Top Stories

The CFPB issued a "Data Spotlight" on a recent analysis of credit card cash advance fees and interest. The CFPB analyzed cash advance fees after the legalization of sports betting in Kansas and Ohio, as well as cardholder agreements, consumer complaints, and online sports betting platforms. The Bureau found that:

• Issuers that allow consumers to use their credit cards with sportsbooks are largely treating the transactions as cash advances
• Cash advances can incur high fees as a percentage of the transaction amount and start accruing interest from day one
• Credit card use data from Kansas and Ohio suggest that legalizing sports betting corresponded with an increase in cash advance fee incidence
• Disclosures made by credit card issuers about cash advance fees for online betting are not always clear or consistent

The Department of the Treasury has reported that OFAC has sanctioned nine individuals and seven entities that have provided financial and military support to the Democratic People’s Republic of Korea (DPRK). Also, the U.S. Department of State sanctioned three targets related to the DPRK’s ballistic missile program. These actions reflect the DPRK’s escalating provocation and hostile military posturing that exacerbate global tensions and destabilize regional peace and security.

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

The FDIC, Federal Reserve Board, and OCC, as members of the Federal Financial Institutions Examination Council (FFIEC), have jointly released data on small business, small farm, and community development lending during 2023, as required by the Community Reinvestment Act.

The FFIEC also prepared aggregate disclosure statements of small business and small farm lending for all of the metropolitan statistical areas and non-metropolitan counties in the United States and its territories. These statements are available on the FFIEC's website.

• Data tables
• Fact Sheet

The Office of the Comptroller of the Currency has reported the key issues facing the federal banking system in its Semiannual Risk Perspective for Fall 2024.

The OCC highlighted credit, operational, compliance, and market risks, as the key risk themes in the report. Highlights from the report include:

• Commercial credit risk remains moderate and shows signs of stabilizing as risks are better identified, monitored, and controlled.
• Overall retail credit risk is stable. Delinquency and loss rates on residential real estate-secured loans held by banks remain historically low but are increasing. Delinquencies in other retail asset classes, namely credit cards and auto loans, reflect an increasing trend.
• Operational risk is elevated. Banks continue to respond to an evolving and increasingly complex operating environment. Evolving cyber threats by sophisticated malicious actors target the financial services industry and their key service providers.
• From a compliance risk perspective, banks continue to operate in a dynamic banking environment as customers’ needs and preferences related to products, services, and delivery channels evolve.
• Community Reinvestment Act (CRA) related risks remain stable as the OCC continues to assess banks’ CRA performance under the 1995/2021 regulatory framework.
• Regarding market risk, banks net interest margin (NIM) performance has varied across bank asset sizes.

A special topic in the report focuses on the increasing trend in external fraud activity targeting consumers and the federal banking system. The frequency of both traditional and novel, more sophisticated fraud activities targeting customers and banks continues to increase. Banks should maintain sound fraud risk management practices through prudent controls and appropriate fraud monitoring capabilities to identify, investigate, mitigate, and report fraudulent activity. Banks can also support their customers by providing educational information about trending fraud activities and ways to protect themselves.

The CFPB on Monday released a special edition of Supervisory Highlights that focuses on significant unlawful activities identified by CFPB examiners across student loan markets. The report covers violations related to student loan refinancing, private lending and servicing, debt collection, and federal loan servicing.

Student loans represent the second-largest form of U.S. consumer debt at more than $1.7 trillion in total outstanding balances. Within the past year, many student borrowers faced challenges, including as 28 million federal student loan borrowers returned to repayment following the end of the COVID-19 payment pause. The report details illegal practices, including:

• Lenders misleading borrowers and failing to carry out their instructions for refinancing
• Private lenders deceiving borrowers or denying benefits
• Servicers failing to address claims related to school misconduct
• Servicers distributing contracts allowing illegal collection tactics
• Federal loan servicers harming borrowers during return to repayment

The Federal Trade Commission today announced a final rule to prohibit bait-and-switch pricing involving unfair and deceptive fees used to hide total prices in the live-event ticketing and short-term lodging industries.

The final rule specifies that it is an unfair and deceptive practice for businesses to offer, display, or advertise any price of live-event tickets or short-term lodging without clearly, conspicuously and prominently disclosing the total price. The rule also requires businesses to clearly and conspicuously make certain disclosures before a consumer consents to pay. The rule further specifies that it is an unfair and deceptive practice for businesses to misrepresent any fee or charge in any offer, display, or advertisement for live-event tickets or short-term lodging.

