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The FDIC yesterday issued Financial Institution Letter FIL-39-2024 with information and Supplemental Instructions related to the Call Report for the June 30, 2024, report date and guidance on certain reporting issues.

With certain exceptions, completed Call Reports must be received by Tuesday, July 30, 2024.

Yesterday, FinCEN released a supplemental alert (FIN-2024-Alert002), highlighting five additional red flags regarding the financing of Israeli extremist settler violence against Palestinians in the West Bank.

FinCEN issued an alert (FIN-2024-Alert001) on February 1, 2024, to financial institutions related to the financing of Israeli extremist settler violence against Palestinians in the West Bank. This supplemental alert provides additional red flags to assist U.S. financial institutions in identifying and reporting suspicious activity related to the financing of this violence. Additionally, this alert requests that financial institutions continue to use the existing SAR code (FIN-2024-WBEXTREMISM) when submitting SARs specific to the financing of Israeli extremist settler violence in the West Bank and reminds financial institutions of their Bank Secrecy Act (BSA) reporting obligations.

Yesterday, the U.S. Department of State reported it has imposed sanctions on three individuals and five entities under Executive Order 14115 for being involved in violence or threats of violence targeting civilians, seizure or dispossession of property by private actors, or actions that threaten the peace, stability and security of the West Bank; or being owned or controlled by an individual designated under that order.

For the names and identification information of the designated parties, see this July 11, 2024, BankersOnline OFAC Update.

The CFPB yesterday announced it has taken action against repeat offender Fifth Third Bank for a range of illegal activities that would result in the bank paying $20 million in penalties in addition to paying redress to approximately 35,000 harmed consumers, including about 1,000 who had their cars repossessed. Specifically, the CFPB is ordering Fifth Third Bank to pay a $5 million penalty for forcing vehicle insurance onto borrowers who had coverage. The CFPB also filed a proposed court order that would require Fifth Third Bank to pay a $15 million penalty for opening fake accounts in the names of its customers. The proposed court order bans Fifth Third Bank from setting employee sales goals that incentivize fraudulently opening accounts.

For further information on yesterday's CFPB actions against Fifth Third, see BankersOnline's Penalty page.

In 2015, the CFPB took two actions against the bank – one for discriminatory auto loan pricing, which was a joint CFPB and U.S. Department of Justice action, and the other for illegal credit card practices. For the discriminatory auto loan pricing action, Fifth Third Bank was ordered to pay $18 million to harmed Black and Hispanic borrowers. For the illegal credit card practices, the bank was ordered to pay $3 million to harmed consumers and a $500,000 penalty.

FinCEN has updated its Beneficial Ownership Information Frequently Asked Questions, adding three new Reporting Company questions (questions C.12 – C.14), and one new Beneficial Owner question (question D.17).

In related news, FinCEN has posted an alert on its Beneficial Ownership Information webpage concerning fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act.

OFAC has issued OFAC Guidance: Production Submission Standards, updating its former delivery standards. The new document provides technical and general guidance to persons submitting material to OFAC and applies primarily to persons providing responses to administrative subpoenas, requests for information, disclosures, and especially for submissions that may entail voluminous documentation (e.g., more than 100 pages).

On Wednesday, FinCEN 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), issued a public statement at the conclusion of its plenary meeting last month highlighting the growing financial connectivity of the Democratic People’s Republic of Korea (DPRK) with the international financial system, and reiterating the FATF’s concerns over the DPRK’s continued failure to address the significant deficiencies in its AML/CFT regime and the serious threats posed by the DPRK’s illicit activities related to the proliferation and financing of weapons of mass destruction. In order to protect the international financial system, the FATF continues to urge all jurisdictions to remain vigilant to these risks and calls for renewed implementation and enforcement of countermeasures against the DPRK.

The FATF also updated its lists of jurisdictions with strategic AML/CFT/CPF deficiencies. 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 June 28, 2024, the FATF added Monaco and Venezuela to its list of Jurisdictions Under Increased Monitoring and also removed Jamaica and Türkiye from the list.

The FATF’s list of High-Risk Jurisdictions Subject to a Call for Action remains the same, with Iran, DPRK, and Burma subject to calls for action. Iran and DPRK are still subject to the FATF’s countermeasures, while Burma is still subject to the application of enhanced due diligence, but not countermeasures.

The CFPB yesterday announced publication of an edition of its Supervisory Highlights sharing key findings from recent examinations of auto and student loan servicing companies, debt collectors, and other financial services providers. The report also highlights consumer complaints about medical payment products and identifies concerns with providers preventing access to deposit and prepaid account funds.

On Monday, the Federal Reserve Board announced it had fined Silvergate Capital Corporation and Silvergate Bank $43 million for deficiencies in Silvergate's monitoring of transactions in compliance with anti-money laundering laws.

The action was taken in coordination with an action by the Department of Financial Protection and Innovation of the State of California, the state supervisor of Silvergate. The penalties announced by the Board and state total $63 million. The U.S. Securities and Exchange Commission separately announced a penalty against Silvergate Capital Corporation.

Silvergate separately announced last year that it was voluntarily winding down its operations, and has now paid back all deposits to its customers.

• Consent order of assessment of civil money penalty

The NCUA has announced its barring of three individuals from participating in the affairs of any federally insured depository institution.

• Tracy Mikulencak, a former employee of A+ Federal Credit Union, Austin, Texas, agreed to the issuance of a prohibition order following a finding that she fraudulently took funds out of her own teller drawer, the Georgetown branch’s vault, and member accounts, defrauding the credit union and its members of $325,708.
• Javier DeJesus Narciso, a former employee of Merced School Employees Federal Credit Union, Merced, California, was issued a prohibition notice based on his conviction on one count of grad theft and embezzlement in connection with his employment
• Philip Brian Topping, a former employee of New Pilgrim Federal Credit Union, Birmingham, Alabama, was issued a prohibition notice based on his conviction on on one count of theft and embezzlement in connection with his employment