estate Rule. This notice gives the public an opportunity to comment on the reporting form, and on FinCEN’s estimate of the burden involved in the reporting process. Comments will be accepted through January 13, 2025.

The FDIC's Board of Directors met in a closed session yesterday and approved a memorandum and resolution on investigations by the FDIC's Office of Professional Conduct. No link to that document was provided, although statements by FDIC Vice Chairman Travis Hill and Director Jonathan McKernan expressed dissatisfaction with "five months of debate, delays and false starts" over how to investigate allegations of misconduct by FDIC executives.

The FDIC's newly established Office of Professional Conduct will retain and oversee law firms that will investigate such allegations. Director McKernan's statement indicates he hopes completed investigations can be expected in the spring of 2025, with disciplinary decisions not long after that.

The FDIC reports that nearly 96 percent of all U.S. households were banked in 2023, according to just-released national FDIC survey data. The 2023 FDIC National Survey of Unbanked and Underbanked Households found that 4.2 percent of U.S. households (representing 5.6 million households) lacked a bank or credit union account.

While the nation’s overall unbanked rate remains at its lowest level since the FDIC survey began in 2009, lower-income, less-educated, Black, Hispanic, disabled, and single-parent households continue to be significantly more likely to be unbanked. In addition, the FDIC survey found 66.2 percent of unbanked households relied entirely on cash while 33.8 percent of unbanked households relied upon a combination of prepaid cards or nonbank online payment services such as PayPal, Venmo or Cash App to conduct transactions.

The Federal Reserve Board reports it has prohibited Anthony R. Gressak III from future participation in the banking industry and fined him $75,000.

Gressak is a former director and former interim chief executive officer of Nano Financial Holdings, Inc. and Nano Banc. In his former role, Gressak violated a prior written agreement between the firm and the Federal Reserve. Gressak also fraudulently obtained loans and grants administered under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and violated other laws and banking regulations.

The Board also announced that it had prohibited James T. Chung, also a former director of Nano Financial Holdings, Inc. and Nano Banc, from future participation in the banking industry for fraudulently obtaining loans and grants administered under the CARES Act.

The CFPB has released a report, "State Consumer Privacy Laws and the Monetization of Consumer Financial Data," summarizing state laws that give consumers more control over their data, how these rights complement the protections under federal law, and the gaps in protection that result from state law exemptions for financial institutions subject to the Gramm-Leach-Bliley Act (GLBA) or the Fair Credit Reporting Act (FCRA).

The CFPB suggests that state policymakers should assess gaps in their state data privacy laws, and consider the importance of ensuring that their citizens are protected in instances where federal law currently has gaps or may be ineffective.

The Federal Trade Commission has announced a proposed settlement with H&R Block Inc. and affiliates that will require the company to make a number of changes for the 2025 tax filing season in addition to longer-term changes. The settlement would also require the company to pay $7 million to the FTC to be used to redress consumers harmed by the company’s unlawful practices.

The proposed settlement would stop H&R Block from unfairly requiring consumers seeking to downgrade to a cheaper H&R Block product to contact customer service, from unfairly deleting users' previously entered data and from making deceptive claims about “free” tax filing.

• FTC's record of filings in this matter

OFAC is asking for user opinions of their website. They are asking site users to take about ten minutes to complete a survey to help them improve their services, enhance users' experience, and create new features.

The survey can be found HERE.

FinCEN has reported its September 2024 outreach efforts on its Beneficial Ownership Reporting Rule requirements.

The report also included a list of upcoming events at which FinCEN representatives are scheduled to further disseminate BOI reporting information through the end of the year.

The Federal Reserve Board has published [89 FR 88877] a final rule that applies an inflation adjustment to the threshold for total consolidated assets in Regulation I (12 C.F.R. Part 209). Federal Reserve Bank (Reserve Bank) stockholders that have total consolidated assets above the threshold receive a different dividend rate on their Reserve Bank stock than stockholders with total consolidated assets at or below the threshold (which is being increased to $12,841,000,000).

The amendments, which are effective today but will apply beginning on January 1, 2025, have been noted in affected sections of Regulation I in the BankersOnline Regulations webpages.

