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The FDIC has issued FIL-56-2024 to alert financial institutions it has updated its Questions and Answers page for the final rule governing FDIC Official Signs and Advertising Requirements, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC Name or Logo (part 328). The Q&As provide clarifying information on the final rule to support stakeholders in the implementation of part 328.

The Q&As cover key implementation topics that include, for example, the placement and display of the official digital sign and non-deposit sign, use of the advertising statement on various deposit-taking channels on websites, mobile apps, ATMs, and social media, as well as information on technical assistance support, such as where to obtain downloadable versions of the official digital sign.

Yesterday, the OCC announced the release of its annual update to the Bank Accounting Advisory Service (BAAS).

The BAAS contains staff responses to frequently asked questions from the banking industry and bank examiners on a variety of accounting topics and promotes consistent application of accounting standards and regulatory reporting among national banks and federal savings associations.

This edition of the BAAS revises certain content for general clarity and also removes superseded content. The updates do not alter the OCC Office of the Chief Accountant’s prior conclusions or interpretations.

The BAAS does not represent rules or regulations of the OCC. Rather, it represents the OCC Office of the Chief Accountant’s interpretations of generally accepted accounting principles and regulatory guidance based on the facts and circumstances presented.

The Treasury Department has reported that OFAC has sanctioned several companies, individuals, and vessels for their involvement in the shipment of Iranian commodities, including oil and liquefied petroleum gas, to Yemen and the United Arab Emirates on behalf of the network of Iran-based, Islamic Revolutionary Guard Corps-Qods Force-backed Houthi financial official Sa’id al-Jamal. OFAC also updated the Specially Designated Nationals and Blocked Persons List entry for the sanctioned vessel ARTURA (IMO: 9150365), which was responsible for shipping commodities for Sa’id al-Jamal, to reflect the changing of its name to OHAR.

For the names and identification information of the designated parties, see this August 15, 2024, BankersOnline OFAC Update.

The White House has issued a Fact Sheet on a new administration effort to address "hassles that waste Americans’ time and money."

Among the initiatives listed in the Fact Sheet, there are two that could affect banks. The CFPB will initial a rulemaking to require businesses under its jurisdiction to provide consumers direct, one-button access to a live human being instead of being forced to listen to a series of long messages and menu options. The Bureau will also issue rules or guidance to crack down on ineffective and time-wasting chatbots used by some banks and other financial institutions in lieu of customer service. The CFPB will identify when the use of automated chatbots or AI voice recordings is unlawful, including in situations in which customers are led to believe they are speaking with a human being.

The FDIC has issued FIL-55-2024 to notify FDIC-supervised institutions of an amendment of the U.S. Department of Labor’s (DOL) Prohibited Transaction Class Exemption rule (PTE 84-14) for Qualified Professional Asset Manager (QPAM) exemptions. The QPAM Exemption (hereafter, PTE 84-14) provides broad relief for employee benefit plan and individual retirement account transactions that would otherwise be prohibited by Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA) and Title II of ERISA, as codified in the Internal Revenue Code of 1986, as amended, as long as the transactions involve a QPAM. Under the prior rule, QPAMs did not need to notify the DOL that they were relying on the Exemption. However, under the newly amended rule, a one-time notice is now required in order to continue to rely on the Exemption, provided certain conditions are met.

The revised DOL QPAM Exemption PTE 84-14 was published [89 FR 23090] in the Federal Register on April 3, 2024, and became effective June 17, 2024. Among other things, PTE 84-14 will require institutions relying on the exemption to:

• Notify DOL of their intent to rely upon the Exemption. Each QPAM that relies upon the Exemption must report its legal name (and any name the QPAM may be operating under) by email to the DOL at QPAM@dol.gov within an initial 90-day period from the date the Exemption became effective, with an additional 90-day period to cure inadvertent failures to report;
• Meet the adjusted QPAM asset management and equity thresholds, which will phase in through incremental changes in 2024, 2027, and 2030;
• Become familiar with Section I(g)(3)’s expanded list of types of misconduct and entities that may cause ineligibility for the QPAM exemption;
• Comply with the new recordkeeping requirements in PTE 84-14 section VI(u), which would require maintaining records for six years demonstrating compliance with this exemption; and
• Request any individual exemptions in case a bank becomes ineligible or anticipates becoming ineligible under the new PTE 84-14 section I(k).

