Exception Tracking Spreadsheet (TicklerTrax™)
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Top Stories for April 2002
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Treasury Report to Congress on FBAR Reporting
As required by Section 361(b) of the USA PATRIOT Act, the Treasury Department filed a report with Congress about FBAR reporting. The FBAR is a report filed with the Secretary stating that the person filing has a financial interest in, or signature authority over, financial accounts in a foreign country with an aggregate value exceeding $10,000 at any time during the calendar year. Treasury News 4/29/02
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FTC Members Express Views about Online Personal Privacy Act
Members of the Federal Trade Commission have submitted letters to regarding their views on the Online Personal Privacy Act, at the request of Senator John McCain. FTC 4/29/02
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OCC Issues Alert on Identity Theft and Embezzlement in connection with Outside Parties
The OCC has been advised of fraud schemes involving organized gangs and newly hired bank tellers. OCC:Alert 2002-4 4/26/02
FDIC Issues Alert on Bank Investment Securities and Custodial Accounts Held at Securities Broker-Dealers
The FDIC is alerting you to concerns it has identified regarding bank custodial relationships with failed broker-dealers. These concerns have arisen following the failure of a large regional securities broker-dealer and its liquidation by the Securities Investor Protection Corporation (SIPC). FDIC:FIL-38-2002 4/26/02
OTS Releases February Enforcement Statistics
The OTS reported that it issued four enforcement orders to two individuals and two institutions during the month of February, 2002. OTS also terminated four orders previously issued to three institutions. OTS 02-23 4/26/02
FDIC Report Discusses Challenges Bank Mortgage Lenders May Face If Interest Rates Rise
The profitability of the nation's residential mortgage lending specialists has become more exposed to the effects of a rising interest rate scenario that would compress net interest margins and suppress noninterest revenues associated with mortgage production and sales, according to a report released by the FDIC. FDIC:PR-47-2002 4/26/02
OTS Proposes Rule on a Preemption of the Alternative Mortgage Transaction Parity Act
OTS proposes to revise its rule identifying the OTS regulations that apply to creditors under the Parity Act. OTS would no longer identify its regulations on prepayment and late charges for state housing creditors. 67FR20468 (text) 4/26/02
OCC Proposes to Amend Assessments for Independent Trust Banks
The proposal would update the regulation to reference the appropriate portion of new forms issued by the FFIEC which replace the FFIEC form currently referenced in the regulation. OCC 2002-15, 67FR20466 (text), 67FR20466 (pdf) 4/26/02
FDIC Issues Warning on Entities That May Be Conducting Banking Operations Without Authorization
The OCC has advised the FDIC that the following entity may be conducting banking business in the United States without authorization: Chase Trust Bank, 2706 Wisconsin Avenue, Washington, DC FDIC:FIL-37-2002 4/25/02
FDIC Seeks Ideas on Reducing Burden on Banks and the Public, While Improving the FDIC's Efficiency
One of the top priorities as Chairman of the Federal Deposit Insurance Corporation is to ensure that the FDIC is as efficient as it can be in its roles as supervisor and insurer of financial institutions. He is particularly interested in ways the FDIC can reduce burden on financial institutions and the public. FDIC:FIL-36-2002 4/25/02
W3C Approves P3P
The World Wide Web Consortium (W3C) has formally issued the Platform for Privacy Preferences (P3P) 1.0 as a W3C Recommendation, representing cross-industry agreement on an XML-based language for expressing Web site privacy policies. P3P is designed to help individuals make informed choices by providing a standard, simple, automated way for users to gain more control over the use of personal information on Web sites they visit. Financial institutions will need to consider the P3P implications for their own Web sites. Press Release 4/24/02
Agencies Outline Risks of Parallel-Owned Banking Organizations
This guidance describes various risks that may be increased because of the structure of parallel-owned banking organizations, including engaging in transactions that prefer the foreign bank member of the group over the U.S. depository institution. The agencies will address these risks by coordinating their supervision of the U.S. operations of parallel-owned banking organizations. Enhanced communication and cooperation with foreign bank supervisors is also important to this process. FRB Press Release, OCC:NR 2002-37, FDIC-PR-46-2002, Joint Release 4/24/02
Comptroller Hawke Urges Senate to End Inequitable Treatment of National Banks
Comptroller of the Currency John D. Hawke, Jr. told a Senate panel that Congress should address the unfair disparity in the fees paid by national and state chartered banks as part of any legislation on deposit insurance reform. OCC:NR 2002-38 4/24/02
Treasury Department's USA PATRIOT Act Developments
There are several new developments in the Treasury Department's implementation of the USA PATRIOT Act.