The NCUA on Friday reported that Florida's Office of Financial Regulation placed Alliance Credit Union of Florida into conservatorship, and appointed the NCUA as conservator.

According to the Credit Union Times, at the end of 2023, the credit union reported a loss of $184,231, and losses continued to pile up in each quarter of 2024.

The Securities and Exchange Commission on Friday reported that it had charged Invesco Advisers, Inc. for making misleading statements about the percentage of company-wide assets under management that integrated environmental, social, and governance (ESG) factors in investment decisions. The Atlanta-based registered investment adviser agreed to pay a $17.5 million civil penalty to settle the SEC’s charges.

According to the SEC’s order, from 2020 to 2022, Invesco told clients and stated in marketing materials that between 70 and 94 percent of its parent company’s assets under management were “ESG integrated.” However, in reality, these percentages included a substantial amount of assets that were held in passive ETFs that did not consider ESG factors in investment decisions. Furthermore, the SEC’s order found that Invesco lacked any written policy defining ESG integration.

Without admitting or denying the order’s findings, Invesco also agreed to cease and desist from violations of the charged provisions and be censured.

The Federal Reserve Board has released the Statement of the Federal Open Market Committee following its meeting on November 6 and 7. The committee said that recent indicators suggest that economic activity has continued to expand at a solid pace. Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee's 2 percent objective but remains somewhat elevated.

The Committee "decided to lower the target range for the federal funds rate by 1/4 percentage point to 4-1/2 to 4-3/4 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective."

The implementation note released with the Minutes indicates that the Board of Governors voted unanimously to lower the interest rate paid on reserve balances to 4.65 percent, effective November 8, 2024, and to approve a 1/4 percentage point decrease in the primary credit rate to 4.75 percent, effective November 8, 2024.

The CFPB has announced a consent order filed in an Administrative Proceeding against Navy Federal Credit Union for charging "illegal overdraft fees." The Bureau said that, from 2017 to 2022, Navy Federal charged customers surprise overdraft fees on certain ATM withdrawals and debit card purchases, even when their accounts showed sufficient funds at the time of the transactions. The CFPB is ordering Navy Federal to refund more than $80 million to consumers, stop charging illegal overdraft fees, and pay a $15 million civil penalty to the CFPB’s victims relief fund.

The CFPB said Navy Federal illegally charged it members' accounts in two ways.

1. Charging OD fees on "approved positive, settled negative" or APSN debit card transactions, collecting an average of $44 million a year, in spite of warnings about such fees by federal regulators, including the CFPB and the Federal Reserve Board, as early as 2015.
2. Charging member accounts that received money via Zelle, PayPal, and similar peer-to-peer payment services when Navy Federal's systems showed those funds as immediately available, but the credit union failed to disclose that payments received after 10:00 a.m. Eastern (later 8:00 p.m.) would not actually post to the accounts until the next business day. Some members tried using those funds and were charged OD fees.

In addition to the order's requirement to pay the $15 million civil money penalty and $80 million in refunds to Navy Federal members, there is a provision in the order banning Navy Federal from charging OD fees for APSN transactions or resulting from delayed posting of funds received from peer-to-peer payment networks.

• NCUA Chairman Todd M. Harper's Statement on the CFPB's settlement with Navy Federal Credit Union.

Our monthly review of the Federal Reserve Board's archive of Community Reinvestment Act evaluations found that the Reserve Banks released ten evaluations of state-chartered member banks in the month of October, all with Satisfactory ratings.

The FTC has reported it has charged Sitejabber, a company offering an AI-enabled consumer review platform, deceived consumers by misrepresenting that ratings and reviews it published came from customers who experienced the reviewed product or service, artificially inflating average ratings and review counts.

Under a proposed order settling the agency’s complaint, Sitejabber will be prohibited from making such misrepresentations in the future and from making other misrepresentations about consumer ratings or reviews.

