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Top Stories for April 2003

Standards for Treasury Check Indorsements and Losses

The Department of the Treasury Financial Management Service has published an advance notice of proposed rulemaking on revisions to its regulations (31 CFR 240) governing the indorsement and payment of checks drawn on the United States Treasury. The regulations provide how checks may be indorsed, and remedies when checks are lost or stolen, and then subsequently negotiated by someone other than the intended payee. In instances where losses occur, such as when a check bearing a fraudulent indorsement is paid, the regulations provide for the allocation of losses between the Government and indorsers of the check. Txt version of ANPR PDF version of ANPR 4/30/03
BANKFIRST Written Agreement

The FRB has announced the execution of a Written Agreement by and among BANKFIRST Corporation, Sioux Falls, South Dakota, a registered bank holding company, and its subsidiary bank, BANKFIRST, also of Sioux Falls, South Dakota, and the Federal Reserve Bank of Minneapolis regarding banking practices relating to credit card operations. Written Agreement 4/30/03
Securities and Commodities AML Rules Proposed

Treasury and FinCEN have issued three separate proposed rules under the USA Patriot Act that would expand anti-money laundering regulation to commodity trading advisors and securities investment advisers, as well as require suspicious activity reporting by futures commission merchants. Treasury JS-333 Investment Advisors Commodity Trading Advisors BSA Amendment 4/30/03
High Marks for NCUA Exam

The results of a NCUA survey regarding a risk-focused examination program indicate that the program, which was introduced in fall 2002, has been well received. Highest marks were given for examiners' conduct, the overall examination process and effective communication during the examination. NCUA Survey 4/30/03
Texas Banker Subject of Removal and Civil Money Penalty

The FDIC has issued a removal and probation order in addition to imposing a $5,000 civil money penalty against former Texas banker, Mary Gonzales. She allegedly made unauthorized loan and credit card advances in violation of bank policies; concealed delinquent loans from the bank's board of directors; issued herself a credit card and increased the credit limit on an existing bank credit card without the necessary approval and in violation of Regulation O; and concealed the failure on her part to pay delinquent payroll taxes. FDIC Pr-38-2003 4/29/03
Investment Research Scandal Leads to Major Penalties

The SEC, New York Attorney General, North American Securities Administrators Association, NASD, New York Stock Exchange, and state securities regulators announced the settlement of enforcement actions against ten of the nation's top investment firms resulting in $875 million in penalties and disgorgement. The firms, which included Citigroup Global Markets Inc. f/k/a Salomon Smith Barney Inc.; J.P. Morgan Securities Inc.; and U.S. Bancorp Piper Jaffray Inc.; were alleged to have engaged in acts and practices that created or maintained inappropriate influence by investment banking over research analysts, thereby imposing conflicts of interest on research analysts that the firms failed to manage in an adequate or appropriate manner.Joint Release 4/29/03
Basel II Risk Management Objectives

The objectives relating to risk management of the Basel II proposal were discussed by FRB Vice Chairman Ferguson in a presentation at the Risk Management Workshop for Regulators, The World Bank, Washington, D.C. Ferguson Speech 4/29/03
Treasury Economic Update

An overview of the current state of the economy was given by Treasury Assistant Secretary Clarida to the Treasury Borrowing Committee of the Bond Market Association. He noted the economy continued to grow over the last three months but at a pace short of its potential. The war in Iraq, higher oil prices, and an unusually severe winter restrained economic activity. Clarida Speech 4/29/03
Second Quarter $79 Billion Borrowing Expected

The Treasury Department announced that it expects to borrow $79 billion in marketable debt during the second quarter and to target a cash balance of $45 billion on June 30. The increase in borrowing is due to lower receipts, higher outlays, placement of additional compensating balances and a lower cash balance at the beginning of the quarter. Treasury JS332 Charts 4/29/03
$72,200 OFAC Civil Penalty Imposed

OFAC has released its weekly report of civil penalties enforcement activities. The latest report contains the largest civil money penalty imposed against a financial institution since the weekly report was started three weeks ago. A voluntary disclosure by a financial institution of a violation of the export provisions of the Cuba sanction program resulted in the imposition of a settled penalty of $72,200. OFAC 4/28/03
FinCEN Advisories Withdrawn

FinCEN has withdrawn Advisory 16 regarding Dominica and Advisory 31 regarding Grenada. The enhanced scrutiny of transactions involving the countries, as called for by the advisories, is no longer necessary. Dominica 16W Grenada 31W 4/28/03
FRB G.20 Report

