Washington Report 360 | May 03, 2019

OFAC sanctions compliance; DOJ to evaluate corporate compliance program effectiveness; FINRA rule on firms with history of misconduct.

Key Highlights

  • The Department of the Treasury’s OFAC released a framework for sanctions compliance that is applicable to U.S. organizations and foreign entities doing business in or with U.S. parties or goods.
  • The Department of Justice Criminal Division released guidelines to evaluate the effectiveness of corporate compliance programs.
  • FINRA released a proposed rule to impose additional obligations on firms with a significant history of misconduct.

Financial services legislative and regulatory news

FINRA proposed a rule to impose additional obligations on firms with a significant history of misconduct.

The OCC:

  • Sought comment on a proposed Innovation Pilot Program.
  • Published an advanced notice of proposed rulemaking (ANPR) on its fiduciary regulations related to a bank’s authority regarding a trust and guidance related to “non-fiduciary custody activities.”
  • Proposed to clarify and streamline its regulations governing “other real estate owned.”


  • Published a proposed rule to set coverage thresholds for certain Home Mortgage Disclosure Act (HMDA) reporting, including two alternatives to raise the threshold for close-end mortgages to either 50 or 100 loans, and a two-year extension of the temporary 500-loan threshold for open-end lines of credit.
  • Published an ANPR on the costs and benefits associated with certain data points.
  • Is expected to release proposed debt collection rules on May 8th.

The SEC:

  • Proposed to improve disclosures related to acquisitions and dispositions of businesses.
  • Is working together with the Department of Labor on fiduciary-related issues; each will issue rules in this area. (Investment Adviser).

The Federal Reserve proposed a rule to apply netting protections to a broader range of financial institutions.

The House of Representatives passed H.R. 1876, the Senior Security Act, which would create an SEC task force for senior issues; the bill now moves to the Senate.

A federal judge ruled the New York Department of Financial Services may proceed with its case to invalidate the OCC’s fintech charter. (American Banker).

Ginnie Mae considered changes to the eligibility requirements for its bond programs to address certain “abnormal prepayment patterns,” generally referred to as “churning.” (WSJ).

Financial services policy news

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) released a framework for a sanctions compliance program; the framework applies to organizations subject to U.S. jurisdiction, or foreign entities operating in or with the U.S., U.S. persons, or using U.S.-origin goods and services.

The U.S. Department of Justice Criminal Division released new guidelines on evaluating the effectiveness of corporate compliance programs.

The CFTC released results for the third in a series of supervisory stress testing exercises for central counterparties (CCP) covering a reverse stress test of CCP resources and analysis of stressed liquidation costs.