Top Story Compliance Related

On June 11, the CFPB announced a proposed rule [published in the Federal Register at 89 FR 51682 on 6/18/2024] that would remove medical bills from most credit reports, increase privacy protections, help to increase credit scores and loan approvals, and prevent debt collectors from using the credit reporting system to coerce people to pay. The proposal would stop credit reporting companies from sharing medical debts with lenders and prohibit lenders from making lending decisions based on medical information. The proposed rule is part of the CFPB’s efforts to address the burden of medical debt and coercive credit reporting practices.

In 2003, Congress restricted lenders from obtaining or using medical information, including information about debts, through the Fair and Accurate Credit Transactions Act. However, federal agencies subsequently issued a special regulatory exception to allow creditors to use medical debts in their credit decisions. The CFPB is proposing to close the regulatory loophole that has kept vast amounts of medical debt information in the credit reporting system. The proposed rule would help ensure that medical information does not unjustly damage credit scores, and would help keep debt collectors from coercing payments for inaccurate or false medical bills.

Specifically, the proposed rule, if finalized would:

• Eliminate the special medical debt exception
• Establish guardrails for credit reporting companies
• Ban repossession of medical devices

Comments on the CFPB's proposal will be accepted through August 12, 2024. The CFPB proposes to make the final rule, when issued, effective 60 days after it is published in the Federal Register.

• Unofficial redline of the proposed rule amendments to Regulation V
• Fast Facts on the proposal

The OCC has issued Bulletin 2024-13 announcing version 2.0 of the "Retail Nondeposit Investment Products" booklet of the Comptroller's Handbook. This booklet discusses risks and risk management practices associated with the recommendation or sale of nondeposit investment products to retail customers. This booklet also provides examiners with a framework for evaluating a bank’s retail nondeposit investment product program.

The revised booklet replaces version 1.0 of the booklet with the same title issued January 2015. Also rescinded is OCC Bulletin 2015-2, “Retail Nondeposit Investment Products: Revised Comptroller's Handbook Booklet and Rescissions.”

The revised booklet—

• incorporates significant regulatory changes adopted in the U.S. Securities and Exchange Commission’s Regulation Best Interest that may relate to banks' securities activities
• reflects OCC and interagency issuances that have been published or rescinded since January 2015
• provides further clarity regarding sound risk management practices and guidance to examiners
• includes other minor updates for general clarity

On June 11, the Treasury Department announced that OFAC has sanctioned members of one of Guyana’s wealthiest families, Nazar Mohamed and his son, Azruddin Mohamed, their company, Mohamed’s Enterprise, and a Guyanese government official, Mae Thomas, for their roles in public corruption in Guyana. Additionally, OFAC designated two other entities, Hadi’s World and Team Mohamed’s Racing Team, for being owned or controlled by Mohamed’s Enterprise and Azruddin, respectively. These individuals and entities are sanctioned pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world.

For the identification information of the designated parties, see the June 11, 2024, BankersOnline OFAC Update.

The Treasury Department yesterday reported that OFAC has sanctioned four individuals (including tanker captains), four entities, and two vessels in multiple jurisdictions that have engaged in the illicit transport of oil and other commodities, including for the network of Houthi financial facilitator Sa’id al-Jamal. This action targets maritime shipping and financial facilitators, several vessel managers and owners, and a company involved in forging shipping documents. This seventh round of sanctions targeting the network of Sa’id al-Jamal since October 2023 underscores the U.S. government’s commitment to isolating and disrupting the financing of international terrorist groups such as the Houthis.

For the names and identification information of the designated individuals, entities, and vessels, see the June 10, 2024, BankersOnline OFAC Update.

The Financial Crimes Enforcement Network (FinCEN) has updated its Beneficial Ownership Information Frequently Asked Questions about reporting companies and exemptions, beneficial owners, the reporting requirements, and general questions, including information about how the Corporate Transparency Act applies to Indian Tribes and entities formed under tribal law.

New FAQs have been added to Sections C (Reporting Company), D (Beneficial Owner), and L (Reporting Company Exemptions). Updated FAQs can be found in Sections A (General Questions), C (Reporting Company), and F (Reporting Requirements).