The FRB has released the February 2003 G.20 Report containing information regarding owned and managed receivables and auto loans terms of credit. G. 20 Report 4/28/03
FinCEN Responds to Ruling Request

FinCEN has responded to a request for a ruling that a bank be considered neither a "foreign shell bank" nor a "foreign bank", or, in the alternative, be granted an exemption. FinCEN Ruling 2003-2 4/28/03
FDIC Corporate Sector Roundtable Held

The FDIC hosted its second economic roundtable this year, this time for the corporate sector. The focus was on job growth and what can be done to help get the U.S. economy moving forward. FDIC PR-36-2003 4/25/03
FRB Governor Addresses Loan Guarantee Programs

In a speech before the National Economists Club, Fed Governor Gramlich addressed the subject of loan guarantee programs. Gramlich Speech 4/25/03
New Economic Papers Posted

Three new papers have been posted online by the Federal Reserve as part of the Finance and Economics Discussion Series. They address "Market Structure and Quality", "Spillovers Across U.S. Financial Markets", and "New Evidence on the Interest Rate Effects of Budget Deficits and Debt". 2003 FEDS Papers 4/25/03
Business Bounce Back Addressed by FRB's Bernanke

In a speech to the Forecasters Club in New York City, FRB Governor Ben Bernanke lent his perspective to the economy and the issue of whether business investment will bounce back. Bernanke Speech 4/25/03
FDIC Announces Administrative Enforcement Actions

The Federal Deposit Insurance Corporation has released a list of orders of administrative enforcement actions taken against banks and individuals in March. The FDIC processed a total of 10 orders in March. These included five cease-and-desist orders, two civil money penalty orders, two terminations of cease-and-desist orders, and one adjudicated decision. PR-37-2003 4/25/03
SEC Acts on Electronic Filing and Auditor Issues

The Securities and Exchange Commission voted to require that reports by insiders disclosing their securities holdings be filed electronically with the SEC. It also voted to adopt rules prohibiting company officials from improperly influencing auditors of financial statements. SEC RELEASE 2003-51 4/25/03
Interagency Internal Audit Guidance Issued

The FRB, FDIC, OCC and OTS have issued an amendment to their policy statement, Internal Audit Function and its Outsourcing, which provides guidance regarding the independence and effectiveness of an institution's internal audit function.FRB SR 03-5 FRB Statement 4/24/03
Risks of Weblinking Guidance

The OTS, OCC, FDIC and NCUA have issued a joint guidance on the risks of weblinking to assist institutions in the identification and managing of the potential risks involved if the institution places weblinks to other websites on its Web Page. This subject was discussed in a Special BOL Compliance Briefing issued yesterday. If you are not receiving the free BOL briefings, sign up here. OTS 03-15 OTS TB 83 FDIC PR-34-2003 FDIC Statement FDIC FIL-30-2003 NCUA PR NCUA Letter 03-CU-08 OCC Bulletin 4/24/03
Guidance Issued Regarding Golden Parachutes

The FRB has issued a guidance regarding certain restrictions imposed on the issuance of severance packages known as "golden parachutes" and the appointment of any new senior executive officer or director by any institution in a "troubled condition".FRB SR 03-6 4/24/03
April 2003 Beige Book Issued

The FRB has published the April 23, 2003 issue of the Beige Book which contains summaries of the economic conditions in each of the twelve Federal Reserve Districts.
Beige Book 4/24/03
OCC Gives Bank Go-Ahead for New Transactions

In Interpretive Letter #962, the Office of the Comptroller of the Currency gave conditional approval for a bank to expand customer-driven financial intermediation transactions in electricity derivatives to include transitory title transfers. OCC Interpretative Letter #962
OCC Issues Proposed Rule to Amend Regulations Pertaining to Foreign Operations

The proposed rule would clarify certain regulatory definitions and simplify approval procedures for foreign banks seeking to establish Federal branches and agencies in the United States. These proposed changes will further conform the treatment of Federal branches and agencies of foreign banks to that of their domestic national bank counterparts consistent with the national treatment principles of the International Banking Act. 68FR19949 (txt) 68FR19949 (pdf) 4/23/03
Flood Violation Civil Money Penalty Assessed

The FRB has announced the assessment of a Civil Money Penalty in the amount of $3,850 against the First Farmers Bank and Trust, Converse, Indiana. The consent Order of Assessment resulted from alleged violations of Reg H and the National Flood Insurance Act. FRB Order 4/23/03
OCC Revises Audit Handbook