The rule, which will add 16 C.F.R. part 464, is to become effective 120 days after its publication in the Federal Register.

The FDIC has released an update to several sections of its Consumer Compliance Examination Manual (CEM). The December 2024 update includes changes in these Chapters:

• Overview of Compliance Examinations (II-1.1): This chapter was updated with technical changes related to supervisory recommendations.
• Review and Analysis (II-5.1): This chapter was updated with technical changes related to supervisory recommendations.
• Documenting the Examination (II-7.1): This chapter was updated with technical changes related to supervisory recommendations.
• Violation Codes (II-14.1): This chapter was with a technical revision to violation code TILA-B 1026.9(g).
• Fair Lending Laws and Regulations (IV-1.1): This chapter was updated with technical changes related to ECOA.
• Equal Credit Opportunity Act (V-7.1): This chapter was updated with technical changes related to ECOA.
• Fair Housing Act (V-8.1): This chapter was updated with technical changes related to ECOA.
• Home Mortgage Disclosure Act (V-9.1): This chapter was updated with technical changes related to supervisory recommendations.
• Unfair, Deceptive, and Abusive Practices — Federal Trade Commission Act/Dodd-Frank Act (VII-1.1): This chapter was updated with technical changes related to ECOA.
• FTC Rule — Preservation of Claims and Defenses (VII-2.1): This chapter was updated with technical revisions.
• Telephone Consumer Protection Act (VIII-5.1): This chapter was updated with technical changes related to supervisory recommendations.
  

The Treasury Department's Office of Foreign Assets Control (OFAC) has announced a $257,690 settlement with C.H. Robinson International Inc. (CHR). CHR agreed to settle its potential civil liability for 82 apparent violations by five of its non-U.S. subsidiaries, which provided freight brokerage or transportation services for shipments in apparent violation of OFAC sanctions on Cuba and Iran. The settlement amount reflects OFAC's determination that the apparent violations were voluntarily self-disclosed and were not egregious.

CHR is a Minnesota-based global transportation and logistics company. Following a series of overseas acquisitions by CHR of freight and logistics firms, between November 2018 and February 2022 five of CHR’s foreign subsidiaries provided freight brokerage or transportation services for 82 shipments, to or from Iran (in two instances), of Iranian- or Cuban-origin goods, or by dealing with an Iranian airline. The vast majority of the apparent violations appear to have occurred because the subsidiaries’ brokerage management systems had not yet been incorporated into CHR’s system or otherwise updated to include the latest sanctions compliance controls and did not screen for potentially violative transactions.

Further details can be found in OFAC's Enforcement Release.

On Friday, the CFPB released its annual report on trends in the residential mortgage lending market. In 2023, there was a significant decline in mortgage lending activities, with loan applications and originations dropping by about a third from 2022. The decline was more prominent in refinancing activity than home purchase, with single-family refinance originations down nearly two-thirds from 2022. Median total loan costs also jumped significantly in 2023, with a higher percentage of borrowers reported having paid discount points than any other year since tracking of the data began.

The report also noted that total loan costs increased faster for Hispanic and Black borrowers than for Asian and non-Hispanic borrowers, and that non-depository institutions continued to increase their share of originations.

• CFPB press release

The FDIC has published [89 FR 101014] a "Sunshine Act" notice of its next Board of Directors meeting, scheduled for 10:00 a.m. EST on Tuesday, December 17, 2024. The meeting will be open to public observation only by webcast. Matters on the agenda for consideration include:

• Proposed 2025 FDIC Operating Budget
• Discussion Draft relating to FDIC Policy regarding the Annunzio-Wylie Anti-Money Laundering Act
• Discussion Draft relating to FDIC Policy on Bank Capital Distributions in Unusual and Exigent Circumstances

The CFPB this morning announced it has finalized its Overdraft Lending: Very Large Financial Institutions Rule, which will apply to banks and credit unions with more than $10 billion in assets. The reforms in the rule will allow large banks three options to manage their overdraft lending program:

• Cap their overdraft fee at $5: Under this simple option, covered banks and credit unions could simply cap their fee at $5, which is the estimated level at which most banks could be able to cover their costs associated with administering a courtesy overdraft program.
• Cap their fee at an amount that covers costs and losses: For banks that wish to offer overdraft as a convenient service rather than as a profit center, the final rule allows financial institutions to set their fee at an amount that covers their costs and losses.
• Disclose the terms of their overdraft loan just like other loans: For financial institutions that wish to profit from overdraft lending, they may do so by complying with the standard requirements governing other loans, like credit cards. This would include giving consumers a choice on whether to open the line of overdraft credit, providing account-opening disclosures that would allow comparison shopping, sending periodic statements, and giving consumers a choice of whether to pay automatically or manually.

