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The FBI has posted a Public Service Announcement warning the public that criminals exploit generative artificial intelligence (AI) to commit fraud on a larger scale which increases the credibility of their schemes. The PSA calls attention to criminals' use of AI-generated text, images, audio, and video in furtherance of their schemes. The FBI's message also includes tips for self-protection.

The FDIC has updated its webpage Questions and Answers Related to the FDIC's Part 328 Final Rule to add several answers to a growing collection of frequently asked questions relating to the updated regulation from stakeholders, including banks, trade associations, tech companies, vendors, and others.

OFAC has posted a Notice announcing that it will retire its RSS feed on January 31, 2025. Email updates on recent updates will continue, and can be subscribed to HERE.

FinCEN has announced it has joined a multi-sector national task force dedicated to the prevention of fraud and scams. The National Task Force on Fraud and Scam Prevention, convened by the Aspen Institute’s Financial Security Program, brings together key stakeholders including the financial services sector, technology companies, consumer advocacy groups, information sharing and analysis centers, and federal government agencies to develop a comprehensive national strategy for combating fraud and scams. Fraud and cybercrime (including fraudulent schemes) are two of FinCEN’s Anti-Money Laundering and Countering the Financing of Terrorism National Priorities.

As part of its role on the Task Force, FinCEN will participate in specific working groups that will develop recommendations to include in the Task Force’s national strategy to combat fraud through cross-sector collaboration and “whole-of-government” support.

The U.S. Department of the Treasury’s Bureau of the Fiscal Service has announced the selection of The Bank of New York Mellon Corporation (“BNY”), a global financial services company, as the financial agent for the Fiscal Service's Direct Express program.

In its press release, Fiscal Service said it selected BNY as the new financial agent for the program after conducting a competitive selection process and evaluating proposals from multiple financial institutions. Based on this review, Fiscal Service determined that BNY’s suite of features and customer service options will enable an evolution in the Direct Express program by providing enhanced efficiency and services tailored to the program’s customer base. With the new financial agent, customers will enjoy rent and other bill payment solutions, virtual cards, cardless ATM access, chat and text customer service, online dispute filing, in-person identity authentication options, and more.

The Federal Reserve Board has reported it has issued an Order of Prohibition barring Shan Hanes, former chief executive officer of Heartland Tri-State Bank, Elkhart, Kansas, for using his position to embezzle $47.1 million of bank funds in a cryptocurrency scheme that led to the bank becoming insolvent and failing in 2023.

The CFPB this morning announced it is has finalized a rule to supervise the largest nonbank companies offering digital funds transfer and payment wallet apps. The rule will help the CFPB to ensure that these companies – specifically those handling more than 50 million transactions per year – follow federal law just like large banks, credit unions, and other financial institutions already supervised by the CFPB. The CFPB estimates that the most widely used apps covered by the rule collectively process over 13 billion consumer payment transactions annually.

The final rule will enable to the CFPB to supervise companies in key areas including:

• Privacy and Surveillance: Large technology companies are collecting vast quantities of data about an individual’s transactions. Federal law allows consumers to opt-out of certain data collection and sharing practices, and also prohibits misrepresentations about data protection practices.
• Errors and Fraud: Under longstanding federal law, consumers have the right to dispute transactions that are incorrect or fraudulent, and financial institutions must take steps to look into them. The CFPB is particularly concerned about how digital payment apps can be used to defraud older adults and active duty servicemembers. Some popular payment apps appear to design their systems to shift disputes to banks, credit unions, and credit card companies, rather than managing them on their own.
• Debanking: Given the volume of payments consumers make through many popular payment apps, consumers can face serious harms when they lose access to their app without notice or when their ability to make or receive payments is disrupted. Consumers have reported concerns to the CFPB about disruptions to their lives due to closures or freezes.

While the CFPB has always had enforcement authority over these companies, today's rule gives the CFPB the authority to conduct proactive examinations to ensure companies are complying with the law in these and other areas.

In the final rule, the CFPB made several significant changes from its initial proposal. The transaction threshold determining which companies require supervision is now substantially higher, at 50 million annual transactions. Given the evolving market for digital currencies, the CFPB also limited the rule's scope to count only transactions conducted in U.S. dollars. The rule, which amends 12 C.F.R. part 1090, will be effective 30 days after publication in the Federal Register.

The FDIC has made its November 2024 updates to its Risk Management Manual of Examination Policies (RMS Manual). The Manual provides FDIC examiners information relating to examination activities and supervisory practices. The FDIC conducts examinations at financial institutions to ensure public confidence in the banking system and to protect the Deposit Insurance Fund. The Manual promotes consistency in examination activities, which center on evaluating an institution’s capital, assets, management, earnings, liquidity, sensitivity to market risk, and adherence to laws and regulations.

This month's updates are found in Section 22.1 — Examination Documentation Modules. The FDIC has added 25 Reference ED Modules to this section.

The CFPB has published its Personal Financial Data Rights Rule at 89 FR 90838 in this morning's Federal Register.

Subject to the outcome of pending litigation against the rule, it will become final on January 17, 2025, with compliance dates for data providers beginning April 1, 2026; April 1, 2027; April 1, 2028; April 1, 2029; or April 1, 2030, based on the criteria set forth in § 1033.121(c).

FinCEN has updated two FAQs related to access to Beneficial Ownership Information. The topics covered are in Section O (Access FAQs), and include FAQ O1 (Access to BOI for authorized recipients) and FAQ O2 (Access to BOI for Federal agencies).

FAQ O1 indicates that access is being offered in five phases. The first four phases will extend the opportunity to request access to Federal and State, local, and Tribal law enforcement partners. The fifth phase, expected to begin in the spring of 2025, will extend the opportunity to request access to financial institutions subject to due diligence requirements under applicable law and their supervisors.