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  • OCC Releases Schedule of Fees and Assessments for 2018; Rates to Remain Unchanged

    Agency Rule-Making & Guidance

    On December 1, the OCC issued Bulletin 2017-60 (Bulletin), which informs all national banks, federal savings associations, and federal branches and agencies of foreign banks that the agency’s 2018 fees and assessment rates remain unchanged from last year. The Bulletin provides details concerning, among other things, the assessment schedule, surcharges designed to ensure fees accurately reflect the increased cost of supervision, and general assessment fees. The Bulletin takes effect January 1, 2018.

    Agency Rule-Making & Guidance OCC Banking

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  • Mulvaney Completes First Week as Acting Director of CFPB

    Federal Issues

    In his first week at the Bureau, Mulvaney ordered freezes on hiring and any new regulations for 30 days, and also announced a halt to payouts from the enforcement fund. It is also reported that Mulvaney has put new enforcement actions on hold as he reviews on-going matters. Additionally, on December 1, the White House appointed Brian Johnson, an aide to House Financial Services Committee Chairman Jeb Hensarling (R-Texas), to assist Mick Mulvaney in his role as the Acting Director of the CFPB. Johnson was a featured speaker at Buckley Sandler’s CFPB Today conference at the end of October.

    As previously covered by InfoBytes, Judge Timothy Kelly, denied CFPB Deputy Director Leandra English’s  request for a temporary restraining order preventing Mulvaney from acting as the Acting Director. English is expected to continue the litigation; a briefing schedule is due in the case by December 1.

    Federal Issues CFPB Trump Courts CFPB Succession

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  • Dutch Oilfield Company Agrees to Pay DOJ $238 Million; Two Former Executives Charged by UK SFO

    Financial Crimes

    On November 29, a Dutch oilfield company entered into a three year deferred prosecution agreement with the DOJ to settle allegations that the company paid bribes to secure contracts in various countries around the world. Under the agreement, the company agreed to pay a total of $238 million, including a $500,000 criminal fine and forfeiture of $13.2 million. The next day, the UK Serious Fraud Office announced that two former company executives had been charged with conspiracy to make corrupt payments in connection with government contracts in Iraq between 2005 and 2011. 

    Earlier this month, two different former executives pleaded guilty in US federal court to paying bribes to government officials in Brazil, Angola, and Equatorial Guinea. Click here for FCPA Scorecard’s prior coverage of these guilty pleas. The company has been involved in a sprawling bribery investigation involving enforcement officials in the United States, the UK, Brazil and the Netherlands. The DOJ closed its investigation in 2014 before reopening it in February of 2016. Click here to view previous FCPA Scorecard coverage of the company's investigation.

    The company’s deferred prosecution agreement states that the company did not receive voluntary disclosure credit even though it voluntarily disclosed the conduct to the DOJ, because the disclosure was untimely as it took place “approximately one year” after the company learned of the information. It also states that the company received full cooperation credit because it conducted a “thorough internal investigation, [made] regular factual presentations” to the DOJ, “voluntarily [made] foreign-based employees available for interviews in the United States, [produced] documents to the United States from foreign countries” and expedited parts of the internal investigation. The deferred prosecution agreement goes on to detail the remedial measures that the company has taken to improve its compliance function, which included hiring a third party to design and implement a new compliance program, reduce the number of third party agents engaged by the company, and terminate relationships with questionable third parties. It goes on to explain that all of these factors weighed in the DOJ’s decision not to seek a guilty plea by the company. This information provides insight into the DOJ’s expectations for receiving disclosure and compliance credit.

    Financial Crimes DOJ UK Serious Fraud Office

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  • Deputy Attorney General Rod Rosenstein Announces Expansion of FCPA Pilot Program

    Financial Crimes

    On November 29, Deputy Attorney General Rod Rosenstein issued remarks announcing that the DOJ’s FCPA Pilot Program will be made permanent and expanded to provide greater incentives for more companies to voluntarily disclose potential FCPA violations. The new program will be formally incorporated into the US Attorney’s Manual. These changes will include greater potential benefits offered to companies that promptly disclose suspected FCPA violations.

    Rosenstein identified three components of what will be called the “FCPA Corporate Enforcement Policy.” First, companies who voluntarily disclose, fully cooperate with the DOJ’s investigation, and undertake “timely and appropriate remediation” will be entitled to a presumption that the matter will be resolved through a declination, which “may be overcome only if there are aggravating circumstances related to the nature and seriousness of the offense, or if the offender is a criminal recidivist.” Second, if the company satisfies all other requirements but there are “aggravating circumstances,” the DOJ “will recommend a 50% reduction off the low end of the Sentencing Guidelines fine range,” although “criminal recidivists may not be eligible for such credit.” And third, the policy will provide details on how the DOJ “evaluates an appropriate compliance program, which will vary depending on the size and resources of a business.”

    The Pilot Program began in April 2016. It was greeted with some skepticism that the benefits of disclosure would outweigh the potential benefits, as Rosenstein noted in his remarks. Click here to view previous FCPA Scorecard coverage of the Pilot Program. 

    Financial Crimes DOJ FCPA Pilot Program FCPA

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  • Fed Fines Kansas State Bank for Alleged Deceptive Mortgage Acts

    Consumer Finance

    On November 28, the Federal Reserve Board (Fed) announced it had entered into a consent order with a Kansas state bank over allegations that the bank engaged in deceptive mortgage origination practices in violation of the FTC Act. Specifically, the order alleges that the bank told borrowers that they were paying for discount points that would lower their interest rate, but did not in fact provide those borrowers an interest rate reflective of the price paid for the discount points or, in some cases, a reduced rate at all. The Fed’s order requires the bank to pay restitution to the affected borrowers, but did not impose a further civil money penalty. The bank has decided to terminate all operations of its national mortgage business by year-end 2017.

