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Yesterday was Earth Day. FinCEN issued a reminder to financial institutions to remain vigilant in identifying and reporting suspicious activity related to environmental crimes. Environmental crimes frequently involve transnational criminal activity related to several of FinCEN’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) National Priorities, including corruption, fraud, human trafficking, and drug trafficking.

FinCEN has previously published resources to help stakeholders identify and combat environmental crimes and associated illicit financial activity. FinCEN’s December 2021 Financial Threat Analysis contains information on wildlife trafficking threat patterns and trend information identified in Bank Secrecy Act (BSA) data. FinCEN’s Notice FIN-2021-NTC4 provides financial institutions with specific Suspicious Activity Report (SAR) filing instructions and highlights illicit financial activity related to several types of environmental crimes such as wildlife trafficking and illegal logging, fishing, or mining. SAR filings, along with effective implementation of BSA compliance requirements, are crucial to identifying and stopping environmental crimes and related money laundering.

HUD has announced that the Federal Housing Administration has updated its policies for wind and named storm insurance coverage required for multifamily properties financed with an FHA-insured mortgage, as part of HUD’s broader work to address rising insurance costs.

Effective immediately, the FHA is increasing the maximum permissible wind or named storm deductible to the greater of $50,000 or five percent of the insurable value per location, up to a maximum amount of $475,000 per occurrence. Previous MAP Guide policy prohibited this deductible from exceeding the greater of $50,000 or one percent of the insurable value for any insured building up to a maximum amount of $250,000.

The OCC has published the spring 2024 edition of the Interest Rate Risk Statistics Report. The report presents interest rate risk data gathered during examinations of OCC-supervised midsize and community banks and federal savings associations. The report provides statistics on interest rate risk exposures and risk limits for different midsize and community bank populations, including

• all OCC-supervised midsize and community banks with reported data
• banks by asset size
• banks by charter type
• minority depository institutions

The publication is intended as a resource for the industry, examiners, and the public.

The FDIC has published at 89 FR 29222 in today's Federal Register the proposed Statement of Policy on Bank Merger Transactions that it announced last month. Comments are due by June 19, 2024.

The OCC has released a list of recent enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with them. Actions taken against national banks and federal savings associations include:

• A Formal Agreement with First FS & LA of Lorain (Lorain, Ohio) for unsafe or unsound practices, including those related to the failure of the board of directors and bank management to develop and implement an appropriate strategic plan; appropriately manage and control liquidity and interest rate risks; implement effective Bank Secrecy Act (“BSA”) /Anti-Money Laundering internal controls; and appoint a BSA Officer with the requisite skills and expertise to oversee the BSA program, and the bank’s violation of law, rule, or regulation, including a violation relating to conducting ongoing customer due diligence.
• A Cease and Desist Order against Heritage Bank, N.A. (Spicer, Minnesota), for unsafe or unsound practices, including those related to capital adequacy, capital and strategic planning, credit review, ongoing monitoring of the credit portfolio, liquidity and liquidity management practices, and the allowance methodology.
• A Formal Agreement with Minnstar Bank, N.A. (Lake Crystal, Minnesota), for unsafe or unsound practices, including those related to concentrations of credit, credit underwriting and administration, appraisals, allowance for credit losses, strategic planning, incentive compensation, capital planning, and liquidity risk management, and violations of law, rule, or regulation, including those relating to loans to executive officers, lending limits, and appraisals.

Actions against institution-affiliated parties included:

• An Order of Prohibition and for payment of a $40,000 civil money penalty (CMP) against Norman Desembrana, former operations senior manager at the Philadelphia, Pennsylvania, lockbox facility of Wells Fargo Bank, N.A., Sioux Falls, South Dakota, for concealing a significant backlog of unprocessed customer checks.
• An Order of Prohibition and for payment of a $300,000 CMP against Gary Judd, former chairman and CEO, Sterling Bank and Trust, FSB, Southfield, Michigan, for failing to appropriately oversee the bank’s operation of its Advantage Loan Program or supervise bank insiders involved in the implementation of the Advantage Loan Program.
• An Order of Prohibition and for payment of a $400,000 CMP against Scott Seligman, an institution-affiliated party of Sterling Bank and Trust, FSB, Southfield, Michigan, for participating in the operation of the Advantage Loan Program, contributing to a poor compliance culture at the bank, and pressuring bank employees to quickly underwrite Advantage Loan Program loans.
• An Order of Prohibition against Jackie M. Snider, former AVP at a Sulphur, Oklahoma, branch of Vision Bank, N.A., Ada, Oklahoma, for misappropriating at least $95,430 via the diversion of funds from customers’ accounts and taking efforts to conceal such misappropriation.
• An Order of Prohibition against John Edmonds, former VP at JPMorgan Chase Bank N.A., Columbus, Ohio, based on his conviction for commodities fraud and conspiracy to commit wire fraud, commodities fraud, commodities price manipulation, and spoofing.
• An Order of Prohibition against Christian Trunz, former executive director at JPMorgan Chase Bank N.A., Columbus, Ohio, based on his conviction for spoofing and conspiracy to commit spoofing.

