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The FDIC has issued FIL-33-2024 with guidance intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Mississippi — Hancock, Hinds, Humphreys, Madison, Neshoba, and Scott Counties — affected by severe storms, straight-line winds, tornadoes, and flooding from April 8 to April 11, 2024.

The Federal Housing Finance Agency (FHFA) on June 11, 2024, issued a request for input on the proposed 2025-2027 Underserved Markets Plans submitted by Fannie Mae and Freddie Mac (the Enterprises) under the Duty to Serve (DTS) program. The proposed Plans cover the period from January 1, 2025, to December 31, 2027.

The FHFA issued a final rule in 2016 that implemented the DTS provisions of the Housing and Economic Recovery Act of 2008. The statute requires the Enterprises to serve three specified underserved markets — manufactured housing, affordable housing preservation, and rural housing — by increasing the liquidity of mortgage financing for very low-, low-, and moderate-income families in those markets.

The FHFA invites interested parties to provide written input, feedback, and information on all aspects of the proposed Plans by August 12, 2024.

• Fannie Mae's proposed 2025-2027 Underserved Markets Plan
• Freddie Mac's proposed 2025-2027 Underserved Markets Plan

On June 11, the CFPB announced a proposed rule [published in the Federal Register at 89 FR 51682 on 6/18/2024] that would remove medical bills from most credit reports, increase privacy protections, help to increase credit scores and loan approvals, and prevent debt collectors from using the credit reporting system to coerce people to pay. The proposal would stop credit reporting companies from sharing medical debts with lenders and prohibit lenders from making lending decisions based on medical information. The proposed rule is part of the CFPB’s efforts to address the burden of medical debt and coercive credit reporting practices.

In 2003, Congress restricted lenders from obtaining or using medical information, including information about debts, through the Fair and Accurate Credit Transactions Act. However, federal agencies subsequently issued a special regulatory exception to allow creditors to use medical debts in their credit decisions. The CFPB is proposing to close the regulatory loophole that has kept vast amounts of medical debt information in the credit reporting system. The proposed rule would help ensure that medical information does not unjustly damage credit scores, and would help keep debt collectors from coercing payments for inaccurate or false medical bills.

Specifically, the proposed rule, if finalized would:

• Eliminate the special medical debt exception
• Establish guardrails for credit reporting companies
• Ban repossession of medical devices

Comments on the CFPB's proposal will be accepted through August 12, 2024. The CFPB proposes to make the final rule, when issued, effective 60 days after it is published in the Federal Register.

• Unofficial redline of the proposed rule amendments to Regulation V
• Fast Facts on the proposal

The OCC has issued Bulletin 2024-13 announcing version 2.0 of the "Retail Nondeposit Investment Products" booklet of the Comptroller's Handbook. This booklet discusses risks and risk management practices associated with the recommendation or sale of nondeposit investment products to retail customers. This booklet also provides examiners with a framework for evaluating a bank’s retail nondeposit investment product program.

The revised booklet replaces version 1.0 of the booklet with the same title issued January 2015. Also rescinded is OCC Bulletin 2015-2, “Retail Nondeposit Investment Products: Revised Comptroller's Handbook Booklet and Rescissions.”

The revised booklet—

• incorporates significant regulatory changes adopted in the U.S. Securities and Exchange Commission’s Regulation Best Interest that may relate to banks' securities activities
• reflects OCC and interagency issuances that have been published or rescinded since January 2015
• provides further clarity regarding sound risk management practices and guidance to examiners
• includes other minor updates for general clarity

On June 11, the Treasury Department announced that OFAC has sanctioned members of one of Guyana’s wealthiest families, Nazar Mohamed and his son, Azruddin Mohamed, their company, Mohamed’s Enterprise, and a Guyanese government official, Mae Thomas, for their roles in public corruption in Guyana. Additionally, OFAC designated two other entities, Hadi’s World and Team Mohamed’s Racing Team, for being owned or controlled by Mohamed’s Enterprise and Azruddin, respectively. These individuals and entities are sanctioned pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world.

For the identification information of the designated parties, see the June 11, 2024, BankersOnline OFAC Update.

