This compliance news round up features developments from the OCC, Federal Reserve, The Treasury, and others. Continue reading to catch up on the most recent news impacting our industry.
Federal Reserve Governor Bowman Nominated to be Vice Chair for Supervision
March 17, 2025
Federal Reserve Board Governor Michelle W. Bowman has issued a statement following her nomination by the president to be Vice Chair for Supervision of the Board of Governors of the Federal Reserve System.
Task Force to use Federal Lands for Affordable Housing
March 17, 2025
HUD Secretary Scott Turner and Interior Secretary Doug Burgum have announced a Joint Task Force on Federal Land for Housing to identify underutilized federal lands suitable for residential development, streamline land transfer processes and promote policies that increase the availability of affordable housing.
OCC Conditionally Approves Fintech Business Model For Bank
March 17, 2025
The OCC has announced conditional approval of the application for financial technology (fintech) company SmartBiz Loans to change the business model of CenTrust Bank, N.A., Northbrook, Illinois, upon its acquisition of CenTrust Bank, N.A.
Upon acquisition, CenTrust Bank, N.A. was renamed SmartBiz Bank, N.A. CenTrust further applied to change its business model to conduct small business lending activities on a nationwide basis.
The OCC granted a change to the business model after thorough review of SmartBiz and its current operations. In granting this application, the OCC applied the same rigorous review and standards applied to all new entrants to the federal banking system. You can find the conditional approval here.
SSA to Speed Up Direct Deposit Changes
March 18, 2025
The Social Security Administration has announced that, in addition to strengthening its procedures for identity proofing to protect Social Security records and benefits against fraudulent activity, SSA will expedite processing all direct deposit change requests — both in-person and online — to one business day. Currently, online direct deposit changes are being held for 30 days.
Court Issues TRO Against Business Opportunity Scheme Click Profit
March 18, 2025
The FTC obtained a federal court’s temporary restraining order halting a business opportunity scheme known as Click Profit, which allegedly took millions from consumers by falsely promising them that they could earn big profits through online sales.
In its complaint, the FTC alleged that Click Profit and its owners deceived consumers by promising they could make large sums in “passive income” using a proprietary system powered by artificial
intelligence. The system supposedly enables consumers to sell goods through online platforms such as Amazon, Walmart, and TikTok. Click Profit also deceived consumers by claiming to be affiliated with major companies like Nike and Disney as a ploy to convince consumers to turn over tens of thousands of dollars each, according to the complaint.
Consumers who purchased the company’s business opportunity were charged a “management fee” of at least $45,000, in addition to thousands of dollars more, purportedly to buy inventory for their stores. The complaint alleges that few of these consumers see a return on their investments, much less the promised earnings. In fact, most consumers lose their entire payments, and some are saddled with burdensome credit card debt and unsold products.
The FTC’s complaint charges that Click Profit, its co-founders Emslie and Patrick McGeoghean, partners Jason Masri and William Holton, and a number of associated companies have violated the FTC Act, the Business Opportunity Rule, the Consumer Review Fairness Act, and the Rule On Impersonation of Government and Businesses.
Mexico-based TCO leader targeted for human smuggling
March 18, 2025
Yesterday, OFAC sanctioned Jumilca Sandivel Hernandez Perez (Hernandez Perez), a key leader of the Lopez Human Smuggling Organization (HSO), a Guatemala-based Transnational Criminal Organization responsible for the smuggling of thousands of illegal aliens from Guatemala, through Mexico, and into the United States. Additionally, Hernandez Perez has coordinated her illegal activity with members of the violent U.S.-sanctioned drug trafficking organization, La Linea, which among other heinous acts is responsible for the November 2019 murders of nine American citizens, including six children, in the Mexican state of Sonora.
OFAC also issued an alert to raise awareness of sanctions and criminal liability risks for foreign financial institutions and other entities with exposure to international cartels recently designated as terrorist organizations, some of which had been previously designated as transnational criminal organizations engaged in human smuggling and other violent acts.
FOMC statement issued
March 19, 2025
The Federal Reserve Board yesterday issued the Federal Open Market Committee’s statement following the Committee’s meeting on March 18–19, 2025. The Board and Committee also released a summary of the economic projections from the meeting.
