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Yesterday, the Treasury Department reported that OFAC has designated three individuals and one sham charity that are prominent international financial supporters of Hamas, as well as one Hamas-controlled financial institution in Gaza. OFAC also designated a longstanding Hamas supporter and nine of his businesses. These actors play critical roles in external fundraising for Hamas, often under the guise of charitable work, that finance the group’s terrorist activities. Yesterday’s action, which was taken under the counterterrorism authority in Executive Order 13224, highlights the abuse of the non-profit organization (NPO) sector by terrorist financiers through the use of sham charities to generate revenue.

For the names and identification information of the designated parties, see yesterday's BankersOnline OFAC Update.

Yesterday, the OCC reported it had issued a proclamation allowing national banks, federal savings associations, and federal branches and agencies of foreign banks to close offices in areas of Florida affected by Hurricane Milton.

In issuing the proclamation, the OCC expects that only those bank offices directly affected by potentially unsafe conditions will close. Those offices should make every effort to reopen as quickly as possible to address the banking needs of their customers.

• OCC Bulletin 2012-28, Supervisory Guidance on Natural Disasters and Other Emergency Conditions

FinCEN has posted additions and updates to its FAQ page on the Beneficial Ownership Information Reporting requirements. Updated and added questions are dated October 3, 2024.

The Federal Reserve Board has released two enforcement actions.

The Treasury Department yesterday reported that OFAC designated one individual and three companies that have facilitated weapons procurement and smuggling operations for Ansarallah, commonly known as the Houthis. This action targets key procurement operatives and suppliers located in Iran and the People’s Republic of China (PRC) that have enabled the Houthis to acquire dual-use materials and components needed to manufacture, maintain, and deploy an arsenal of advanced missiles and unmanned aerial vehicles (UAVs) against U.S. and allied interests.

Additionally, OFAC designated one entity and two vessels linked with illicit Houthi and Iranian commercial shipments, including one that has transported shipments for Houthi financial official Sa’id al-Jamal and an affiliate of Iran’s Armed Forces General Staff.

For the names and identification information of the designated individuals, entities and vessels, see yesterday's BankersOnline OFAC Update.

The FDIC, Federal Reserve Board, NCUA, OCC and state financial regulators have issued an interagency statement on supervisory practices regarding financial institutions affected by Hurricane Helene. These agencies recognize the serious impact of Hurricane Helene on the customers and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision. The agencies encourage institutions operating in the affected areas to meet the financial services needs of their communities.

The statement addressed agency views on lending, temporary facilities, publishing requirements, regulatory reporting requirements, and potential CRA consideration for certain financial institutions' efforts.

For more information, refer to the Interagency Supervisory Examiner Guidance for Institutions Affected by a Major Disaster, which is available as follows:

• State Financial Regulators
• FDIC
• FRB
• OCC
• NCUA

The FDIC yesterday issued FIL-70-2024 with guidance to help financial institutions and facilitate recovery in areas affected by Hurricane Helene in Florida, Georgia, North Carolina, and South Carolina, on September 23, 2024, and continuing.

The OCC has released its bank supervision operating plan for fiscal year (FY) 2025. The plan outlines the OCC’s supervision priorities and objectives for the year. It also facilitates the implementation of supervisory strategies for individual national banks, federal savings associations, federal branches and agencies of foreign banking organizations, and third-party service providers subject to OCC examination. OCC staff uses this plan to guide its supervisory priorities, planning, and resource allocations.

Heightened focus areas include:

• Financial
  • Credit
  • Allowance for credit losses
  • Asset and liability management
  • Capital
  • Climate-related financial risks for banks with over $100 billion in total consolidated assets
• Operational
  • Cybersecurity
  • Enterprise change management
  • Operations
  • Third-party risks
  • Payments
• Compliance
  • Bank Secrecy Act/anti-money laundering/countering the financing of terrorism and Office of Foreign Assets Control
  • Consumer compliance
  • Community Reinvestment Act
  • Fair lending

The Treasury Department yesterday announced that OFAC was designating Hilltop Youth, a violent extremist group that has repeatedly attacked Palestinians and destroyed Palestinian homes and property in the West Bank.

The Treasury Department alsoreported that OFAC was designating seven individuals and two entities associated with the Russia-based cybercriminal group Evil Corp, in a tri-lateral action with the United Kingdom’s Foreign, Commonwealth & Development Office (FCDO) and Australia’s Department of Foreign Affairs and Trade (DFAT). Additionally, the U.S. Department of Justice has unsealed an indictment charging one Evil Corp member in connection with his use of BitPaymer ransomware targeting victims in the United States.

For identification information on the sanctioned individuals and entities, see BankersOnline’s October 1, 2024, OFAC Update.

The Securities and Exchange Commission has announced charges against registered broker-dealer TD Securities (USA) LLC for manipulating the U.S. Treasury cash securities market through an illicit trading strategy known as spoofing. The bank was also charged for failing to supervise the then-head of its U.S. Treasuries trading desk, who allegedly made hundreds of illegal trades over a 13-month period.

According to the SEC's order, between April 2018 and May 2019, the former TD Securities trader spoofed the U.S. Treasury cash securities market by entering orders on one side of the market that he had no intention of executing (herein, non-bona fide orders), so he could obtain more favorable execution prices on bona fide orders he was entering simultaneously on the other side of the market. After the bona fide orders were filled, resulting in profits to TD Securities, the trader allegedly then canceled the non-bona fide orders. The SEC’s order also finds that TD Securities lacked adequate controls and that it failed to take reasonable steps to scrutinize the trader after receiving warnings of his potentially irregular trading activity.

TD Securities consented to the entry of the SEC’s order finding that it violated an antifraud provision of the federal securities laws and failed to reasonably supervise the trader. TD Securities was further ordered to cease and desist from future violations of the relevant antifraud provision, was censured, and was ordered to pay disgorgement of $400,000, prejudgment interest, and a civil penalty of $6.5 million. In a related matter, TD Securities has entered into a deferred prosecution agreement with the U.S. Department of Justice and has agreed to pay a total monetary sanction of more than $15 million as part of that agreement, of which $400,000 will be credited by disgorgement to the SEC. TD Securities has separately agreed to pay a $6 million fine to the Financial Industry Regulatory Authority to resolve related charges.