The final rule, which will amend Regulations E and Z, is expected to add up to $5 billion in annual overdraft fee savings to consumers, or $225 per household that pays overdraft fees. It will become effective October 1, 2025.

• Executive Summary of the Overdraft Lending: Very Large Financial Institutions rule
• Unofficial Redline of the final rule

The Financial Stability Board (FSB) published today its finalized recommendations to promote greater alignment in data frameworks related to cross-border payments and consistency in the regulation and supervision of bank and non-bank payment service providers.

These recommendations advance key actions from the G20 Roadmap to address legal, supervisory, and regulatory issues in cross-border payments. As part of these efforts and to enhance private sector engagement, the FSB is inviting market stakeholders in cross-border payments to join its Taskforce on Legal, Regulatory, and Supervisory matters (LRS Taskforce).

• Press release

The Treasury Department has reported that OFAC has sanctioned cybersecurity company Sichuan Silence Information Technology Company, Limited, and one of its employees, Guan Tianfeng, both based in the People’s Republic of China, for their roles in the April 2020 compromise of tens of thousands of firewalls worldwide. Many of the victims were U.S. critical infrastructure companies.

For identification information on Sichuan Silence and Guan, see yesterday's BankersOnline OFAC Update.

The CFPB has released its Semi-Annual Report to Congress covering the period October 1, 2023, through March 31, 2024.

The OCC, Federal Reserve Board, and FDIC this morning published [89 FR 99751] a request for comments to inform their review under the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA) of agency regulations to identify outdated or otherwise unnecessary regulatory requirements on insured depository institutions and their holding companies.

This is the third of four such requests for comment on multiple categories of regulations. Today's request seeks comment on regulations in the categories of Rules of Procedure; Safety and Soundness; and Securities. Written comments will be accepted through March 11, 2025.

The IRS has posted a reminder to individuals aged 73 or older of the deadline to take required minimum distributions (RMDs) from individual retirement arrangements (IRAs) and other retirement plans, and highlighted updates to that requirement introduced in the SECURE 2.0 Act.

If an account owner fails to withdraw the full amount of the RMD by the due date, the owner is subject to a 25% excise tax on the amount not withdrawn. The 25% excise tax rate is reduced to 10% if the error is corrected within two years.

IRA trustees or plan administrators must either report the RMD amount to the account owner or offer to calculate it. Each IRA plan’s RMD must be calculated separately, however owners can withdraw the total required amount from one or more accounts of their choice as long as the annual requirement is met. An IRA trustee or plan administrator may calculate the RMD, but the account owner is ultimately responsible for ensuring the correct RMD is taken.

The Department of the Treasury has reported that the EU-U.S. Joint Financial Regulatory Forum took place December 4–5, 2024, with participants exchanging views on topics of mutual interest as part of their regular financial regulatory dialogue. The dialogue was co-chaired by the U.S. Department of the Treasury and the European Commission.

The Forum emphasized close, ongoing U.S. and EU cooperation in a range of areas and focused on seven themes: (1) market developments and financial stability; (2) operational resilience and digital finance; (3) the sharing and financial reporting of financial data; (4) anti-money laundering and countering the financing of terrorism (AML/CFT); (5) sustainable finance; (6) banking and insurance; and (7) capital markets.

Records in the Federal Reserve Board's Community Reinvestment Act evaluations archives show that the Reserve Banks made public 18 evaluations in November. A bank in Harrogate, Tennessee, received a rating of Needs to improve. Thirteen banks received Satisfactory ratings. We congratulate four banks whose evaluations were rated Outstanding:

• 1st Source Bank, South Bend, Indiana
• Commercial and Savings Bank of Millersburg, Ohio, Millersburg, Ohio
• Fall River Five Cents Savings Bank, Fall River, Massachusetts
• Tristate Capital Bank, Pittsburgh, Pennsylvania

The Treasury Department has reported that OFAC has sanctioned one individual and one entity involved in abuses against prisoners held in Houthi-run prisons in Yemen and one individual providing support to Bashar al-Assad, and that the State Department has announced steps to impose visa restrictions on dozens of individuals pursuant to Section 212(a)(3)(C) of the Immigration and Nationality Act, and designated one official under Section 7031(c) of the annual Appropriations Act for involvement in a gross violation of human rights.

