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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 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 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.

The Federal Reserve Board reports it will soon seek public comment on significant changes to improve the transparency of its bank stress tests and to reduce the volatility of resulting capital buffer requirements.

The Board intends to propose changes that include, but are not limited to: disclosing and seeking public comment on all of the models that determine the hypothetical losses and revenue of banks under stress; averaging results over two years to reduce the year-over-year changes in the capital requirements that result from the stress test; and ensuring that the public can comment on the hypothetical scenarios used annually for the test, before the scenarios are finalized. These proposed changes are not designed to materially affect overall capital requirements.

For the 2025 stress test, the Board plans to take immediate steps to reduce the volatility of the results and begin to improve model transparency. The Board intends to begin the public comment process on its comprehensive changes to the stress test during the early part of 2025.

The OCC on Monday announced it has issued a Consent Cease and Desist Order against Bank of America, N.A., for deficiencies related to its Bank Secrecy Act (BSA) and sanctions compliance programs.

The OCC's press release indicates the agency took this action based on violations and unsafe or unsound practices relating to these programs, including a failure to timely file suspicious activity reports and failure to correct a previously identified deficiency related to its Customer Due Diligence processes. The order also identifies deficiencies in the internal controls, governance, independent testing, and training components of the bank’s BSA compliance program.

The CFPB has reported it has sued Walmart, Inc. and Branch Messenger, Inc. for forcing delivery drivers to use costly deposit accounts to get paid and for deceiving workers— “last mile” drivers in Walmart’s Spark Driver program—about how they could access their earnings.

The CFPB’s complaint alleges that Walmart and Branch opened Branch accounts for Spark Drivers, and Walmart then deposited drivers’ pay into these accounts, without the drivers’ consent. Walmart told Spark Drivers that they were required to use Branch to get paid and that they would terminate workers who did not want to use these accounts. Walmart and Branch also misled workers about the availability of same-day access to their earnings. Drivers had to follow a complex process to access their funds, and when they finally did, they faced further delays or fees if they needed to transfer the money they earned into an account of their choice. This resulted in workers paying more than $10 million in fees to transfer their earnings to an account of their choice.

Walmart, the multinational retail corporation headquartered in Bentonville, Arkansas, operates the Spark Driver Program, through which gig economy drivers make “last-mile” deliveries from Walmart stores nationwide. Branch is a financial technology company that offers a deposit account at Evolve Bank & Trust that consumers access through a digital app and debit card.

The CFPB also alleges that Branch engaged in a host of illegal activities related to consumer accounts, including failing to investigate alleged errors, failing to honor stop payment requests, failing to maintain necessary records, failing to provide certain disclosures, and illegally requiring consumers to waive their rights under the law.

The CFPB’s lawsuit seeks to stop the companies’ unlawful conduct, to provide redress for harmed consumers, and the imposition of a civil money penalty, which would be paid into the CFPB’s victims relief fund.

The IRS has announced plans to issue about $2.4 billion in automatic payments later this month to eligible people who did not claim the Recovery Rebate Credit on their 2021 tax returns.

The IRS announced the special step after reviewing internal data showing many eligible taxpayers who filed a return but did not claim the credit. The Recovery Rebate Credit is a refundable credit for individuals who did not receive one or more Economic Impact Payments (EIP), also known as stimulus payments.

No action is needed for eligible taxpayers to receive these payments, which will go out automatically in December and should arrive in most cases by late January 2025. The payments will be automatically direct deposited or sent by paper check; eligible taxpayers will also receive a separate letter notifying them of the payment.

The Securities and Exchange Commission has announced it has charged registered broker-dealer Deutsche Bank Securities Inc., a subsidiary of Deutsche Bank AG, for failing to file certain Suspicious Activity Reports (SARs) in a timely manner. Deutsche Bank Securities has agreed to pay a $4 million civil penalty to settle the SEC’s charges.

According to the SEC’s order, Deutsche Bank Securities received requests in connection with law enforcement or regulatory investigations or litigation that prompted it to conduct SARs investigations. However, the SEC’s order finds that, in certain instances from April 2019 to March 2024, Deutsche Bank Securities failed to conduct or complete the investigations within a reasonable period of time, including at least two instances where Deutsche Bank Securities took more than two years to file the SARs.