The Treasury Department yesterday reported that OFAC has sanctioned four individuals (including tanker captains), four entities, and two vessels in multiple jurisdictions that have engaged in the illicit transport of oil and other commodities, including for the network of Houthi financial facilitator Sa’id al-Jamal. This action targets maritime shipping and financial facilitators, several vessel managers and owners, and a company involved in forging shipping documents. This seventh round of sanctions targeting the network of Sa’id al-Jamal since October 2023 underscores the U.S. government’s commitment to isolating and disrupting the financing of international terrorist groups such as the Houthis.

For the names and identification information of the designated individuals, entities, and vessels, see the June 10, 2024, BankersOnline OFAC Update.

The Financial Crimes Enforcement Network (FinCEN) has updated its Beneficial Ownership Information Frequently Asked Questions about reporting companies and exemptions, beneficial owners, the reporting requirements, and general questions, including information about how the Corporate Transparency Act applies to Indian Tribes and entities formed under tribal law.

New FAQs have been added to Sections C (Reporting Company), D (Beneficial Owner), and L (Reporting Company Exemptions). Updated FAQs can be found in Sections A (General Questions), C (Reporting Company), and F (Reporting Requirements).

FinCEN has released its Year in Review for Fiscal Year 2023, which is intended to help stakeholders gain insight into the collection and use of Bank Secrecy Act data, including FinCEN’s efforts to support law enforcement and national security agencies. The Year in Review includes statistics from fiscal year 2023 on BSA reporting and how it is queried and used by law enforcement agencies. It also includes information on how FinCEN uses and analyzes BSA reporting to fulfill its mission, including to support alerts, trend analyses, and regulatory actions.

The Securities and Exchange Commission on Friday reported it had charged three New Yorkers with fraud for selling unregistered membership interests in LLCs that purported to invest in shares of pre-IPO companies, first on behalf of StraightPath Venture Partners LLC, the subject of the Commission’s emergency action in May 2022, and, later, on behalf of Legend Venture Partners LLC, the subject of the Commission’s emergency action in June 2023. Both StraightPath and Legend are now under court-ordered receiverships.

In this new action, the SEC alleges that New York residents Mario Gogliormella, Steven Lacaj, and Karim Ibrahim directed an unregistered sales force of more than 50 callers in boiler rooms to pressure investors into making investments without telling them that the shares had been substantially marked up—between approximately 19 and 105 percent on average above the prices that StraightPath or Legend had paid for the underlying shares. As a result of these tactics, the defendants and their sales force allegedly pocketed more than $45 million in fees from unsuspecting investors from 2019 to 2022.

The SEC’s complaint charges the defendants with violating antifraud and other provisions of the federal securities laws. The complaint seeks permanent injunctive relief, return of allegedly ill-gotten gains, and civil penalties. The SEC also charged Adam Ibrahim, Karim Ibrahim’s brother, as a relief defendant.

The U.S. Attorney’s Office for the Southern District of New York on Friday reported it has unsealed an indictment charging Gogliormella, Lacaj, and Karim Ibrahim with securities fraud, among other offenses, in connection with their work for StraightPath and Legend.

Yesterday, the Treasury Department announced that OFAC had sanctioned the Ecuador-based Los Lobos Drug Trafficking Organization and its leader Wilmer Geovanny Chavarria Barre (also known as “Pipo”).

Also yesterday, the Department of State reported its imposition of sanctions on "Lion's Den," a military Palestinian group centered in Nablus's Old City in the West Bank.

For the names and identification information of the designated parties, see the June 6, 2024, BankersOnline OFAC Update.

The Treasury Department has released a Request for Information on the Uses, Opportunities, and Risks of Artificial Intelligence (AI) in the Financial Services Sector.

Through this RFI, Treasury seeks to increase its understanding of how AI is being used within the financial services sector and the opportunities and risks presented by developments and applications of AI within the sector, including potential obstacles for facilitating responsible use of AI within financial institutions, the extent of impact on consumers, investors, financial institutions, businesses, regulators, end-users, and any other entity impacted by financial institutions’ use of AI, and recommendations for enhancements to legislative, regulatory, and supervisory frameworks applicable to AI in financial services. Treasury is particularly interested in understanding how AI innovations can help promote a financial system that delivers inclusive and equitable access to financial services.

UPDATE: Published at 89 FR 50048 in the June 12, 2024, Federal Register, with a comment period ending on August 12, 2024.

The Federal Reserve Board has announced that results from its annual bank stress tests will be released on Wednesday, June 26, at 4:30 p.m. EDT. Aggregate results from the Board's first exploratory analysis, which will not affect bank capital requirements, will also be released at that time.

