Thursday, December 3, 2020

Week of June 18

In This Issue…

Kraninger selected to lead Bureau of Consumer Financial Protection
RBSA/anti-money laundering bill introduced in House faces hurdles
Trio of Oklahoma bankers graduate from GSB-LSU
Bowman, Clarida nominations approved
Luetkemeyer seeks clarity on rule-making procedures
Banks’ economic impact in Oklahoma quantified
Frauds popping up among Oklahoma banks
OBA education corner …

Kraninger selected to lead Bureau of Consumer Financial Protection

President Trump announced over the weekend he will nominate Kathy Kraninger to serve as director of the Bureau of Consumer Financial Protection (BCFP, formerly the CFPB). She currently serves in the Office of Management and Budget as associate director at Office of Management and Budget with responsibility for financial regulatory agency budgets.

OMB is currently run by the interim director of the Bureau, Mick Mulvaney.

Kraninger previously served as Senate staff on Capitol Hill and at the Department of Homeland Security. She will replace Mulvaney if and when she is confirmed by the Senate.

“One of the things that’s not widely understood is what happens now to Director Mulvaney,” OBA President and CEO Roger Beverage said. “(Mulvaney’s) current term as ‘interim’ director was set to expire this Friday. The Federal Vacancies Reform Act provides that when a permanent replacement is nominated, the clock resets for the ‘interim’ director. As a practical matter, it allows Mulvaney to remain in his current position as acting director until Kraninger is confirmed. That’s the genius of this nomination.”

ABA President and CEO Rob Nichols said over the weekend that . . . “[h]er experience at OMB alongside Acting CFPB Director Mick Mulvaney, along with her years of work on Capitol Hill and in the executive branch, would serve her well in this important position. We trust she shares our interest in ensuring consumers have access to the financial products they want and need, while maintaining the protections they deserve.”

All we can say is thank you President Trump. Acting Director Mulvaney is on a roll as he revamps the Bureau’s approach to consumer protection and helps banks of all sizes understand what’s required of them and how it’s to be enforced.

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BSA/anti-money laundering bill introduced in House faces hurdles

H.R. 6068 has been introduced in the U.S. House of Representatives. The Counter Terrorism and Illicit Finance Act updates the Bank Secrecy Act and anti-money laundering laws and regulations. These laws have not been changed since their adoption in 1970 (CTRs) and 1996 (SARs).

The bill would increase the dollar threshold that triggers the requirement that banks file a currency transaction report (CTR) from $10,000 to $30,000. It would double the dollar threshold that triggers the requirement of filing a suspicious activity report to $10,000.

The bill was introduced by Reps. Blaine Luetkemeyer (R-Mo.) and Steve Pearce (R-N.M.).

“In past surveys and conversations with bankers, these requirements were at or near the top of the list of complaints about ‘burdensome’ rules and regulations,” OBA President and CEO Roger Beverage said. “The current dollar amounts require the filing of thousands and thousands of reports with virtually no feedback about whether the CTRs and SARs have any value to law enforcement agencies.”

The bill also:

  • Makes it easier for banks to share SAR data internally.
  • Creates a fee-based system for FinCEN to issue no-action letters.
  • Requires Treasury to:
    • Review BSA filing requirements to streamline the process.
    • Publish priorities for combating money laundering and terrorist financing and make that part of the supervisory process.
    • Evaluate whether FinCEN should take back BSA supervisory authority from the banking regulators.
    • Evaluate the overall value of BSA data.
  • Encourages the use of technology in BSA compliance.
  • Creates an 18-month safe harbor from enforcement of the new CDD rule as long as a bank is making a good faith effort to comply.
  • Requires the following studies by GAO:
    • Whether lack of beneficial ownership information for partnerships, trusts or other legal entities is a problem for law enforcement.
    • A comprehensive cost-benefit analysis of BSA compliance.

“(The bill has) run into some problems, however,” Beverage said. “For one thing, an earlier version of the bill included a provision to place the responsibility to identify ‘beneficial ownership’ information where it belongs: at FinCEN. New companies would have to provide this information at the time they are incorporated. Instead, some in Congress seem to think that it’s better to deputize you and your bank to ferret out this information.”

This provision was stripped from the bill and, as a result, the House Financial Services Committee voted to table the measure. When that happened, various groups (including law enforcement entities) dropped their support of the bill and are now vigorously working against its passage.