- No new AML program regs for banks, thrifts and credit unions!
- New regulations expand the requirement for an anti-money laundering program to new industries: mutual funds; operators of credit card systems; money services businesses, such as money transfer companies and check cashers; securities brokers and dealers registered with the Securities and Exchange Commission; and futures commission merchants and accompanying introducing brokers registered with the Commodity Futures Trading Commission.
- New regulations are now available for those industries, all of whom have ninety days to develop AML programs (except broker dealers and futures commissions merchants).
- The Treasury Department will study additional sectors over the next six months, such as loan or finance companies, pawnbrokers, insurance companies, travel agencies, dealers in precious metals, stones or jewels, telegraph companies, persons engaged in real estate closings and settlements, and others, in order to develop regulations applicable to them.
- Additional working groups devoted to each of these industry sectors have been formed and will be responsible for drafting regulations.
Click here to learn more about these developments and access the new regulations. 4/24/02
FTC Extends COPPA Rule
The FTC issued a final amendment to the Children’s Online Privacy Protection Rule to extend, until April 21, 2005, the time period during which website operators may use an e-mail message from the parent, coupled with additional steps, to obtain verifiable parental consent for the collection of personal information from children for internal use by the website operator. FTC Notice 4/23/02
FTC Gets Tough on COPPA
The Federal Trade Commission has announced a number of new initiatives under the Children's Online Privacy Protection Act, including a new enforcement action involving a $35,000 penalty, release of an FTC COPPA compliance survey, and warning letters to more than 50 children's sites. FTC Press Release 4/23/02
IRS Issues Rule on Required Distributions From Retirement Plans
IRS has issued both final and temporary regulations relating to required minimum distributions from IRAs, qualified plans, individual retirement plans, 457, and section 403(b) annuity contracts, custodial accounts, and retirement income accounts. The new distribution rules become effective January 1, 2003. 67FR18987 (text) 67FR18987 (pdf) 4/23/02
OTS Proposes Revisions to Parity Act Regulations
The OTS announced that it is proposing to remove prepayment and late fee rules from the list of OTS regulations that preempt state law under the Alternative Mortgage Transaction Parity Act. OTS 02-21 4/23/02
OCC Announces New Electronic Interpretations and Actions
Interpretive Letters and No-Objection Letters reflect the views of the Comptroller's legal staff. Corporate Decisions, CRA Decisions and Conditional Approvals are from the office of Bank Organization and Structure. Electronic Interpretations and Actions 4/22/02
Minority Depository Institutions Program
Minority Depository Institutions often play a unique role in promoting the economic viability of under-served communities. The FDIC has historically taken steps to preserve and encourage minority ownership of insured financial institutions. On April 9, 2002, the FDIC Board adopted a new Policy Statement Regarding Minority Depository Institutions. Minority Depository Institutions Program, FDIC: FIL-34-2002 4/22/02
Terrorist Threat Against Banks
Warning directly affects banks in Virginia, Maryland, Delaware, Pennsylvania, New York, New Jersey, Connecticut, Massachusetts, Rhode Island, Maine, Vermont, New Hampshire and the District of Columbia.
