All in Regulatory Update

FRB Fines Metropolitan Commercial Bank for BSA Violations

Adam Witmer
BSA, Regulatory Update

On October 19, 2023, the Federal Reserve Board issued an enforcement action and fined Metropolitan Commercial Bank, of New York, New York, approximately $14.5 million for violations of customer identification rules and for deficient third-party risk management practices relating to the bank's issuance of prepaid card accounts. The Board conducted an investigation of MCB’s issuance of general purpose reloadable prepaid cards with MovoCash, Inc.,  a former third-party program manager for MCB’s Global Payments Group, that identified deficiencies in the Bank’s third-party risk management and compliance with the Customer Identification Program under BSA.

CFPB Takes Action Against Chime (Sendwave) for Deceptive Practices

Adam Witmer
Regulatory Update, UDAAP, Regulation E

On October 17, 2023, the CFPB took action against Chime Inc. for deceiving consumers about the speed and cost of remittance transfers through its mobile app, Sendwave. According to the CFPB’s press release, Chime also illegally forced consumers to waive their legal rights, failed to provide consumers with legally required disclosures and receipts, and failed to properly investigate consumer disputes and errors.

CFPB and DOJ Issue Joint Statement Warning Against Immigrant Discrimination

Adam Witmer
Regulatory Update, Fair Lending

On October 12, 2023, the CFPB and the DOJ issued a joint statement that reminds financial institutions that all credit applicants are protected from discrimination on the basis of their national origin, race, and other characteristics covered by the Equal Credit Opportunity Act, regardless of their immigration status. The joint statement was issued in light of consumers’ reports on being rejected for credit cards as well as for auto, student, personal, and equipment loans because of their immigration status, even when they have strong credit histories and ties to the United States and are otherwise qualified to receive the loans.

CFPB Issues Guidance for Large Banks on Charging Illegal Fees for Basic Customer Service

Adam Witmer
Regulatory Update

On October 11, 2023, the CFPB issued an advisory opinion regarding a provision enacted by Congress which generally prohibits large banks and credit unions from imposing unreasonable obstacles on customers, such as charging excessive fees, for basic information about their own accounts. The advisory opinion clarifies that people are entitled to get the basic information they need without having to pay junk fees.

CFPB Sues Freedom Mortgage for Providing False Information to Regulators

Adam Witmer
Regulatory Update, HMDA

On October 10, 2023, the CFPB filed a lawsuit in federal court, alleging that Freedom Mortgage Corporation submitted legally-required mortgage loan data that was riddled with errors, violating both the Home Mortgage Disclosure Act (HMDA) and a 2019 consent order. It can be recalled that in August 2023 the CFPB fined Freedom $1.75 million for paying illegal kickbacks for mortgage loan referrals.

FinCEN Director Gacki Discusses FinCEN Initiatives at the ACAMS

Adam Witmer
Regulatory Update

On October 3, 2023, FinCEN Director Andrea Gacki spoke at the The Assembly by ACAMS where she enumerated FinCEN’s present priorities in terms of combatting financial crimes. In particular, Gacki discussed the agency’s updates on Beneficial Ownership Information implementation, anti-Corruption initiatives in the residential real estate and investment, efforts to combat fentanyl trafficking, and proposed whistleblower program.

FRB’s FedNow Service Reports Growth in Participation

Adam Witmer
Regulatory Update

On October 3, 2023, announced that the FedNow Service has experienced strong growth following its launch in July, with 108 institutions now sending and receiving on the network. According to the Federal Reserve’s press release, 21 financial institutions are providing liquidity and settlement services, and 20 service providers are supporting payment processing in the instant payments infrastructure.

FinCEN Proposes Changes to the BOI Reports

Adam Witmer
Regulatory Update, BSA

On September 29, 2023, the Department of the Treasury published through the Federal Register a Notice of information collection, that the Agency will submit to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995 (PRA). The request for information is in relation to the BOIR Form. The public is invited to submit comments on this information collection request on or before October 30, 2023.

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