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The FDIC has made public its enforcement actions taken in January 2025. They include four consent orders, three prohibition orders, three orders to pay civil money penalties, one order for restitution, and one decision and order to remove and prohibit from further participation.

Consent orders:

• Lamont Bank of St. John, Saint John, Washington (jointly issued with the Washington Department of Financial Institutions) — charges of unsafe or unsound banking practices relating to Board and senior management oversight, credit underwriting and administration, internal audit, and information technology
• FFB Bank, Fresno, California (issued jointly with the California Department of Financial Protection and Innovation) — charges of unsafe or unsound banking practices and violations of law relating to the Bank Secrecy Act; 31 C.F.R. Chapter X; and 12 U.S.C. § 1818(s), and the FDIC’s implementing regulations, 12 C.F.R. § 326.8 and 12 C.F.R. Part 353 (collectively, the BSA) with respect to the Bank’s Anti-Money Laundering/Countering the Financing of Terrorism Program
• Independence Bank, East Greenwich, Rhode Island (issued jointly with the Rhode Island Division of Banking) — charges of violations of law or regulations (see Order for Restitution, below). The bank is directed to dispose of all SBA loans in its portfolio or ensure the maintenance of all servicing rights and obligations associated with such loans
• Crescent Bank, New Orleans, Louisiana (issued jointly with the Louisiana Office of Financial Institutions) — charges of or unsound banking practices or violations of law related to the bank's current expected credit loss (CECL) and underwriting model risk management (MRM) framework, its methodology for determining the Allowance for Credit Losses, compliance with loan policy, and capital maintenance

Civil money penalties:

• The Farmers Bank and Savings Company, Pomeroy, Ohio — $12,000 CMP for violation of flood insurance regulations
• First Secure Bank and Trust Co., Palos Hills, Illinois — $12,375 CMP for violation of flood insurance regulations
• Pinnacle Bank, Inc., Pineville, Kentucky — $4,500 CMP for violation of flood insurance regulations

Restitution:

• Independence Bank, East Greenwich, Rhode Island — Restitution of $3,500,00 to affected SBA borrowers (charging fees in connection with the bank's SBA lending program that were prohibited by applicable SBA regulations and failing to disclose that the fees were prohibited by the SBA

Removal/Prohibition orders:

• Shirley L. Watson, formerly affiliated with State Bank of Cochran, Cochran, Georgia
• Martin Fernandez Jr., formerly affiliated with International Bank of Commerce, Laredo, Texas
• John B. Padilla, formerly affiliated with BancFirst, Oklahoma City, Oklahoma
• Jaqueline R. Brandt, formerly affiliated with Foundation One Bank, Waterloo, Nebraska

NPR's Your Money reported last evening that the Consumer Financial Protection Bureau has dropped five major lawsuits it had underway — including a large suit against Capital One. Last month, the Bureau had accused Capital One of failing to pay more than $2 billion in interest to its customers by misleading them into thinking they would be getting higher rates.

The CFPB also dropped its cases against Rocket Homes, Pennsylvania Higher Education Assistance Agency, Vanderbilt Mortgage and Finance, and Heights Finance Holding Company.

FinCEN yesterday sent an email to FinCEN Update subscribers providing additional information on its plan for the Corporate Transparency Act Beneficial Ownership Information (BOI) Reporting Rule. [Related press release]

• FinCEN assured businesses subject to the rule that there will be no fines or penalties issued, and no enforcement actions taken against any companies based on any failure to file or update BOI reports by the current deadlines.
• No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed.
• No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported.
• FinCEN also intends to solicit public comment on potential revisions to existing BOI reporting requirements. FinCEN will consider those comments as part of a notice of proposed rulemaking anticipated to be issued later this year to minimize burden on small businesses while ensuring that BOI is highly useful to important national security, intelligence, and law enforcement activities, as well to determine what, if any, modifications to the deadlines referenced here should be considered.

FinCEN has reported that the Financial Action Task Force (FATF), an intergovernmental body that establishes international standards for anti-money laundering, countering the financing of terrorism, and countering the financing of proliferation of weapons of mass destruction (AML/CFT/CPF), updated its lists of jurisdictions with strategic AML/CFT/CPF deficiencies at the conclusion of its plenary meeting this month. U.S. financial institutions should consider the FATF’s stance toward these jurisdictions when reviewing their obligations and risk-based policies, procedures, and practices.