Treasury also reported that OFAC has sanctioned 28 individuals and businesses involved in a global gold smuggling and money laundering network based in Zimbabwe, under the authority of Executive Order 13818, which targets perpetrators of serious human rights abuse and corruption around the world.

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

The CFPB has announced an advance notice of proposed rulemaking (ANPR) to gather additional public input on potential amendments to Regulation V, which implements the Fair Credit Reporting Act (FCRA). After gathering public comment, the CFPB intends to issue a proposed rule concerning "coerced debt."

The ANPR asks consumer advocates, credit reporting companies, and the public to comment on:

• The prevalence and extent of harms to people with coerced debt, including through the credit reporting system.
• Evidence regarding the relevance of coerced debt to a survivor’s credit risk.
• Barriers to accessing existing protections under federal or state law for survivors of economic abuse.
• Challenges resulting from coerced debt facing specific populations including survivors of intimate partner violence and gender-based violence, older Americans, and children in foster care.
• Potential documentation or self-attestation requirements for showing that a person’s debt was coerced.

The proposed rulemaking is in response to a petition for rulemaking submitted by the National Consumer Law Center and the Center for Survivor Agency and Justice. Comments will be accepted through March 7, 2025.

• Publication update: Published at 89 FR 100922 on 12/13/2024.

The Federal Trade Commission has published [89 FR 99069] in this morning's Federal Register a final rule amending the Telemarketing Sales Rule to extend the Rule's applicability to inbound telemarketing calls in response to an advertisement through any medium or direct mail solicitation in which technical support products or services are offered for sale.

The amendments will be effective January 9, 2025.

The CFPB has announced it has issued a consent order against Performant Recovery, Inc., a California corporation headquartered in Plantation, Florida, that collected on student loan debt, including from borrowers who had defaulted on Federal Family Education Loan Program (FFELP) loans.

FFELP borrowers who have defaulted have a one-time right to rehabilitate their loans and bring them back into good standing by entering into an agreement and making a series of reasonable and affordable payments. If borrowers entered into loan rehabilitation agreements within 65 days of default, the loan holders did not charge the borrowers collection costs for the rehabilitations and also did not typically pay debt collection agencies any fees for these rehabilitations. However, the Bureau found that, between 2015-2020, Performant used its control over the rehabilitation process to delay borrowers’ loan rehabilitations beyond 65 days so that these borrowers would incur collection costs and Performant would generate fees for itself.

The Bureau found that, when borrowers called Performant with 65 days of default, the company routed these borrowers to specialized agents, who were told by managers that “the objective is to delay as much as possible without getting Performant in trouble.” Instead of filling out rehabilitation forms over the phone as they did with other borrowers, agents told these borrowers that they would need to receive blank forms by postal mail, and typically did not use email, fax, or other methods. Performant agents held up these borrowers’ rehabilitations at every stage. As a manager explained to agents, “[W]e want them to mail all documents. Remember the whole objective is to DELAY, DELAY, DELAY.”

The CFPB's order requires Performant to:

• Stop servicing and collecting on student loans
• Pay a $700,000 penalty to the CFPB’s victims relief fund. The payment will make it possible for the CFPB to potentially use the fund to fully redress borrowers harmed by Performant’s illegal conduct.
  

The Federal Reserve Board has provided a technical clarification that its account access guidelines also apply to excess balance accounts, known as EBAs. An EBA is a limited-purpose account at a Federal Reserve Bank established for maintaining the reserve balances of eligible institutions. An EBA is managed by an agent on behalf of the participating institutions.

The Board's account access guidelines establish transparent, risk-based, and consistent factors for Reserve Banks to use in reviewing requests for access to accounts and services.

The guidance on excess balance accounts is effective upon its publication in the Federal Register, which is expected shortly.

PUBLICATION UPDATE: Published 12/12/2024 at 89 FR 100495.

The Federal Trade Commission has announced it has stopped a scheme that allegedly bilked millions of dollars out of consumers burdened with student loan debt by pretending to be affiliated with the U.S. Department of Education in violation of the FTC’s Impersonation Rule, collecting illegal advance fees, and making other deceptive claims. A federal court temporarily halted the scheme and froze its assets at the request of the Commission.