The OCC has published a revision to its "Internal and External Audits" handbook which clarifies the expectations of the OCC regarding national bank audits. The update includes changes resulting from the Sarbanes-Oxley Act, new SEC rules and regulations, and the revised "Interagency Policy Statement on Internal Audit and Its Outsourcing". Handbook Introduction Supplemental Examination Procedures Appendixes 4/23/03
Error In Briefing

In the text of yesterday's Compliance briefing article titled, "BSA Compliance Subject of Written Agreement", the bank involved was misidentified as Pioneer Bank of Denver, Colorado. The correct name of the bank is Premier Bank. BankersOnline.com regrets the error and any confusion it may have caused. 4/23/03
Help Your MSB Customers

If you have customers which are Money Services Businesses, you may want to pass along notice to them that FinCEN is making available through its Web site an order form for free materials to help Money Services Businesses understand and comply with new federal laws and regulations on money laundering. FinCEN Order Form 4/23/03
Double Taxation of Corporate Dividends

Learn the view of the Treasury Department on this hot topic from the comments of Deputy Assistant Secretary Zerzan before a meeting of the Vineland, New Jersey Chamber of Commerce. He noted that currently the United States is one of only three countries in the developed world that treats dividends as fully taxable. Treasury JS-208 4/23/03
BSA Compliance Subject of Written Agreement

The FRB announced a Written Agreement with Premier Bank of Denver, Colorado. The bank is required to establish adequate BSA internal controls, arrange for independent compliance testing, designate a qualified officer responsible for BSA compliance, and conduct regular employee training. In addition, the bank is to retain the services of an independent accounting firm to conduct a complete forensic audit of the bank's BSA compliance since August 1, 2002. FRB Enforcement 4/22/03
Financial Holding Company List Update

The FRB has released an update of its Financial Holding Company List which contains those bank holding companies that have elected to be treated as financial holding companies under the provisions of the Bank Holding Company Act. FRB FHC 4/22/03
FedACH Services Online

The FRB has announced it is now possible to use the web to track, research and account for an institution's FedACH activity. Starting May 19, 2003, receiving depository financial institutions will also have the ability to return ACH payments and forward change information by way of FedLine for the Web. Operating Circular 4 is being amended effective May 18, 2003. to accommodate the changes. FRB Services FRB Operating Circular 4 4/22/03
Greenspan Cancer Test Negative

FRB Chairman Greenspan is being treated for an enlarged prostate, but tests were negative for prostate cancer. He plans to resume work later this week. FRB PR 4/22/03
April OCC Interpretations and Actions Online

The OCC has announced that the April 2003 issue of the Corporate Applications report is available online. The report covers Interpretive Letters, No-Objection Corporate Decisions, CRA Decisions and Conditional Approvals.OCC 4/21/03
Treasury 2002-2003 Priority Guidance Plan Updated

Treasury has announced the Third Quarterly Update of its 2002-2003 Priority Guidance Plan. The plan is updated to reflect additional guidance that Treasury intends to publish during the plan year. The update contains 45 additional guidance items. Treasury PR Guidance Plan 4/21/03
OCC Announces 16 Enforcement Actions

Sixteen Enforcement Actions were announced by the OCC involving five banks and seven individuals. Civil money penalties ranging from $2,000 to $20,000 were assessed. The largest amount was imposed against a loan officer who was also banned from banking for transferring over 2,200 customer loan files via an unsecured Internet connection to a third party. For more information on that matter see our BOL Article, "InfoSec Violations Result in Ban from Banking" OCC NR 2003-31 4/18/03
48 CRA Evaluations Released

The OCC has released the CRA evaluations for forty-eight national banks. Of the banks evaluated, seven were rated outstanding and forty-one received a satisfactory rating. OCC NR 2003-32 4/18/03
FDIC Corporate Sector Roundtable

The FDIC Corporate Sector Roundtable will be held on April 24, 2003, at the JP Morgan Chase Conference Center in New York City. Topics to be discussed include: where we are in the corporate credit cycle; the status of previously troubled industry sectors; and predictions as to which sectors may lead the recovery or experience a new round of problems. FDIC Notice041703 4/18/03
HOEPA APR Reference Rates for May Released

The Federal Reserve has posted the new reference rates which lenders must use to determine if loans for which applications are received in May 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 that precedes the month you received the application. FRB Daily Rates FRB Weekly Rates 4/17/03
FDIC FIL about OFAC Change

