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March, 09 News
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Following are news stories, events, and Josefa Group ideas that we believe provide value to compliance and risk officers. Although much of this news is available from other sources, our goal is to aggregate a summary of this information on a single web page. Where appropriate, we will also provide links to further details.

 

Our goal is to continue to improve the value of this service. We would appreciate any comments or suggestions. Let us know if this page is useful to you or how you would like to see it changed. You may also submit your own news articles simply by sending your ideas to sal@josefagroup.com.

June/July/August, 2009
 

FinCEN has provided guidance helping banks determine whether a customer is eligible for exemption under currency transaction reporting rules. For further information, see:

 
 
For fun: Give a man a fish and you can feed him for a day. Teach a man to fish and you can charge a consulting fee. - WSJ.
 
 
The MSB registration list has been updated. See:
 
 

FinCen Advisory FIN-2008-A003 (issued March 20, 2008), regarding the area of Cyprus administered by Turkish Cypriots (northern part of Cyprus), is hereby withdrawn. As a result of the enactment of new laws and the beginning of effective implementation, the enhanced scrutiny called for in Advisory FIN-2008-A003 with respect to transactions involving the northern part of Cyprus is no longer necessary.

For further information see http://www.fincen.gov/statutes_regs/guidance/pdf/fin-2009-a005.pdf

 
The Federal Deposit Insurance Corporation (FDIC) today released a list of orders of administrative enforcement actions taken against banks and individuals in June. 
 

FINAL ORDERS ISSUED PURSUANT TO SECTION 8(b), 12 U.S.C. § 1818(b)
(Cease-and-Desist)

Colonial Bank, Montgomery, AL; FDIC-09-125b; Issued 6/15/09 - PDF (PDF Help)

Valley Bank and Trust, Brighton, CO; FDIC-09-126b; Issued 6/1/09 - PDF (PDF Help)

Park State Bank & Trust, Woodland Park, CO; FDIC-09-186b; Issued 6/22/09 - PDF (PDF Help)

AL Amerilife First Financial LLC, Clearwater, FL; FDIC-09-257b and FDIC-09-258k; Issued 6/18/09 - PDF (PDF Help)

Mountain Heritage Bank, Clayton, GA; FDIC-09-117b; Issued 6/17/09 - PDF (PDF Help)

The Bank of Georgia, Peachtree City, GA; FDIC-09-133b; Issued 6/30/09 - PDF (PDF Help)

Satilla Community Bank, St. Marys, GA; FDIC-09-149b; Issued 6/30/09 - PDF (PDF Help)

Arcola Homestead Savings Bank, Arcola, IL; FDIC-09-078b; Issued 6/9/09 - PDF (PDF Help)

Grand Rivers Community Bank, Grand Chain, IL; FDIC-09-093b; Issued 6/25/09 - PDF (PDF Help)

First DuPage Bank, Westmont, IL; FDIC-08-387b; Issued 6/16/09 - PDF (PDF Help)

The Community Bank, Brocton, MA; FDIC-09-212b; Issued 6/29/09 - PDF (PDF Help)

New Liberty Bank, Plymouth, MI; FDIC-09-193b; Issued 6/17/09 - PDF (PDF Help)

Americana Community Bank, Sleepy Eye, MN; FDIC-09-168b; Issued 6/9/09 - PDF (PDF Help)

Nevada Security Bank, Reno, NV; FDIC-09-173b; Issued 6/29/09 - PDF (PDF Help)

First BankAmericano, Elizabeth, NJ; FDIC-09-235b; Issued 6/19/09 - PDF (PDF Help)

High Desert State Bank, Albuquerque, NM; FDIC-09-127b; Issued 6/22/09 - PDF (PDF Help)

Savoy Bank, New York, NY; FDIC-09-118b; Issued 6/8/09 - PDF (PDF Help)

The Hicksville Bank, Hicksville, OH; FDIC-09-045b; Issued 6/10/09 - PDF (PDF Help)

American Patriot Bank, Greeneville, TN; FDIC-09-163b; Issued 6/3/09 - PDF (PDF Help)

Prosper Bank, Prosper, TX; FDIC-09-191b; Issued 6/9/09 - PDF (PDF Help)

Advanta Bank Corp., Draper, UT; FDIC-08-259b and FDIC-08-403k; Issued 6/30/09 - PDF (PDF Help)

Advanta Bank Corp., Draper, UT; FDIC-09-266b; Issued 6/30/09 - PDF (PDF Help)

Centennial Bank, Ogden, UT; FDIC-09-293b; Issued 6/26/09 - PDF (PDF Help)

