The Office of the Comptroller of the Currency announced Oct. 26 that it will establish an office dedicated to responsible innovation and implement a formal framework to improve the agency’s ability to identify, understand and respond to financial innovation affecting the federal banking system. The Office of Innovation will be headed by a Chief Innovation Officer assigned to OCC headquarters with a small staff located in Washington, New York and San Francisco. The office will be the central point of contact and a clearinghouse for requests and information related to innovation. The OCC expects the office to begin operations in the first quarter of 2017.
The Financial Action Task Force on Oct. 21 released the outcomes of its plenary meeting that was held Oct. 19-21.
Among other issues, delegates discussed the global response to terrorist financing, the decline of correspondent banking relationships, improving transparency and beneficial ownership, and the mutual evaluation reports of Switzerland and the U.S. The FATF also released the following guidance documents:
• Criminalizing Terrorist Financing: Explains the various aspects that the terrorist financing offense must cover in national legal systems.
• Correspondent Banking Services: Explains the FATF’s requirements in the context of correspondent banking services to manage the money laundering and terrorist financing risks associated with these business relationships.
The National Credit Union Administration recently published the October 2016 issue of The NCUA Report. In the report, the NCUA’s Office of Small Credit Union Initiatives details what ransomware is and the increasing role it plays in cyberattacks against smaller financial institutions. The article also provides resources credit unions can use to prevent and respond to these kinds of attacks.
More Compliance News
NMLS announces annual renewal period
The Nationwide Multistate Licensing System announced the annual renewal period for 2017 began Nov. 1 and ends Dec. 31. According to federal regulations, both institutions and most individual mortgage loan originators must be renewed through the NMLS annually. The NMLS Call Center operates Mon.-Fri., from 9 a.m. to 9 p.m. ET. Additional information is available on the NMLS’s Annual Renewal information page.
CFPB warns lenders about mortgage reporting failures
The CFPB announced Oct. 27 it has issued warning letters to 44 mortgage lenders and mortgage brokers. The CFPB has information that appears to show the lenders and brokers may be required to collect, record and report data about their housing-related lending activity, and they may be in violation of those requirements. The CFPB identified the 44 companies by reviewing available bank and nonbank mortgage data. The letters warned that entities that meet certain requirements are required to collect, record and report mortgage lending data, and suggested the recipients review their practices to ensure they comply with all relevant laws. The CFPB, in sending these letters, made no determination that a legal violation did, in fact, occur.
CFPB complaint report focuses on prepaid products
The Consumer Financial Protection Bureau released its October complaint spotlight, which focuses on consumer complaints about prepaid products. The report shows consumers continue to experience issues trying to manage their accounts and access funds. The monthly report also highlights trends seen in complaints coming from North Carolina.
FATF report focuses on terrorist financing in Africa
On Oct. 31, the Financial Action Task Force released a report on terrorist financing in West and Central Africa. The report looks at the confirmed and suspected funding sources of terrorist groups that are operating in this region. It identifies the terrorist financing risks that are unique to the region, such as cattle rustling. Cash, including foreign currency, also plays an important role in terrorist financing in the West and Central African region. The report identifies challenges the region faces to regulate financial products and sectors, and emphasizes the need for better cross-border collaboration.
CFPB releases Fall 2016 Supervisory Highlights
The Consumer Financial Protection Bureau in October released its Fall 2016 issue of its Supervisory Highlights, where the CFPB announced the release of procedures for examining reverse mortgage servicers and new procedures for examining student loan servicers. The CFPB also provided its supervisory observations on automobile loan and lease origination and servicing, debt collection, mortgage origination and student loan servicing, plus four fair lending topics.