According to the FTC’s complaint, since at least January 2023, Nevada-based Superior Servicing, LLC and its operator Dennise Merdjanian made telemarketing calls and sent personalized mailers to borrowers falsely claiming that consumers enrolled in defendants’ program could obtain benefits such as loan consolidation, reduced interest rates on their student loans, reduced monthly student loan payments, or loan forgiveness. The operators collected illegal advance fees of up to $899 as an initial payment followed by monthly payments that defendants falsely represented were going towards consumers’ student loan debt.

To convince borrowers that their claims were legitimate, the operators allegedly pretended to “work with” or be affiliated with the Department of Education or its approved loan servicers and, in some instances, even advised consumers to stop making payments to their existing loan servicers. The operators then falsely claimed that they would take over responsibility for servicing consumers’ loans, collect monthly student loan payments for a term of up to 20 years, and said that upon completion of those monthly payments, the consumers’ federal student loan debt would be forgiven. Contrary to Superior Servicing’s false promises, borrowers have reported that they never received loan consolidation, lowered payments, or loan forgiveness, according to the complaint. The FTC noted that at most, and if anything at all, the defendants filled out simple applications for debt relief that are available for free from the Department of Education.

The FTC charged that the scheme’s operators violated the Impersonation Rule by claiming to be affiliated with the Department of Education, as well as the FTC Act’s prohibition on deceptive practices, the Telemarketing Sales Rule, and the Gramm-Leach-Bliley Act.

The Department of Housing and Urban Development has announced that the Federal Housing Administration is extending through April 11, 2025, its foreclosure moratoriums for FHA-insured Single Family Title II forward and Home Equity Conversion Mortgages in Presidentially Declared Major Disaster Areas (PDMDAs) declared as a result of this past summer’s Hurricanes Helene and Milton. This extension provides borrowers affected by these catastrophic events with additional time to access federal, state, or local housing resources; to consult with a HUD-approved housing counselor; and/or to rebuild their homes.

FHA is extending the foreclosure moratoriums for all Hurricanes Helene and Milton PDMDAs, regardless of their declaration date, through April 11, 2025. FHA is also extending the deadline dates for servicers to perform certain legal actions related to foreclosure for an additional 180 days following the end of the foreclosure moratoriums.

On Friday, the Financial Stability Oversight Council unanimously approved its 2024 annual report, which reviews developments in financial markets, identifies vulnerabilities and emerging threats to U.S. financial stability, and makes recommendations to mitigate those vulnerabilities and threats. The report also details the activities of the Council and summarizes significant regulatory developments. The report was developed collaboratively by Council members and their agencies and staffs. Overall, the Council finds that the U.S. financial system remains resilient, though vulnerabilities warrant ongoing vigilance.

The report made recommendations in the following areas:

• Cybersecurity
• Depository institutions
• Third-party service providers
• Commercial real estate credit risk
• Digital assets
• Investment funds

The CFPB on Friday announced it has published an order establishing supervisory authority over Google Payment Corp. While Google Payment Corp. is already subject to CFPB’s enforcement jurisdiction, the CFPB has determined that Google Payment Corp. has met the legal requirements for supervision. The CFPB is making this order public to provide transparency about how it assesses risks using consumer complaints and other factors.

The CFPB's order does not constitute a finding that the entity has engaged in wrongdoing and does not require the CFPB to conduct a supervisory examination.

CNN reported on Friday that Google has filed suit against the CFPB, challenging the Bureau's decision to place Google Payment Corp. under federal supervision. A Google spokesman was quoted as saying "This is a clear case of government overreach involving Google Pay peer-to-peer payments, which never raised risks and is no longer provided in the U.S., and we are challenging it in court.”

The Federal Reserve Board has released results of a survey of senior financial officers at banks about their strategies and practices for managing reserve balances. The Senior Financial Officer Survey is used by the Board to obtain information about banks' reserve balance management strategies and practices, their deposit pricing strategies, their expectations for potential changes in both the size and composition of their balance sheets, and their views regarding Federal Reserve facilities.

The CFPB has announced it has sued Comerica Bank for "systematically failing its 3.4 million Direct Express cardholders — primarily unbanked Americans receiving federal benefits" on Direct Express prepaid debit cards. The CFPB alleges that Comerica deliberately disconnected 24 million customer service calls, impeding cardholders from exercising their rights under the law, charged illegal ATM fees to over 1 million cardholders, and mishandled fraud complaints while providing federal benefits through the Direct Express prepaid debit card program. The CFPB is asking the court to order Comerica to halt these practices, provide refunds to affected customers, and pay civil penalties that would go to the CFPB's victim relief fund.