This year, 32 banks with $100 billion or more in total assets are subject to the Board's stress tests. The scenario includes a severe global recession with heightened stress in commercial and residential real estate markets. Separately, the exploratory analysis includes four separate hypothetical elements, including two funding stresses applied to all banks tested and two market shocks applied to only the largest and most complex banks.

Acting Comptroller of the Currency Michael J. Hsu yesterday discussed improving customer financial health during a presentation at the Emerge Financial Health conference in Chicago.

Hsu’s written remarks in support of his presentation discussed the OCC’s work to describe financial health and develop measures of financial health that banks may voluntarily use to support the financial stability, resilience, and security of their customers. Mr. Hsu also announced the publication of an OCC report that describes three Financial Health Vital Signs that banks may consider using to assess a customer’s financial health.

The NCUA has released its Quarterly Credit Union Data Summary for the quarter ending March 31, 2024.

According to the report, total assets in federally insured credit unions rose by $96 billion, or 4.4 percent, over the year ending in the first quarter of 2024 to $2.31 trillion. During the same period, total loans outstanding increased $71 billion, or 4.6 percent, to $1.60 trillion. Insured shares and deposits rose $40 billion, or 2.3 percent, to $1.77 trillion, from one year earlier. The delinquency rate at federally insured credit unions was 78 basis points in the first quarter of 2024, up 25 basis points compared with the first quarter of 2023.

Credit unions with assets over $1 billion were required to provide information on overdraft and NSF fees collected during the quarter. There were 443 credit unions that provided that information, with total assets of $1.781 trillion for the group. Those CUs reported $915.6 million in overdraft and NSF fees for the quarter. Forty-five of those CUs reported $0 in NSF fees. Twenty-five reporting CUs showed no overdraft fees, and nine CUs reported they collected neither NSF nor overdraft fees during the quarter.

OFAC has posted a Notice that it has amended the Syrian Sanctions Regulations (31 C.F.R. Part 542) to, among other things, implement the relevant provisions of a May 1, 2012 Executive order regarding foreign sanctions evaders with respect to Syria and Iran, and certain provisions of the Iran Threat Reduction and Syria Human Rights Act of 2012, the Countering America’s Adversaries Through Sanctions Act, and the Caesar Syria Civilian Protection Act of 2019. In addition to new prohibitions, OFAC is adding several relevant definitions and interpretations and one new general license. OFAC is also incorporating, with amendments, one general license; and updating six general licenses. The amendments were published at 89 FR 48310 in today's Federal Register, and are now effective.

OFAC has also published a list of areas of northeast and northwest Syria in which activities are authorized under General License 22,

OFAC also issued a new Syria Frequently Asked Question (FAQ 1180) and amended a number of Syria Frequently Asked Questions (FAQs 205, 231, 232, 934, and 938).

The CFPB yesterday announced it has finalized a rule outlining the qualifications for becoming a recognized industry standard setting body that can issue standards that companies can use to help them comply with the CFPB’s upcoming Personal Financial Data Rights Rule. The new rule identifies the attributes that standard setting bodies must demonstrate in order to be recognized by the CFPB. The rule also includes a step-by-step guide for how standard setters can apply for recognition and how the CFPB will evaluate applications.

The CFPB is working to accelerate the shift to open banking in the United States. In 2010, Congress passed into law new personal financial data rights for consumers. Guaranteeing a consumer’s right to their data will open up more opportunities for smaller financial institutions and startups offering products and services. However, these new rights have not taken full effect, because the CFPB never issued a rule. In October 2023, the CFPB proposed a rule to implement these rights and will finalize it in the coming months.

As part of the upcoming Personal Financial Data Rights rule, the CFPB expects to allow companies to use technical standards developed by standard-setting organizations recognized by the CFPB. The final rule announced yesterday kicks off the process for standard-setting organizations to seek formal recognition. It also includes a mechanism for the CFPB to revoke the recognition of standard setters and a maximum recognition duration of five years, after which recognized standard setters will have to apply for re-recognition. These protections will ensure recognized standard setters’ ongoing adherence to the attributes codified in the rule.

UPDATE 6/11/2024: The final rule was published at 89 FR 49084 in the Federal Register on 6/11/2024. It will become effective July 11, 2024.