FinCEN has announced it has issued a Financial Trend Analysis focusing on patterns and trends identified in Bank Secrecy Act data linked to Elder Financial Exploitation (EFE), or the illegal or improper use of an older adult’s funds, property, or assets. FinCEN examined BSA reports filed between June 15, 2022 and June 15, 2023 that either used the key term referenced in FinCEN’s June 2022 EFE Advisory or checked “Elder Financial Exploitation” as a suspicious activity type. This amounted to 155,415 filings over this period indicating roughly $27 billion in EFE-related suspicious activity.

Financial institutions began filing BSA reports featuring the advisory’s key term on the same day that FinCEN published its 2022 advisory. FinCEN has continued to receive EFE BSA reports, averaging 15,993 per month between June 15, 2023, and January 15, 2024. Banks have submitted the vast majority of EFE-related BSA filings.

EFE typically consists of two subcategories: elder scams and elder theft. Elder scams, identified in approximately 80% of the EFE BSA reports that FinCEN analyzed, involve the transfer of money to a stranger or imposter for a promised benefit that the older adult does not receive. In elder theft, identified in approximately 20% of the reports, an otherwise trusted person steals an older adult’s assets, funds, or income. Among other conclusions, FinCEN’s analysis revealed that most elder scam-related BSA filings referenced “account takeover” by a perpetrator unknown to the victim; that adult children were the most frequent elder theft-related perpetrators; and that illicit actors mostly relied on unsophisticated means to steal funds that minimize direct contact with financial institution employees.

The Treasury Department yesterday announced that, in response to Iran's April 13 attack on Israel, OFAC has targeted 16 individuals and two entities enabling Iran’s UAV production, including engine types that power Iran’s Shahed variant UAVs, which were used in the April 13 attack. OFAC also designated five companies in multiple jurisdictions providing component materials for steel production to Iran’s Khuzestan Steel Company (KSC), one of Iran’s largest steel producers, or purchasing KSC’s finished steel products.

OFAC also sanctioned three subsidiaries of Iranian automaker Bahman Group, which have continued to materially support the IRGC and other entities designated pursuant to counterterrorism authorities, including Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL). Bahman Group itself was concurrently designated for owning these entities.

For the names and identification information of the designated parties, see the April 18, 2024, BankersOnline OFAC Update.

The Federal Housing Finance Agency has released its annual Housing Mission Report, describing the activities taken by Fannie Mae and Freddie Mac and the Federal Home Loan Banks in 2023 to promote access to financing for affordable, sustainable, and equitable housing and targeted economic development.

The Federal Reserve Board has released the April 17, 2024, issue of the Beige Book, a summary of anecdotal information on current economic conditions in each of the Reserve Districts gathered through Reserve Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources.

FinCEN has updated its Beneficial Ownership Information FAQs to include new questions and updated information about reporting companies, beneficial ownership through trusts, and access to beneficial ownership information, among other topics. New and updated FAQs carry an April 18, 2024, date.

The Social Security Administration has published [89 FR 27472] a notice of a revision in the upper transactions limit to the upper subscription tier for the electronic Consent Based Social Security Number (SSN) Verification (eCBSV) service, to become effective for subscription payments made on or after April 22, 2024.

The top tier subscriber, making more than 25 million inquiries a year, will pay an annual fee of $8.25 million.

The Federal Trade Commission has posted a consumer alert concerning scammers taking advantage of news coverage of student loan forgiveness programs.

Scammers have called consumers to say they are affiliated with Federal Student Aid (FSA) or the Department of Education, and that they are following up on the consumer's eligibility for a new loan forgiveness program. They may even have information about the consumer's loan, including the balance or account number. But they are looking for two things -- upfront fees, which are illegal, and information like the consumer's FSA ID login information, which can be used by the scammer to cut the consumer off from their loan servicer or steal the consumer's identity.