American Express Centurion Bank, Salt Lake City, UT; FDIC-09-251b; Issued 6/30/09 - PDF (PDF Help)

Prime Alliance Bank, Woods Cross, UT; FDIC-09-239b; Issued 6/23/09 - PDF (PDF Help)

City Bank, Lynnwood, WA; FDIC-09-291b; Issued 6/29/09 - PDF (PDF Help)

Seattle Bank, Seattle, WA; FDIC-09-139b; Issued 6/8/09 - PDF (PDF Help)

 

FINAL ORDERS ISSUED PURSUANT TO SECTION 8(e), 12 U.S.C. § 1818(e)
(Removal and Prohibition Orders)

Jennings State Bank, Spring Grove, MN; FDIC-09-390e; against Anne E. Justesen; Issued 6/29/09 - PDF (PDF Help)

Purdum State Bank, Purdum, NE; FDIC-07-248e; against Michael L. Moody; Issued 6/2/09 - PDF (PDF Help)

Branch Banking and Trust Company, Winston Salem, NC; FDIC-09-012e; against Melody A. Owens; Issued 6/2/09 - PDF (PDF Help)

Citizens Bank of Pennsylvania, Philadelphia, PA; FDIC-08-215e; against Clarissa A. Gavin; Issued 6/29/09 - PDF (PDF Help)

Citizens Bank of Pennsylvania, Philadelphia, PA; FDIC-09-107e; against Marcus R. Nabried; Issued 6/29/09 - PDF (PDF Help)

First Texas Bank, Lampasas, TX; FDIC-08-315e; against Pamela Ruth Haynie; Issued 6/2/09 - PDF (PDF Help)

Home Banking Company, Selmer, TN; FDIC-08-143e; against Pamela S. Sagely; Issued 6/2/09 - PDF (PDF Help)

 

FINAL ORDERS ISSUED PURSUANT TO SECTION 8(h), 12 U.S.C. § 1828(h)
(Civil Money Penalties)

Community Bank, National Association, Mobile, AL; FDIC-09-169OA; in the amount of $300.00; Issued 6/5/09 - PDF (PDF Help)

 

FINAL ORDERS ISSUED PURSUANT TO SECTION 8(i), 12 U.S.C. § 1818(i)
(Civil Money Penalties)

AL Amerilife First Financial LLC, A Delaware Limited Liability Company; Clearwater, FL; FDIC-09-257b and FDIC-09-258k; Order to Cease and Desist and Order to Pay in the amount of $100,000.00; Issued 6/18/09 - PDF (PDF Help)

Solon State Bank, Solon, IA; FDIC-09-141k; in the amount of $1,500.00; Issued 6/22/09 - PDF (PDF Help)

Jennings State Bank, Spring Grove, MN; FDIC-08-391k; against Anne E. Justesen in the amount of $25,000.00; Issued 6/29/09 - PDF (PDF Help)

Gateway Bank of St. Louis, St. Louis, MO; FDIC-09-088k; in the amount of $2,500.00; Issued 6/10/09 - PDF (PDF Help)

Purdum State Bank, Purdum, NE; FDIC-07-249k; against Michael L. Moody in the amount of $12,500.00; Issued 6/2/09 - PDF (PDF Help)

USA Bank, Port Chester, NY; FDIC-08-076k; against Thomas Calabro in the amount of $1,000.00; Issued 6/11/09 - PDF (PDF Help)

USA Bank, Port Chester, NY; FDIC-08-076k; against Fred A. DeCaro, Jr. in the amount of $125,000.00; Issued 6/11/09 - PDF (PDF Help)

USA Bank, Port Chester, NY; FDIC-08-076k; against Fred A. DeCaro III in the amount of $15,000.00; Issued 6/11/09 - PDF (PDF Help)

USA Bank, Port Chester, NY; FDIC-08-076k; against Peter Keller in the amount of $1,500.00; Issued 6/11/09 - PDF (PDF Help)

USA Bank, Port Chester, NY; FDIC-08-076k; against Barry I. Spiegler in the amount of $25,000.00; Issued 6/11/09 - PDF (PDF Help)

USA Bank, Port Chester, NY; FDIC-08-076k; against James G. Verrillo in the amount of $15,000.00; Issued 6/11/09 - PDF (PDF Help)

USA Bank, Port Chester, NY; FDIC-08-076k; against Ilyse Wilpon in the amount of $5,000.00; Issued 6/11/09 - PDF (PDF Help)

