The Federal Deposit Insurance Corporation (FDIC) announced on July 24 the approval of a final rule that will ease restrictions on banks’ hiring process for individuals with certain criminal offenses on their records. The final rule codifies and revises the current and longstanding FDIC Statement of Policy on this topic and will be effective 30 days after its publication in the Federal Register.

Section 19 of the Federal Deposit Insurance Act prohibits, without the FDIC’s prior consent, any person from being affiliated with, or participating in the affairs of, an insured depository institution who has been convicted of a crime of dishonesty or breach of trust or money laundering, or who has entered a pretrial diversion or similar program in connection with the prosecution of such an offense. The FDIC’s final rule makes some useful and burden-reducing changes to current FDIC policies and practices:

Read More

The Federal Deposit Insurance Corporation (FDIC) issued a final rule on June 25 that reaffirms the enforceability of the interest rate terms of loans made by state-chartered banks and insured branches of foreign banks (collectively, state banks) following the sale, assignment, or transfer of the loan. The rule also provides that whether interest on a loan is permissible is determined at the time the loan is made, and is not affected by a change in state law, a change in the relevant commercial paper rate, or the sale, assignment, or other transfer of the loan. The final rule follows the FDIC’s proposed rule on this topic, and will take effect 30 days after publication in the Federal Register.

The Office of the Comptroller of the Currency (OCC) issued a similar final rule on May 25 that reaffirms the enforceability of the interest rate terms of national banks’ loans following their sale, assignment, or transfer. The OCC’s rule (on which we previously reported) takes effect 60 days after its June 2 publication in the Federal Register, or August 3.

Read More

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the US Department of the Treasury’s Financial Crimes Enforcement Network, in conjunction with the Conference of State Bank Supervisors, issued a joint statement on December 3 to provide more clarity regarding Bank Secrecy Act (BSA) compliance for banks that service customers with hemp-related businesses.

Read More

A working group composed of the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the US Department of the Treasury’s Financial Crimes Enforcement Network issued a joint statement on July 22 that is intended to provide greater clarity regarding the risk-focused approach used by examiners for planning and performing Bank Secrecy Act (BSA)/anti-money laundering (AML) examinations.

Read More

The latest nail in the coffin for Operation Choke Point was added on May 22 by the Federal Deposit Insurance Corporation (FDIC) when it issued a press release announcing its resolution of a lawsuit against it by several payday lenders. Plaintiff payday lenders, echoing the generalized complaint regarding Operation Choke Point, had alleged that coordinated efforts by FDIC and US Department of Justice (DOJ) officials forced them out of the financial system by having their banking relationships terminated and, in some cases, having their bank accounts shut down.

Read More

The five federal banking agencies (Federal Reserve, Bureau of Consumer Financial Protection, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency – collectively Agencies) have issued a joint statement on the role of supervisory guidance.

The statement says that supervisory guidance does not have the force and effect of law, and that the Agencies do not take enforcement actions based on supervisory guidance. However, the Agencies state that supervisory guidance outlines the Agencies’ “supervisory expectations or priorities and articulates the [A]gencies’ general views regarding appropriate practices for a given area.” For example, supervisory guidance often contains examples of practices that the Agencies “generally consider consistent with safety-and-soundness standards or other applicable laws and regulations.”

Read More

It’s here. The Federal Reserve Board and the Federal Deposit Insurance Corporation have released a proposed rule (Proposed Rule) that would make important modifications to Section 13 of the Bank Holding Company Act, commonly known as “the Volcker Rule.” The Proposed Rule is intended to address the “complexity” of the Volcker Rule, which has created “compliance uncertainty” and, in the words of Fed Chairman Jerome Powell, to “allow firms to conduct appropriate activities without undue burden and without sacrificing safety and soundness.”

The remaining three agencies responsible for implementation of the Volcker Rule (Office of the Comptroller of Currency, the US Securities and Exchange Commission, and the Commodity Futures Trading Commission) are expected to release their proposals shortly. Other than agency-specific variations, the proposal released by each of the five agencies is expected to be the same. The comment period for the Proposed Rule will be 60 days from the date of publication of the proposal in the Federal Register.

Read More

On June 22, senior officials from the three primary federal bank regulatory agencies—the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (Board), and the Federal Deposit Insurance Corporation (FDIC)—testified before the Senate Committee on Banking, Housing and Urban Affairs (Committee) on, among other things, financial services reform matters. In the wake of the Financial CHOICE legislation (CHOICE Act), which recently passed the House of Representatives, and the more recent US Department of the Treasury report (Treasury Report) recommending changes to the current financial regulatory framework, financial reform’s legislative center of gravity has now moved to the Senate, which is currently trying to develop its own version of such legislation.

Read More

Starting August 1, violations of financial regulations will come with higher civil money penalties (CMPs). The CMP increases are in response to the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015 (the Act). The Act requires Executive Branch and independent agencies (Agencies) to make annual adjustments for inflation to CMP dollar amounts, as well as an initial “catch-up” adjustment based on a formula set forth in the Act. Although the Act was part of the contentious budget bill that was passed on October 30, 2015 (and that avoided a government shutdown), the Act did not receive much independent coverage, and the increases may be unexpected to businesses that are potentially subject to the increased penalties.

Read More