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Yesterday, OFAC released Guidance on Extension of Statute of Limitations to address questions raised by recent legislation that extended the statute of limitations for violations of certain sanctions that the agency administers. As explained in the guidance, OFAC may now commence an enforcement action for civil violations of International Emergency Economic Powers Act- or Trading with Enemy Act-based sanctions prohibitions within 10 years of the latest date of the violation if such date was after April 24, 2019.

The Treasury Department, on behalf of the Financial Crimes Enforcement Network (FinCEN) has published [89 FR 59805] in today's Federal Register a request for public comment on an information collection associated with requests made to FinCEN by certain persons for beneficial ownership information. Written comments on the proposed information collection are due within 30 days (by August 22, 2024).

The 30-day notice seeks comment on the information to be collected from certain authorized recipients requesting access to beneficial ownership information, consistent with the requirements of the Beneficial Ownership Information Access and Safeguards Rule published on December 22, 2023, and effective since February 20, 2024. The Corporate Transparency Act authorizes government agencies as well as financial institutions and their regulators to obtain beneficial ownership information under certain specified circumstances for national security and law enforcement purposes.

This 30-day notice gives the public an opportunity to comment on: (1) the information to be collected from certain persons requesting beneficial ownership information from FinCEN; and (2) FinCEN’s estimate of the burden involved in the information collection. Comments must be submitted by August 22, 2024.

FinCEN is setting the stage for financial institutions and certain government agencies to have access to Beneficial Ownership Information reported by entities subject to Beneficial Ownership Information Reporting requirements, which is expected to be finalized early in 2025.

The FDIC, Federal Reserve Board, NCUA, and OCC have jointly announced they are requesting comment on a proposal to update their requirements for supervised institutions to establish, implement, and maintain effective, risk-based, and reasonably designed anti-money laundering and countering the financing of terrorism (AML/CFT) programs. The amendments are intended to align with changes concurrently proposed by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), most of which result from the Anti-Money Laundering Act of 2020 (AML Act).

The proposed amendments would require supervised institutions to identify, evaluate, and document the regulated institution’s money laundering, terrorist financing, and other illicit finance activity risks, as well as consider, as appropriate, FinCEN’s published national AML/CFT priorities. Additionally, and consistent with the AML Act, the proposal would mandate that the duty to establish, maintain, and enforce the AML/CFT program remain the responsibility of, and be performed by, persons in the United States who are accessible to, and subject to the oversight and supervision by, the relevant agency. The proposal also supports institutions’ consideration of innovative approaches to meet compliance obligations.

Comments on the proposal are due 60 days after the date of publication in the Federal Register.

• Interagency Statement on the Issuance of the AML/CFT Program Notices of Proposed Rulemaking
• FDIC FIL-42-2024
• OCC Bulletin 2024-19

The Treasury Department on Friday reported that OFAC has exposed the identity of two members of a Russian government-related hacktivist group, and imposed sanctions on them. OFAC designated Yuliya Vladimirovna Pankratova and Denis Olegovich Degtyarenko, two members of the Russian hacktivist group Cyber Army of Russia Reborn (CARR) for their roles in cyber operations against U.S. critical infrastructure. These two individuals are the group’s leader and a primary hacker, respectively.

For identification information on Pankratova and Degtyarenko, see BankersOnline’s July 19, 2024, OFAC Update.

The Federal Reserve Board has reported it has addressed consumer compliance breakdowns by Green Dot, fining the firm $44 million for numerous unfair and deceptive practices and a deficient consumer compliance risk management program.

The Board found that Green Dot violated consumer law in its marketing, selling, and servicing of prepaid debit card products, and its offering of tax return preparation payment services. For example, Green Dot failed to adequately disclose the tax refund processing fee for tax preparation services offered on a third party's website. The firm also blocked access to accounts of legitimate customers receiving unemployment benefits and lacked reasonable policies and procedures to help those customers cure those blocks. In addition, Green Dot did not maintain effective consumer compliance risk management and anti-money laundering programs.

For additional details and a link to the Board's consent order, see "Green Dot fined $44M for UDAP violations and deficient compliance program," in BankersOnline's Penalties webpages.

On Friday, the Federal Reserve Board announced it has executed a consent cease and desist order with Jiko Group, Inc., San Francisco, California, a registered bank holding company that owns and controls Mid-Central National Bank, Wadena, Minnesota, and various non-bank subsidiaries that develop and service technology platforms and provide broker-dealer services.