The Department of the Treasury's Office of Foreign Assets Control has updated its list of approved service providers to Cuba. FDIC FIL-28-2003 4/17/03
Counterfeit Cashier's Checks Special Alert

The Federal Deposit Insurance Corporation has announced that counterfeit cashier's checks drawn on Pioneer Bank, Baker City, Oregon, are currently in circulation. The information has been added to the BOL Alerts & Counterfeits page. 4/17/03
Regulatory Reorganization, Predatory Lending and Preemption

Learn the views of Comptroller Hawke regarding these important issues from his remarks before the Exchequer Club. He observed the current bank regulatory structure offends all of our aesthetic and logical instincts, but it works. He also indicated the OCC is currently reviewing the applicability to national banks of a state law regarding predatory lending that has been determined by the OTS to not apply to federally chartered saving institutions. Speech 4/17/03
Money Smart Welcomes DeKalb County Georgia

The FDIC announced that the DeKalb County Georgia First Accounts program will utilize the Money Smart as the curriculum to educate consumers to improve their ability to make informed choices about financial matters and effectively manage their personal finances. FDIC MS-09-2003 4/17/03
FFIEC 2002 Annual Report Available Online

The FFIEC has made its 2002 Annual Report available on its Web site. FFIEC 2002 Annual Report Other FFIEC Reports 4/17/03
Proposed AML Action Against Nauru

FinCEN has announced a notice of proposed rulemaking that would require U.S. financial institutions to terminate correspondent accounts involving Nauru financial institutions. FinCEN PR 68FR18917 4/16/03
Ukraine's ML Designation Rescinded

FinCEN has rescinded the designation of the Ukraine as a Primary Money Laundering Concern. However, the existing guidance issued by FinCEN or obligations arising under the Bank Secrecy Act with respect to accounts and transactions involving Ukraine are still in effect. Furthermore, Ukraine remains on the non-cooperative countries and territories list of the Financial Action Task Force. FinCEN PR 4/16/03
OFAC Change FIL

The FDIC has issued a FIL notifying state-chartered banks about the March 27 additions to the OFAC list of Specially Designated Narcotics Traffickers. [The OFAC change was previously announced on BOL.] FDIC FIL-27-2003 Attachment 4/16/03
Additional Terrorism Risk Insurance Regulations Announced

The Treasury Department has announced the second set of regulations under the Terrorism Risk Insurance Act of 2002. The regulations address the disclosure requirements, the "make available" requirements, and the participation of state residual market insurance entities and state workers' compensation funds under the Act. Treasury PR
Terrorism Risk Insurance Program 4/16/03
FRB G.17 Report Released

The FRB has released the April 15 edition of the G.17 Industrial Production and Capacity Utilization Report. FRB G.17 4/16/03
Marketing to Minority Customers Discussed

Comptroller Hawke, in a presentation before the Consumer Bankers Association, noted that that the banks that have been most successful in minority communities are those that took time to research the market and to develop local partnerships. He also observed that banks should not underestimate the willingness of low-income and minority customers to obtain banking services electronically.
OCC NR2003-29 Speech 4/16/03
FDIC Advisory Committee To Hold Meeting

The FDIC announced that meeting of the FDIC Advisory Committee on Banking Policy will be held on April 22 at the FDIC's Seidman Center in Arlington, Virginia. Presentations involving issues affecting the FDIC's regional and field structure; effective supervision and capital regulation; and the ongoing Future of Banking Study will be discussed at the meeting which is open to the public. FDIC PR33-2003 Advisory Committee Information 4/16/03
State Profiles From FDIC

The FDIC has released the Spring 2003 update of banking and economic conditions for each state.
FDIC Profiles 4/16/03
OFAC Civil Penalties Revealed

OFAC has made its weekly release regarding OFAC violations and the resulting civil penalties or informal settlements. The only bank listed, the State Bank of India, was cited with a Yugoslavian funds transfer violation resulting in a $5,500 settlement. (For an article about the more extensive penalties announced the prior week, see BOL's article "Lessons from OFAC Civil Penalties") OFAC Penalties 4/15/03
Revised OCC Manuals Available Online

The OCC has revised the "Change in Bank Control" and "Branch Closings" booklets in the Licensing Manual series and placed them on the OCC Web site. Change in Bank Control Branch Closings 4/15/03
New York City Joins Money Smart

The FDIC has announced that New York City has join the Money Smart Alliance Program and the Office of the City Comptroller is hosting Train-the-Trainer workshops for volunteer instructors. FDIC MS-088-2003 4/15/03
OCC Issues Interim Rule to Permit National Banks to make any Class of Licensing Filings Electronically

