U.S. Department of the Treasury

Treasury Publishes 2024 National Risk Assessments for Money Laundering, Terrorist Financing, and Proliferation Financing 

The U.S. Department of the Treasury published the 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing. These reports highlight the most significant illicit finance threats, vulnerabilities, and risks facing the United States.   

The reports detail recent, significant updates to the U.S. anti-money laundering/counter-financing of terrorism framework and explain changes to the illicit finance risk environment. These include the ongoing fentanyl crisis, foreign and domestic terrorist attacks and related financing, increased potency of ransomware attacks, the growth of professional money laundering, and continued digitization of payments and financial services. These assessments also address how significant threats to global peace and security—such as Russia’s ongoing illegal, unprovoked, and unjustified war in Ukraine and Hamas’s October 7, 2023 terrorist attacks in Israel—have shaped the illicit finance risk environment in the United States. 

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Federal Communication Commission (FCC) 

FCC Makes AI-Generated Voices in Robocalls illegal 

The FCC adopted a Declaratory Ruling that recognizes calls made with AI-generated voices are “artificial” under the Telephone Consumer Protection Act (TCPA). The ruling, which takes effect immediately, makes voice cloning technology used in common robocall scams targeting consumers illegal. This would give State Attorneys Generals across the country new tools to go after bad actors behind these nefarious robocalls. 

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Financial Crimes Enforcement Network (FinCEN) 

FinCEN Releases a Proposed Rule to Require the Reporting of Information Related to Real Estate Closings 

FinCEN issued a proposed rule which would require certain professionals involved in real estate closings and settlements to report information to FinCEN about non-financed transfers of residential real estate to legal entities or trusts. FinCEN’s proposal is tailored to target residential real estate transfers considered to be high-risk for money laundering, while minimizing potential business burden, and it would not require reporting of transfers made to individuals. 

The proposed rule describes the circumstances in which a report would be filed; who would file a report; what information would need to be provided, including information about the beneficial owners of the legal entities and trusts; and when a report about the transaction would be due. Data from the reports would assist the Department of the Treasury and its law enforcement and national security partners in addressing vulnerabilities that leave the U.S. residential real estate market exposed to abuse by illicit actors. 

League InfoSight Highlight: Consumer Compliance Outlook Article 

In the February 6, 2024 newsletter, we provided a link to the most recently published Consumer Compliance Outlook (Issue 4), which is a Federal Reserve Publication that addresses Consumer Compliance Topics. This publication generally focuses on what the Federal Reserve is identifying in the review of banks under their purview. This offers us an opportunity to see some trends (regulatory agencies tend to focus on similar things) and gain expertise on how we can jump start and improve our processes and avoid similar violations. 

Issue 4 focused on the top violations in 2022 for Regulation E Error Resolution Requirements, Regulation X Escrow Account Requirements, Fair Credit Reporting Act (FCRA) and the Equal Credit Opportunity Act (ECOA). Do you see a trend here? 

Below are highlights from the articles. Note that the “common issues” identified by the Federal Reserve for the violations identified across the board were generally inadequate training, controls, and procedures. 

FCRA and ECOA Violations 

• Adverse Action Notices. It was identified that financial institutions were not providing notices when required, not including the range of credit scores utilized, and not including required FCRA disclosures. Examiners also cited financial institutions for failing to provide notices in a timely manner (within 30 days of receiving a complete credit application). Procedures should identify when an application is considered “complete.”  

• Spousal Signatures. Financial institutions cited were requiring individual creditworthy applicants to obtain the signature of their spouse or another person as a condition of their loan. With state law implications and certain exceptions, procedures need to be in place with proper controls to avoid violations.  

• Copies of Appraisals and Required Disclosures. Examiners cited financial institutions for not appropriately providing applicants copies of appraisals or valuations on first-lien mortgage applications. Financial institutions also failed to mail or deliver notice in writing of the applicants right to receive a copy of appraisal/valuations, no later than the third business day after the creditor receives an application.  