According to the FTC’s complaint, GGL Projects, Inc., which does business as Sitejabber, collected ratings and reviews for its online business clients from consumers at the time of purchase, before they received or had the chance to experience the products or services they bought. For example, after online customers checked out, they were asked to “rate your overall shopping experience so far” on a 5-star scale and then to “type a quick message about your shopping experience so far.” Sitejabber allegedly used these point-of-sale ratings and reviews to deceptively inflate the average ratings and review counts of its clients on the company’s review platform, claiming that the ratings “indicat[e] that most customers are generally satisfied with their purchases.”

The Federal Housing Finance Agency has announced two partnerships involving Fannie Mae, Freddie Mac, and Federal Home Loan Banks (FHLBanks) to boost awareness and liquidity for programs that expand housing access for tribal communities.

In one partnership, the FHLBank of Des Moines will promote a Freddie Mac mortgage product intended to improve credit access for federally recognized Native American tribes. In the other, Fannie Mae will purchase loans originated through the FHLBank Mortgage Partnership Finance (MPF) program — administered by the FHLBank of Chicago — to increase mortgage liquidity for tribal communities.

• Fannie Mae and FHLBank of Chicago press release
• Freddie Mac and FHLBank of Des Moines press release

The OCC has announced its designation of Dewayne Lott, Ron Pasch, and Tanya Smith as Senior National Bank Examiners.

The Senior National Bank Examiner designation recognizes examiners who have distinguished themselves through high-quality performance and service as field examiners, subject matter experts, and advisors on highly complex and technical bank supervision issues. This is the highest honor bestowed on national bank examiners.

Yesterday, the Treasury Department reported that OFAC has designated one individual and one entity who support a corrupt patronage network in Bosnia and Herzegovina (BiH) that is attempting to evade U.S. sanctions.

For the names and identification information of the designated individual and entity, see yesterday's BankersOnline OFAC Update.

The FDIC has issued Financial Institution Letters with guidance to help financial institutions and facilitate recovery in areas affected by severe weather.

• FIL-78-2024 for financial institutions in areas of South Dakota affected by the Cheyenne River Sioux Tribe severe storm, straight-line winds, and flooding on July 13 and 14, 2024
• FIL-79-2024 for financial institutions in areas of New Mexico affected by a severe storm and flooding on October 19 and 20, 2024

The FDIC has announced it will introduce a new online tool to help financial institutions, investors, and other interested groups to identify neighborhoods that could benefit from banking services. The FDIC’s new Minority Banking Opportunity Explorer will be presented at a meeting of the agency’s Minority Depository Institutions (MDI) Subcommittee to the Advisory Committee on Community Banking today.

This new tool supports FDIC’s statutory mission to promote and encourage the creation of new minority depository institutions by assisting financial institution organizing groups with exploring potential business opportunities in areas that may meet the "community served" part of an MDI designation. The tool can also support existing MDIs’ growth by identifying new branch locations or advertising opportunities.

The Federal Trade Commission yesterday announced it has filed a complaint against Dave, Inc., a Delaware corporation behind the "Dave" online cash advance app, for allegedly using misleading marketing to deceive consumers about the amount of its cash advances, charging consumers undisclosed fees, and charging so-called “tips” to consumers without their consent.

Dave describes the consumers it targets as being “financially vulnerable” or “financially coping,” including those whose spending exceeds their income, who have minimal savings, and who overdraft their bank accounts frequently. Dave’s advertising is dominated by claims that consumers can receive “up to $500” by using Dave, and that they can do so “instantly.” According to the FTC’s complaint, though, Dave’s service failed to live up to its promises. Despite promising “instant” or “on the spot” access to advances, Dave requires users to pay an “Express Fee” to get instant access to that money that is not disclosed until after the sign-up process is complete and the user has given Dave access to their bank account, according to the complaint. This fee ranges from $3 to $25, and consumers who do not pay the fee have to wait two to three business days to receive their advance.