Its purpose is to facilitate the expansion of the OCC's e-Corp program. The e-Corp program, which began as a pilot project to enable participating national banks to make certain types of licensing filings electronically, has been made available to all national banks through the OCC's National BankNet web site. The rule furthers the OCC's objectives of reducing regulatory burden for national banks and improving the agency's efficiency in processing filings through increased use of electronic technology. 68FR17890 (txt) 68FR17890 (pdf) 4/14/03
Tutorial on LOMAs and LOMR-Fs

On FEMA's Web site, you can now access a tutorial series that explains the Letter of Map Amendment (LOMA) and Letter of Map Revision Based on Fill (LOMR-F) application processes, including all necessary forms and information. There is also an online tool to complete portions of the required forms for single-lot/structure requests. LOMA / LOMR-F Tutorial Series 4/14/03
Comment Online On FRB Proposals

The FRB has issued for comment a proposal to extend for three years the following reports: Report of Transaction Accounts, Other Deposits, and Vault Cash (FR 2900); Annual Report of Total Deposits and Reservable Liabilities (FR 2910a); Report of Repurchase Agreements (RPs) on U.S. Government and Federal Agency Securities with Specified Holders (FR 2415); Monthly Survey of Industrial Electricity Use (FR 2009a,b,c); without revision: Allocation of Low Reserve Tranche and Reservable Liabilities Exemption (FR 2930/2930a); Report of Foreign (Non-U.S.) Currency Deposits (FR 2915); and the discontinuation of: Report of Certain Eurocurrency Transactions (FR2950/2951). The closing date for comments is June 17, 2003 and comments may be submitted online. Proposal Electronic Comment Form 4/14/03
FinCEN's Anti-Terrorism Activities

Learn about how the role of FinCen has expanded to combat terrorism from the comments of Director Sloan before Subcommittee on Oversight and Investigations. He observed that the financial channels of terrorism have created an urgency for seeking greater cooperation among governments, law enforcement, regulators and regulated industries to share and disseminate information. Speech 4/14/03
IRS To Handle BSA FBAR Filing Compliance

The IRS and FinCEN announced an agreement under which FinCEN delegated its BSA enforcement authority for Foreign Bank and Financial Account reporting to the IRS. IRS Release 4/11/03
FFIEC 002 Report Form Online

The March 2003 FFIEC 002 Report of Assets and Liabilities of U. S. Branches and Agencies of Foreign Banks and the Instructions for Preparation have been placed on the FFIEC Web page. FFIEC 002 Instructions 4/11/03
How Did Banks Post Record 2002 Earnings?

Banks posted record earnings of more than $100 billion in 2002. FDIC Chairman Powell provides his insight on how this was accomplished in spite of a sluggish economy in remarks before the Federal Reserve Bank of Atlanta. Speech 4/11/03
More on Basel II

Learn the implications of Basel II for second tier and community banks from a presentation by FRB Governor Olson at the 2003 Banking Institute, Center for Banking and Finance, of the University of North Carolina. He noted it would be as inappropriate to require the smallest banks to adopt techniques designed for megabanks as it would to limit the largest banks on the basis of the capacity and capability of the smallest.Speech 4/11/03
FDIC's First Quarter Activities Revealed

The FDIC has published its fourth Letter to Stakeholders, which reports priorities and activities for the first quarter of 2003. The FDIC's three priorities for 2003 - stability, sound policy, and stewardship are addressed.FDIC FIL-26-2003 Letter 4/11/03
Importance of Bond Auctions Discussed

The important role the auction process plays in reducing the cost of borrowing was explained by Treasury Deputy Assistant Secretary Bitsberger in remarks to the Bond Market Association. He noted that on a daily basis approximately $350 billion in Treasuries change hands and last year $3.8 trillion in securities were auctioned. Treasury JS-173 4/11/03
The Ugly Faces of Identity Theft

The consequences this crime has on its innocent victims are discussed by Treasury Assistant Secretary Abernathy at the 2003 Banking Institute of the University of North Carolina School of Law Center of Banking and Finance. He remarked that a crook can take a person's good name and use it to open new accounts that they know nothing of, with the statements going to places they have never been, so that weeks and months pass without their knowledge of the fraud. In addition, it can take victims as many as 175 man hours to clear their name and records. Treasury JS-177 4/11/03
Federal Register Publishes Business Continuity Planning Post-September 11