Regulation E and Escrow Requirements 

• Investigating Errors. Financial institutions were not promptly conducting error resolution investigations after being notified by consumers. Issues were also identified with staff not recognizing when consumers were making error resolution claims, initiating investigations, and not correctly identifying disputed transactions.  

• Provisional Credit. Financial institutions were not providing provisional credit for the amount of the alleged error within 10 business days of receiving an error notice when the financial institution was not able to complete the investigation within 10 business days and took up to 45 days to investigate. Also identified was failure to provide full access to use of the provisionally credited funds during the investigation.  

• Investigations. Examiners identified financial institutions not conducting adequate investigation of error claims. When the alleged error is an unauthorized EFT, the burden of proof is on the financial institution to establish the transaction was not authorized. A consumer’s claim cannot be denied without conducting a reasonable investigation under the Regulation.  

• Escrow analysis. Examiners found inaccurately computed and disclosed initial and annual escrow analyses. Incorrect system settings and payment amount issues typically caused the errors identified.  

• Annual Escrow Analysis. Financial institutions were conducting annual escrow account analyses beyond the 12-month computation year, without issuing short-year statements as required.  

This issue also identifies “sound compliance practices” for financial institutions to consider. It should be no surprise that some of those practices include board and management oversight and increasing oversight (inclusive of third-party oversight), internal controls, consumer complaints, training, monitoring and/or audit, and policies and procedures. Need help? Please don’t hesitate to contact us at info@leagueinfosight.com! 

Glory LeDu
CEO, League InfoSight and CU Risk Intelligence 

Whether you are a federal or state-chartered credit union, there are state laws that impact your operations. The most efficient and quickest way to find those laws is through InfoSight. This member benefit provides you with access to applicable state content for all 50 states, without you needing to search through tons of random online sources. Stop wasting time trying to research when InfoSight has aggregated all the information your credit union needs to stay compliant in an ever-changing and evolving federal and state environment. 

CFPB Secures $12 Million From Ringleaders of Foreclosure Relief Scam 

NCUA Chairman Todd M. Harper’s Remarks on Agenda for Review of Credit Union Regulations 

FinCEN Requests Comments on Renewal of the OMB Control Numbers for Bank Secrecy Act Requirements in Connection with Reports of Transactions in Currency Regulations and the Currency Transaction Report 

The CFPB’s Enforcement Work in 2023 and What Lies Ahead 

Think You Know What the Top Scam of 2023 Was? Take a Guess 

IRS Warns Tax Professionals to be Aware of EFIN Scam Email 

Feb 19, 2024: Presidents Day - Federal Holiday 

Feb 20, 2024: Effective Date FinCEN BOI Access Rule 

Mar 11, 2024: Comments Due FTC Proposed COPPA Changes 

Mar 22, 2024: Last day to submit IRS ERC Voluntary Disclosure Program 

Mar 25, 2024: CFPB Proposed Rule on NSF (Declined Transaction) Fees 

Apr 1, 2024: Comments Due CFPB Overdraft Rule 

Apr. 30, 2024: 5300 Call Report Due 

May 12, 2024: FRB Interchange Fee Proposal Comments Due 

May 27, 2024: Memorial Day – Federal Holiday 

Who can make contributions to a member's Health Savings Account? 

Anyone can make a contribution to a member’s HSA. Although guidance issued by the IRS refers to contributions by employers or family members, anyone can make a contribution to an HSA on behalf of an eligible individual. All contributions, regardless from whom they are made, will be applied toward the total amount that the member is eligible to contribute. 

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If you have questions about this communication, contact us at 800.546.4465, or via our shared email inbox at compliance@gowest.org.

Have a great week!

Your GoWest Compliance Team, 

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GoWest Credit Union Association, 18000 International Blvd Ste. 1102, SeaTac, WA 98188, United States
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