NCUA Issues Final Rule Repealing CAP Proposal
Statement of NCUA Chairman Dennis Dollar: "From my first NCUA Board meeting in October 1997 when we put the initial ‘Community Service Amendments’ out for public comment through the first ‘Community Action Plan’ or ‘CAP’ comment period in 2000 and now through this - the second - official comment period on CAP which ended in February 2002, the commenters have spoken clearly. Statement of NCUA Board Member JoAnn Johnson, Statement of Board Member Deborah Matz 4/19/02
FDIC Reminds Bankers of the Responsibilities and Activities of FDIC’s Community Affairs Program
The FDIC established a Community Affairs Program (1990) that advances compliance with the Community Reinvestment Act and the fair lending laws by FDIC-supervised institutions. The FDIC's Division of Compliance and Consumer Affairs administers the program and provides Community Affairs staff to assist lenders and the public. 4/19/02
FDIC And Operation Hope Sign Mou Agreement Promoting Financial Education In Underserved Communities
The FDIC and Operation Hope, Inc. announced a pilot program to help strengthen communities across America through financial education. Under an agreement, Operation Hope has adopted the FDIC's "Money Smart" financial literacy program to train high school students and adults in basic money management skills. FDIC:PR-45-2002 4/19/02
New Data Collection Offers Insight Into Noninterest Income Activity at U.S. Banks
The FDIC reported new detail on commercial banks' noninterest income, added to their quarterly financial reports in 2001, sheds light on the fastest-growing component of banks' revenues. FDIC:PR-44-2002 4/19/02
FDIC Chairman Asks for Input on Reducing Regulatory Burden
The FDIC has established a special group to consider ideas on how to reduce burden on banks and the public and to make the FDIC more efficient. Suggested topics can be transmitted via the FDIC website. FDIC Press Release 4/18/02
FDIC Chairman Powell's Statement on Passage of Deposit Insurance Reform Legislation by House Financial Services Committee
The House Committee passed a good bill and we will continue working to pass deposit insurance reform this year." Don Powell, FDIC Chairman. FDIC:PR-43-2002 4/18/02
$100 Billion Claim Against the Federal Reserve Rejected
The United States Court of Appeals for the 7th Circuit on April 16, 2002 issued an opinion regarding one of the most ludicrous claims ever to be filed against the Federal Reserve System. The plaintiffs, in the case of Marques v. Federal Reserve Bank of Chicago, claimed to be agents of the owners of $25 billion in bearer bonds issued in 1934 in exchange for 1665 metric tons of gold. The suit sought an order requiring payment of the bonds at face value plus 4% interest for a total claim of $100 billion. Plaintiffs also contended there is an international conspiracy to deny the validity of the bonds. The Court noted there is no record of any such bond issue and the total debt of the U.S. in 1934 was only $28 billion. In addition, the entire stock of U. S. gold in 1934 had a value of $9 billion. The case was dismissed in the lower court upon the government's motion for summary judgment but the judgment was reversed by the Court of Appeals on purely procedural grounds. The plaintiffs were admonished that if a new similar suit were filed, they would be subject to appropriate civil or criminal sanctions. The Treasury has issued a warning regarding similar claims regarding the class of frauds called "Morgenthaus" named after Henry Morgenthaus, Jr. the Secretary of Treasury in 1934. 4/17/02
FDIC Issues Final Rule Relating to Forms, Instructions, and Reports
The FDIC is revising its regulation on forms, instructions, and reports to make the information contained in it current. The revised regulation includes current FDIC addresses and websites, and updated descriptions of FDIC forms. 67FR18793 (text) 4/17/02
OCC Announces 12 New Enforcement Actions and 2 Terminations
The OCC announced 12 new enforcement actions taken against national banks and individuals currently and formerly affiliated with national banks and 2 terminations of existing enforcement actions. OCC:NR 2002-36 4/17/02
OCC Releases CRA Evaluations For 27 National Banks
The OCC released a list of Community Reinvestment Act (CRA) performance evaluations that became public during the period of March 15 through April 14, 2002. OCC:NR 2002-35 4/17/02
BSA Violations Prove Expensive for PA Bank
FinCEN has levied civil money penalties of $700,000 against a federally chartered savings bank in Pennsylvania for what it terms a "willful" failure to file Currency Transaction Reports. 4/16/02
FinCEN Issues New Advisory Newsletters
The advisories pertain to the following: Burma (Myanmar), Ukraine, Arab Republic of Egypt, Grenada, Federal Republic of Nigeria. The latest FinCEN advisories suggest that financial institutions should give enhanced scrutiny to all financial transactions originating in or routed to or through the affected countries. 4/16/02
OTS Updates Thrift Holding Companies Handbook
OTS updated the handbook to reflect its risk-focused approach to holding company examinations. It designates two risk classification categories: low risk or noncomplex, and high risk or complex. OTS 02-020 4/16/02