Learn the recommendations of the FRB, OCC and SEC in the ""Interagency Paper on Sound Practices to Strengthen the Resilience of the U.S. Financial System" issued jointly by the agencies. [This was previously announced on BOL] 68FR17809 (txt) 68FR17809 (pdf) 4/11/03
FinCEN Publishes AML Proposal for RE Closings and Settlements

Under the USA PATRIOT Act, the definition of "financial institutions" subject to the AML program requirement was expanded to include persons involved in real estate closings and settlements. In this advanced notice of proposed rulemaking, FinCEN solicits comments relating to applying the AML program requirement to such activities. 68FR17569 (txt) 68FR17569 (pdf) 4/10/03
FDIC Updates Call and Thrift Reports Instructions

The FDIC has published a March 2003 update to the Reports of Condition and Income Instructions for report forms FFIEC 031 and 041. FDIC Resources Call Report Instruction Book Forms 4/10/03
FRB Basel II Update

The Basel Committee has proposed the implementation of Basel II to replace the current Basel I. Learn the views of FRB Vice Chairman Ferguson regarding the status of the proposal and where it is headed. In comments before the Risk Management Association's Conference on Capital Management, he remarked that the FRB concluded that the greatest potential benefit of Basel II was found in the most advanced versions--the Advanced IRB for credit risk and the AMA for operational risk. Speech 4/10/03
FDIC CRA Examination Results

The Federal Deposit Insurance Corporation has issued its monthly list of state nonmember banks recently evaluated for compliance with CRA. The list covers evaluation ratings that the FDIC assigned to institutions in January 2003. FDIC PR3103 FDIC CRA List 4/9/03
Credit Card Issuer Fraud Settlement

The FTC announced that Robert Barr and Candace Rodriguez, principals of Westcal Equipment, doing business as Pioneer First and PF Member Services, Inc., have agreed to settle federal charges that they engaged in fraudulent business practices. The defendants advertised nationally on cable TV the Pioneer First Platinum credit card which guaranteed a $5,000 credit limit and 0 percent interest for 12 months to anyone who was a legal U.S. resident, at least 18 years old, and had a checking account. Applicants were required to pay a $ 189 fee for a catalog card that did not function as a credit card. FTC Release Order 4/9/03
Business Continuity Planning Post-September 11

Learn the recommendations of the FRB, OCC and SEC in the ""Interagency Paper on Sound Practices to Strengthen the Resilience of the U.S. Financial System" issued jointly by the agencies. Paper - FRB OCC SEC FRB PR OCC Release 2003-28 OCC Bulletin 2003-14 SEC PR2003-45 4/9/03
Act Authorizes Check Processing Technology

Congress is considering the Check Clearing for the 21st Century Act which removes existing legal barriers to the use of new technology in check processing. Learn the opinion of the FRB in the testimony of Vice Chairman Ferguson before a House subcommittee. He indicated the Act will improve the efficiency and reduce the cost of the nation's check collection system while providing better services to bank customers. Testimony 4/9/03
InfoSec Compromised - Bankers Barred and CMP Assessed

The OCC has permanently barred two former bank officers from banking and assessed civil money penalties of $20,000 and $10,000. James Earl Smith and Vicki Boutilier, who were officers of Grand Valley National Bank, Grand Junction, Colorado, emailed over 2,220 customer loan files to a third party. In addition to the permanent removals and civil money penalties, if Mr. Smith or Ms. Boutilier apply for a job where they would be handling NPI they are required to disclose the enforcement action to future employers. Read our article: "InfoSec Violations Result in Ban from Banking" OCC NR 2003-27 Smith Consent Order Boutilier Consent Order 4/8/03
OFAC Change Bulletin

The Treasury issued an OFAC change designating KHAN RESEARCH LABORATORIES, Pakistan, as subject to the import ban of Weapons of Mass Destruction Trade Control Regulations and made available a redacted letter on the OFAC Web site. The information has been placed on the BOL OFAC page. Treasury 20030407 4/8/03
FDIC Issues Alert in Stolen $1,000,000 Checks

The Federal Deposit Insurance Corporation announced that six $1,000,000 official checks drawn on Interbank of New York, New York, New York, and payable through Huntington National Bank, Columbus, Ohio, were stolen. In addition, counterfeit cashier's checks drawn on both the Bank of Mount Hope, Mount Hope, West Virginia, and the Affinity Federal Credit Union, Basking Ridge, New Jersey, are in circulation. The information has been added to the BOL Alert & Counterfeits page. 4/8/03
February G.19 Report Released