The Bureau's complaint against Comerica seeks to stop Comerica’s unlawful conduct, to provide redress for harmed borrowers, and the imposition of a civil money penalty, which would be paid into the CFPB’s victims relief fund.

[Editor's Note:The Treasury Department's Bureau of the Fiscal Service recently announced it has selected Bank of New York Mellon Corporation to be the Financial Agent of the Direct Express program for five years starting January 3, 2025.]

The ABA Banking Journal reports a judge at the U.S. District Court for the Eastern District of Texas has issued a preliminary injunction blocking enforcement of the Beneficial Ownership Reporting Rule. The order says the covered companies nationwide do not need to comply with the January 1, 2025, reporting deadline unless the judge or a higher court reverses the order before then.

The lawsuit in question was brought by the National Federation of Independent Business and several of its members. It challenges the constitutionality of the Corporate Transparency Act.

The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) published in today's Federal Register a notice of proposed rulemaking to implement a framework to govern the ASC’s enforcement authority regarding the effectiveness of Appraiser and Appraisal Management Company (AMC) Programs overseen by State Appraiser Regulatory Agencies. The proposed rule would codify the existing compliance review process with modifications. The proposed rule would require an analysis to assess program effectiveness, outline requirements for maintaining effective programs, and authorize the ASC to bring enforcement actions against such agencies that fail to maintain effective programs.

Comments on the proposal will be accepted through February 4, 2025.

The CFPB yesterday announced it is distributing $1.8 billion to 4.3 million consumers charged illegal advance fees or subjected to allegedly deceptive bait-and-switch advertising by a group of credit repair companies including Lexington Law and CreditRepair.com. Together, the payments constitute the largest-ever distribution from the CFPB’s victims relief fund, which is funded by civil penalties paid by companies that violate consumer protection laws.

In August 2023, the CFPB secured a legal judgment against the credit repair conglomerate, after a district court ruled that the companies had violated the Telemarketing Sales Rule’s advance fee prohibition. Under federal law, credit repair companies that engage in telemarketing cannot collect fees until they provide documentation showing they have achieved the promised results for consumers, at least six months after the results were achieved.

Following the district court’s ruling, the companies filed for Chapter 11 bankruptcy protection, shuttering approximately 80 percent of their business operations, including their telemarketing call centers. The CFPB’s $1.8 billion distribution to consumers harmed by the credit repair companies is a result of the agency’s enforcement action.

• CFPB 12/5/2024 Blog article for affected consumers: "CreditRepair.com and Lexington Law refund checks: What you need to know"

The CFPB has reported it has taken action against student lender Climb Credit and its investors, including 1/0 (“One Zero”), filing a proposed final judgment and order that, if entered by the court, will require the companies to stop making representations in their advertising about the quality of the training programs at their partner schools and graduates’ hiring rates and salaries.

The CFPB sued Climb Credit in October 2024 [see earlier Top Story] for offering loans for educational programs that often were not vetted for quality and job placement success or that failed the vetting, despite Climb Credit making representations to the contrary. The CFPB's complaint also names wholly owned subsidiaries Climb Investco and Climb GS Loan Fund. If entered, the final judgment and order will require the defendants to stop making certain representations about their educational offerings in their advertising and pay a $950,000 civil money penalty into the CFPB’s victims relief fund. A judgment for redress of $6.618 million will be suspended based on a demonstrated inability to pay.

The CFPB yesterday announced it has taken action to permanently ban Student Loan Pro and Judith Noh, its owner, from offering or providing consumer financial products. The CFPB alleges that Student Loan Pro and Noh violated federal law by charging borrowers upfront fees to file paperwork on their behalf to access free debt-relief programs available to consumers with federal student loans. The CFPB’s stipulated judgment, if entered by the court, would also require Noh to take steps to dissolve Student Loan Pro and a related business, FNZA Marketing, LLC, and pay a civil money penalty.

According to the CFPB's press release, Student Loan Pro is a California sole proprietorship formed in 2015 by Noh that telemarketed debt-relief services for consumers with federal student loan debt. The CFPB filed a lawsuit in 2021 alleging that Student Loan Pro, Noh, and Syed Gilani—Student Loan Pro’s manager and owner-in-fact—violated the Telemarketing Sales Rule by requesting and receiving advance fees, initially running as high as $795, for its debt-relief services. The company’s services included filing paperwork on consumers’ behalf to apply for programs that were already available to borrowers for free from the United States Department of Education.