SSA to Reduce Costs of eCBSV Service
March 19, 2025
The Social Security Administration (SSA) has announced a plan aimed at reducing costs and enhancing the Electronic Consent Based Social Security Number Verification (eCBSV) service. This initiative is designed to ensure the continued viability of the eCBSV service while addressing the needs of customers, including the financial industry and various governmental bodies.
The SSA intends to reduce operating costs by up to 40 percent and cut annual fees charged to participating entities by about 25 percent. The agency also will work to enhance the “no-match” results provided by eCBSV, and plans, in a future phase, to explore integration of Consent Based SSN Verification (CBSV) with eCBSV by streamlining processes and expanding the user base.
OCC Posts Digitalization Resources For Community Banks
March 19, 2025
OCC Bulletin 2025-3 announced that the OCC has established a new Digitalization page on its website to help community banks meet their digitalization objectives.
The OCC recognizes that community banks may face key challenges when implementing a digitalization strategy. The new page highlights relevant OCC rules, statements, and guidance that community banks can reference when pursuing their digitalization efforts. The OCC plans to maintain the page by keeping it up to date as new resources become available.
OCC Ceases Examinations for Reputation Risk
March 20, 2025
The Office of the Comptroller of the Currency announced it will no longer examine its regulated institutions for reputation risk and is removing references to reputation risk from its Comptroller’s Handbook booklets and guidance issuances.
“The OCC has never used reputation risk as a catch-all justification for supervisory action. Focusing future examination activities on more transparent risk areas improves public confidence in the OCC’s supervisory process and makes clear that the OCC has not and does not make business decisions for banks,” said Acting Comptroller of the Currency Rodney E. Hood.
The removal of references to reputation risk from OCC handbooks and guidance issuances does not alter the OCC’s expectation that banks remain diligent and adhere to prudent risk management practices across all other risk areas. The OCC expects to complete its efforts to update its public documents in the coming weeks.
Treasury Sanctions Network Supporting Iran’s Oil Exports
March 20, 2025
The Treasury Department has reported that OFAC has designated a “teapot” oil refinery and its chief executive officer for purchasing and refining hundreds of millions of dollars’ worth of Iranian crude oil, including from vessels linked to the Foreign Terrorist Organization, Ansarallah, commonly known as the Houthis, and the Iranian Ministry of Defense of Armed Forces Logistics (MODAFL).
OFAC also sanctioned 19 entities and vessels responsible for shipping millions of barrels of Iranian oil, comprising part of Iran’s “shadow fleet” of tankers supplying teapot refineries like Luqing Petrochemical. The State Department also designated an entity for having knowingly engaged in a significant transaction for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran.
Federal Reserve Announces Two Enforcement Actions
March 20, 2025
The Federal Reserve Board announced execution of two enforcement actions.
– Cease and Desist Order against Frankewing Bancshares, Inc., Frankewing, Tennessee
– Civil money penalty of $15,500 against Bank of Hawaii, Honolulu, Hawaii, for a pattern or practice of violations of section 208.25 of Regulation H, which implements the provisions of the National Flood Insurance Act.
OCC Issues Enforcement Actions List for March
March 20, 2025
The OCC issued its March list of enforcement actions taken against national banks and federal savings associations and individuals currently and formerly affiliated with such institutions. Included were one Cease and Desist Order and two Orders of Prohibition.
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- Cease and Desist Order against 42 North Private Bank, Canton, Massachusetts, for unsafe or unsound practices, including those related to interest rate risk, strategic planning, capital, liquidity, and earnings. A 2017 cease and desist order against the bank was terminated.
- Order of Prohibition against Karla Vanderneut, former assistant branch manager at an Earlville, New York, branch of NBT Bank, National Association, Norwich, New York, for using a customer’s account to make unauthorized cash withdrawals and debit card transactions totaling at least $16,000.
- Order of Prohibition against Josiah Kennedy, former vice president and mortgage loan officer at Citizens Bank, N.A., Abilene, Texas, for making unauthorized draws on a customer’s construction loan and obtaining customers’ funds, totaling at least $59,000, for his personal benefit.
The OCC also terminated Cease and Desist Orders against ICICI Bank Limited, New York, New York (October 3, 2022) and Wells Fargo Bank, N.A., Sioux Falls, South Dakota (September 9, 2021).
The aim of our compliance news round ups are to help you stay informed and prepared for the evolving regulatory landscape. If you have any questions about an item in this week’s round-up, consider submitting it to our forum. You can also reach out to the Compliance Resource team at support@mycomplianceresource.com.