The Federal Reserve Board has issued the February 2003 G.19 Consumer Credit Report which indicates that consumer credit rose at an annual rate of 1 percent in February following an 8-1/2 percent increase in January. FRB Release 4/8/03
Business Method Patents

Learn about the public policies issues regarding business method patents from a presentation by FRB Vice Chairman Ferguson before the 2003 Financial Markets Conference in which he discussed a patent that was recently issued for a "system and method for conducting web-based financial transactions in capital markets." Speech 4/8/03
OCC Quarterly Journal Online

The June, September, and December 2002 issues of the Quarterly Journal are now available online and contain information ranging from the "Condition and Performance of Commercial Banks" to staff interpretations. Quarterly Journal 4/8/03
OFAC Civil Money Penalties Revealed

The Office of Foreign Assets Control has published its first set of OFAC civil penalties data on the Internet. This was done pursuant to a rule recently adopted by OFAC which calls for publication of penalty information every two weeks. [This was previously announced on BOL] OFAC 4/7/03
FinCEN 314(a) Response

FinCEN has posted on its Web site their response to the BOL 314(a) Information Request letter. [This was previously announced on BOL] FinCEN Response 4/7/03
Online FFIEC March 31 Reporting Forms

The FFIEC has made the following March 31, 2003 Reporting Forms available online: Form 009, Form 009a, Form 031 and Form 041. Form 009, Form 009a, Form 031, Form 041, Instructions 4/7/03
FTC Fights Pretexting

The FTC's Annual Report to Congress features details of four enforcement actions filed against companies engaged in "pretexting" (obtaining a consumer's financial information by false pretenses). FTC Annual Report 4/7/03
Regulators Clarify GLB Section 305 Disclosures

Responding to a request from the American Bankers Insurance Association and the American Bankers Association, the regulators indicate the disclosures required by section 305 of the Gramm-Leach-Bliley Act are not mandatory with respect to renewals of insurance policies sold prior to October 1, 2001. FDIC FIL-25-2003 4/7/03
CRA Investment Guide

The FDIC has announced the issuance of a Community Development Investment Guide which provides information on permissible and CRA-qualified investments for financial institutions. Guide 4/7/03
Greenspan Discusses Market Economics

Chairman Greenspan spoke before the 2003 Financial Markets Conference of the Federal Reserve Bank of Atlanta. He commented on the importance of state protection of individual rights to own property and the ways information technology has improved the ability of businesses to identify and address economic imbalances. Speech 4/7/03
Check Truncation Act Creates "Substitute Check"

Congress is conducting hearings on the proposed Check Truncation Act. Learn about some of its provisions from the testimony of FRB Vice Chairman Ferguson. He noted, "The proposed legislation facilitates check truncation by creating a new negotiable instrument called a "substitute check," which would permit banks to truncate the original checks, to process the check information electronically, and to print and deliver substitute checks to banks and bank customers that want to continue receiving paper checks." FRB Testimony 4/04/03
Greenspan Stresses Importance of Financial Education

FRB Chairman Greenspan stated, "Fostering education that will enable individuals to overcome their reluctance or inability to take full advantage of technological advances and product innovation in the financial sector can increase economic opportunity", during a presentation before the JumpStart Coalition's Annual Meeting in Washington, D.C. Chairman's Speech 4/04/03
FTC Combats Identity Theft

The FTC is utilizing many different approaches to combat identity theft ranging from consumer education to bring enforcement actions against entities that fail to protect personal information. Learn more from the testimony of FTC officials which summarize the actions of the agency regarding identity theft. FTC PR , Presentation 1 Presentation 2 4/04/03
Reg Z Commentary Changes Published in Federal Register

The revisions cover credit card- related fees, replacement of cards, disclosure of private mortgage insurance premiums and the selection of Treasury security yields for determining whether a mortgage loan is covered by Reg Z. [The change was previously announced on BOL] 68FR16185 (txt) 68FR16185 (pdf) 4/03/03
FinCEN Responds To BOL 314(a) Letter

FinCEN Director James Sloan directly responded to the letter BOL sent to him last week containing comments and suggestions from BOL Users regarding 314(a) search requests. His response addressed questions ranging from formatting issues to the method of transmission of the requests. Among the items of interest to all financial institutions was his statement, "FinCEN is in the process of completely redesigning the 314(a) system to ease the burden on the financial institutions." BOL Letter, FinCEN Response 4/03/03
Counterfeit Checks Special Alert Issued by FDIC

