On April 26, FinCEN announced the departure of Director Calvery. Commenting on Calvery’s accomplishments during her tenure as Director, the agency opined that, “[u]nder Ms. Calvery’s direction, [it] has enhanced its reputation within the U.S. government, throughout the U.S. financial sector, and with international financial partners as a key resource in the fight against terrorist finance, money laundering, and transnational organized crime.” As Director of FinCEN since September 2012, Calvery’s team has addressed topics such as virtual currency, money laundering via real estate purchases, and terrorist financing. Calvery will be departing FinCEN at the end of May 2016.
On April 27, the OCC issued Bulletin 2016-13 to remind banks of their obligations pertaining to the maintenance of records, records retention, and examiner access to records. According to the bulletin, communications technology recently made available to banks could “prevent or impede OCC access to bank records through certain data deletion or encryption features.” The OCC’s bulletin reminds banks that (i) pursuant to 12 U.S.C. § 481 and 12 U.S.C. § 1464(d)(1)(B)(ii), the OCC has full and unimpeded access to a bank’s books and records; and (ii) communications technology should not be used to limit an examiner’s access to bank records. The bulletin further cautions that, while some chat and messaging platforms claim the ability to permanently delete internal communication, the OCC believes that the “permanent deletion of internal communications, especially if occurring within a relatively short time frame, conflicts with OCC expectations of sound governance, compliance, and risk management practices as well as safety and soundness principles.”
On April 21, OFAC updated its list of frequently asked questions related to Cuba. The updated document includes eight new FAQs clarifying (i) that Section 515.584(d) of the Cuban Assets Control Regulations (CACR) permits authorized U-turn transactions to originate or terminate at foreign branches and subsidiaries of U.S. banking institutions; (ii) due diligence expectations for banks processing an authorized U-turn transaction from a sanctions compliance perspective; (iii) that the importation into the United States of goods previously exported to Cuba for servicing requires a specific license; (iv) requirements regarding the export and reexportation of mixed-origin goods to Cuba; (v) that persons subject to U.S. jurisdiction may provide insurance-related services to persons subject to U.S. jurisdiction and engaging in authorized activity in Cuba; (vi) OFAC license requirements for insurance-related services; (vii) that educational grants, scholarships, or awards may be given to a Cuban state-owned entity; and (viii) the circumstances under which a person subject to U.S. jurisdiction is authorized to purchase or lease real property in Cuba.
On April 26, the FDIC voted to approve a final rule that amends how small banks – those with less than $10 billion in total assets – are assessed for deposit insurance. The rule will (i) revise the financial ratios method, basing it on a statistical model that estimates the probability of failure over three years; (ii) update the financial measures used in the financial ratios method to ensure consistency with the statistical model; and (iii) eliminate risk categories for established small banks and use the financial ratios method to determine assessment rates for the small banks. According to FDIC Chairman Martin J. Gruenberg, the final rule will “allow future assessments to better differentiate riskier banks from safer banks . . . . [and] will better allocate the costs of maintaining a strong Deposit Insurance Fund.” The FDIC first published a proposed rule regarding the deposit insurance assessment of small banks in June 2015, and issued a revised proposal in January 2016. Intended to be revenue neutral, the final rule is effective July 1, 2016 with the following caveat: “[i]f the reserve ratio reaches 1.15 percent before that date, the assessment system described in the final rule will become operative July 1, 2016. If the reserve ratio has not reached 1.15 percent by that date, the assessment system described in the final rule will become operative the first day of the calendar quarter after the reserve ratio reaches 1.15 percent.”
Last week, the NYDFS appointed Scott Fischer Executive Deputy Superintendent for Insurance and Laura E. Evangelista Deputy Superintendent for Insurance. Fischer joins the NYDFS from the New York Liquidation Bureau where he served as Special Deputy Superintendent. Previously, Fischer worked at the European Bank for Reconstruction and Development in London, served as Senior Counsel in the Office of General Counsel at the New York Insurance Department, and as Assistant AG at the New York State Attorney General’s Office. Evangelista most recently served as Vice President and Assistant General Counsel at an international insurance brokerage firm; previously, she was a commercial litigator in private practice.