Generally, banks have until September 24, 2024, to notify DOL of their intent to rely upon the Exemption; see the exemption amendment to PTE 84-14 for additional information.

• Fact Sheet

OTC Link LLC, a New York-based broker-dealer, has agreed to pay $1.19 million to settle SEC charges that it failed to file numerous reports of suspicious financial transactions (SARs) for a period of more than three years, according to an SEC news release.

The SEC’s order finds that, from March 2020 through May 2023, OTC Link failed to adopt or implement reasonably designed anti-money laundering (AML) policies and procedures to surveil transactions conducted through its three alternative trading systems (ATSs) for possible red flags of suspicious activity. As a result, OTC Link did not file a single SAR over this time period. The three ATSs are used by broker-dealers on a daily basis to execute or facilitate tens of thousands of transactions in over-the-counter (OTC) securities, many of which are considered microcap or penny stock securities.

Without admitting or denying the SEC’s findings, OTC Link agreed to a censure and a cease-and-desist order in addition to the $1.19 million penalty. The SEC’s order also directs OTC Link to continue its engagement of a compliance consultant to review and recommend changes to the firm’s AML policies and procedures.

FinCEN has published in today's Federal Register three notices and requests for comment on proposals to renew, without change, certain recordkeeping requirements. Comments on each of the notices will be accepted through October 15, 2024.

• Additional Records to be Made and Retained by Dealers in Foreign Exchange and Additional Records to be Made and Retained by Brokers or Dealers in Securities (89 FR 65980)
• Anti-Money Laundering Program Requirements for Casinos (89 FR 65977)
• Records to be Made and Retained by Financial Institutions, Banks, and Providers and Sellers of Prepaid Access (89 FR 65971)

On Friday, the Treasury Department reported that OFAC has acted against 19 individuals, 14 entities, and one aircraft under Belarus-related Executive Order 14038. This action targets persons involved in supporting Russia’s war in Ukraine through military resource production and transshipment of goods to Russia, sanctions evasion on behalf of Belarusian defense entities, and revenue generation for Belarusian oligarchs in Alyaksandr Lukashenka’s inner circle. OFAC concurrently designated five of these targets—three individuals and two entities—under Russia-related Executive Order 14024.

For identification information on the designated individuals, entities, and aircraft, see BankersOnline’s August 9, 2024, OFAC Update.

The FDIC has issued Financial Institution Letter FIL-53-2024, "Classification of Interactive Teller Machines as Domestic Branches or Remote Service Units."

Interactive Teller Machine (ITM) technology has become increasingly sophisticated in recent years. State nonmember banks have sought guidance from the FDIC regarding whether the proposed use of an ITM at a location other than an established branch facility would require the filing of a domestic branch application, or would qualify for the RSU exclusion to the definition of domestic branch (meaning no branch application would be necessary). ITMs generally resemble automated teller machines but allow customers to interact with live tellers to complete a variety of banking transactions.

The FDIC would not consider an ITM established by a state nonmember bank to be a “domestic branch” subject to FDIC approval under section 18(d) of the FDI Act under the following circumstances:

• The ITM is an automated, unstaffed banking facility owned or operated by, or operated exclusively for, the bank, which is equipped to enable existing customers to initiate an interactive session with remotely located bank personnel;
• State nonmember banks may also provide access to ITM facilities to non-customers as long as the ITM services available to non-customers are limited to the same functionality typically provided by an Automated Teller Machine (ATM) to non-customers (e.g., withdrawal of cash) and such users are unable to engage a live remote teller to remotely perform core banking functions for the customer; and,
• To the extent that bank personnel have the ability to remotely assist the customer with the operation of the ITM to perform core banking functions, customers must also be able to perform such transactions without the involvement of bank personnel and must have the sole discretion to initiate and terminate interactive sessions with bank personnel.

ITMs that operate outside of these parameters may require a branch application.

The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) has announced the launch of a public service announcement (PSA) campaign as part of its ongoing efforts to educate the small business community about new beneficial ownership reporting requirements. To directly reach business owners, educate stakeholders about these reporting requirements, and encourage compliance, television and radio PSAs are now running nationwide in tandem with digital and print ads.