Top Story Compliance Related

The OCC has released a list of Community Reinvestment Act performance evaluations that became public during the month of December 2024. Thirteen of the institutions on the list received a CRA rating of Satisfactory.

Ratings of Outstanding were listed for —

• The First National Bank of Sparta, Sparta, Illinois
• First Seacoast Bank, Dover, New Hampshire
• Metropolitan Bank and Trust Company, New York, New York

OFAC has announced a $22,172 settlement with SkyGeek Logistics, Inc. SkyGeek agreed to settle its potential civil liability for six apparent violations of OFAC sanctions related to Russia’s aerospace and technology sectors.

In 2024, SkyGeek attempted two refunds and sent four shipments to two Specially Designated Nationals in the United Arab Emirates sanctioned in connection with these sectors. The settlement amount reflects OFAC's determination that the apparent violations were non-egregious and that certain of its conduct was voluntarily self-disclosed.

Additional details are available in OFAC's enforcement release, which indicates that two of SkyGeek's apparent transaction violations were blocked and reported to OFAC by a financial institution.

The Treasury Department on Tuesday reported OFAC sanctions actions.

• A Russian judge was sanctioned for her role in the arbitrary detention of Moscow city councilor and human rights defender Alexei Gorinov. The judge was designated under the authority of 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.
• OFAC also designated a subordinate organization of Iran’s Islamic Revolutionary Guard Corps (IRGC), and a Moscow-based affiliate organization of the Russian Main Intelligence Directorate (GRU) and its director under the authority of Executive Order 13848 (U.S. election interference). As affiliates of the IRGC and GRU, these actors aimed to stoke socio-political tensions and influence the U.S. electorate during the 2024 U.S. election.

For the names and identification information of the designated parties, see Tuesday's BankersOnline OFAC Update.

The NMLS has posted a reminder that its annual renewal period for Mortgage Loan Originators ends tomorrow (January 31). The NMLS system will not be available on January 1 (New Year's Day). MLOs who miss the renewal deadline can apply for reinstatement from January 2 through midnight EST February 28, 2025.

The OCC, Federal Reserve Board, and FDIC on Friday issued a revised interagency statement to supersede the “Extension of the Revised Statement Regarding Status of Certain Investment Funds and their Portfolio Investments for Purposes of Regulation O and Reporting Requirements under Part 363 of FDIC Regulations.” The prior interagency statement was issued on December 15, 2023, and was set to expire on January 1, 2025.

The revised interagency statement explains that the agencies will continue to exercise discretion not to take action against banks or against certain companies that sponsor, manage, or advise investment funds and institutional accounts (fund complexes) that become principal shareholders of banks (principal shareholder fund complexes). The discretion relates to certain extensions of credit by banks to portfolio companies of the principal shareholder fund complex (fund complex–controlled portfolio companies) that otherwise would violate Regulation O, 12 CFR 215, provided certain eligibility criteria are satisfied. The agencies also clarify the eligibility criteria in the revised interagency statement.

• FDIC FIL-85-2024
• OCC Bulletin 2024-37

The FDIC on Friday made public its November 2024 administrative enforcement actions against banks and individuals. There were two orders of prohibition, two consent orders, three orders for civil money penalties (CMPs), one combined order of prohibition and order for restitution, and one notice of charges for assessment of a CMP.

Assessment of Civil Money Penalties:

• Spring Valley Bank, Wyoming, OH, a $19,800 CMP for violations of the Home Mortgage Disclosure Act (HMDA) and of Regulation C for failing to follow HMDA reporting requirements.
• Rockland Trust Company, Rockland, MA, a $10,000 CMP for engaging in a pattern or practice of violations of the Flood Disaster Protection Act and section 339.3(a) of the FDIC's Rules and Regulations, in 10 instances by making, increasing, extending, and/or renewing designated loans secured by personal property not covered by flood insurance by failing to require borrowers to get flood insurance covering contents pledged as security when contents are owned by a non-borrower guarantor.
• Citizens State Bank, Hudson, WI, a $6,000 CMP for engaging in a pattern or practice of committing violations of the FDPA and Part 339 of the FDIC Rules and Regulations, 12 C.F.R. Part 339, by failing to obtain flood insurance on a building securing a designated loan at the time of the origination of one loan; failing to obtain adequate flood insurance at the time of the origination of four loans; and failing to follow force placement flood insurance procedures in four instances

Notice of Charges and of Hearing for Assessment of Civil Money Penalty:

• CBW Bank, Weir, KS, related to a determination that the bank violated laws and regulations by failing to maintain an adequate Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) compliance program, which led to multiple incidents where the bank repeatedly violated the Bank Secrecy Act and its implementing regulations. If the bank fails to timely request a hearing on the FDIC's charges, a CMP of $20,448,000 will be imposed.