The FDIC has published [89 FR 48430] in today's Federal Register a notice that it has terminated its receiverships of Nova Bank (Berwyn, PA) and Ericson State Bank (Ericson, NE), effective June 1, 2024. FDIC, as Receiver for each of the insured depository institutions, was charged with the duty of winding up the affairs of the former institutions and liquidating all related assets. The FDIC has fulfilled its obligations and made all dividend distributions required by law.

The CFPB has announced it has issued Consumer Financial Protection Circular 2024-03, which addresses the use of unlawful or unenforceable terms and conditions on contracts for consumer financial products and services, which may violate the prohibition on deceptive acts or practices in the Consumer Financial Protection Act (CFPA).

“Covered persons” and “service providers” under the CFPA must comply with the prohibition on deceptive acts or practices in the CFPA. The inclusion of certain terms in contracts for consumer financial products or services may violate the prohibition when applicable federal or state law renders such contractual terms, including those that purport to waive consumer rights, unlawful or unenforceable.

UPDATE: Published in the 6/21/2024 Federal Register, at 89 FR 51955.

The FDIC has issued its June 2024 list of banks examined for CRA Compliance, which includes 61 financial institutions whose CRA evaluation ratings were assigned in March 2024. Fifty-three of those evaluations were rated Satisfactory. Four banks' evaluations were rated Outstanding:

• Cape Cod Five Cents Savings Bank, The, Hyannis, Massachusetts
• Medallion Bank, Salt Lake City, Utah
• Stock Exchange Bank, The, Woodward, Oklahoma
• Tustin Community Bank, Tustin, California

Four of the banks' evaluations were rated Needs to Improve:

• Century Bank of Kentucky, Inc., Lawrenceburg, Kentucky
• First Bank of Ohio, Tiffin, Ohio
• Milestone Bank, Salt Lake City, Utah
• United Savings Bank, Philadelphia, Pennsylvania

The FDIC has issued FIL-32-2024 with guidance to provide regulatory relief to financial institutions and facilitate recovery in areas of Arkansas — Benton, Boone, and Marion Counties — affected by severe storms, straight-line winds, tornadoes and flooding May 24–27, 2024.

The CFPB has announced it has finalized a rule, "Nonbank Registration," to be added to Title X of the C.F.R. as Part 1092. The rule will establish a registry to detect and deter corporate offenders that have broken consumer laws and are subject to federal, state, or local government or court orders. The registry will also help the CFPB to identify repeat offenders and recidivism trends.

The CFPB’s new registry will facilitate better understanding of bad actors that seek to restart a scam, fraudulent scheme, or other illegal conduct that harms the public. The CFPB expects that the registry will be used by state attorneys general, state regulators, and a range of other law enforcement agencies. The registry will also assist investors, creditors, business partners, and members of the public that are conducting due diligence or research on financial firms bound by law enforcement orders.

The CFPB’s final rule requires covered nonbank companies to:

• Register with the CFPB when they have been caught violating consumer law: Generally, covered nonbanks will report certain final agency and court orders and judgments to the CFPB. These orders include consent and stipulated orders brought under consumer protection laws.
• Provide an attestation from a senior executive that the company is not flouting orders: For nonbank companies supervised by the CFPB, the entity subject to an order will provide a written attestation from an executive that confirms compliance with any relevant orders.

The rule will become effective September 16, 2024, with implementation dates that are 30, 120, or 210 days after the effective date.

• Executive summary
• Publication update: Published at 89 FR 56028 on 7/8/2024

The OCC has released 19 CRA evaluations that became public in May for national banks and federal savings associations. Eleven of those institutions received rating of Satisfactory. Eight institutions received ratings of Outstanding:

• PNC Bank, National Association, Wilmington, Delaware
• First National Bank, Cloverdale, Indiana
• United Fidelity Bank, F.S.B., Evansville, Indiana
• Industrial Commercial Bank of China (USA), National Association, New York, New York
• Keybank National Association, Cleveland, Ohio
• Texas National Bank, Mercedes, Texas
• Community National Bank, Derby, Vermont
• Hilltop National Bank, Casper, Wyoming

The Federal Reserve Board's archive of CRA evaluations of state member banks shows that the Reserve Banks made public ten CRA evaluation in May. Eight of those evaluations were rated Satisfactory, and Outstanding ratings were assigned to:

• Bank of Hawaii, Honolulu, Hawaii
• First State Bank, Anadarko, Oklahoma

The NCUA has announced it issued four consent prohibition orders in May 2024. The individuals named below are permanently prohibited from participating in the affairs of any federally insured depository institution.