In a related press release, the FTC announced that Marco Manzi, the ringleader of a student loan debt relief scam, will be permanently banned from the debt relief industry and is required to turn over assets as part of a settlement with the Commission.

The CFPB has published in today's Federal Register two Consumer Financial Protection Circulars previously posted to its website.

• Adverse Action Notification Requirements and Proper Use of Sample Forms [89 FR 27361], released on the CFPB's website on September 19, 2023
• Deceptive Marketing Practices about the Speed or Cost of Sending a Remittance Transfer [89 FR 27357], released on the CFPB's website on March 27, 2024

The Consumer Financial Protection Bureau has announced it has issued an order against BloomTech and its CEO, Austen Allred, for deceiving students about the cost of loans and making false claims about graduates’ hiring rates. The CFPB found that —

• BloomTech and Allred falsely told students the school’s “income share” agreement contracts were not loans, when in fact the agreements were loans carrying an average finance charge of around $4,000
• BloomTech and Allred lured prospective enrollees with inflated promises of job-placement rates as high as 86 percent, when the company’s internal metrics showed placement rates closer to 50 percent and in some cases as low as 30 percent.

The Bureau's consent order permanently bans BloomTech from all consumer-lending activities and bans Allred from any student-lending activities for ten years. The CFPB is also ordering BloomTech and Allred to cease collecting payments on income share loans for graduates who did not have a qualifying job, eliminate finance changes for certain agreements, and allow students the option to withdraw without penalty. BloomTech and Allred must also pay over $164,000 in civil penalties, which will be deposited in the CFPB’s victims relief fund.

The CFPB's press release states that BloomTech is a for-profit vocational school that is headquartered in San Francisco and owned primarily by Allred and various Silicon Valley venture-capital funds. Allred founded the company as the Lambda School in 2017, and rebranded it as BloomTech or the Bloom Institute of Technology in 2022. BloomTech operates short-term, typically six-to-nine-month training programs in areas such as web development, data science, and backend engineering. Since 2017, BloomTech originated at least 11,000 income share loans, with most of BloomTech students funding their tuition with these loans. Under almost all these loans, students who earn more than $50,000 in a related field are required to pay BloomTech 17 percent of their pre-tax income each month until they make 24 payments or hit a “cap” of $30,000 in total payments.

On Tuesday, the Federal Housing Finance Agency sent to the Federal Register a notice of a proposed new product from Freddie Mac to begin purchasing certain single-family closed-end second mortgages.

Freddie Mac proposes to purchase closed-end second mortgages on properties for which it already holds the first mortgage. FHFA has determined this to be a new product that merits public notice and comment about whether it is in the public interest. The FHFA invites interested parties to provide written feedback on the proposed new product. Comments may be submitted via the FHFA’s website or by email to RegComments@fhfa.gov.

Once the Federal Register publishes the notice, a statutory 30-day comment period begins. After that 30-day period has ended, FHFA has a statutory 30-day period to make a final decision as to whether to approve the proposed new product.

FinCEN has announced the renewal of its Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used in non-financed purchases of residential real estate.

The terms of the GTOs are effective beginning April 19, 2024, and ending on October 15, 2024. The GTOs continue to provide valuable data on the purchase of residential real estate by persons possibly involved in various illicit enterprises. Renewing them will further assist in tracking illicit funds and other criminal or illicit activity, as well as continuing to inform FinCEN’s regulatory efforts in this sector. FinCEN renewed the GTOs that cover certain counties and major U.S. metropolitan areas in California, Colorado, Connecticut, Florida, Hawaii, Illinois, Maryland, Massachusetts, Nevada, New York, Texas, Washington, Virginia, and the District of Columbia.

The purchase amount threshold remains $300,000 for each covered metropolitan area, with the exception of the City and County of Baltimore, where the purchase threshold is $50,000.

• Copy of GTO
• FAQs about the GTOs

The Federal Housing Finance Agency has announced it will host a Federal Home Loan Bank (FHLBank) and Community Development Financial Institution (CDFI) Symposium in Washington, D.C., on Thursday, June 20, 2024.