USA Bank, Port Chester, NY; FDIC-08-076k; against Richard D. Zeisler in the amount of $15,000.00; Issued 6/11/09 - PDF (PDF Help)

Altoona First Savings Bank, Altoona, PA; FDIC-09-170k; in the amount of $4,350.00; Issued 6/2/09 - PDF (PDF Help)

Home Banking Company, Selmer, TN; FDIC-08-400k; in the amount of $25,000.00; Issued 6/2/09 - PDF (PDF Help)

Advanta Bank Corp., Draper, UT; FDIC-08-259b; FDIC-08-403k; Order to Cease and Desist, Order for Restitution and Order to Pay in the amount of $150,000.00; Issued 6/30/09 - PDF (PDF Help)

American Express Centurion Bank, Salt Lake City, UT; FDIC-09-215k; in the amount of $250,000.00; Issued 6/30/09 - PDF (PDF Help)

First Exchange Bank, Mannington, WV; FDIC-09-130k; in the amount of $8,225.00; Issued 6/19/09 - PDF (PDF Help)

Securant Bank & Trust, Menomonee Falls, WI; FDIC-08-283k; in the amount of $2,500.00; Issued 6/2/09 - PDF (PDF Help)

 

FINAL ORDERS ISSUED PURSUANT TO SECTION 8, 12 U.S.C. § 1818
(Written Agreement)

Michigan Commerce Bank, Ann Arbor, MI; Written Agreement; Issued 4/20/09 - PDF (PDF Help)

 

FINAL ORDERS ISSUED PURSUANT TO SECTION 38, 12 U.S.C. § 1831(o)
(Prompt Corrective Actions)

Temecula Valley Bank, Temecula, CA; FDIC-09-280PCAS; Supervisory Prompt Corrective Action Directive; Issued 6/15/09 - PDF (PDF Help)

Security Bank of North Fulton, Alpharetta, GA; FDIC-09-310PCAP; Prompt Corrective Action Directive, Issued 6/30/09 - PDF (PDF Help)

 

FINAL ORDERS ISSUED PURSUANT TO SECTION 8(p), 12 U.S.C. § 1831(p)
(Termination of Insurance)

National Motors Bank FSB, Fort Washington, PA; FDIC-08-407p; Issued 6/2/09 - PDF (PDF Help)

 

TERMINATIONS

Orders Terminating an Order to Cease and Desist

Columbus Bank and Trust Company, Columbus, GA; FDIC-08-033b; Issued 6/4/09 - PDF (PDF Help)

Southern Community Bank, Fayetteville, GA; now known as United Community Bank Blairsville, GA; FDIC-08-156b; Issued 6/24/09 - PDF (PDF Help)

American Southern Bank, Kennesaw, GA; FDIC-08-366b; Issued 6/30/09 - PDF (PDF Help)

Herrin Security Bank, Herrin, IL; FDIC-08-055b; Issued 6/16/09 - PDF (PDF Help)

Great Basin Bank of Nevada, Elko, NV; FDIC-09-095b; Issued 6/15/09 - PDF (PDF Help)

Israel Discount Bank of New York, New York, NY; FDIC-05-232b; Issued 6/3/09 - PDF (PDF Help)

Cooperative Bank, Wilmington, NC; now known as First Bank, Troy, NC; FDIC-09-053b; Issued 6/24/09 - PDF (PDF Help)

 

ADJUDICATED DECISION

Commonwealth Co-operative Bank, Boston, MA; FDIC-07-252e and FDIC-08-016k; Decision and Order to Prohibit From Further Participation against Brenda J. Vikre; Issued 6/23/09 - PDF  (PDF Help)

 

 

FinCEN has issued an advanced notice of proposed rules pertaining to an anti-money laundering program and SAR reporting for non-bank residential mortgage lenders and originators. FinCEN is currently seeking comment on a range of questions regarding the application of the proposed rules.

For complete information see http://www.fincen.gov/statutes_regs/frn/pdf/ANPRM.pdf

 
FinCEN has issued an advisory informing banks and other financial institutions operating in the U.S. of deficiencies in the anti-money laundering and counter terrorist financing programs within the jurisdictions of Iran, Uzbekistan, Turkmenistan, Pakistan, and São Tomé and Príncipe. In this regard, financial institutions must establish due diligence programs that include appropriate, specific, risk-based, and, where necessary, enhanced policies, procedures, and controls that are reasonably designed to detect and report known or suspected money laundering activity conducted with correspondent accounts.

See http://files.ots.treas.gov/27206004.pdf for further information.