Dave’s undisclosed charges go beyond this Express Fee, though, according to the complaint. Consumers who take advances from Dave are often charged a surprise fee of 15% of their advance that’s described by Dave as a “tip.” Many consumers are either unaware that Dave is charging them or unaware that there is any way to avoid being charged. Dave’s interface leads consumers to believe that, for every percentage of tip they are giving, Dave is donating an actual healthy meal to a needy child. But, according to the complaint, Dave donates just 10 cents for each percentage in “tip” the consumer clicks on and keeps the rest of the “tip” amount. Dave’s donation does not pay for the food required to actually provide a meal. Dave has reported receiving more than $149 million in revenue for these "tips" alone from 2022 through the first half of 2024. Dave also charges a poorly disclosed $1 monthly "membership fee" charged directly to members' bank accounts, and makes it difficult for consumers to cancel their membership.

The FTC's complaint seeks a permanent injunction, a monetary judgment, and other relief.

The Federal Trade Commission yesterday announced it has taken action against Global Circulation, Inc. (GCI), a Georgia-based debt collector that tricked consumers into paying more than $7.6 million in bogus debt by threatening them with jail time, harassing their family members, and other unlawful actions. In response to a federal court complaint filed against GCI and its owner, Kenneth Redon III, the court agreed to temporarily halt the company’s operation and ordered it to turn its assets over to a court-appointed receiver.

In its complaint, the FTC alleges that GCI and Redon contacted consumers under a number of fictitious company names, including Total Mediation Solutions, Total Consumer Solutions, and Consumer Impact Recovery. The company’s collectors call consumers out of the blue and threaten them with arrest, wage garnishment, and lawsuits if they don’t pay a supposed debt. However, the debts GCI is attempting to collect either don’t exist at all or are not debts GCI can legally collect. The company’s calls to consumers can be incessant, with some receiving calls multiple times a day, leaving voicemails saying to call about an urgent legal matter. When consumers answer, they’re told that, unless they pay the bogus debts on that phone call using a credit or debit card, they’ll face legal peril.

The complaint alleges that GCI’s deceptive statements and the urgency behind them have helped convince thousands of consumers to pay at least $7.6 million in bogus debts to the company.

FinCEN recently announced that certain victims of Hurricane Milton, Hurricane Helene, Hurricane Debby, Hurricane Beryl, and Hurricane Francine will receive an additional six months to submit beneficial ownership information reports, including updates and corrections to prior reports.

FinCEN has issued the five Notices below extending the filing deadlines for reporting companies that 1) have an original reporting deadline beginning one day before the date the specified disaster began and ending 90 days after that date, and 2) are located in an area that is designated both by the Federal Emergency Management Agency as qualifying for individual or public assistance and by the Internal Revenue Service as eligible for tax filing relief.

Notice regarding—

• Hurricane Milton
• Hurricane Helene
• Hurricane Debby
• Hurricane Beryl
• Hurricane Francine

The FDIC has released a list of 51 banks examined for Community Reinvestment Act compliance whose evaluations were recently made public. Forty-seven of the banks on the list received ratings of Satisfactory. Three banks received Needs to Improve ratings.

We congratulate NorthEast Community Bank, White Plains, New York, on its receipt of a rating of Outstanding.

The FBI, the Treasury Department, and the Israel National Cyber Directorate have issued a Cybersecurity Advisory (CSA) to warn network defenders of new cyber tradecraft of the Iranian cyber group Emennet Pasargad, which has been operating under the company name Aria Sepehr Ayandehsazan (ASA) and is known by the private sector terms Cotton Sandstorm, Marnanbridge, and Haywire Kitten.

The group exhibited new tradecraft in its efforts to conduct cyberenabled information operations into mid-2024 using a myriad of cover personas, including multiple cyber operations that occurred during and targeting the 2024 Summer Olympics – including the compromise of a French commercial dynamic display provider. ASA has also undertaken a project to harvest content from IP cameras and used online resources related to Artificial Intelligence. Since 2023, the group has exhibited new tradecraft including the use of fictitious hosting resellers to provision operational server infrastructure to its own actors as well as to an actor in Lebanon involved in website hosting. Recently released reporting from Microsoft indicates this group has demonstrated interest in election-related websites and media outlets, suggesting preparations for future influence operations.