The order was issued following the October 30, 2023, supervisory inspection of and recent communications to Jiko issued by the Federal Reserve Bank of San Francisco, which identified significant deficiencies in the financial condition of the holding company, including capital planning, earnings, strategic planning, cash flow, and liquidity, which Jiko has begun to take steps to address.

The Treasury Department yesterday reported that OFAC has designated and identified as blocked property a dozen persons and vessels, respectively, that have played a critical role in financing the Houthis’ destabilizing regional activities as part of the network of Sa’id al-Jamal.

Treasury also reported that OFAC sanctioned the Abdul Karim Conteh Human Smuggling Organization (Karim HSO), a transnational criminal organization (TCO) based in Tijuana, Mexico.

For the names and identification information of the designated parties and blocked vessels, see this July 18, 2024, BankersOnline OFAC Update.

The OCC has released a list of 11 enforcement actions taken against national banks and federal savings associations and individuals currently and formerly affiliated with OCC-supervised financial institutions.

• The amended cease and desist order previously announced against Citibank, N.A., Sioux Falls, South Dakota.
• A cease and desist order against CNB Bank & Trust, N.A., Carlinville, Illinois, for violations of 12 CFR 21.21 (BSA/AML compliance program), 31 CFR 1020.210 (Customer Due Diligence), and 1020.220 (Customer Identification Program) as well as unsafe or unsound practices relating to the bank’s BSA/AML compliance, and failure to correct previously reported BSA/AML compliance problems.
• A formal agreement with Lincoln FSB of Nebraska, Lincoln, Nebraska, for unsafe or unsound practices, including those relating to strategic planning, liquidity risk management, contingency funding planning, interest rate risk management, and board oversight and corporate governance.
• A cease and desist order against Summit National Bank, Hulett, Wyoming, for unsafe or unsound practices including those related to capital and strategic planning, liquidity risk management, transactions with affiliates, and the bank’s BSA/AML compliance program, and violations including of 12 CFR 21.21 (BSA/AML compliance program).
• Orders of prohibition against the following individuals:
  • Cindy M. Flores, former branch operations associate manager at a Fargo, North Dakota, branch of Wells Fargo Bank, N.A., Sioux Falls, South Dakota, for misappropriating at least $47,600 by diverting funds from customer deposit accounts
  • Randall David Ditzer, former banking center team lead relationship banker at a Prairie Village, Kansas, branch of BOKF, N.A., Tulsa, Oklahoma, for making unauthorized withdrawals from the accounts of an elderly bank customer and depositing the funds into his own accounts.
  • Aaliyah Shaheed, former digital banking representative for Varo Bank N.A., Draper, Utah, who worked remotely from Charlotte, North Carolina, for improperly accessing and modifying customer account information, which resulted in approximately $21,700 of fraudulent transfers.
  • Kathryn Thomure (now known as Kathryn Makler), former business banking specialist at a Farmington, Missouri, branch of U.S. Bank, N.A., Cincinnati, Ohio, for making false representations on two Paycheck Protection Program loan applications to the U.S. Small Business Administration and receiving a loan for approximately $29,300.
  • Valeria Martinez Vazquez, former branch relationship banker at Zions Bancorporation, N.A., Salt Lake City, Utah, for misappropriating approximately $11,100 from a customer’s account.
  • Andre Jackson, former relationship banker at a Kenmore, New York, branch of Bank of America N.A., Charlotte, North Carolina, for misappropriating at least $8,000 in cash from the bank.
  • Cordia Shedde McDonald, former associate banker at a New Rochelle, New York, branch of JPMorgan Chase Bank, N.A., Columbus, Ohio, for misappropriating at least $10,000 in cash from the bank.

The OCC has reported that Acting Comptroller of the Currency Michael J. Hsu yesterday discussed three long-term trends that are reshaping banking in remarks at the Exchequer Club.

Mr. Hsu’s written remarks in support of his appearance discussed the increasing number and size of large banks, the complexity of bank-nonbank relationships, and the rise in polarization. Mr. Hsu described how the OCC is uniquely positioned to address each trend.

The FDIC's final rule amending Part 328 — "Advertisement of Membership, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC's Name or Logo" — became effective on April 1, 2024, with compliance required as of January 1, 2025.

The FDIC has posted Questions and Answers Related to the FDIC’s Part 328 Final Rule, which will be updated periodically, with answers to a collection of questions about the rule.

The Q&A clarifies several questions resulting from some misinterpretations of wording in the regulation.