• Arneta Davis, a former member service representative of Dow Great Western Credit Union in Antioch, California; the NCUA Board found that she had stolen tens of thousands of dollars from credit union member accounts, defrauding the CU of over $40,000.
• Eric Stash, a former teller, loan officer, and branch manager of San Juan Credit Union in Blanding, Utah, for stealing over $294,000 in cash from the branch's vault and altering internal records.
• Britnee Maree Starling, a former member services representative/teller at AltaOne Federal Credit Union in Ridgecrest, California, for increasing her VISA credit card's cash advance limit from $1,000 to $100,000 and obtaining cash advances against the card of $96,950.
• Tina L. Torres, a former manager of Valley Agricultural Federal Credit Union in Santa Paula, California, for embezzling funds from the credit union by initiating unauthorized wire transfers and falsely reporting that the credit union held greater assets than it possessed, causing the credit union significant losses. Torres subsequently pleaded guilty to four counts of grand theft, two counts of forgery, and four counts of grand theft/embezzlement.

An order of prohibition bars a party from ever working for a federally insurance depository institution.

On Friday, the Treasury Department reported that OFAC has targeted four entities associated with OFAC-designated Rayan Roshd Afzar Company that have procured critical parts for Iran’s unmanned aerial vehicle (UAV) program. Additionally, OFAC is targeting an Iranian executive of Iran Aviation Industries Organization, a subsidiary of Iran’s Ministry of Defense and Armed Forces Logistics that oversees UAV manufacturers Iran Aircraft Manufacturing Industrial Company and Qods Aviation Industries.

For the names and identification information of the designated parties, see the May 31, 2024, BankersOnline OFAC Update.

The FDIC has issued FIL-31-2024 to remind all FDIC-insured financial institutions of the annual Summary of Deposits Survey as of June 30, 2024. All institutions with branch offices are required to submit the survey; institutions with only a main office are exempt. Survey responses are due by July 31, 2024, and no extensions will be granted.

• The description for the Home Banking service level (13) has been expanded to include mobile applications (mobile apps). Refer to Section 7 of the SOD instructions.
• No later than September 30, 2024, SOD survey results will be published on the FDIC’s SOD Deposit Market Share website.
• The FDIC’s SOD Deposit Market Share website will be discontinued by the end of 2024, and will be replaced by a new and improved SOD application that is available for preview now. Refer to Section 1G of the SOD instructions for more information.
• Institutions must either complete the survey directly in the Central Data Repository (CDR), or use vendor software to prepare and submit their survey responses to the CDR. Software vendors available to assist with the SOD filing are listed under “Filing Procedures” within this FIL.
• Consistent with the prior year, password requirements have been implemented for the CDR. Refer to Section 5C of the SOD instructions.
• Reporting instructions are available on the FDIC’s Summary of Deposits website. Refer to Section 5I of the SOD instructions for amending SOD surveys after initial submission.

The Federal Reserve Board, FDIC, and OCC on Friday jointly issued state loan-to-deposit ratios that are used to evaluate compliance with the Riegle-Neal Interstate Banking and Branching Efficiency Act. Each respective host state loan-to-deposit ratio shows the ratio of total loans in a state to total deposits in the state for all banks that have that state as their home state. These ratios replace those issued in May 2023.

By law, a bank is generally prohibited from establishing or acquiring branches outside of its home state primarily for the purpose of acquiring additional deposits. This prohibition seeks to ensure that interstate bank branches will not take deposits from a community without the bank also reasonably helping to meet the credit needs of that community.

• Section 109 Host State Loan-to-Deposit Ratios

The FDIC has issued a list of nine enforcement decisions and orders issued in April 2024.