Assessment of Civil Money Penalty and Removal/Prohibition Order:

• Carlos Acosta, formerly a senior vice president and Chief auditor of Citizens Business Bank, Ontario, CA, for recording confidential meetings, including meetings with FDIC and state examiners, without consent, and attempting to extort bank executives. CMP: $70,000.
• Bryan E. Dalton, a former loan officer at RiverBank, Pocahontas, AR, in an adjudicated decision, a $35,000 CMP and a notice of prohibiiton for a scheme by which he misappropriated $87,951.50 from the accounts of four loan customers.

Removal/Prohibition Orders:

• Stacia S. Wilson, former vice president at St. Clair County State Bank, Osceola, MO, after a finding that she created false and fictitious loans using bank customer information without their knowledge, misappropriated funds to fund payments on those loans, and used the proceeds of the loans for her personal gain.
• Jessica Ann Marshall, former branch manager at Bank of Idaho, Idaho Falls, ID, for stealing cash and embezzling funds from the bank in the amount of $345,774.66, and falsifying documents and directing bank employees to falsify documents to hide her actions.

FinCEN has posted an alert on its Beneficial Ownership Information webpage reporting that the U.S. Court of Appeals for the Fifth Circuit on December 23, 2024, issued a temporary stay of the U.S. District Court for the Eastern District of Texas's preliminary injunction in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al. The temporary stay reinstated the enforceability of the Corporate Transparency Act (CTA) and its requirement that covered entities file reports of their beneficial ownership with FinCEN pending the government's appeal of the District Court's conclusion that both the CTA and the reporting requirement are unconstitutional.

FinCEN's alert stated that reporting companies' deadlines for filing their reports of beneficial ownership have been extended. The earliest such deadline — for reporting companies created or registered before January 1, 2024 — is now January 13, 2025.

A different panel of the Court of Appeals for the Fifth Circuit on December 26, 2024, issued an order vacating the stay of enforcement in the appeals court's December 23, 2024, order, effectively reinstating the injunction against enforcement by the district court on December 3.

FinCEN has posted an updated alert on its Beneficial Ownership Information page: "In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports."

[Editor's note: This story was initially posted in our Top Stories pages on December 26, 2024. It has been updated to reflect a reversal of the December 23, 2024, stay of the district court's stay of enforcement of the reporting requirement.]

The CFPB has released its fifteenth annual report to Congress on college credit cards as required by the Credit Card Accountability, Responsibility, and Disclosure Act (CARD Act), augmented with information on trends related to student deposit and prepaid card accounts offered and advertised to students through partnerships between colleges and financial service providers. The College Banking and Credit Card Agreements report is informed by account agreements and data from 2022 through 2023, covering over 1.4 million such accounts.

In addition to this year’s findings, the CFPB highlights other products and partnership between financial service providers and colleges which may create risks to students.

The CFPB has filed for public inspection with the Office of the Federal Register a final rule scheduled for publication on December 27, 2024, to adjust the asset-size exemption in the official commentary interpreting requirements of Regulation C (Home Mortgage Disclosure Act) threshold for banks, savings associations, and credit unions. The threshold is adjusted, effective January 1, 2025, from $56 million to $58 million.

Institutions with assets of $58 million or less as of December 31, 2024, are exempt from collecting data in 2025.

[Editor's note: The 12/27/2024 issue of the Federal Register was not yet available at 8:30 a.m. EST on 12/27/2024. UPDATE: Published at 89 FR 105429 on 12/27/2024. The amendment has been posted to section 1003.2(g) of Regulation C in the BankersOnline Regulations section.]

The FDIC has issued FIL-84-2024, "Consolidated Reports of Condition and Income for Fourth Quarter 2024," with instructions to all FDIC-insured financial institutions for completion and submission of their fourth quarter Call Reports.