The Federal Deposit Insurance Corporation has announced that counterfeit cashier's checks drawn on Lorain National Bank, Lorain, Ohio and counterfeit official checks drawn on Alpine Bank, Rifle, Colorado and The Columbia Bank, Ellicott City, Maryland are currently in circulation. The information has been added to the BOL Alerts & Counterfeits page. FDIC SA-18-2003 4/03/03
OFAC Change FIL

The FDIC put out an FIL notifying state-chartered banks about the March 21 changes to the OFAC SDN list. [The OFAC change itself was previously announced on BOL] FDIC FIL-24-2003 4/03/03
Considering the Elimination of Mexican Remittance Fees?

Read the comments of a Treasury Official applauding Bank of America's announcement that it has reduced its remittance fees for non-customers to send money to Mexico. Treasury JS-155 4/03/03
House Passes FDIC Reform Act - Regulators' Comments

FDIC Chairman Powell Treasury stated, "We're pleased the House resoundingly passed a deposit insurance reform bill today that is good for the American people, good for our country's banking industry and good for the FDIC." Treasury Under Secretary Fisher also supported the action and commented, "We share the goals of improving the operation of the system to ensure its long-term strength and soundness, promoting the important role of banks in our nation's economic growth." FDIC PR 30-2003 Treasury JS-154 4/03/03
G.15 Foreign Exchange Rates For March 2003

The FRB has issued the March 2003 edition of the monthly G.15 Foreign Exchange Rates Statistical Release. FRB Release 4/03/03
Sarbanes-Oxley Compliance Required To List Stock

The Securities and Exchange Commission has adopted rules directing the national securities exchanges and national securities associations to prohibit the listing of any security of an issuer that is not in compliance with the audit committee requirements established by the Sarbanes-Oxley Act of 2002. SEC PR 2003-43 4/2/03
Race Discrimination Fair Lending Models Reviewed

An OCC study on race discrimination in mortgage lending utilized information obtained during fair lending examinations to replicating a bank's underwriting process. It found the use of variables customarily omitted from fair lending models would have affected estimates of the effect of race on mortgage decisions, predictions of the probability of denial, and identification of outliers for manual review. OCC Workpaper 4/2/03
FFIEC Names New Officers

OTS Director James Gilleran has been named Chairman and NCUA Chairman Dennis Dollar has been named Vice Chairman of FFIEC.
FinCEN PR 4/2/03
FDIC Transmits 3/31/03 Call Report Materials

The FDIC has transmitted materials relating to the upcoming March 2003 Call Reports. Certain revisions to the Call Report are scheduled to take effect this quarter. The principal changes involve the reporting of insurance-related income, the transactional capability of bank Web sites, credit enhancements for securitizations, accrued fees and finance charges on credit cards at banks with significant credit card activity, the fair values of derivatives at small banks with such contracts, and allocated transfer risk reserves. For the March 31, 2003, report date only, banks may report a reasonable estimate for any new or revised item for which the requested information is not readily available. FDIC FIL-23-2003 4/1/03
Contact Persons for PATRIOT Act Section 314(a)

Beginning this quarter, the banking agencies will collect on the Call Report contact information for the persons who are in charge of your bank's anti-money laundering searches under Section 314(a) of the USA PATRIOT Act. FDIC FIL-23-2003 4/1/03
FRB Rounds Up Personal Financial Resources

The Federal Reserve Board launched a new Web site which brings together resources from various Federal Reserve District Web sites dealing with personal financial matters. Subjects range from economic literacy to protection against fraud and scams.FRB Personal Financial Information 4/1/03
FRB Financial Services Updates Web Site

On the updated Web site for FRB Financial Services, they have streamlined common tasks and provided more intuitive navigation. They have also updated the look to reflect their commitment to providing reliable and consumer-focused financial service.FRB Financial Services 4/1/03
FRB Agricultural Finance Databook Updated

The Federal Reserve Board has released the March 2003 E.15 Agricultural Databook which contains farm loan characteristics, selected quarterly reports of condition, credit conditions and land values.FRB Release 4/1/03
More Regulatory Relief Act Information

Learn more about the Financial Services Regulatory Relief Act of 2003 from the testimony of OCC First Senior Deputy Comptroller and Chief Counsel Julie Williams before the House Subcommittee on Financial Institutions and Consumer Credit.Testimony 4/1/03

First published on:

03/31/2003

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Lending

Operations

Security

Technology

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