The Symposium follows a recommendation in FHFA’s ​​​FHLBank System at 100: Focusing on the Future report ​that calls for increased FHLBank engagement with mission-oriented members, and will feature representatives from both CDFIs and the FHLBanks discussing topics that include:

• FHLBank membership and programs
• Appropriately measuring risk in CDFI lending
• Innovative FHLBank and CDFI products and partnerships

This in-person event will be hosted at FHFA Headquarters at 400 7th Street, S.W., Washington, D.C. An option to attend virtually will also be available.

FinCEN has issued a Notice [FIN-2024-NTC1] on the use of counterfeit U.S. passport cards to perpetrate identity theft and fraud schemes at financial institutions. The Notice, which was coordinated with the Department of State's Diplomatic Security Service, provides an overview of typologies associated with U.S. passport card fraud, highlights 17 select red flags to assist financial institutions in identifying and reporting suspicious activity, and reminds financial institutions of their reporting requirements under the Bank Secrecy Act (BSA).

FinCEN reports that, from 2018 to 2023, U.S. passport card fraud has resulted in $10 million in actual losses and $8 million in additional attempted losses with over 4,000 victims in the United States. However, DSS and other law enforcement agencies assess losses associated with U.S. passport card fraud and associated identity theft are likely significantly greater and seek increased reporting by financial institutions to identify additional illicit activity. Fraud, including financial crimes related to the use of counterfeit U.S. passport cards, is the largest source of illicit proceeds in the United States and represents one of the most significant money laundering threats to the United States, as highlighted in the U.S. Department of the Treasury’s National Money Laundering Risk Assessment, the National Strategy for Combatting Terrorist and Other Illicit Financing, and FinCEN’s Anti-Money Laundering and Countering the Financing of Terrorism National Priorities.

OFAC has published a final rule in today’s Federal Register to remove its Zimbabwe Sanctions Regulations (part 541) from 31 C.F.R. chapter V, as a result of the termination of the national emergency on which the regulations were based. The removal of part 541 is effective today.

The Federal Trade Commission has published [89 FR 26760] a final rule with amendments to the Telemarketing Sales Rule (“TSR”) that, among other things, require telemarketers and sellers to maintain additional records of their telemarketing transactions, prohibit material misrepresentations and false or misleading statements in business to business (“B2B”) telemarketing calls, and add a new definition for the term “previous donor.” The amendments are being made to address technological advances and to continue protecting consumers, including small businesses, from deceptive or abusive telemarketing practices.

The amendments are effective May 16, 2024. However, compliance with 16 CFR 310.5(a)(2) — a recordkeeping requirement — is not required until October 15, 2024.

The Commission also published [89 FR 26798] a proposed rulemaking that would extend the coverage of the TSR to inbound telemarketing calls by consumers to technical support services—i.e., calls that consumers make in response to an advertisement through any medium or to a direct mail solicitation. The FTC said the proposed amendment is necessary in light of the widespread deception and consumer injury caused by tech support scams. The amendment would provide the Commission with the ability to obtain stronger relief in cases involving tech support scams, including civil penalties and consumer redress. Comments on the proposed amendments will be accepted through June 17, 2024.

The FDIC has published [89 FR 26881] a notice of its intent to terminate its receiverships of Firstier Bank (Louisville, CO) and Nova Bank (Berwyn, PA) on or after May 16, 2024.

The liquidation of the assets for each receivership has been completed. To the extent permitted by available funds and in accordance with law, the FDIC will be making a final dividend payment to proven creditors.

The FDIC has reported that the heads of resolution, regulatory and supervisory authorities, central banks, and finance ministries of the United States, the United Kingdom, and the European Banking Union are among leaders participating in a Trilateral Principal Level Exercise (TPLE) on Saturday, April 20, 2024.

The meeting is part of a series of regular exercises and exchanges among the principals of these key financial sector authorities. The intent is to enhance understanding of each jurisdiction’s resolution regime for global systemically important banks (G-SIBs), strengthen coordination on cross-border resolution, and promote confidence in and commitment to the orderly resolution of G-SIBs.

The 2024 TPLE, to be hosted by the FDIC, builds on a series of such exercises going back to 2014, with the European Banking Union authorities joining in 2016. The exercise coincides with the spring meetings in Washington, D.C. sponsored by the World Bank and International Monetary Fund. The 2024 TPLE will draw on cross-border cooperation processes developed to operationalize international standards applicable to G-SIBs and lessons learned from the 2023 failures of large banks in multiple jurisdictions.