FDIC and Neighborhood Reinvestment Corporation Announce Program to Promote Financial Education and Homeownership
The Neighborhood Reinvestment Corporation will use the FDIC's "Money Smart" financial literacy program to train adult educators and teach money management skills to thousands of people, primarily low-income consumers, minorities or women who are potential homebuyers or existing homeowners having problems making ends meet. FDIC:PR-42-2002 4/16/02
OFAC Updates Information on its Travel, Carrier, and Remittance Forwarding Service Provider Program
The Circular summarizes the current regulatory program that permits certain transactions involving property in which Cuba has an interest with respect to the provision of travel services, carrier services and the forwarding of remittances under the Cuban Assets Control Regulations. 4/15/02
Resumption of Critical Operations
The OCC has published Discussion Notes and a Meeting Summary from a multi-agency meeting held in February to analyze events in the wake of the September 11 attacks in order to strengthen the resilience of the financial system and share insights about developing more robust business continuity plans. 4/12/02
New Rule Affects Lockbox Arrangements for Federal Agencies
If you operate a lockbox for a federal agency, you'll want to read about the revisions to the rule of the Department of the Treasury, Financial Management Service that will permit the conversion of checks to ACH debit entires at federal agency points-of-purchase and at lockbox locations to which payments to agencies are mailed or delivered. 67FR17895 (text) 67FR17895 (pdf) 4/12/02
New FMS Interim Rule to Reflect NACHA Changes
The Department of the Treasury, Financial Management Service has issued an interim rule to reflect certain changes NACHA has made to the ACH Rules since the publication of NACHA's 2001 rule book. The interim rule addresses four topics: l) affidavit and electronic communication issues; 2) reinitiation of entries; 3) electronic authorization; and 4) electronic terminals. 67FR17895 (text) 67FR17895 (pdf) 4/12/02
NCUA Chairman Releases Study On Deposit Insurance Reform Legislation
NCUA Chairman Dennis Dollar told a group of California and Nevada credit union leaders that a recently completed NCUA study of the potential impact of pending deposit insurance reform legislation shows the likelihood of a premium assessment as minimal, but a strong possibility exists that increasing coverage above $100,000 would reduce the NCUSIF equity ratio enough to require at least two years for the fund ratio to be re-built through earnings sufficiently to again begin paying credit unions a dividend. NCUA Press Release 4/12/02
OTS Announces 21 March CRA Ratings
The OTS announced savings associations' Community Reinvestment Act (CRA) performance evaluation ratings that became available in March 2002. OTS 02-18 4/12/02
Gilleran Announces OTS Restructuring Plans
OTS Director James E. Gilleran announced today that he has begun implementing a restructuring plan designed to achieve greater operating efficiencies and consistency of regulation for the thrift industry. OTS 02-19 4/12/02
OCC Chief Counsel Julie L. Williams Underscores Major Increase In the Beneficial Relationships Between Banks and CDCs
Bank involvement with Community Development Corporations has increased significantly in recent years, Julie L. Williams, First Senior Deputy Comptroller and Chief Counsel, said in a speech. 4/11/02
FDIC Issues Alert on Counterfeit Cashier's Checks
The Federal Deposit Insurance Corporation has learned that counterfeit cashier's checks drawn on three separate financial institutions are in circulation. FDIC:FIL-33-2002 4/11/02
FDIC FIL about OFAC Change
The FDIC has published FIL-32 to notify banks of a recent OFAC change where OFAC amended its listing of Specially Designated Nationals. [The OFAC change itself was previously covered on BOL.] FDIC:FIL-32-2002 4/11/02
FDIC's Credit Card Center Available Online
The FDIC's Credit Card Center handles consumer complaints and inquiries for all FDIC-regulated Credit Card Specialty Banks. The staff provides an avenue for efficient and effective resolution of consumer complaints or inquiries. 4/11/02
FRB Issues Final Rule Amending Reg Z Commentary
The revisions clarify how creditors that place Truth in Lending Act disclosures on the same document with the credit contract may satisfy the requirement for providing the disclosures, in a form the consumer may keep, before consummation. In addition, the revisions provide guidance on disclosing costs for certain credit insurance policies and on the definition of ``business day'' for purposes of the right to rescind certain home-secured loans. 67FR16980 (txt) 67FR16980 (pdf) 4/9/02
Regulators Issue Final Rule on Risk Based Capital Standards
This rule amends their risk-based capital standards to permit a zero percent risk weight for certain claims on qualifying securities firms that are collateralized by cash on deposit in the lending institution or by securities issued or guaranteed by the United States or other OECD central governments. 67FR16971 (txt) , 67FR16971 (pdf), FRB Press Release , FDIC-PR-41-2002, FDIC:FIL-31-2002, OCC: NR 2002-33, OTS 02-17, OCC 2002-13 4/9/02
