Top Story Compliance Related

The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) has announced the launch of a public service announcement (PSA) campaign as part of its ongoing efforts to educate the small business community about new beneficial ownership reporting requirements. To directly reach business owners, educate stakeholders about these reporting requirements, and encourage compliance, television and radio PSAs are now running nationwide in tandem with digital and print ads.

The United States, Italy, and Saudi Arabia virtually hosted a meeting last month of the Counter ISIS Finance Group (CIFG) under the auspices of the Global Coalition to Defeat ISIS. The CIFG co-leads yesterday issued a joint statement exhorting the Coalition members to continue working together and encouraging them to implement a list of comprehensive strategies to counter ISIS financing worldwide.

The joint statement was accompanied by a Fact Sheet on ISIS Financing.

On Thursday, the Federal Reserve Board announced the execution of a written agreement among Customers Bancorp, Inc., West Reading, Pennsylvania, Customers Bank, Malvern, Pennsylvania (together, the "organization"), and the Federal Reserve Bank of Philadelphia, Pennsylvania.

According to the agreement, Customers Bancorp, Inc., the holding company for Customers Bank, has pursued a business strategy that involves offering banking services to digital asset customers, and also operates an instant payments platform that allows commercial clients to make tokenized payments over a distributed ledger technology system to other commercial clients of the Bank. Recent examinations of the holding company and bank by the Reserve Bank identified significant deficiencies related to the Bank’s risk management practices and compliance with the applicable laws, rules, and regulations relating to anti-money laundering, including the Bank Secrecy Act and the regulations issued by OFAC.

The agreement acknowledges that the organization has begun to address the identified deficiencies and sets forth specific further steps the organization must take in that regard.

Yesterday, the OCC announced it will allow national banks, federal savings associations, and federal branches and agencies of foreign banks to close offices in areas of Maryland, North Carolina, South Carolina, Virginia, and Washington, D.C. if the offices are directly affected by potentially unsafe conditions caused by Hurricane Debby.

The CFPB yesterday announced it had filed a proposed order to resolve its lawsuit against Daniel A. Rosen, Inc., d/b/a Credit Repair Cloud and Daniel A. Rosen, its CEO, for providing substantial assistance or support to credit repair businesses that charge illegal advance fees to consumers. The proposed order, if entered by the court, would impose a $2 million civil penalty against Rosen and a $1 million civil penalty against Credit Repair Cloud. The order would also require the company and Rosen to take steps to ensure credit repair companies using Credit Repair Cloud stop charging consumers illegal advance fees.

On September 20, 2021, the Bureau filed a lawsuit against Credit Repair Cloud — a Los Angeles, California, company that since at least 2013 has provided an “all-in-one solution” for people to start their own credit repair businesses — and its owner and CEO, Daniel Rosen. On January 7, 2022, the Bureau filed an amended complaint. The Bureau alleged that Credit Repair Cloud and Daniel Rosen violated the Telemarketing Sales Rule by providing substantial assistance to credit repair businesses that violated the Telemarketing Sales Rule’s advance-fee prohibition. Specifically, the Bureau alleged that Rosen and Credit Repair Cloud encouraged the credit repair businesses that use their services — including Credit Repair Cloud’s trainings, materials, and software — to telemarket and charge unlawful advance fees. The Bureau further alleges that Rosen and Credit Repair Cloud knew or consciously avoided knowing that these credit repair businesses were telemarketing their services and charging consumers unlawful advance fees. The Bureau also alleges that by violating the Telemarketing Sales Rule, Credit Repair Cloud and Daniel Rosen violated the Consumer Financial Protection Act of 2010.

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.