All in Regulatory Update

Proposed BSA Rule on Recordkeeping & Travel Rule Regulations

Adam Witmer
BSA, Regulatory Update

On 10/23/2020, the Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve Board jointly invited comment on a proposed rule that would amend the recordkeeping and travel rule regulations under the Bank Secrecy Act. Having joint authority, FinCEN and the Federal Reserve, are together proposing amendments to the recordkeeping rule, while FinCEN, pursuant to its sole authority, is proposing amendments to the travel rule.

FATF Updates AML Standards

Adam Witmer
BSA, Regulatory Update

On 10/23/2020, the U.S. Department of the Treasury issued a release explaining that the Financial Action Task Force - and international group of nations that work together to implement consistent anti-money laundering standards world wide - is set to revise its standards to further strengthen the global response to the financing of proliferation related to weapons of mass destruction.

The Treasury also explained that the task force also continued its focus on the impact of the COVID-19 pandemic on detecting and countering fraud including attempts to defraud government backed stimulus programs. Furthermore, FATF also adopted an updated report on trade-based money laundering and recognized progress by a number of jurisdictions in rectifying their AML/CFT deficiencies.

CFPB Issues Advance Notice of Proposal on Consumer Access to Financial Records

Adam Witmer
Regulatory Update

On 10/22/2020, the CFPB released an advance notice of proposed rulemaking (ANPR) requesting feedback from the public as to how it might most efficiently and effectively develop regulations to implement Section 1033 of the Dodd-Frank Act, which provides for consumer rights to access financial records. In their release, the CFPB explains that consumer access to data collected by financial product and service providers allow consumers to manage their financial accounts and can enhance consumers’ control of their financial matters. While consumer access to financial records can enable the development of innovative and beneficial consumer financial products, it can also present consumer risks. Therefore, the CFPB’s ANPR is seeking comments and information on costs and benefits of consumer data access; competitive incentives; standard-setting; access scope; consumer control and privacy; and data security and accuracy.

CFPB Final Rule Extends GSE QM

Adam Witmer
Regulation Z, Regulatory Update

On 10/20/2020, the Consumer Financial Protection Bureau (CFPB) issued a final rule to extend the Government-Sponsored Enterprise (GSE) Qualified Mortgage (QM) definition, known as the “GSE Patch”, until the upcoming amendments to the General Qualified Mortgage QM definition are finalized. The GSE Patch was set to expired on 1/10/2021, and this extension of the GSE QM definition will ensure a smooth transition for those who rely on secondary market underwriting for many of their Qualified Mortgages.

FTC Reports of Increasing Social Media Scams

Adam Witmer
Regulatory Update

On 10/21/2020, the Federal Trade Commission (FTC) released data related to recent social media scams. In their release, the FTC explains that their data reflects a tripling of scams that started on social media. Of the list of complaints received from consumers, online shopping through Facebook or Instagram where a purchased item was never received was the most reported scam that originated on social media. Other top scams that started on social media included romance scams, economic relief, or income opportunities.

OFAC Settles with Berkshire Hathaway

Adam Witmer
BSA, Regulatory Update

On 10/20/2020, the Department of the Treasury issued an “enforcement release” explaining that OFAC had settled with Berkshire Hathaway Inc. with respect to potential civil liability for apparent violations of the Iranian Transactions and Sanctions regulations engaged in by one of its foreign subsidiaries, known as “Iscar Turkey.” As a result of Iscar Turkey’s actions, Berkshire Hathaway has agreed to pay a $4,144,651 payment to settle its potential civil liability for trade-related transactions and exports to Iran.

FinCEN Fines Bitcoin "Mixer" for BSA/AML Deficiencies

Adam Witmer
BSA, Regulatory Update

On 10/19/2020, the Financial Crimes Enforcement Network (FinCEN) announced a $60 million civil money penalty (CMP) against Larry Dean Harmon and two convertible virtual currency businesses he founded. In their release, FinCEN explained that Harmon’s two businesses, Helix and Coin Ninja, were convertible virtual currency “mixers,” or “tumblers” and violated the Bank Secrecy Act and its implementing regulations. Specifically, FinCEN states that Harmon and his businesses operated as an unregistered money transmitting business. In doing so, Harmon and his businesses operated “as a bitcoin mixer, or tumbler, and advertised its services in the darkest spaces of the internet as a way for customers to anonymously pay for things like drugs, guns, and child pornography.” Mr. Harmon is also currently being prosecuted in the U.S. District Court for the District of Columbia on charges of conspiracy to launder monetary instruments and the operation of an unlicensed money transmitting business.

Load More