The Securities and Exchange Commission on Friday reported it had charged three New Yorkers with fraud for selling unregistered membership interests in LLCs that purported to invest in shares of pre-IPO companies, first on behalf of StraightPath Venture Partners LLC, the subject of the Commission’s emergency action in May 2022, and, later, on behalf of Legend Venture Partners LLC, the subject of the Commission’s emergency action in June 2023. Both StraightPath and Legend are now under court-ordered receiverships.

In this new action, the SEC alleges that New York residents Mario Gogliormella, Steven Lacaj, and Karim Ibrahim directed an unregistered sales force of more than 50 callers in boiler rooms to pressure investors into making investments without telling them that the shares had been substantially marked up—between approximately 19 and 105 percent on average above the prices that StraightPath or Legend had paid for the underlying shares. As a result of these tactics, the defendants and their sales force allegedly pocketed more than $45 million in fees from unsuspecting investors from 2019 to 2022.

The SEC’s complaint charges the defendants with violating antifraud and other provisions of the federal securities laws. The complaint seeks permanent injunctive relief, return of allegedly ill-gotten gains, and civil penalties. The SEC also charged Adam Ibrahim, Karim Ibrahim’s brother, as a relief defendant.

The U.S. Attorney’s Office for the Southern District of New York on Friday reported it has unsealed an indictment charging Gogliormella, Lacaj, and Karim Ibrahim with securities fraud, among other offenses, in connection with their work for StraightPath and Legend.

FinCEN has released its Year in Review for Fiscal Year 2023, which is intended to help stakeholders gain insight into the collection and use of Bank Secrecy Act data, including FinCEN’s efforts to support law enforcement and national security agencies. The Year in Review includes statistics from fiscal year 2023 on BSA reporting and how it is queried and used by law enforcement agencies. It also includes information on how FinCEN uses and analyzes BSA reporting to fulfill its mission, including to support alerts, trend analyses, and regulatory actions.

Yesterday, the Treasury Department announced that OFAC had sanctioned the Ecuador-based Los Lobos Drug Trafficking Organization and its leader Wilmer Geovanny Chavarria Barre (also known as “Pipo”).

Also yesterday, the Department of State reported its imposition of sanctions on "Lion's Den," a military Palestinian group centered in Nablus's Old City in the West Bank.

For the names and identification information of the designated parties, see the June 6, 2024, BankersOnline OFAC Update.

OFAC has posted a Notice that it has amended the Syrian Sanctions Regulations (31 C.F.R. Part 542) to, among other things, implement the relevant provisions of a May 1, 2012 Executive order regarding foreign sanctions evaders with respect to Syria and Iran, and certain provisions of the Iran Threat Reduction and Syria Human Rights Act of 2012, the Countering America’s Adversaries Through Sanctions Act, and the Caesar Syria Civilian Protection Act of 2019. In addition to new prohibitions, OFAC is adding several relevant definitions and interpretations and one new general license. OFAC is also incorporating, with amendments, one general license; and updating six general licenses. The amendments were published at 89 FR 48310 in today's Federal Register, and are now effective.

OFAC has also published a list of areas of northeast and northwest Syria in which activities are authorized under General License 22,

OFAC also issued a new Syria Frequently Asked Question (FAQ 1180) and amended a number of Syria Frequently Asked Questions (FAQs 205, 231, 232, 934, and 938).

The FDIC has issued its June 2024 list of banks examined for CRA Compliance, which includes 61 financial institutions whose CRA evaluation ratings were assigned in March 2024. Fifty-three of those evaluations were rated Satisfactory. Four banks' evaluations were rated Outstanding:

• Cape Cod Five Cents Savings Bank, The, Hyannis, Massachusetts
• Medallion Bank, Salt Lake City, Utah
• Stock Exchange Bank, The, Woodward, Oklahoma
• Tustin Community Bank, Tustin, California

Four of the banks' evaluations were rated Needs to Improve:

• Century Bank of Kentucky, Inc., Lawrenceburg, Kentucky
• First Bank of Ohio, Tiffin, Ohio
• Milestone Bank, Salt Lake City, Utah
• United Savings Bank, Philadelphia, Pennsylvania