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 May 5, the DOJ announced that it plans to submit to Congress proposals for legislative amendments that would provide the DOJ with additional tools to advance anti-corruption work in the areas of pursuing illegal proceeds of transnational corruption and modifying the substance of criminal corruption offenses. The DOJ’s proposals regarding the illegal proceeds of transnational corruption would amend various sections of the U.S.C. to (i) expand foreign money laundering predicate crimes to include any violation of foreign law that, if committed in the U.S., would be a money laundering predicate; (ii) allow administrative subpoenas for money laundering investigations; (iii) enhance law enforcement’s ability to obtain overseas records by allowing access to foreign bank or business records by serving subpoenas on foreign bank branches located in the United States regardless of bank secrecy or data privacy laws in the foreign jurisdictions; (iv) create a framework to use and protect classified information in civil kleptocracy-related cases; and (v) extend the time period in which the United States can restrain property based on a request from a foreign country from 30 to 90 days. The proposals pertaining to substantive corruption offenses would amend 18 U.S.C. § 666 (theft or bribery concerning programs receiving federal funds) to (i) expressly criminalize the corrupt offer or acceptance of payments to “reward” official action; and (ii) lower the dollar threshold for liability from $5,000 to $1,000 to address cases where the dollar amount may be low but threat to the integrity of a government function is high.
On April 18, Senators Sherrod Brown (D-OH), Jeffrey Merkley (D-OR), and Jeanne Shaheen (D-NH) sent a letter to the Government Accountability Office (GAO) requesting that it complete a study on the fintech industry. Under the Dodd-Frank Act, the GAO is required to examine the regulatory structure of person-to-person (P2P) lending. While the letter recognizes that the GAO issued a report on P2P lending in 2011, the senators urged the GAO to recognize that the lending platforms of financial technology firms (often called fintech) “has changed dramatically and evolved beyond consumer lending,” and that “P2P lending, now generally called marketplace lending, is not the only form of fintech that has developed over the last several years.” The letter further cautions that, “gaps in understanding and regulation of emerging financial products may result in predatory lending, consumer abuse, or systemic issues.” Finally, Senators Brown, Merkley, and Shaheen urged the GAO to provide responses to questions relating to, among other things, (i) the size and structure of the loan portfolios maintained by privately owned fintech lenders; (ii) how fintech lenders’ relationships with financial institutions impact both the financial system at large and regulatory framework; (ii) whether the risks that may arise from the investor base shifting from individual investor to institutional investor have grown since this issue was first noted in the GAO’s 2011 report; and (iii) the anti-money laundering, data security, and privacy requirements fintech companies are subject to.
On April 15, OFAC issued new regulations to implement the Hizballah International Financing Prevention Act of 2015. The regulations authorize the Secretary of the Treasury to prohibit U.S. financial institutions from opening or maintaining correspondent or payable through accounts, or to impose strict conditions on the opening or maintenance of such accounts, for foreign financial institutions determined to knowingly: (i) facilitate significant transactions for or on behalf of Hizballah or any person whose property or interests in property are blocked due to a connection with Hizballah; (ii) engage in money laundering to carry out such transactions; or (iii) facilitate or provide significant financial services in relation to transactions described in (i) and (ii). OFAC will publish the names of foreign financial institutions sanctioned under the Hizballah Financial Sanctions Regulations in the Federal Register, and include them in the Hizballah Financial Sanctions Regulations List, a new list maintained on OFAC’s website. The regulations took effect immediately upon issuance.
On April 13, the OCC named Donna Murphy Deputy Comptroller for Compliance Risk. Effective May 1, Murphy will be responsible for supervising the development of policy and examination procedures relating to consumer, BSA/AML, and Community Reinvestment Act issues. Prior to joining the OCC in 2013, Murphy supervised the DOJ’s fair lending enforcement program.