The CSA provides the threat group’s tactics, techniques, and procedures (TTPs), including its leveraging of online resources related to Artificial Intelligence, and indicators of compromise (IOCs). The CSA also highlights similar activity from a previous FBI advisory that was published on 20 October 2022. This new advisory’s information and guidance are derived from FBI investigative activity and technical analysis of this group’s intrusion activity against U.S. and foreign organizations and engagements with numerous entities impacted by this malicious activity.

The authoring agencies recommend all organizations follow guidance provided in the Mitigations section to defend against the Iranian cyber group’s activities.

The Federal Housing Finance Agency has announced its issuance of Advisory Bulletin 2024-05, "Affordable Housing Program: Determining the Need for Affordable Housing Program Subsidy In Rental Projects," that simplifies the process for project sponsors to receive Federal Home Loan Bank (FHLBank) funds for affordable housing projects.

The Advisory Bulletin reinforces the importance of scrutinizing funding requests, using rigorous feasibility guidelines based on sound reasoning, to ensure that Affordable Housing Program (AHP) funds support the projects most in need. The bulletin provides for a streamlined compliance process and eliminates uncertainty for project sponsors about the amount of their AHP award. It also provides further clarity to the FHLBanks on determining the need for an AHP subsidy when a rental project includes capitalized reserves and supportive services.

The Securities and Exchange Commission has announced it has charged J.P. Morgan Securities LLC (JPMS) and J.P. Morgan Investment Management Inc. (JPMIM) – both affiliates of JPMorgan Chase & Co. (JP Morgan) – in five separate enforcement actions for failures including misleading disclosures to investors, breach of fiduciary duty, prohibited joint transactions and principal trades, and failures to make recommendations in the best interest of customers.

Without admitting or denying the findings in the SEC’s orders, the two affiliates agreed to pay more than $151 million in combined civil penalties and voluntary payments to investors to resolve four of the ­actions. The SEC did not impose a penalty in one of the actions, taken against JPMS, because JPMS cooperated in the investigation and undertook remedial measures.

SEC Orders:

• J.P. Morgan Securities LLC - 1
• J.P. Morgan Securities - 2
• J.P. Morgan Securities - 3
• J.P. Morgan Investment Management Inc. - 1
• J.P. Morgan Investment Management Inc. - 2

The CFPB has announced it has filed a Proposed final judgment and order to resolve its case against Townstone Financial for discriminatory lending practices and redlining African American neighborhoods in Chicago.

If entered by the court, the proposed order would prohibit Townstone from taking any actions that violate the Equal Credit Opportunity Act (ECOA) and require the company to pay a $105,000 penalty to the CFPB’s victims relief fund. Today’s action follows lengthy contested litigation and a unanimous July 2024 decision from the United States Court of Appeals for the Seventh Circuit that stated that the ECOA prohibits lenders from discouraging prospective applicants on a prohibited basis from applying for loans.

The Seventh Circuit’s decision held unanimously that “an analysis of the text of the ECOA as a whole makes clear that the text prohibits not only outright discrimination against applicants for credit, but also the discouragement of prospective applicants for credit,” which is consistent with the Bureau’s regulation (Regulation B) interpreting ECOA.

• 2020 Complaint
• 2020 Amended Complaint
• U.S. Court of Appeals Opinion
• Stipulated final judgment and order
• Stipulated dismissal - Sturner

The Internal Revenue Service on Friday announced that the amount individuals can contribute to their 401(k) plans in 2025 has increased to $23,500, up from $23,000 for 2024. The IRS also issued technical guidance regarding all cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2025 in Notice 2024-80.

The limit on annual contributions to an IRA remains $7,000. The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment but remains $1,000 for 2025.

The NCUA has announced it issued three consent orders and one prohibition notice in October permanently prohibiting individuals from participating in the affairs of any federally insured depository institution.

Consent orders were issued to:

• Gloria J. Hall, a former employee of Prairie View Federal Credit Union, Prairie View, Texas
• Diane Stephens, a former employee of Priority First Federal Credit Union, Du Bois, Pennsylvania
• Laurie Allen, a former employee of Vibrant Credit Union, Danville, Illinois

A Notice of Prohibition was issued to Salusthian Lutamile, a former employee of IDB Global Federal Credit Union, Washington, D.C.