• An order to pay a $13,000 civil money penalty for flood insurance rules violations was issued to CNB Bank, Carlsbad, New Mexico
• Consent orders were issued to —
  • Spring Valley Bank, Wyoming, Ohio
  • Tioga-Franklin Savings Bank, Philadelphia, Pennsylvania
  • Commodore Bank, Somerset, Ohio
  • The First Bank and Trust Company of Murphysboro, Murphysboro, Illinois (Corrected order)
• A notice of intention to prohibit and notice of charges for an order of restitution and assessment of a civil money penalty was issued to Derrick Alan Smith, formerly a community banking branch banker at Branch Banking and Trust Company (now known as Truist Bank), Charlotte, North Carolina
• An order of prohibition assessing a $7,000 civil money penalty was issued to Cody Kietzman formerly employed by The Frederick Community Bank, Paxton, Illinois
• An order of prohibition was issued to David P. Ritter formerly employed by Summit Community Bank, Inc., Moorefield, West Virginia
• An order approving the termination of FDIC insurance was issued to Interstate Federal Savings and Loan Association of McGregor, McGregor, Iowa

The FDIC has posted its Community Reinvestment Act examination schedules for the third and fourth quarters of 2024.

The CFPB has reported it has sued student loan servicer Pennsylvania Higher Education Assistance Agency (PHEAA), which does business as American Education Services (AES), for illegally collecting on student loans that have been discharged in bankruptcy and sending false information about consumers to credit reporting companies. The CFPB’s lawsuit asks the court to order PHEAA to stop its illegal conduct, provide redress to borrowers it has harmed, and pay a civil penalty.

PHEAA is a student loan servicer with its principal office in Harrisburg, Pennsylvania. It is a public corporation organized under the laws of the Commonwealth of Pennsylvania. As of December 2023, PHEAA serviced a portfolio of student loans worth roughly $17.8 billion.

The United States Bankruptcy Code provides consumers a financial fresh start by discharging debts and prohibiting creditors from collecting on discharged debts. Many student loans, both federal and private, can be discharged in bankruptcy only if a borrower initiates a separate proceeding and meets a more stringent legal standard than is applied to other debts. However, certain private student loans are discharged in normal bankruptcy proceedings like other unsecured consumer debt. These “non-qualified” private student loans include money borrowed to pay for tuition at schools that do not qualify for federal Title IV funding, such as unaccredited trade or K-12 schools, loans for medical and dental residency, loans to students attending school less than half-time, or loans where the loan amount was higher than the cost of attendance (which can occur when a loan is disbursed directly to a consumer).

AES services a range of private student loans, including those that have strict discharge requirements in bankruptcy and non-qualified loans that are routinely discharged. Nevertheless, when a consumer with private student loans serviced by AES receives a bankruptcy discharge, the company’s practice is to treat all of that consumer’s education-related loans as not discharged, unless it receives an explicit court order or other express direction from the loan owner.

In March 2023, the CFPB issued a bulletin warning the industry about this issue, detailing how supervisory examinations had found some student loan servicers illegally returning loans to collections after bankruptcy courts had discharged the loans.

The CFPB's complaint alleges that, between 2017 and 2021, AES collected or attempted to collect on approximately 7,934 private student loans after a bankruptcy proceeding. Although discovery in litigation will reveal the total scope of PHEAA’s unlawful collection activity, the Bureau says at least 177 were loans eligible for discharge in bankruptcy. Borrowers were thus subjected to illegal collections on loans they did not owe. AES also furnishes inaccurate information to credit reporting companies regarding borrowers’ outstanding debt, which causes financial harm to consumers and may make it harder to qualify for other credit in the future.

This is the CFPB’s second public enforcement action against PHEAA this year. On May 6 the CFPB filed a complaint and proposed stipulated judgment, which, if approved by the court, would require PHEAA and the National Collegiate Student Loan Trusts to pay more than $5 million for student loan servicing failures, including failing to provide accurate information to borrowers and incorrectly denying forbearance requests.

The CFPB on Thursday morning announced it is launching a public inquiry into fees that are increasing mortgage closing costs. The CFPB wants to understand why closing costs are increasing, who is benefiting, and how costs for borrowers and lenders could be lowered. According to a CFPB analysis, the closing costs borrowers pay in connection with a mortgage have risen steeply in recent years. From 2021 to 2023, median total loan costs for home mortgages increased by over 36%. The unavoidable fees borrowers must pay at closing can strain household budgets and families’ ability to afford a down payment. The fees may also limit the ability of lenders to offer competitive mortgages because they have to absorb the higher costs or pass them on to borrowers.

The CFPB noted that, in 2022, median closing costs were $6,000, including substantial increases in the cost of credit reports.