On February 21, 2025, the FATF added Laos and Nepal to its list of Jurisdictions Under Increased Monitoring and removed the Philippines from that list.

The FATF’s list of High-Risk Jurisdictions Subject to a Call for Action remains the same, with Iran, the Democratic People’s Republic of Korea (DPRK), and Burma subject to calls for action. Specifically, the FATF continues to call on jurisdictions to apply countermeasures on Iran and DPRK. Burma remains subject to the application of enhanced due diligence, but not countermeasures.

The FDIC has issued FIL-2-2025 with steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Kentucky affected by severe storms, straight-line winds, flooding, landslides, and mudslides. The affected areas include Breathitt, Clay, Floyd, Harlan, Knott, Lee, Letcher, Martin, Owsley, Perry, and Pike Counties. Additional areas may be added. A current list of designated areas is available at https://www.fema.gov.

Yesterday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted six entities based in Hong Kong and the People’s Republic of China (PRC) engaged in the procurement of unmanned aerial vehicle (UAV) components on behalf of OFAC-designated Iranian firm Pishtazan Kavosh Gostar Boshra (PKGB) and its subsidiary Narin Sepehr Mobin Isatis (NSMI). These entities operate as front companies and facilitate the purchase and shipment of key components for the benefit of PKGB and NSMI, which serve as key suppliers for Iran’s UAV and ballistic missile programs.

For a link to the names and identification information of the designated parties, see yesterday's BankersOnline OFAC Update.

The Social Security Administration (SSA) has announced it is immediately beginning to pay retroactive benefits and will increase monthly benefit payments to people whose benefits have been affected by the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). These provisions reduced or eliminated the Social Security benefits for over 3.2 million people who receive a pension based on work that was not covered by Social Security (a "non-covered pension") because they did not pay Social Security taxes. The Social Security Fairness Act (Pub.L. 118-273) ends WEP and GPO as of January 1, 2024.

Recipients will see SSA lump-sum adjustment payments retroactive to January 1, 2024, and increases in monthly SSA payments in current and future payments. The SSA has posted a Fact Sheet on the Social Security Fairness Act on its website.

FinCEN has issued a reminder to financial institutions to remain vigilant regarding suspicious activity that may be indicative of relationship investment scams. The Commodity Futures Trading Commission launched the #DatingOrDefrauding national awareness effort to alert the public to relationship investment scams targeting Americans through wrong-numbered texts, dating apps, and social media. Losses from romance and confidence scams reported to the Federal Bureau of Investigation exceeded $650 million in 2023.

FinCEN has previously published several resources to help stakeholders identify and report illicit financial activity that may be indicative of relationship investment scams and other types of romance and confidence scams:

• Alert on Prevalent Virtual Currency Investment Scam Commonly Referred to as “Pig Butchering” by Perpetrators (September 2023)
• Advisory on Elder Financial Exploitation (June 2022)
• Financial Trend Analysis: Elder Financial Exploitation: Threat Pattern & Trend Information, June 2022 to June 2023 (April 2024)
• Financial Trend Analysis: Mail Theft-Related Check Fraud: Threat Pattern & Trend Information, February to August 2023 (September 2024)

In its first press release since January 21, the FDIC yesterday announced that the 4,487 FDIC-insured institutions reported return on assets of 1.11 percent and net income of $66.8 billion in the fourth quarter of 2024, an increase of $1.5 billion or 2.3 percent from the prior quarter, largely driven by an increase in net interest income.

Full year net income was $268.2 billion, up $14.1 billion (5.6 percent) from calendar year 2023.

Yesterday, OFAC and the Department of State imposed sanctions on over 30 persons, entities, and vessels in multiple jurisdictions for their role in brokering the sale and transportation of Iranian petroleum-related products. Among those sanctioned today are oil brokers in the United Arab Emirates (UAE) and Hong Kong, tanker operators and managers in India and People’s Republic of China (PRC), the head of Iran’s National Iranian Oil Company, and the Iranian Oil Terminals Company, whose operations help finance Iran’s destabilizing activities. The vessels sanctioned today are responsible for shipping tens of millions of barrels of crude oil valued in the hundreds of millions of dollars.

For a link to OFAC's list of the individuals, entities, and vessels affected by yesterday's OFAC action, see yesterday's BankersOnline OFAC Update.