ABA and the ICBA have written to Congress supporting H.R. 6068 with the “beneficial ownership” provision included. The industry is working with law enforcement to reach a compromise.

Luetkemeyer is also a Missouri community banker who knows the industry and is one of its biggest champions. In addition, he has written to the Federal Reserve asking them to clarify the status of agency “guidance” and any other written statement of policy which do not comply with the normal requirements for notice and comment to persons affected by the guidance.

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Trio of Oklahoma bankers graduate from GSB-LSU

Three Oklahoma bankers recently received diplomas for successfully completing work at the Graduate School of Banking at Louisiana State University. Those three were Terry R. Lockhart, RCB Bank, Coweta; Dominic T. Sokolosky, First Bank of Owasso, Owasso; and Steven Wayne Speck, The Exchange Bank, Skiatook.

Lockhart, Sokolosky and Speck were among 185 graduates from the school on June 1. This three-year program provides courses covering all aspects of banking, economics and related subjects. Students traveled from 22 states and Mexico to participate in this class.

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Bowman, Clarida nominations approved

Last week, the Senate Banking Committee considered two nominations submitted by President Trump as members of the Board of Governors of the Federal Reserve System. The two nominees – Michelle Bowman and Richard Clarida – are certainly well-qualified for service on the Board.

Bowman was most recently the banking director for Kansas. She is also a banker at her family’s bank – Farmers and Drovers Bank, Council Grove, Kansas.

She was nominated to fill the designated community bank seat on the Fed Board. She has been vocal in criticizing the post-banking crisis regulations, and her nomination was approved on a vote of 18-7.

By a 20-5 vote, the Committee also the nomination of Richard Clarida to serve as the Fed’s vice chairman. Clarida is a former assistant treasury secretary for economic policy and has served as a global advisor for Pimco, one of the leading investment firms. He has also has been an economics professor at Columbia University for 30 years.

The nominations now go to the full Senate for consideration and should pass without much controversy from Democrat opponents.

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Luetkemeyer seeks clarity on rule-making procedures

Rep. Blaine Luetkemeyer (R-Mo.) recently sent a letter to the Fed asking it clarify what does and what does not establish legal standards with which banks must comply. Specifically, Luetkemeyer asked for clarification as to whether agency guidance and other statements not issued via notice-and-comment rulemaking establish binding legal standards.

“Over the years, a significant number of agency guidance, handbooks and circulars have been issued,” Luetkemeyer wrote. “Greater clarity around the appropriate use and interpretation of such guidance is of the utmost importance.”

Luetkemeyer is a community banker and serves on the House Financial Services Committee. It is highly likely he will be one of the main contenders for the position of chairman of the Committee.

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Banks’ economic impact in Oklahoma quantified

Thanks to the ABA for creating this incredibly impressive new tool that enables us to look at the economic impact of banks in every state, including Oklahoma. You can see the map (interactive) here: https://www.aba.com/EconomicImpact/Default.aspx.

Here’s what it looks like in Oklahoma:

 

 

 

 

 

 

 

 

 

 

 

 

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Frauds popping up among Oklahoma banks

They’re back: BEC wire and ACH fraud.

Not that they ever went away, but we are seeing a serious uptick in wire fraud that is impacting realtors and abstract companies.  The numbers are large (just under $40,000 and just under $300,000, as two examples).  Our bankers are doing callbacks as required but the realtors believe they have been given correct wiring instructions and approve the wires.  It is reasonable to be sure they are aware of this trend and to ask questions with any concerns.

We have contacted the real estate association and found it has done education on this topic. Links below go to podcasts it shared so that you can share them with your real estate/abstraction customers as needed:

OBA is also sharing some links for more information on the topic, also something you can share with your customers.

Finally, in addition to watching for these, we have had an instance of a large attempted ACH wire fraud today, so we are encouraging you to be vigilant on all fronts. A great note to share with your retail customers on the topic of wire fraud is found in the CNBC story linked above:

“Don’t dismiss this as an interesting news story and distance yourself thinking this is something that won’t happen to you.” said Jessica Edgerton, associate counsel, National Association of Realtors.

As always, contacting our cyber partners at the FBI is often the first best step.  If we can get it in their hands immediately, we have a much better chance of recovery for our customers. Stay aware on this and let OBA know when we can be of help!

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OBA education corner …

Summer is upon us and the beach and mountains are calling many of our names! If, however, more work-related pursuits are your idea of taking advantage of these months of the calendar, the OBA has you covered! Take note of the following:

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