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  • President Trump issues new Venezuela Executive Order targeting gold sector; OFAC publishes related FAQs

    Financial Crimes

    On November 1, President Trump issued Executive Order 13850 (E.O. 13850) authorizing the imposition of sanctions on persons who operate in Venezuela's gold sector “or in any other sector of the Venezuelan economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State.” The sanctions come in response to the actions of Venezuelan President Maduro’s regime and associated persons in allegedly “plunder[ing] Venezuela's wealth for their own corrupt purposes.” Among other things, the sanctions specifically block the acquisition or retention of property and interests in the United States by persons who “operate in the gold sector of the Venezuelan economy” or “have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any activity or transaction” involving deceptive practices or corruption in conjunction with the Venezuelan government.

    The same day, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) released a set of FAQs connected to the issuance of E.O. 13850, stating that it “expects to use its discretion to target in particular those who operate corruptly in the gold or other identified sectors of the Venezuela economy, and not those who are operating legitimately in such sectors.”

    E.O. 13850 is issued in conjunction with E.O.s 13692, 13808, 13827, and 13835. See here for continuing InfoBytes coverage of Venezuelan actions and E.O.s.

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  • President Trump issues Executive Order authorizing sanctions in the event of foreign interference in U.S. elections

    Financial Crimes

    On September 12, President Trump announced the issuance of Executive Order 13848 (E.O.), which authorizes sanctions against foreign persons found to have engaged in, assisted, or otherwise supported foreign interference in U.S. elections. Should an intelligence assessment determine such activity has occurred, Section 2 of the E.O. requires that transactions in property and interests of such interfering persons that are in the U.S. or under control of a U.S. person be blocked, and Section 3 of the E.O. directs the Secretaries of State and Treasury—in consultation with the heads of other appropriate agencies—to recommend to the President additional sanctions against “the largest business entities licensed or domiciled in a country whose government authorized, directed, sponsored, or supported election interference, including at least one entity from each of the following sectors: financial services, defense, energy, technology, and transportation.” Such additional sanctions may include, with respect to the targeted entities, (i) blocking all transactions related to property and interests subject to U.S. jurisdiction; (ii) prohibitions on U.S. financial institutions making loans or extending credit to identified entities; (iii) prohibitions on transfers of credit or payments between, by, or through financial institutions for the benefit of such an entity; and (iv) prohibitions on U.S. persons investing in equity or debt of such entities.

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  • President Trump issues Iran-related executive order reimposing previously lifted sanctions; OFAC updates Iran-related FAQs

    Financial Crimes

    On August 6, President Trump announced the issuance of Iran-related Executive Order 13846 (E.O. 13846), which reimposes nuclear-related sanctions that were lifted in connection with the United States’ participation in the Joint Comprehensive Plan of Action (JCPA) of July 14, 2015. As previously covered in InfoBytes, President Trump announced his decision to withdraw from the JCPA on May 8. Newly issued E.O. 13846 reimposes certain sanctions, effective August 7, concerning persons—including foreign financial institutions—who facilitate or provide “financial, material, or technological support for” areas including Iran’s trade in U.S. bank notes and precious metals, its automotive sector, and its currency. Sanctions targeting Iran’s energy sector, as well as transactions between foreign financial institutions and the Central Bank of Iran, will resume effective November 5. E.O. 13846 also revokes and supersedes several previously issued E.O.s.

    In response to E.O. 13846, OFAC released updates to its FAQs concerning the additional sanctions, along with amendments to existing FAQs concerning the Iran Freedom and Counter-Proliferation Act of 2012. FAQs related to revoked E.O. 13622, Section 4 of E.O. 13628, and E.O. 13645 have been archived.

    See here for previous InfoBytes coverage on Iranian sanctions.