The Federal Trade Commission's Telemarketing Sales Rule (16 C.F.R. part 310) prohibits sellers and telemarketers from requesting or receiving advance fees for any debt-relief service before renegotiating, settling, reducing, or otherwise altering the terms of at least one of a consumer’s debts, and before a consumer has made at least one payment on such altered debt. Student Loan Pro’s advance-fee violations cost approximately 3,300 consumers nearly $3.5 million in advance fees.

• CFPB Complaint
• Proposed stipulated judgment and order

The Treasury Department has reported that OFAC has sanctioned five individuals and four entities — including Pullman Global Solutions LLC, a Wyoming-based entity that is owned 50 percent or more by a sanctioned individual — that are associated with or leverage the TGR Group, a sprawling international network of businesses and employees that have facilitated significant sanctions circumvention on behalf of Russian elites.

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

Yesterday, the Federal Reserve Board, CFPB, FDIC, OCC, FinCEN, NCUA and state financial regulators issued a joint press release to announce a joint Statement on Elder Financial Exploitation.

The eleven-page Statement provides supervised institutions with examples of risk management and other practices that may be effective in combating such exploitation.

• FDIC FIL-83-2024
• OCC Bulletin 2024-34

The Federal Reserve Board has announced it has issued a consent Cease and Desist Order to First of Murphysboro Corp., Murphysboro, Illinois (FMC), a registered bank holding company that owns The First Bank and Trust Company of Murphysboro, after a recent inspection of FMC by the Federal Reserve Bank of St. Louis identified deficiencies with respect to the operations of FMC, including FMC's ability to serve as a source of strength to the bank, and with respect to compliance with rules related to affiliate transactions.

FinCEN has published [89 FR 96708] an invitation to the public to nominate financial institutions, trade groups, and non-Federal regulators or law enforcement agencies for membership in the Bank Secrecy Act Advisory Group (BSAAG). New members will be selected for three-year membership terms.

BSAAG membership is open to financial institutions subject to the BSA, trade groups that represent financial institutions subject to the BSA, and federal and non-federal regulators and law enforcement agencies that are located within the United States. The BSAAG is the means by which the Treasury receives advice on the reporting requirements of the Bank Secrecy Act (BSA) and informs private sector representatives on how the information they provide is used.

Nominations must be emailed to BSAAG@fincen.gov, and received by January 6, 2025.

The OCC has issued Bulletin 2024-33 announcing it has issued version 1.1 of its “Unfair or Deceptive Acts or Practices and Unfair, Deceptive, or Abusive Acts or Practices” booklet of the Comptroller’s Handbook. The booklet contains information for examiners regarding supervision of a bank’s practices related to section 5 of the Federal Trade Commission Act, which prohibits banks from engaging in unfair or deceptive acts or practices (UDAP), and sections 1031 and 1036 of the Dodd-Frank Act, which prohibit unfair, deceptive, or abusive acts or practices (UDAAP).

The updated booklet—

• provides further clarity regarding sound risk management practices and guidance to examiners regarding overdraft services.
• incorporates updates from the Consumer Financial Protection Bureau regarding data protection and information security.
• includes an updated version of the “Appendix B: UDAP and UDAAP Risk Indicators.”
• reflects OCC and interagency issuances that have been published or rescinded since June 2020.
• includes other minor updates for general clarity.

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 released its December 2024 list of banks examined for CRA compliance. This month's list includes 65 institutions whose most recent CRA evaluations have been made public. CRA evaluations are assigned one of four ratings: Outstanding, Satisfactory, Needs to Improve, or Substantial Non-compliance.

The December 2024 list includes 60 banks whose evaluations were rated Satisfactory. Two banks — one in Brentwood, Tennessee, and one in New York, New York — were rated "Needs to Improve.

We congratulate three institutions whose evaluations were rated Outstanding:

• Bank of Wiggins, Wiggins, Mississippi
• Liberty Bank, Middletown, Connecticut
• Waukesha State Bank, Waukesha, Wisconsin

The Treasury Department yesterday announced that the U.S. is imposing sanctions on 35 entities and vessels that play a critical role in transporting illicit Iranian petroleum to foreign markets. This action imposes additional costs on Iran’s petroleum sector following Iran’s attack against Israel on October 1, 2024, as well as Iran’s announced nuclear escalations. Petroleum revenues provide the Iranian regime with the resources to fund its nuclear program, develop advanced drones and missiles, and provide ongoing financial and material support for the terrorist activities of its regional proxies.