The CFPB’s request for information seeks input from the public, including borrowers and lenders, about how mortgage closing costs may be inflated and constraining the mortgage lending market. Specifically, the CFPB asks for information about:

• Which fees are subject to competition: The CFPB is interested in the extent to which consumers or lenders currently apply competitive pressure on third-party closing costs. The CFPB also wants to learn about market barriers that limit competition.
• How fees are set and who profits from them: The CFPB wants to learn about who benefits from required services and whether lenders have oversight or leverage over third-party costs that are passed onto consumers.
• How fees are changing and how they affect consumers: The CFPB wants information about which costs have increased most in recent years and the reasons for such increases, including the rise in cost for credit reports and credit scores. The CFPB is also interested in data on the impact of closing costs on housing affordability, access to homeownership, or home equity.

Publication and comment period update: Published in the Federal Register on 6/6/2024 at 89 FR 48400, with comments due by 8/2/2024.

The FDIC Board has announced its has terminated the Special Committee charged with overseeing the Cleary Gottlieb Steen & Hamilton LLC third-party review of allegations of sexual harassment and other interpersonal misconduct at the FDIC and assessment of the FDIC's workplace culture. The committee's termination was effective May 30, 2024. Going forward, any inquiries and other matters relating to the recently completed independent review will be handled by the FDIC’s staff.

The FDIC has issued Financial Institution Letters with guidance to provide regulatory relief to financial institutions and facilitate recovery in areas of—

• Boyd, Carter, Fayette, Greenup, Henry, Jefferson, Jessamine, Mason, Oldham, Union, and Whitley Counties in Kentucky (FIL-28-2024) affected by severe storms, straight-line winds, tornadoes, landslides, and mudslides on April 2, 2024.
• Adair, Montgomery, Polk, and Story Counties in Iowa (FIL-29-2024) affected by severe storms causing significant property damage May 20–21, 2024.
• Boone, Cabell, Fayette, Kanawha, Lincoln, Marshall, Nicholas, Ohio, Putnam, Wayne, and Wetzel Counties in West Virginia (FIL-30-2024) affected by severe storms, straight-line winds, tornadoes, flooding, landslides, and mudslides caused significant property damage April 2–6, 2024.

The OCC has released its schedule of Community Reinvestment Act (CRA) evaluations to be conducted in the third (July–September) and fourth (October–December) quarters of 2024.

The Treasury Department has announced that OFAC has sanctioned two companies that are linked to the Private Military Company “Wagner” (Wagner Group). Mining Industries SARLU and Logistique Economique Etrangere SARLU were designated pursuant to Executive Order (E.O.) 14024 for enabling Wagner Group security operations and Wagner Group-linked illicit mining endeavors in the Central African Republic (CAR).

For the identification information of the designated parties, see the May 30, 2024, BankersOnline OFAC Update.

The OCC has announced the launch of REACh 2.0 at its Project REACh Financial Inclusion Summit.

Project REACh, the Roundtable for Economic Access and Change, brings together leaders from the banking industry, national civil rights organizations, business, and technology to identify and reduce barriers that prevent full, equal, and fair participation in the nation’s economy. Under REACh 2.0, working groups will replace workstreams and focus on place-based initiatives; underserved and disadvantaged populations; technology; and tools, products, and services. Existing REACh projects will transition to the new working groups.

The Federal Housing Finance Agency yesterday announced that Fannie Mae and Freddie Mac (the Enterprises) will enhance their Flex Modification policies to allow more borrowers facing longer-term hardships to achieve meaningful payment reductions. The updated Flex Modification policies will promote sustainable homeownership and the safety and soundness of the Enterprises.

Flex Modification is the Enterprises’ loan modification offering that provides a home retention solution for eligible borrowers facing a permanent hardship who can no longer afford to make their regular monthly mortgage payments. ​The enhanced Flex Modification policies lower a borrower’s monthly payment by incrementally applying the steps below to achieve a 20 percent Principal and Interest payment reduction:

• Reducing the borrower’s interest rate (if eligible); 
• ​Extending the mortgage term; and
• Forbearing principal for borrowers with mark-to-market loan-to-value ratios greater than 50 percent.

