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The Securities and Exchange Commission yesterday announced charges against six nationally recognized statistical rating organizations, or NRSROs, for significant failures by the firms and their personnel to maintain and preserve electronic communications. The firms admitted the facts set forth in their respective SEC orders; acknowledged that their conduct violated recordkeeping provisions of the federal securities laws; agreed to pay combined civil penalties of more than $49 million; and have begun implementing improvements to their compliance policies and procedures to address these violations.

• Moody’s Investors Service, Inc. agreed to pay a $20 million civil penalty;
• S&P Global Ratings agreed to pay a $20 million civil penalty;
• Fitch Ratings, Inc. agreed to pay an $8 million civil penalty;
• HR Ratings de México, S.A. de C.V. agreed to pay a $250,000 civil penalty;
• A.M. Best Rating Services, Inc. agreed to pay a $1 million civil penalty; and
• Demotech, Inc. agreed to pay a $100,000 civil penalty.

The NCUA has reported it has permanently prohibited Luz Araceli Davila-Hernandez, a former employee of Magnifi Financial Credit Union, Melrose, Minnesota, from ever working for a federally insured depository institution.

The FDIC has released a list of enforcement orders issued in July 2024.

• A Consent Order against The State Exchange Bank, Lamont, Oklahoma
• A Consent Order against Chesterfield State Bank, Chesterfield, Illinois
• Prohibition orders against:
  • Raqeel Rashida Alsalam, formerly affiliated with First-Citizens Bank & Trust Company, Raleigh, North Carolina
  • Brent D. Torgerson, formerly affiliated with The Union Bank, Beulah, North Dakota
  • Samuel Ortiz-Perez, formerly affiliated with FirstBank Puerto Rico, Santurce, Puerto Rico
  • Leann Athas, formerly affiliated with Bank of Montana, Missoula, Montana

Yesterday, FinCEN announced two final rules designed to help safeguard the residential real estate and investment adviser sectors from illicit finance.

The final residential real estate rule, published [89 FR 70258] in today’s Federal Register and effective December 1, 2025, will require certain industry professionals to report information to FinCEN about non-financed transfers of residential real estate to a legal entity or trust, which present a high illicit finance risk. The rule will increase transparency, limit the ability of illicit actors to anonymously launder illicit proceeds through the American housing market, and bolster law enforcement investigative efforts.

• Residential Real Estate Rule Fact Sheet
• FAQs on Real Estate Reports

The final investment adviser rule, scheduled for Federal Register publication on September 4, and effective January 1, 2026, will apply anti-money laundering/countering the financing of terrorism (AML/CFT) requirements—including AML/CFT compliance programs and suspicious activity reporting obligations—to certain investment advisers that are registered with the U.S. Securities and Exchange Commission (SEC), as well as those that report to the SEC as exempt reporting advisers. The rule will help address the uneven application of AML/CFT requirements across this industry.

• Investment Advisor Rule Fact Sheet

The Federal Trade Commission yesterday announced an update to the fees telemarketers must pay to access phone numbers on the National Do Not Call (DNC) Registry in Fiscal Year (FY) 2025, which starts on October 1, 2024.

The cost of accessing a single area code in the Registry will be $80 in FY 2025, which is an increase of $2 from FY 2024. The maximum charge to any single entity for accessing all area codes nationwide is now $22,038 (up from 21,402 in FY 2024). The fee for accessing an additional area code for a half year will increase $1 from FY 2024, to $40.

The CFPB has announced its publication of a new “issue spotlight” report on Cash-Back Fees.

The CFPB sampled eight large retail companies (Dollar General, Dollar Tree/Family Dollar, Kroger, Albertsons, Walgreens, CVS, Walmart and Target) and assessed their practices for charging cash-back fees. Three companies in the sample — Dollar General, Dollar Tree/Family Dollar, and Kroger — charge fees for cash-back service. At Dollar General and Dollar Tree/Family Dollar, cash-back fees for small withdrawal amounts are the highest in the sample ($1 fee or more for cash-back amounts under $50). Kroger, the country’s largest grocery chain, recently announced new charges at their Harris Teeter stores (75 cents for $100 cash back or less), and charges 50 cents for up to $100 cash back at their other brand stores such as Ralph’s, Fred Meyer, and others.

The CFPB's release says “Americans are paying tens of millions of dollars in fees to access their own money when getting ‘cash back’ at large retail stores when making a purchase with a debit or prepaid card, and that these cash-back fees are occurring against the backdrop of bank mergers, branch closures, and prevalence of out-of-network ATM fees that have reduced the supply of free cash access points for consumers.”

• CFPB Director’s Notebook statement

[Editor’s Note: The ABA noted this morning that public data indicate that nearly 96 percent of Americans live within a few miles of a bank or credit union branch.]

The OCC has announced community bank director and senior management workshops scheduled in nine cities across the country in September and October. The list includes the OCC's basic Building Blocks workshop and its Risk Management Series, which includes workshops on Risk Governance, Credit Risk, Operational Risk, Compliance Risk, and Capital Markets.

Most of the sessions are available for both in-person or virtual attendance.

Yesterday, FinCEN issued a press release reminding financial institutions to monitor for and report suspicious transactional activity related to the illicit fentanyl supply chain and the trafficking of illicit fentanyl and other synthetic opioids.

FinCEN has previously published resources on the trafficking of fentanyl, fentanyl analogues, and other synthetic opioids and the precursor chemicals and associated manufacturing equipment needed to synthesize these deadly drugs:

• Supplemental Advisory on the Procurement of Precursor Chemicals and Manufacturing Equipment Used for the Synthesis of Illicit Fentanyl and Other Synthetic Opioids (June 2024)
• Advisory to Financial Institutions on Illicit Financial Schemes and Methods Related to the Trafficking of Fentanyl and Other Synthetic Opioids (August 2019)

On Friday, the Department of the Treasury announced that OFAC and the State Department targeted nearly 400 individuals and entities both in Russia and outside its borders—including in Asia, Europe, and the Middle East—whose products and services enable Russia to sustain its war effort and evade sanctions. The United States government will continue to support Ukraine as it defends its independence and hold Russia accountable for its aggression.

For the names and identification information of the designated parties and vessels, see this August 23, 2024, BankersOnline OFAC Update.

The FDIC has issued FIL-59-2024 with guidance intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Vermont affected by the severe storm, flooding, landslides, and mudslides from July 9 – 11, 2024. The initial designated areas include Addison, Caledonia, Chittenden, Essex, Lamoille, Orleans, and Washington Counties. FEMA may change the list of affected counties after damage assessments are completed.