The CFPB yesterday announced action against VyStar Credit Union for harming consumers through its botched rollout of a new online banking system. In May 2022, VyStar transitioned to a new, dysfunctional online banking platform that made it difficult for credit union members to perform basic banking functions for weeks, with some features unavailable for more than six months. Families incurred fees and costs as a result of these problems. The CFPB is ordering VyStar to ensure that all consumers are made whole. VyStar must also pay a $1.5 million civil penalty to the CFPB’s victims relief fund.

VyStar, formerly known as JAX Navy Federal Credit Union, is a Florida state-chartered credit union headquartered in Jacksonville with 70 branches in Florida and 10 branches in Georgia. VyStar is one of the largest credit unions in the country, with approximately $14.75 billion in total assets and over 980,000 members. In May 2022, VyStar attempted to launch a new virtual banking platform. VyStar anticipated banking services would be inaccessible for several days during the transition to the new platform, but it turned out to be much longer. The new system crashed upon launch because VyStar brought it online prematurely and failed to establish or follow critical processes to ensure its success. The platform was taken offline soon after launch. Upon bringing the system back online, the new platform lacked key banking services, some of which were not restored for months.

For further details, see “VyStar CU pays $1.5M for botched systems upgrades” in BankersOnline’s Penalties pages.

• NCUA Chairman Harper and Board Member Otsuka Statements on CFPB's VyStar Credit Union action

The Federal Emergency Management Agency today published [89 FR 87299] a final rule revising the National Flood Insurance Program's regulations to offer NFIP policyholders who are not required to escrow their premiums and fees for flood insurance the option of paying their annual flood insurance premium in monthly installments.

The rule will become effective December 31, 2024.

FDIC FIL-77-2024, issued yesterday, describes steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas affected by the Havasupai Tribe Flooding August 22–23, 2024..

The CFPB yesterday announced it has joined with the Centers for Medicare & Medicare Services (CMS) in a joint statement to protect people with Medicare living at or below the poverty line from unlawful medical bills. These people in the Qualified Medicare Beneficiary group represent about one in eight Medicare recipients nationwide. Federal law generally prohibits healthcare providers who accept Medicare from billing these people – referred to as “QMBs” – for cost-sharing, such as co-pays or deductibles.

The agencies' joint statement emphasizes that Traditional Medicare providers and suppliers, Medicare Advantage providers and suppliers, and debt collectors can be sanctioned by CMS or be liable under federal law for improperly billing these recipients. CMS is also releasing new resources clarifying that healthcare providers must refund any improper charges, regardless of whether they received incorrect information about a recipient's QMB status from Medicare Advantage plans.

The joint statement describes the CMS guidance issued yesterday and explains how the laws that the CFPB administers and enforces apply to improper debt collection of QMBs. Specifically, the statement explains:

• Debt collectors may not collect on improper and inaccurate bills targeting Medicare beneficiaries. The Fair Debt Collection Practices Act prohibits collecting bills that are not actually owed or are in the wrong amount.
• Debt collectors may not tarnish credit reports with improper and inaccurate bills. Furnishing inaccurate information may violate the Fair Credit Reporting Act, and may also demonstrate that furnishers do not verify the accuracy of information they furnish.

The Federal Reserve System has issued the third 2024 issue of Consumer Compliance Outlook. This issue includes articles on:

• Top Federal Reserve System Compliance Violations in 2023 Under the Flood Disaster Protection Act of 1973
• Top Federal Reserve System Compliance Violations in 2023 Under the Real Estate Settlement Procedures Act and Regulation X
• Consumer Compliance Requirements for Purchasers of Residential Mortgage Loans
• Consumer Compliance Requirements for Servicers of Purchased Mortgage Loans

Yesterday, the Treasury Department reported that OFAC had sanctioned five Mexican nationals and two Mexico-based entities linked to La Linea, a violent Mexico-based drug trafficking organization responsible for trafficking fentanyl and other deadly drugs into the United States.

See BankersOnline’s October 31, 2024, OFAC Update for the names and identifying information of the designated individuals and businesses .