Gilleran Announces New Proposal for Enhancing the Mutual Thrift Charter
As part of an on-going, comprehensive review of the treatment of mutual thrifts, the OTS is proposing rule changes governing mutual thrifts, mutual holding companies and mutual-to-stock conversions. OTS 02-16 4/9/02
Comptroller Outlines the Benefits of Financial Literacy Programs
Financial education programs can be critical to combating predatory lending, to reaching the unbanked and to meeting the needs of the underbanked, Comptroller of the Currency John D. Hawke said. OCC:NR 2002-32, Speech 4/9/02
Warning: Bogus Letters with Sham IRS Forms
Ever heard of an IRS form W-9095? There's no such thing, but con artists are sending them to bank customers -- along with cover letters purporting to be from the bank asking the customer to complete the form (which requests a great deal of sensitive and confidential information) and fax it to a number designated on the letter. If completed and faxed back, the data would make it easy for the thief to commit ID theft. OCC has issued a special warning that includes a copy of the fake form and the bogus letter. Alert those who man the phones at your institution to be especially vigilant about verifying customer identity in the wake of this scam. OCC:Alert 2002-3, Customer Letter, Application Form 4/8/02
FDIC Issues April List of Banks Examined for CRA Compliance
The FDIC issued its monthly list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). The list covers evaluation ratings that the FDIC assigned to institutions in January 2002. FDIC:PR-40-2002 4/8/02
FR Financial Services Publishes International ACH Service Manual
The Federal Reserve Financial Services has published a new manual that is intended to assist financial institutions in establishing a Canadian ACH program using the Federal Reserve’s International ACH Service. The manual will provide you with an overview of the service, implementation steps and technical requirements. 4/8/02
OTS Announces Nine February CRA Ratings
The OTS announced savings associations' Community Reinvestment Act (CRA) performance evaluation ratings that became available in February 2002. OTS 02-15 4/8/02
FFIEC Publishes Annual Report
The Federal Financial Institutions Examination Council has issued its Annual Report for 2001. 4/5/02
FRB Issues Revisions to Reg Z Commentary
The commentary revisions clarify how creditors that place Truth in Lending Act disclosures on the same document with the credit contract may satisfy the requirement for providing the disclosures, in a form the consumer may keep, before consummation. In addition, the revisions provide guidance on disclosing costs for certain credit insurance policies and on the definition of "business day" for purposes of the right to rescind certain home-secured loans. FRB Press Release
4/4/02Treasury Extends Public Comment Period on Information-Sharing Study
The Treasury Department announced the extension of the public comment period from April 1, 2002 to May 1, 2002, for the Study of Information Sharing Practices Among Financial Institutions and Their Affiliates. This study was required by Section 508 of the Gramm-Leach-Bliley Act of 1999. Treasury News 4/4/02
FDIC Announces Agency Meeting
The FDIC's Board of Directors will meet in open session at 10:00 a.m. on Tuesday, April 9, 2002. Meeting Notice 4/4/02
FFIEC Updates Reporting Forms
The FFIEC has updated two Reporting Forms for March 2002 -- FFIEC 031(Consolidated Reports of Condition and Income for A Bank With Domestic and Foreign Offices) and FFIEC 041 (Consolidated Reports of Condition and Income for A Bank With Domestic Offices. FFIEC 031, FFIEC 041 4/3/02
Regulators Distribute Call Report for First Quarter 2002
Banks should complete your first quarter Call Report, review it for accuracy, and submit the report electronically as soon as possible. Except for certain banks with foreign offices, your completed report must be received by April 30, 2002. FDIC:FIL-29-2002 4/2/02
FRB Issues Notice on Derivative Contracts Hedging Trust Preferred Stock
The Federal Reserve has issued SR 02-10 to express supervisory concerns about certain arrangements under which bank holding companies seeking to hedge the interest rate risk on their issues of trust preferred stock have been offered derivative contracts with terms that have the effect of contravening the strict conditions for the inclusion of the trust preferred stock in tier 1 capital. FRB:SR 02-10 4/1/02
OCC Informs National Banks of Information Sharing Proposal and Interim Rule
In OCC Bulletin 2002-12, the OCC transmits to national bank's the treasury department's recent proposed rule and interim rule on information sharing under Section 314(b) of the USA PATRIOT Act. The proposed rule, which was previously written about in Top Stories, has a comment deadline of April 3, 2002. OCC 2002-12 4/1/02
FDIC Makes Public February Enforcement Actions; Two Administrative Hearings Scheduled
The FDIC released a list of orders of administrative enforcement actions taken against banks and individuals in February. Two administrative hearings are scheduled for April. FDIC:PR-39-2002 4/1/02
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