The CFPB has announced an update to its procedural rule on how the agency designates a nonbank for supervision. The updates will streamline the designation proceedings for both the CFPB and nonbanks.

The updated process published yesterday reflects changes to the CFPB’s organizational structure and is informed by the CFPB’s experience with the first round of supervisory designation proceedings under procedures issued in 2013.

• PUBLICATION AND COMMENT PERIOD UPDATE: Published in the 4/23/2024 Federal Register. Effective on publication. Comments will be accepted through 5/23/2024.

Yesterday, the Treasury Department reported that OFAC had designated 12 entities and ten individuals under Executive Order 14038. This action built on U.S. sanctions imposed in response to Belarus’s fraudulent August 2020 election, as well as President Alyaksandr Lukashenka’s support for Russia’s illegal full-scale invasion of Ukraine. The action sustains U.S. financial pressure on the Lukashenka regime for its continuing support for Russia’s war against Ukraine and the financial benefit it derives from this activity.

For the names and identification information of the designated individuals and entities, see BankersOnline's April 15, 2024, OFAC Update.

On Friday, the Treasury Department reported that OFAC had taken action against Hamas, targeting Gaza- and Lebanon-based leaders of the terrorist group’s offensive cyber and unmanned aerial vehicle (UAV) operations. Concurrent with this action, the European Union imposed sanctions targeting Hamas.

For the names and identification information of the designated parties, see the April 12, 2024, BankersOnline OFAC Update.

The Financial Stability Board yesterday reported that its Regional Consultative Group for Europe met Thursday in Dublin.

The group discussed global and regional macroeconomic developments and their implications for financial stability. The macro-financial environment continues to be shaped by the adjustment of the global economy to high interest rates, while geopolitical factors are weighing on the outlook. Despite tight financing conditions and subdued confidence, growth in the region is projected to gradually pick up, amid a recovery in real incomes. In global financial markets, certain asset valuations remain stretched and vulnerable to adjustment in the face of adverse shocks. Members discussed sectors which warranted close monitoring, specifically the outlook for – and risks associated with – commercial real estate markets, which have been undergoing a substantial adjustment recently, due to both cyclical and structural shocks.

Members received an update on the FSB’s work priorities for 2024, including its deliverables under Brazil’s G20 Presidency. The effective implementation of its global regulatory and supervisory framework for crypto-asset activities and markets is a key focus for the FSB. Members shared their experiences in addressing regulatory challenges stemming from the cross-border and cross-sectoral nature of crypto-asset activities. They also exchanged views on preparations for new crypto-asset regulations entering into force, such as the Regulation on Markets in Crypto-assets (MiCA) in the European Union and the proposed regulatory regime for crypto-assets in the United Kingdom.

The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and develops and promotes the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The FSB also conducts outreach with approximately 70 other jurisdictions through its six Regional Consultative Groups.

The Department of Housing and Urban Development has published [89 FR 25644] a notice of its intention to competitively offer approximately 1,265 home equity conversion mortgages (HECM, or reverse mortgage loans) secured by vacant properties with an updated loan balance of approximately $346 million. The sale will consist of due and payable Secretary-held reverse mortgage loans. The mortgage loans consist of first liens secured by single family, vacant residential properties, where all borrowers are deceased, and no borrower is survived by a non-borrowing spouse.

The Secretary will prioritize up to 50 percent of the offered assets for award to nonprofit organizations or governmental entity bidders with a documented housing mission. The notice also generally describes the bidding process for the sale and certain entities who are ineligible to bid. This is the twelfth sale offering of its type and will be held on May 7, 2024.

The OCC has announced it will extend until June 15, 2024, the comment period on its proposal to update its rules for business combinations to allow interested parties more time to provide comments.

The proposal also includes a policy statement to clarify the OCC’s review of applications under the Bank Merger Act.

Comments were originally due by April 15, 2024.

• Federal Register extension notice

The Federal Trade Commission reports it is sending $1.2 million in refunds to consumers who paid for the advice of supposed experts based on deceptive claims of substantial investment profits.

The FTC sued Wealthpress in January 2023 along with two of its owners, Roger Scott and Conor Lynch, alleging that the company used deceptive claims of likely profits to sell consumers investment advising services—often touting that the services’ recommendations were based on a specific “algorithm” or “strategy” created by a purported expert. The company charged consumers hundreds or even thousands of dollars for access to these services but could not show that services they offered purchasers were likely to reap substantial profits. However, many consumers lost substantial amounts of money in attempting to follow the services’ advice.