 
Recent network attacks, possible from North Korea, should serve as a reminder of the need to identify and manage risks associated with computer systems, networks, and related infrastructure. Of particular concern is that the relatively unsophisticated attacks highlight weaknesses in controls that can pose a heightened risk for financial institutions.  

The OTS will Host a Webinar on Information Security. For further information see:
http://www.ots.treas.gov/?p=PressReleases&ContentRecord_id=65307e7d-1e0b-8562-ebac-1c832a584728

 
The June 2009 MSB list is now available. For further details see:

http://www.fincen.gov/financial_institutions/msb/pdf/msb_registration_list.pdf and
http://www.fincen.gov/financial_institutions/msb/msbstateselector.html

 
SAR Activity Review- By the Numbers, Issue 12 June 2009 is now available from FinCEN at:

http://www.fincen.gov/news_room/rp/files/sar_by_numb_12.pdf

 
FinCEN has issued an advisory on apparent transaction structuring by casino patrons and personnel. Please see http://www.fincen.gov/statutes_regs/guidance/pdf/fin-2009-a003.pdf

 

For fun: "Happiness is good health and a bad memory" - Ingrid Bergman

Several regulatory agencies have requested comment on proposed guidance to express consistent expectations on sound practices related to funding and liquidity risks and to strengthen liquidity risk-management practices.  This guidance aligns the agencies’’ principles with the international guidance issued by the Basel Committee on Banking Supervision titled.

For details see:
http://www.ots.treas.gov/?p=PressReleases&ContentRecord_id=31fc22fd-1e0b-8562-eb13-6b91e7a3eee0
http://files.ots.treas.gov/482049.pdf

In light of the large number of ratings downgrades to mortgage and asset backed securities, the OTS has provided further explanation on how to risk rate those downgraded securities.

Please see http://files.ots.treas.gov/25307.pdf for the complete memorandum.

 

FinCen advises all U.S. financial institutions to take risk mitigation measures in light of expected use of deceptive financial practices by North Korea and North Korean entities.

See http://www.fincen.gov/statutes_regs/guidance/pdf/fin-2009-a002.pdf for full details

 

FinCEN has provided guidance clarifying the application of the information sharing provisions of section 314(b) of the PATRIOT Act. See the following link for further details:

http://www.fincen.gov/statutes_regs/guidance/pdf/fin-2009-g002.pdf

The OTS has provided a frequently asked questions (FAQs) document to help financial institutions meet their responsibilities under the Identity Theft Red Flags and Address Discrepancies Rules and Guidelines. For further information see:

http://files.ots.treas.gov/25306.pdf
http://files.ots.treas.gov/482044.pdf

Country Wide is again in the news. This time the SEC is accusing senior executives of fraud. The complaint is in part based on the details of email messages alleging insider trading and fraud. Although the details of the complaint are complex, the issues surrounding email messages should serve as a reminder to Chief Risk Officers.

 

  • Are risks related to email practices adequately identified
  • Are appropriate policy and procedures in place and effective
  • Have Key performance Indicators been updated in light of the broad risk inherent in improper email use
  • Has training been reviewed for adequacy

 

The above are just a few of the issues that should be considered. For the full text of the article see:
http://online.wsj.com/article/SB124414278536586095.html

 

 

Professionals in Risk and Compliance understand all too well the impact of regulations. Yet few know the actual extent of and consequences of federal regulation. The Competitive Enterprise Institute prepares yearly its own analysis titled “Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State”.

 

The full text may be found at http://cei.org/cei_files/fm/active/0/Wayne%20Crews%20-%2010,000%20Commandments%202009.pdf and will likely provide surprising information.

 

 

For fun: “Seven months ago I could give a single command and 541,000 people would immediately obey it. Today I can’t get a plumber to come to my house.” -- Norman Schwarzkopf III

 

 

The MSB registration list has been updated. See:

http://www.fincen.gov/financial_institutions/msb/pdf/msb_registration_list.pdf and
http://www.fincen.gov/financial_institutions/msb/msbstateselector.html

 

 

FinCEN has proposed for mutual funds the replacement of IRS/FinCEN Form 8300 – Report of Cash Payments Over $10,000 Received in a Trade or Business – with a requirement to file FinCEN Form 104, Currency Transaction Report (CTR). The goal is to bring the mutual fund industry into greater conformity with other financial institution and to streamline reporting.

 

See:
http://www.fincen.gov/news_room/nr/pdf/20090605.pdf and
http://edocket.access.gpo.gov/2009/pdf/E9-13136.pdf