    Consumer Finance Federal Reserve Mortgages FTC Act Settlement

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  • VA Releases New Disaster Loan Modification Option

    Federal Issues

    On November 27, the Department of Veterans Affairs (VA) announced a new Disaster Loan Modification option via circular 26-17-39. In addition to the existing VA Disaster Loan Modification process, which allows servicers to extend permanent payment relief to disaster-impacted borrowers without a completed application, the VA will now allow servicers the option to waive the three-month trial period payment (TPP) requirement. According to the circular, servicers will be able to waive the TPP requirement to extend the term of the new loan by the number of months the borrower is delinquent, and must waive any accrued delinquent interest. Additionally, the loan must have been current at the time of the disaster and the VA must approve any term extensions greater than 12 months.

    Find more InfoBytes disaster relief coverage here.

    Federal Issues Disaster Relief Department of Veterans Affairs Mortgages Mortgage Modification

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  • FTC Announces Final Approval of Settlements With Companies Over EU-U.S. Privacy Shield False Certification Claims

    Privacy, Cyber Risk & Data Security

    On November 29, the FTC announced it had approved final settlements with three companies over allegations that they falsely claimed  participation in the European Union-U.S. Privacy Shield (EU-U.S. Privacy Shield) framework. (See previous InfoBytes coverage here.) The settlements mark the FTC’s first EU-U.S. Privacy Shield enforcement actions following the EU’s finalization and adoption in July 2016 (as covered by InfoBytes) of the EU-U.S. Privacy Shield Framework, which established a mechanism for companies to transfer consumer data between the EU and the U.S. in compliance with specified obligations.

    Privacy/Cyber Risk & Data Security Enforcement FTC Settlement

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  • Ride-Sharing Company Announces Data Breach; State Attorneys General Launch Investigations

    State Issues

    On November 21, a ride-sharing company disclosed via press release a 2016 data breach that exposed the personal data of 57 million riders and drivers. According to the company, an outside forensic investigation revealed that in October 2016 hackers obtained approximately 600,000 driver names and license numbers, along with rider names, email addresses, and mobile phone numbers. The company claimed that hackers did not obtain driver or passenger social security, credit card, bank account, birth date, or trip location information. Though the company stated that it has taken action to address the delay in notifying affected individuals and regulators, lawsuits filed by the State of Washington and the City of Chicago claim that the company capitulated to hackers’ demands and “paid the hackers to delete the consumer data and keep quiet about the breach.”

    According to a letter from the company to the Washington attorney general attached to the state’s complaint, the company “is taking personnel actions with respect to some of those involved in the handling of the incident.” The company further stated that it has “implemented and will implement further technical security measures, including improvements related to both access controls and encryption.”

    According to sources, three separate class action lawsuits have been filed against the company as a result of the 2016 breach (see here, here, and here) and five attorneys general (New York, Illinois, Connecticut, Massachusetts, and Missouri) have launched investigations.

    The 2016 data breach follows a settlement in January of that year with the New York Attorney General related to allegations that the company failed to promptly disclose a 2014 data breach.  The 2014 data breach involved an alleged failure to prevent unauthorized access to the company’s consumer and driver data maintained on a third-party cloud service provider. As previously reported in InfoBytes in August, the company reached a settlement with the FTC related to the 2014 data breach; however, that settlement was entered into before the company disclosed the existence of the 2016 breach.

    In a related development, on November 27, the U.S. District Court for the Northern District of California dismissed without prejudice a putative class action lawsuit against the company related to the 2014 data breach. The court held that the driver’s name, license number, and limited banking information disclosed in the breach was not the type of personally identifiable information that could expose plaintiffs to the risk of identity theft. Accordingly, the court dismissed the case for lack of Article III standing. The court also granted plaintiffs a final opportunity to amend their complaint to address the standing deficiencies.

    State Issues Privacy/Cyber Risk & Data Security Data Breach State AG FTC Class Action Settlement Courts

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  • FHFA Increases Conforming Loan Limits for 2018

    Federal Issues

    On November 28, the FHFA announced that it will raise the maximum conforming loan limits for mortgages purchased in 2018 by Fannie Mae and Freddie Mac from $424,100 to $453,100. The announcement marks the second time FHFA has increased the baseline loan limit since 2006. In high-cost areas, such as Los Angeles, New York, San Francisco, and Washington, D.C., the maximum loan limit will be $679,650. For a county-specific list of the maximum loan limits in the U.S., click here.

    Federal Issues Mortgages FHFA Fannie Mae Freddie Mac Conforming Loan

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  • CFPB Fines Large Bank for Alleged Student Loan Servicing Issues

    Lending

    On November 21, the CFPB announced it had entered into a consent order with a large national bank over allegations that the bank engaged in unfair and deceptive practices in violation of the Consumer Financial Protection Act of 2010 (CFPA) related to its student loan servicing activities. The order, which the bank consented to without admitting or denying the findings, asserts that for the student loan accounts it was servicing, the bank (i) misrepresented information to borrowers about tax benefits; (ii) failed to refund interest and fees inaccurately charged; (iii) misstated minimum monthly payment amounts in bills; and (iv) failed to provide required information when denying co-signer release requests. In addition to imposing a civil money penalty, the CFPB’s order requires the bank to pay restitution to certain consumers and implement certain policies.

    Lending Student Lending CFPB Enforcement UDAAP CFPA

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