The U.S. Senate Committee on Banking, Housing, and Urban Affairs yesterday announced that Ranking Member Tim Scott has introduced a measure (Senate Joint Resolution 70) under the Congressional Review Act to overturn the CFPB's rule capping credit card late penalties. The report said that Scott's resolution has the support of Republicans on the Senate Banking Committee and from members across the Republican conference.

The House of Representatives has a similar resolution (House Joint Resolution 122) under consideration.

If the resolutions pass in both houses of Congress and the surviving measure is signed by President Biden (or the president's veto is overturned by both houses), the CFPB's rule will be vacated and the Bureau would not be permitted to issue a similar rule affecting credit card late fees.

The CFPB's rule, which is also being challenged in the courts, carries an effective date of May 14, 2024.

The Federal Reserve Board on Wednesday released the minutes of the Federal Open Market Committee meeting of March 19–20, 2024.

The Department of Veterans Affairs has published [89 FR 25142] a final rule to rename and clarify certain loss-mitigation terms used in the VA's regulations. The VA is making these changes to align the names and definitions with their general use in the housing finance industry and believes that these revisions will help avoid confusion and enable servicers and veterans to address loan defaults more quickly and effectively.

The rule, which amends the VA's “Loan Guaranty” regulation at 38 C.F.R. Part 36, will become effective on May 10, 2024.

The FDIC on Wednesday released a comprehensive report on how the FDIC would manage the orderly resolution of a large, complex financial company under the Dodd-Frank Act.

In remarks to the Peterson Institute for International Economics in Washington, DC, FDIC Chairman Martin J. Gruenberg presented the Overview of Resolution Under Title II of the Dodd-Frank Act, the most detailed description to date of the FDIC’s preparedness to use its Title II resolution authority in a manner that promotes financial stability and prevents taxpayer bailouts.

The Overview explains how the FDIC would use authorities under Title II of the Act, with a particular focus on how it expects to resolve U.S.-headquartered Global Systemically Important Banking Organizations (GSIBs). In addition, the paper:

• Provides background of resolution-related authorities in the Dodd-Frank Act
• Highlights key measures that facilitate preparation and implementation of resolution under Title II authority
• Reviews strategic decision-making for the use of Title II authority
• Explains how the FDIC expects to carry out a Title II resolution of a U.S. GSIB using a Single Point of Entry resolution strategy

The Federal Housing Finance Agency has reported that the agency and the Conference of State Bank Supervisors have entered into a formal agreement designed to facilitate information sharing with respect to nonbank mortgage companies.

The memorandum of understanding establishes substantive information sharing protocols between state financial regulators and FHFA, improving the ability to coordinate on market developments, identify and mitigate risks, and ultimately, further protect consumers, taxpayers, and the nation’s housing finance system.

State financial regulators are the primary regulators of nonbank mortgage companies. The FHFA is the regulator and conservator of two of the nonbank mortgage industry’s largest and most important counterparties, Fannie Mae and Freddie Mac. While each supervisory agency maintains specific authorities related to the mortgage industry, only state financial regulators have complete prudential authority over nonbank mortgage companies.

The FDIC has issued FIL-17-2024 with materials and guidance pertaining to the Consolidated Reports of Condition and Income (Call Report) for the March 31, 2024, report date. The FIL also carried attached Supplemental Instructions.

Except for certain institutions with foreign offices, completed Call Reports must be received by Tuesday, April 30, 2024, in accordance with the filing requirements discussed below. An institution with more than one foreign office, other than a “shell” branch or an International Banking Facility, is permitted an additional five calendar days to submit its Call Report data. Such an institution must electronically file its data to the Central Data Repository no later than Sunday, May 5, 2024.

The CFPB has released the 32nd edition of its Supervisory Highlights, which covers select examinations in connection with credit reporting and furnishing completed from April 1, 2023, through December 31, 2023.

