All in Regulatory Update

FinCEN Issues Advisory on FATF Identified Deficient Jurisdictions

Adam Witmer
BSA, Regulatory Update

On 11/6/2020, the Financial Crimes Enforcement Network (FinCEN) issued an advisory on the Financial Action Task Force (FATF)-identified jurisdictions with anti-money laundering, combating the financing of terrorism, and the proliferation deficiencies. In short, FATF recently (10/23/2020) updated its list of jurisdictions with strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. These changes may affect US financial institutions’ obligations and risk-based approaches with respect to relevant jurisdictions. FinCEN requests that financial institutions filing a SAR for related activity reference their advisory in SAR field 2 (Filing Instruction Note to FinCEN) and the narrative by including the key term “October 2020 FATF FIN-2020-A009.”

Interagency Statement on Reference Rates for Loans

Adam Witmer
Regulatory Update

On 11/6/2020, the joint regulators (Federal Reserve, OCC, and FDIC) issued a statement reiterating that the agencies do not endorse a specific replacement rate for the London InterBank Offered Rate (Libor), which is expected to cease after 2021. The statement explains that banks may use any reference rate for loans that the banks determine to be appropriate for their funding models and customer needs. In addition, the statement encourages banks to include appropriate language in lending contracts that provides for using a robust fallback rate if the initial reference rate is discontinued.

OCC Director's Toolkit Updated

Adam Witmer
Regulatory Update

On 11/5/2020, the OCC announced updates to its Director’s Toolkit, which is intended to assist directors of national banks and federal savings associations fulfill their corporate governance responsibilities. Th guide covers topics like strategic issues, risk management, and compliance responsibilities and updates include a revised Director's Book: Role of Directors for National Banks and Federal Savings Associations as well as a new publication, the Director’s Reference Guide to Board Reports and Information.

FinCEN Geographic Targeting Orders Renewed Again

Adam Witmer
BSA, Regulatory Update

On 11/4/2020, FinCEN Director Kenneth Blanco issued a renewal of a Geographic Targeting Order that requires title insurance companies to collect and report information about the persons involved in certain residential real estate transactions. This order covers certain transactions in which residential real property is purchased by a legal entity in the amount of $300,000 or more without the use of a loan in certain metropolitan areas. In conjunction with the geographic targeting orders, FinCEn has also released a set of FAQs to help clarify the requirements.

IRS Warns of Text Scam

Adam Witmer
Regulatory Update

On 11/4/2020, the Internal Revenue Service (IRS), along with the state tax agencies and the tax industry, issued a warning of a new text scam that tricks people into disclosing bank account information under the guise of receiving the $1,200 Economic Impact Payment.

CFPB Issues Final Fair Debt Collection Practices Rule

Adam Witmer
Regulatory Update

On 10/30/2020, the CFPB issued a 653 page final rule relating to debt collection practices. According to the CFPB’s release, the rule focuses on debt collection communications and gives consumers more control over how often and through what means debt collectors can communicate with them regarding their debts. The rule also clarifies how the protections of the Fair Debt Collection Practices Act (FDCPA), which was passed in 1977, apply to newer communication technologies, such as email and text messages.

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.

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