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Thursday, 21 Aug 2014

On August 11, 2014 FinCEN issued the following Advisory:

Advisory to U.S. Financial Institutions on Promoting a Culture of Compliance BSA/AML shortcomings have triggered recent civil and criminal enforcement actions — FinCEN seeks to highlight the importance of a strong culture of BSA/AML compliance for senior management, leadership and owners of all financial institutions subject to FinCEN’s regulations regardless of size or industry sector.

While this advisory does not change any existing expectations or obligations toward BSA/AML requirements; nor is it intended to change or otherwise interpret regulatory expectations or obligations that financial institutions may have outside of the BSA. It is, however, designed to specifically emphasize the following:

• Leadership Should Be Engaged
• Compliance Should Not Be Compromised By Revenue Interests
• Information Should Be Shared Throughout the Organization
• Leadership Should Provide Adequate Human and Technological Resources
• The Program Should Be Effective and Tested By an Independent and Competent Party
• Leadership and Staff Should Understand How Their BSA Reports are Used

Understanding and communicating the context and the purpose of FinCEN’s BSA/AML regime is equally important to a financial institution’s culture as understanding its underlying requirements, and financial institutions should consider including such information as part of their ongoing training requirement.

TRC Interactive can help your staff understand the significant importance of the BSA/AML requirements as well as how the information in BSA reports is used. Our BSA training courses are tailored to job description and are supported by additional information requirements including Anti-Money Laundering, USA PATRIOT Act, Customer Identification Program, Suspicious Activity Reporting, and Office of Foreign Assets Control. To learn more, contact us at or (800) 222-9909.

The complete FinCEN advisory is available HERE.

Friday, 8 Aug 2014

The Consumer Financial Protection Bureau (CFPB) proposed a rule to improve information reported about the residential mortgage market. The rule would shed more light on consumers’ access to mortgage credit by updating the reporting requirements of the Home Mortgage Disclosure Act (HMDA) regulations. The Bureau also aims to simplify the reporting process for financial institutions.

HMDA, which was originally enacted in 1975, requires many lenders to report information about the home loans for which they receive applications or that they originate or purchase. The public and regulators can use the information to monitor whether financial institutions are serving the housing needs of their communities and identify possible discriminatory lending patterns.

Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) in 2010 in response to the mortgage market crisis. The Dodd-Frank Act directed the CFPB to expand the HMDA dataset to include additional information about loans that would be helpful to better understand these aspects of the mortgage market.

The Bureau is proposing to improve the quality and type of HMDA data as required by the Dodd-Frank Act. The Bureau is also looking at ways to make submission of data easier for lenders and to improve the user experience in accessing the public data.

To provide better information about residential mortgage credit, the Bureau is proposing changes to the rules that establish what data financial institutions are required to provide. The proposed changes include improving market information and monitoring access to credit.

The CFPB aims to:
• Standardize the reporting threshold
• Ease reporting requirements for some small banks
• Align reporting requirements with industry data standards
• Improve the electronic reporting process
• Improve data access

The proposed rule will be open for public comment through October 22, 2014.

A copy of the proposed rule, which includes information on how to submit comments, is available at:

Keeping your financial institution up to date on regulatory issues and your employees educated can be a daunting task. TRC can help. To learn more, contact us at or (800)222-9909.

Friday, 25 Jul 2014

The Financial Crimes Enforcement Network (FinCEN) is issuing an update to advise financial institutions on the increased use of bold funnel accounts as part of trade-based money laundering conducted by criminal actors following the restrictions on U.S. currency transactions in Mexico. This Advisory provides “red flags” that may assist financial institutions identifying and reporting suspicious funnel account activity.

A “funnel account” is an individual or business account in one geographic area that receives multiple cash deposits, often in amounts below the cash reporting threshold, and from which the funds are withdrawn in a different geographic area with little time elapsing between the deposits and withdrawals.

There are, of course, similar legitimate financial activities. So, no one activity by itself is a clear indication of trade-based money laundering. Financial institutions are encouraged to use previous FinCEN advisories as a reference when evaluating potential red flags.

If your financial institution has suspicion, filing of a Suspicious Activity Report (SAR) may be required. While the transactional activity that U.S. financial institutions may experience as a result of the Mexican restrictions may not be indicative of criminal activity, U.S. financial institutions should consider this activity in conjunction with other information, including transaction volumes and source(s) of funds, when determining whether to file a SAR.

Financial institutions should continue to be alert to the variety of methods that may be used to move funds linked to the laundering of criminal proceeds and to report that information as appropriate. Be alert to a possible connection between the suspicious activity being reported and the enacted U.S. currency restrictions on Mexican financial institutions.

The Advisory is available at:

Keeping your financial institution up to date on regulatory issues and your employees educated can be a daunting task. TRC can help. To learn more, contact us at or (800) 222-9909.

Wednesday, 9 Jul 2014

Bureau Interpretive Rule Clears the Way for Heirs to Take Over Mortgages When Loved Ones Die

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) is issuing an interpretive rule to clarify that when a borrower dies, the name of the borrower’s heir generally may be added to the mortgage without triggering the Bureau’s Ability-to-Repay rule. This clarification will help surviving family members who acquire title to a property to take over their loved one’s mortgage, and to be considered for a loan workout, if necessary, to keep their home.

“Losing a loved one should not mean also losing your home. Today’s interpretive rule makes it clear that when family members inherit property, they can take over the mortgage without jumping through unnecessary hoops,” said CFPB Director Richard Cordray. “This gives heirs an opportunity to work with the lender to pay off the loan or seek a loan modification.”

The interpretive rule is available at:

Keeping your financial institution up to date on regulatory issues and your employees educated can be a daunting task. TRC can help. To learn more, contact us at or (800) 222-9909.

Wednesday, 25 Jun 2014

A recent article in BAI Banking Strategies indicated that a new report by the Center for Financial Services Innovation reveals that ten percent of consumers using a smartphone to deposit a check had it returned to the originating institution due to fraud -- a rate more than double that of other check-cashing methods.

According to the article, the fraud schemes most commonly involved going to a check-cashing outlet right after depositing the same check via smartphone. Mobile deposit leaves the actual check in the hands of the customer and creates the potential for this type of fraud. It has been suggested that one potential step to help eliminate at least some of this fraud would be to require a restrictive endorsement on any check that is sent via a smartphone for deposit.

For example, a financial institution would only accept checks sent for mobile deposit that contained the restrictive endorsement “Deposit via Mobile” or “Deposit sent by Phone” below the customer’s endorsement.

This would certainly not stop all fraud but could serve as a deterrent to some potentially fraudulent situations. For instance, a check presented to a check-cashing store, which has an erasure or blacked out information below the endorsement is going to raise suspicions.

To help keep your staff aware of the most recent fraud trends First Line of Defense provides “real life” transaction training. Keeping your financial institution up to date on issues such as these and your employees educated can be a daunting task. TRC can help. To learn more, contact us at or (800) 222-9909.

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