In its press release announcing the release of this edition, the Bureau said it found consumer reporting companies failed to ensure the accuracy of credit reports, including by failing to exclude information resulting from alleged identity theft or human trafficking. The CFPB also found furnishers – companies that provide information to consumer reporting companies – failed to correct false or fraudulent information sent to consumer reporting companies. Specifically, the CFPB found that—

• Consumer reporting companies failed to block or remove information related to identity theft and human trafficking
• Consumer reporting companies accepted information from unreliable furnishers
• Furnishers provided information to consumer reporting companies they knew was false
• Furnishers did not follow requirements for dispute investigations and identity theft

The FDIC has posted a Federal Register notice [89 FR 24477] this morning that it has terminated the receiverships of Bank of Clark County (Vancouver, WA), Omni National Bank (Atlanta, GA), and Almena State Bank (Almena, KS), as of April 1, 2024.

Consumer Compliance Outlook's first issue for 2024 casts a Compliance Spotlight on resources to combat increased check fraud. The article describes resources from the Federal Reserve System, FinCEN, the U.S. Postal Inspection Service, the ABA, and check service providers.

The CFPB has issued a report, Trends in discount points amid rising interest rates, finding that more borrowers paid “discount points” upfront as overall interest rates rose. The percentage of homebuyers paying discount points roughly doubled from 2021 to 2023. The increase was even greater among borrowers with lower credit scores. In its press release releasing the report, the CFPB said that, “while discount points may provide advantages to some borrowers, the financial tradeoffs are complex.” The CFPB is monitoring these increases and potential risks to consumers.

According to the press release, discount points are a one-time fee paid at closing to a lender in exchange for a lower interest rate. Paying one discount point is the equivalent of paying a fee of one percent of the loan amount, but discount points have no fixed value in terms of the change in interest rate. Most borrowers only benefit from discount points if they keep their mortgage long enough that the cumulative monthly savings from the reduced interest rate outweigh the upfront costs.

The Federal Reserve Board has announced the execution of:

• a cease and desist order issued with the consent of Mode Eleven Bancorp, the holding company of Summit National Bank, both located in Hulett, Wyoming, related to Bancorp's previous strategy focused on providing banking-related services to financial technology companies through certain nonbank subsidiaries
• a written agreement with Steele Bancshares, Inc., Tyler, Texas, and American State Bank, Arp, Texas, related to identified safety and soundness deficiencies at the bank.

The OCC has reported that Acting Comptroller of the Currency yesterday discussed the importance of fairness in remarks given at the National Community Reinvestment Coalition Just Economy Conference 2024.

Mr. Hsu highlighted bank progress in overdraft protection program reforms since the OCC issued guidance last April and provided an update on Project REACh accomplishments regarding credit invisibles, minority depository institutions and affordable housing. Additionally, he discussed the importance of ensuring fairness as it relates to artificial intelligence and fraud.

The Treasury Department yesterday reported that OFAC has taken additional action against Iranian military revenue generation, targeting Oceanlink Maritime DMCC for facilitating the shipment of Iranian commodities on behalf of Iran’s Armed Forces General Staff and Ministry of Defense and Armed Forces Logistics. OFAC also identified 13 vessels managed by Oceanlink Maritime DMCC as blocked property.

For identification information on the designated company and vessels, see BankersOnline's April 4, 2024, OFAC Update.

The Conference of State Bank Supervisors has posted an NMLS Blog article reporting the results of a November 2023 survey of over 1,400 NMLS users to measure their satisfaction with the system. The survey consisted of two parts: customer satisfaction and system usability. Survey results suggested that, on average, 85% of users are satisfied with their NMLS experience. However, survey comments indicated there are aspects of the system where the user experience can be improved. This feedback is driving upcoming NMLS enhancements, according to the article.

The overall Customer Satisfaction (“CSAT”) score was 85% for the NMLS experience survey. This suggests that, on average, 85% of customers surveyed expressed satisfaction with NMLS. The highest CSAT scores were from mortgage loan originators (MLOs), and the lowest were from company users. This is expected since MLOs generally spend less time completing tasks and activities in NMLS than company users. An analysis of qualitative feedback revealed users feel NMLS is not user friendly or intuitive, difficult to navigate, and the password process is frustrating.

After completing the CSAT survey, respondents were given the option to complete the System Usability Scale (“SUS”) Survey, a 10-question survey for measuring NMLS usability. There were 981 respondents who completed this section. The total SUS score for the surveyed group was 61.64. This score falls within the “OK to Good” range, suggesting that on average, users find the system to be reasonably usable, but there is room for improvement. The highest scores were recorded for federal MLOs, whose score of 71.71 is slightly above the industry average. There were several ratings below a 20, which, along with the average score itself, should be a key metric to improve in the new system.

