FEMA Updates Flood Rules

Adam Witmer
Flood, Regulatory Update

On 7/20/2020, FEMA published a final rule in the Federal Register updating the National Flood Insurance Program rules. This release is the final rule from FEMA’s 7/16/2018 Notice of Proposed Rulemaking that proposed to make several non-substantive changes to the flood program regulations to improve their readability, uniformity, and clarity. In addition, FEMA planned to include certain requirements of the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act of 2014.

FinCEN Alert on Twitter Virtual Currency Scam

Adam Witmer
BSA, Regulatory Update

On 7/16/2020, the Financial Crimes Enforcement Network (FinCEN) issued an alert regarding a high-profile scam that uses Twitter accounts to solicit fraudulent payments denominated in convertible virtual currency. In their release, FinCEN explains that hackers compromised the accounts of financial institutions, organizations, and even public figures to solicit payment to vertual currency accounts. The scam claimed that any virtual security sent to the wallet address provided by the hacked accounts would be doubled and returned to the sender.

Fed Extends Reg O Amendment Deadline

Adam Witmer
Regulatory Update, Regulation O

On 7/16/2020, the Federal Reserve Board issued an interim final rule that provides an exception from Reg O for certain Paycheck Protection Program loans guaranteed by the Small Business Administration (SBA). Previously on April 17, 2020, the Federal Reserve Board issued an exception to certain restrictions found in Regulation O for certain PPP loans made to insiders as the Federal Reserve states that PPP loans pose minimal risk. The original Regulation O exception only applied to PPP loans made through June 30 2020 - the original date the Paycheck Protection Program was set to expire. This new amendment to Regulation O extends the existing exception to apply to PPP loans made through August 8, 2020.

FinCEN Updates List of Deficient Countries July 2020

Adam Witmer
BSA, Regulatory Update

On July 14, 2020, FinCEN released an advisory on the FATF-identified jurisdictions with AML/CFT deficiencies. This advisory, known as FIN-2020-A004, relays information to US financial institutions regarding countries the Financial Action Task Force (FATF) has identified as having deficiencies.

FATF is an intergovernmental body comprised of 37 nations that work together to create uniform anti-money laundering standards. When countries don’t meet their standards, FATF communicates deficient countries to the FinCEN, who then provides communication to financial institutions.

This current advisory noted that FATF has temporarily paused its review process for most countries with strategic deficiencies due tot he COVID-19 pandemic. In their advisory, FinCEN explains that FATF made the initial determination

CFPB Ratifies Previous Actions

Adam Witmer
Regulatory Update

On 7/7/2020, the CFPB issued a ratification of a number of previous actions taken by the Bureau, including the large majority of existing regulations. This act of making prior actions officially valid provides financial institutions with clarity that the CFPB’s rules and regulations are still valid in light of a recent court ruling (Seila Law) that the removal provision of the CFPB Director violates law and that the Director must be removable by the President at will. The Seila Law ruling also held that the agency may continue to operate, and this ratification provides clarification to the financial industry that official actions taken by the CFPB from January 4, 2012 to June 30, 2020 are still valid.

FinCEN Issues COVID-19 SCAM Advisory

Adam Witmer
BSA, Regulatory Update

On 7/7/2020, the Financial Crimes Enforcement Network (FinCEN) issued advisory FIN-2020-A003 to alert financial institutions to potential indicators of imposter scams and money mule schemes, which are two forms of consumer fraud that have been discovered so far during the COVID-19 pandemic. This advisory contains descriptions of imposter scams and money mule schemes, financial red flag indicators for both, and information on reporting suspicious activity.

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