Top Story Compliance Related

The FDIC has published [89 FR 64353] in today's Federal Register a final rule revising its regulations to conform with the Fair Hiring in Banking Act (FHBA)—which was enacted on and immediately effective as of December 23, 2022. Among other provisions, the FHBA excluded or exempted categories of otherwise-covered offenses from the scope of statutory prohibitions on participation in banking. These categories pertain to certain older offenses, offenses committed by individuals 21 or younger, and relatively minor offenses. The FHBA also clarified several definitions in section 19 and provided application-processing procedures. The FDIC considers most of the revisions to its regulations to be required by the FHBA. Most other revisions reflect the FDIC's interpretation of statutory prohibitions in light of the FHBA.

The amendments will become effective October 1, 2024.

The Treasury Department has reported that OFAC has designated Paraguayan tobacco company Tabacalera del Este S.A. (Tabesa) for providing financial support to Paraguay’s former president, Horacio Manuel Cartes Jara, whom OFAC sanctioned on January 26, 2023, for his involvement in corruption. Tabesa was designated pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act.

BankersOnline’s August 6, 2024, OFAC Update includes identification information on Tabesa.

Our quick look this morning at the Federal Reserve Board's archive of Community Reinvestment Act evaluations revealed that the Reserve Banks released 21 evaluations last month. We congratulate The Northwestern Bank (Chippewa Falls, Wisconsin), State Street Bank and Trust Company (Boston, Massachusetts), and Vista Bank (Dallas, Texas) on their Outstanding ratings. The remaining eighteen banks received Satisfactory ratings.

The FDIC has issued a list of 54 state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA).

One of the banks — Farmers Bank & Trust, Great Bend, Kansas, received a rating of "needs to improve." Fifty-one banks received ratings of "satisfactory." We congratulate two banks — Stock Yards Bank & Trust Company, Louisville, Kentucky, and First Federal Bank of Kansas City, Lees Summit, Missouri — on their "outstanding" ratings.

OFAC has announced upcoming updates for users of its Compliance Hotline service. OFAC is transitioning to a single, user-friendly online platform to receive questions from the public. Users can now submit queries—and provide all necessary details—directly through OFAC’s new OFAC Compliance Hotline page. This new platform is designed to improve OFAC’s tracking of queries and help OFAC assess when additional public guidance may be helpful.

OFAC will fully transition its Compliance Hotline to this web form platform by January 1, 2025, and will retire other existing forms of contacting the OFAC Compliance Hotline according to the following schedule: OFAC will retire the Compliance Hotline email (OFAC_Feedback@treasury.gov) on August 16, 2024; and its Compliance Hotline telephone (1-800-540-6322 and 202-622-2490) on December 31, 2024.

The Federal Trade Commission has reported it is sending more than $12 million in refunds to consumers who paid Zurixx, LLC for a real estate investment training program that allegedly made empty promises about earning big profits by “flipping” houses.

A complaint filed by the FTC and the Utah Department of Commerce Division of Consumer Protection (UDCP) alleged that Zurixx and its owners operated a real estate investment coaching scheme that sold live seminars and telephone coaching using false earnings claims that convinced consumers to pay them thousands or tens of thousands of dollars in a relatively short amount of time by “flipping” or wholesaling real estate using Zurixx’s system. The defendants bolstered sales by partnering with home-improvement and flipping television personalities. The defendants agreed to a settlement in February 2022, that included a monetary judgment and permanently banned them from marketing or selling any real estate or business coaching programs and prohibited them from making misleading earnings claims and from using contract terms to restrict consumers’ ability to review their products or speak to law enforcement agencies.

The FTC is sending checks to 25,563 consumers.

The OCC has released a list of 27 Community Reinvestment Act performance evaluations that became public during July 2024. Of the 27 evaluations, one is rated substantial noncompliance, 20 are rated satisfactory, and six are rated outstanding.

The Lemont National Bank, Lemont, Illinois, received the substantial noncompliance rating.

Outstanding ratings were awarded to—

• Black Hills Community Bank, National Association, Rapid City, South Dakota
• Eastern Savings Bank, FSB, Hunt Valley, Maryland
• First National Bank, Fort Pierre, South Dakota
• Home Savings and Loan Association of Carroll County, F.A., Norborne, Missouri
• Queensborough National Bank & Trust Company, Louisville, Georgia
• Sterling Federal Bank, F.S.B., Sterling, Illinois

The Department of the Treasury yesterday reported that OFAC has sanctioned two individuals and four companies that have facilitated weapons procurement for Ansarallah, commonly referred to as the Houthis. This action targets key actors located in the People’s Republic of China, including Hong Kong, and Yemen who have directly supported Houthis’ efforts to procure military-grade materials abroad and ship these items to Houthi-controlled areas of Yemen, enabling the group’s ongoing attacks.

For the names and identification information of the designated parties, see this July 31, 2024, BankersOnline OFAC Update.

FDIC FIL-50-2024, issued yesterday, lists steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Missouri affected by severe storms, straight-line winds, and flooding from May 19 to May 27, 2024.

FIL-51-2024, also issued yesterday, lists steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Kentucky affected by severe storms, straight-line winds, tornadoes, landslides, and mudslides from May 21 to May 27, 2024.

The FDIC Board of Directors meeting yesterday resulted in approval of:

• A Notice of Proposed Rulemaking that would amend the FDIC's regulations in 12 CFR parts 303 and 337 relating to the brokered deposits restrictions that apply to less than well-capitalized insured depository institutions. Comments will be accepted for 60 days following Federal Reserve publication. UPDATE: This proposed rule was published at 89 FR 68244 with a comment period ending on 10/22/2024.
• A Notice of Proposed Rulemaking that would amend its regulations in 12 CFR Part 354 governing parent companies of industrial banks and industrial loan companies. There will be a 60-day comment period.
• A Request for Information on deposit data that is not currently reported in Call Reports. The request has a 60-day comment period.
• Final Guidance for Title I Resolution Plan Triennial Full Filers [Domestic] [Foreign], to be effective upon publication
• A proposed rulemaking regarding the Change in Bank Control Act Regulations and Procedures, with a 60-day comment period
• A final rule revising the FDIC's Section 19 regulations in 12 CFR Parts 303 and 308, to become effective on October 1, 2024.