The CFPB has issued a report examining the growth of financial transactions in online video games and virtual worlds. These platforms increasingly resemble traditional banking and payment systems that facilitate the storage and exchange of billions of dollars in assets, including virtual currencies. However, consumers report being harmed by scams or theft on gaming platforms and not receiving the protections they would expect under federal law. The CFPB reports it will be monitoring markets where financial products and services are offered, including video games and virtual worlds, to ensure compliance with federal consumer financial protection laws.

The report, Banking in Video Games and Virtual Worlds, looks at the growing use and scale of these assets across the gaming industry, the associated risks to consumers, and the evolution of games and virtual worlds into online marketplaces. American consumers spent nearly $57 billion on gaming in 2023, including on hardware, software, and in-game transactions such as converting dollars to virtual currencies or other gaming assets. These assets are often bought, sold, or traded in virtual markets that allow gaming companies to replicate everyday activities online, including financial payments.

The NCUA has announced that low-income-designated credit unions can apply for 2024 Community Development Revolving Loan Fund grants between May 1 and July 1, 2024.

The 2024 CDRLF grant round is open to credit unions with a low-income designation. Minority depository institution credit unions are not eligible for funding in this year’s grant round if they do not have the low-income designation. Credit unions with questions about the low-income designation should contact the NCUA’s Office of Credit Union Resources and Expansion.

The NCUA will host a webinar in May to explain the grants process. The 2024 Notice of Funding Opportunity has been published in the Federal Register.

The Federal Housing Finance Agency yesterday provided an update on its implementation of the recommendations of the Federal Home Loan Bank (FHLBank) System at 100: Focusing on the Future report​​, which was published in November 2023 and followed the first comprehensive evaluation of the FHLBank System in decades. ​

A significant finding of the report is that the FHLBanks must appropriately support housing and community development in their districts, in addition to providing liquidity to members.

The FHFA has published a regulatory interpretation that clarifies how cooperativas in Puerto Rico can pursue membership in the FHLBank System. Cooperativas are a critical part of the financial system in Puerto Rico, and many are Treasury-certified Community Development Financial Institutions (CDFIs). To date, no cooperativa has become a member of the FHLBank System.

The OCC has announced its support of National Financial Capability Month in April, and encouraged national banks and federal savings associations to support this annual commemoration by recommitting their focus on improving the financial capability and financial health of their customers.

Banks and FSAs can promote financial capability through high-quality financial literacy education, as well as through improved access to financial services for all consumers, especially those who are underserved.

The OCC is dedicated to making resources available to help banks deliver top-tier financial literacy education and services. The OCC’s Community Affairs office issues publications and provides resources to banks on financial capability and financial literacy topics including the recently updated Community Developments Fact Sheet on Financial Capability, the quarterly Financial Literacy Update and the Financial Literacy Resource Directory.

The U.S. Department of Housing and Urban Development yesterday announced the award of over $30 million to fair housing organizations across the country under its Fair Housing Initiatives Program (FHIP). The grants will support the efforts of national, state, and local fair housing entities working to address violations of the Fair Housing Act and to end discrimination in housing.

The grant funding will allow the grantees to provide fair housing enforcement by conducting investigations, testing to identify discrimination in the rental and sales markets, and filing fair housing complaints with HUD or substantially equivalent state and local agencies. In addition, grantees will conduct education and outreach activities to inform the public, housing providers, and local governments about rights and responsibilities that exist under the Fair Housing Act.

The FDIC has released its April 2024 list of FDIC-supervised banks whose latest CRA evaluations have recently been made public. Of the 50 banks listed, two — in Moulton, Texas, and Parker, Colorado — were rated "Needs to Improve," 45 were rated "Satisfactory," and these three received "Outstanding" ratings:

• The Bank of New Glarus, New Glarus, Wisconsin
• First General Bank, Rowland Heights, California
• Rockland Trust Company, Rockland, Massachusetts

The CFPB has released its 2023 Consumer Response Annual Report. The report indicates that during 2023, the Bureau sent more than 1.3 million complaints to over 3,400 companies for review and response.

The report shows a continued increase in credit or consumer reporting complaints, with more than one million of them sent to the three nationwide consumer reporting companies — Equifax, Experian, and TransUnion.

Consumers also raised issues about fraudulent activity in nearly every product category, including credit or consumer reporting, debt collection, checking or savings accounts, and credit cards.