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  • President Trump signs National Flood Insurance Program extension

    Federal Issues

    On July 31, President Trump signed the “National Flood Insurance Program (NFIP) Extension Act of 2018” into law (see Public Law 115-225/S. 1182). The NFIP was set to expire that day. The short-term extension, which the Senate passed earlier that day, reauthorizes the NFIP through November 30, and provides Congress additional time to establish a long-term financial solution.

    Visit here for continuing InfoBytes coverage on the NFIP.

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  • Trump issues Executive Order removing ALJs from competitive service

    Federal Issues

    On July 10, President Trump issued an Executive Order (EO) excepting Administrative Law Judges (ALJs) from the federal government’s competitive hiring service. The EO is in response to the recent Supreme Court decision in Lucia v. SEC, which held that ALJs are “inferior officers” subject to the Appointments Clause of the Constitution. (Previously covered by InfoBytes here.) The EO allows federal agencies to hire ALJs without going through the Office of Personnel Management (OPM) competitive selection process, which will give agencies the ability to select candidates who meet the agency’s specific needs— providing greater “flexibility and responsibility for ALJ appointments,” according to the White House announcement. The announcement emphasizes that the EO “reduces the legal uncertainty” over new ALJ appointments under the Appointments Clause in order to safeguard agencies’ enforcement of federal laws.

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  • Agencies issue statement on the impact of the Economic Growth, Regulatory Relief, and Consumer Protection Act

    Federal Issues

    On July 6, the Federal Reserve Board, FDIC, and OCC issued an interagency statement regarding the impact of the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act), S.2155/P.L. 115-174, which was signed into law by President Trump on May 24. The joint statement describes the interim positions the federal agencies will take with regard to amendments within the Act, including, among other things, (i) extending the deadline to November 25 for all regulatory requirements related to company-run stress testing for depository institutions with less than $100 billion in total consolidated assets; (ii) enforcing the Volcker Rule consistently with the Act’s narrowed definition of banking entity; and (iii) increasing the total asset threshold for well-capitalized insured depository institutions to be eligible for an 18-month examination cycle. The agencies intend to engage in rulemakings to implement certain provisions at a later date. The accompanying OCC and the FDIC releases are available here and here.

    The Federal Reserve Board also issued a separate statement describing how, in accordance with the Act, the Board will no longer subject certain smaller, less complex banking organizations to specified regulations, including stress test and liquidity coverage ratio rules. The Act raised the threshold from $50 billion to $100 billion in total consolidated assets for bank holding companies to be subject to Dodd-Frank enhanced prudential standards. The Board intends to collect assessments from all assessed companies for 2017 but will not collect assessments from newly exempt companies for 2018 and going forward. Additionally, the statement provides guidance on implementation of certain other changes in the Act, including reporting high volatility commercial real estate exposures.

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  • CFPB, OCC, and FDIC release statement on HMDA exemption in regulatory relief act

    Federal Issues

    On July 5, the CFPB issued a statement regarding the implementation of the partial HMDA exemptions in the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act), S.2155/ P.L. 115-174, which was signed into law by President Trump on May 24. As previously covered by InfoBytes, the Act provides an exemption from HMDA’s expanded data reporting requirements for banks and credit unions that originate fewer than 500 open-end and 500 closed-end mortgages (the provision would not apply to nonbanks and would not exempt institutions from HMDA reporting altogether). Although the statement emphasizes that the Act will not affect the format of the Loan/Application Register (LAR) for HMDA data collected in 2018—which should still be formatted in accordance with the Filing Instructions Guide issued in February (covered by InfoBytes here)—the Bureau stated that it intends to provide guidance later this summer on the Act, including an exemption code for institutions that are not reporting a particular field due to the Act’s partial exemptions.

    Additionally, the statement reiterated the Bureau’s December 2017 announcement that it will not require resubmissions for 2018 HMDA data, unless there are material errors; and penalties will not be assessed with respect to errors in the 2018 data. The CFPB notes that institutions should focus the 2018 data collection on identifying areas for improvement in their HMDA compliance management systems for future years. The Bureau further advised that it expects that supervisory examinations of 2018 HMDA data will be “diagnostic” to help “identify compliance weaknesses, and will credit good-faith compliance efforts.”