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

The FDIC, OCC, and Federal Reserve Board have issued a joint press release to announce their third notice requesting comment to reduce regulatory burden. The Economic Growth and Regulatory Paperwork Reduction Act of 1996 requires the Federal Financial Institutions Examination Council and federal bank regulatory agencies to review their regulations at least once every 10 years to identify outdated or otherwise unnecessary regulatory requirements for their supervised institutions.

To facilitate this review, the agencies divided their regulations into 12 categories and are now soliciting comments on their regulations for three categories: Rules of Procedure, Safety and Soundness, and Securities. The public has 90 days from publication of the notice in the Federal Register to comment on the relevant regulations.

The agencies will request comment on regulations in the remaining categories in 2025, asking the public to identify the regulations they believe are outdated, unnecessary, or unduly burdensome.

Yesterday, the Treasury Department reported that OFAC had sanctioned three former Government of Uzbekistan officials who were involved in human trafficking and gender-based violence. All three individuals were designated under the authority of Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse around the world.

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

The OCC has released a list of 19 OCC-supervised financial institutions whose Community Reinvestment Act performance evaluations became public during November. The list includes 16 institutions that received evaluation ratings of "Satisfactory," and the following three whom we congratulate for receiving "Outstanding" ratings:

• Evergreen Federal Bank, Grants Pass, Oregon
• FNC Bank, National Association, Brookville, Indiana
• Santander Bank, National Association, Wilmington, Delaware

The Consumer Financial Protection Bureau this morning proposed a new rule to rein in data brokers that sell Americans' sensitive personal and financial information. The proposed rule would limit the sale of personal identifiers like Social Security Numbers and phone numbers collected by certain companies and make sure that people’s financial data such as income is only shared for legitimate purposes, like facilitating a mortgage approval, and not sold to scammers targeting those in financial distress. The proposal would make clear that when data brokers sell certain sensitive consumer information they are "consumer reporting agencies" under the Fair Credit Reporting Act (FCRA), requiring them to comply with accuracy requirements, provide consumers access to their information, and maintain safeguards against misuse.

The proposed rule would:

• Treat data brokers just like credit bureaus and background check companies: Companies that sell data about income or financial tier, credit history, credit score, or debt payments would be considered consumer reporting agencies required to comply with the FCRA, regardless of how the information is used.
• Protect consumers' personal identifiers from abuse and misuse: When consumer reporting agencies collect information like names, addresses, or ages for credit reports, any subsequent sale of that information would be covered by the FCRA's protections.
• Require clear consumer consent for data sharing: Under the proposed rule, companies relying on consumers’ consent to obtain or share a consumer’s credit report would need separate, explicit authorization to do so, rather than burying permissions in fine print.

Comments on the proposal will be accepted through March 3, 2025.

• Fact Sheet on the proposed rule
• Director Chopra's remarks on the proposal
• Proposed rule
• Press release
• Publication update: Published at 89 FR 101402 on 12/13/2024

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.

The OCC, Federal Reserve Board, and FDIC have jointly published [89 FR 95786] in today's Federal Register their collective annual report to congressional committees describing differences among the accounting and capital standards used by the agencies for insured depository institutions.

As of September 30, 2024, the agencies have not identified any material differences among the agencies' accounting standards applicable to institutions.

With regard to differences in capital requirements, in 2013 the agencies revised the risk-based and leverage capital rule for institutions (capital rule) which harmonized the agencies' capital rule in a comprehensive manner. Since 2013, the agencies have revised the capital rule on several occasions, further reducing the number of differences in the agencies' capital rule. Today, only a few differences remain, which are statutorily mandated for certain categories of institutions, or which reflect certain technical, generally nonmaterial differences among the agencies' capital rule. No new material differences were identified in the capital standards applicable to institutions in this report compared to the previous report submitted by the agencies.

The NCUA has announced it issued a consent order of prohibition in November against Daniel Garza, a former teller with Alhambra Credit Union, Phoenix, Arizona, after a finding that he performed numerous unauthorized cash withdrawals from Alhambra Credit Union member accounts, resulting in a lost of $14,900, and stole $7,597 from his teller cash drawer.

The FDIC has posted its CRA Examinations Schedules for the first quarter and second quarter of 2025. The schedules can be sorted by location, bank name, and other criteria.

There are 238 evaluations scheduled for the first quarter, and 210 for the second quarter.