Borrowers facing financial hardship should contact their servicer to discuss their unique circumstances to determine their eligibility. Servicers may offer borrowers one of several solutions to resolve a delinquency, including the updated Flex Modification, payment deferral, or a repayment plan depending on borrowers’ individual circumstances. The enhanced Flex Modification policies will become effective on December 1, 2024. ​

• ​Fannie Mae's Flex Mod Announcement
• Freddie Mac​'s Flex Mod Announcement

The OCC has issued its Alert 2024-1 indicating that consumers have reported receiving various forms of fictitious correspondence via email, Google Chat, and the U.S. Postal Service related to up-front fee scams involving fictitious inheritance or beneficiary payouts. The notifications appear to be initiated by senior officials of the Office of the Comptroller of the Currency (OCC) regarding funds purportedly held by the OCC. Scam correspondence may include the names of other governmental agencies who are purportedly involved in the fake transaction.

In all instances, victims are initially contacted regarding funds being held on their behalf by the OCC and are asked to provide the scammers general personal information including name, address, and telephone number. Follow-up correspondence from the scammers includes requests for more specific personal information including, but not limited to Social Security number, bank account details, and copies of driver’s licenses and passports. Correspondence is generally poorly written with typographical and grammatical errors and may include instructions for the victim to pay thousands of dollars in required fees or taxes for the release of the supposedly held funds.

These scams not only involve the theft of victim funds, but also their identities. There are at least four known variations of this scam. Refer to the OCC's Alert for details and other information.

In a CFPB Blog article ("Banks' responsibility for scams")posted yesterday, CFPB General Counsel Seth Frotman described an ongoing case in which Citibank has been sued by the state of New York for failing to respond adequately when people promptly told the bank that scammers had stolen money by initiating wire transfers from the consumers’ accounts online. The losses New York alleges people have suffered are serious: for example, New York alleges that one person discovered that a scammer had changed her online banking password, transferred money from her savings to her checking account, and then stole $40,000 via wire transfer—all through Citibank’s online banking platform. And New York alleges that instead of complying with the Electronic Fund Transfer Act’s protections in circumstances like these, Citibank looked to a law that was intended to govern transactions between commercial entities which does not provide the same level of consumer protection to victims of scams.

Mr. Frotman reports that, in response to New York’s allegations, Citibank has argued that the Electronic Fund Transfer Act doesn’t apply because the scammers ultimately used a wire transfer to take the money, and the Act contains an exemption for transfers made by banks “by means of” a wire service. But the CFPB disagrees with Citibank's stance, as it explained in a Statement of Interest (amicus brief) submitted to the court. The Bureau's position is that when a bank connects wire transfer capabilities to its online consumer banking platform and a person authorizes (or a scammer purports to authorize) a transfer online, the Electronic Fund Transfer Act applies to the transaction except for the bank-to-bank portion of it.

Editor's Note: CFPB Blog articles are not official interpretations of law or regulations. The ABA and other industry associations have issued a statement opposing the CFPB's blog article, arguing that the “CFPB cannot reinterpret a statute and reverse decades of settled law in an amicus brief and then use a blog post to suggest that its position is the law.”

The Treasury Department yesterday announced it has published a 2024 Non-fungible Token (NFT) Illicit Finance Risk Assessment. The risk assessment explores how vulnerabilities associated with NFTs and NFT platforms may be exploited by illicit actors for money laundering, terrorist financing, and proliferation financing.

The assessment finds that NFTs are highly susceptible to use in fraud and scams and are subject to theft. The report determines that illicit actors can use NFTs to launder proceeds from predicate crimes, often in combination with other methods to obfuscate the illicit source of proceeds of crime. It also found little evidence of the misuse of NFTs by terrorists or proliferators, in contrast to fraudsters, to date. The assessment finds that inadequate cybersecurity protections, challenges related to copyright and trademark protections, and the hype and fluctuating pricing of NFTs can enable criminals to perpetrate fraud and theft related to NFTs and NFT platforms. Moreover, some NFT firms and platforms lack appropriate controls to mitigate risks to market integrity and to combat money laundering and terrorist financing, and sanctions evasion. The assessment recognizes that mitigation measures, such as industry tools, law enforcement authorities, and analysis of public blockchain data, can partially mitigate such risks.

To address outstanding risks, the risk assessment recommends several U.S. government actions, including:

• Raising awareness within industry of existing obligations
• Continuing to enforce existing laws and regulations related to NFTs and NFT platforms; and
• Considering further application of regulations to NFTs and NFT platforms

The Federal Reserve Board on Tuesday released the minutes from its recent meetings to review and determine the discount rates provided to depository institutions through the discount window. Today's minutes cover the Board meetings that occurred on April 8 through May 1, 2024.