    The OCC issued a similar announcement with OCC Bulletin 2018-19. The FDIC issued a similar announcement with FIL-36-2018.

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  • White House proposes to fully privatize GSEs in broad government reorganization plan

    Federal Issues

    On June 21, the White House announced a government reorganization plan titled, “Delivering Government Solutions in the 21st Century: Reform Plan and Reorganization Recommendations.” The plan covers a wide-range of government reorganization proposals, including several related to the federal government’s involvement in mortgage finance. Among other things, the White House is proposing to end the conservatorship of Fannie Mae and Freddie Mac (GSEs) and fully privatize the companies. The plan notes that a “[f]ederal entity with secondary mortgage market experience would be charged with regulatory oversight” of the GSEs, but does not state whether this would be done by the Federal Housing Finance Agency (FHFA), the GSEs current primary regulator. According to the proposal, this structure would ensure the government’s role “is more transparent and accountable to taxpayers,” as HUD would assume the primary responsibility for affordable housing, and the GSEs would solely focus on secondary market liquidity.

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  • Trump intends to nominate Kathleen Kraninger to be director of the CFPB

    Federal Issues

    On June 18, the White House announced President Trump’s selection of Kathleen Kraninger to be the director of the CFPB for a five-year term. Kraninger currently serves as the associate director for general government at the Office of Management and Budget (OMB). Prior to OMB, Kraninger worked at the Department of Homeland Security and in Congress on the House and Senate Committees on Appropriations. Mick Mulvaney, the acting director of the Bureau and director of OMB, supervises Kraninger in her current role. In a statement commending the selection, Mulvaney emphasized that Kraninger is likely to follow his example, “I have never worked with a more qualified individual than Kathy… I know that my efforts to rein in the bureaucracy at the [Bureau] to make it more accountable, effective, and efficient will be continued under her able stewardship.” While the Federal Vacancies Reform Act (FVRA) required the president to nominate a new director prior to June 22nd, Mulvaney is likely to remain the acting Bureau director for the foreseeable future, as FVRA allows Mulvaney to continue in the acting capacity until the Senate confirms or denies Kraninger’s nomination. If Kranginger’s nomination fails, FVRA would allow Mulvaney to restart a new 210-day period as acting director of the Bureau and to continue serving if the president makes another nomination before that period ends.

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  • President Trump issues new Executive Order prohibiting the purchase of debt from the Venezuelan government

    Financial Crimes

    On May 21, President Trump issued an Executive Order (E.O.) prohibiting U.S. companies or individuals from buying debt or accounts receivable from the Venezuelan government “in light of the recent activities of the Maduro regime, including endemic economic mismanagement and public corruption at the expense of the Venezuelan people and their prosperity.” The sanctions specifically prohibit transactions related to the following: (i) “the purchase of debt owed to the Venezualan government, including accounts receivable;” (ii) debt pledged as collateral after May 21, including accounts receivable; and (iii) “the sale, transfer, assignment, or pledging as collateral by the Government of Venezuela of any equity interest in any entity in which the Government of Venezuela has a 50 percent or greater ownership interest.”

    The E.O., issued in conjunction with E.O. 13692, follows two prior E.O.s, which also targeted the Maduro regime—E.O. 13827, which prohibits U.S. persons from engaging in transactions that involve digital currency issued by, for, or on behalf of the Venezuelan government, and E.O. 13808, which prohibits transactions related to new debt, bonds, and dividend payments in conjunction with the Venezuelan government and the state-owned oil company. (See previous InfoBytes coverage here and here.). The E.O. took effect on May 21 at 12:30 p.m. EDT.

    See here for continuing InfoBytes coverage of actions related to Venezuela.

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