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FinCEN requires title insurance companies to disclose individuals’ identities
On October 15, FinCEN renewed its Geographic Targeting Orders (GTOs) requiring U.S. title insurance companies to report the identities of individuals behind shell companies used in non-financed residential real estate purchases. The renewed GTOs, effective from October 16, 2024, to April 14, 2025, cover specific counties and metropolitan areas in California, Colorado, Connecticut, Florida, Hawaii, Illinois, Maryland, Massachusetts, Nevada, New York, Texas, Virginia, Washington and the District of Columbia, with a purchase price threshold of $300,000. There is one exception for the City and County of Baltimore, where the purchase price threshold is $50,000. The order mandated that title insurance companies report transactions involving residential real estate purchases by legal entities without bank loans, using various forms of payment, including currency and checks. The companies must file a FinCEN Currency Transaction Report within 30 days of closing such transactions, detailing the identities of the individuals and entities involved, the purchase price, and the method of payment.
DOJ, CFPB file complaint, propose order against mortgage company for alleged redlining
On October 15, the CFPB and DOJ announced an enforcement action against a mortgage company, alleging it engaged in redlining against majority-Black neighborhoods in the greater Birmingham, Alabama area. According to the complaint, defendant’s marketing and sales practices discouraged people from applying for mortgage loans in these neighborhoods, allegedly violating ECOA, the CFPA, and the Fair Housing Act.
Defendant allegedly concentrated its retail loan offices in majority-white areas and directed less than 3 percent of its direct mail advertising to consumers in majority-Black neighborhoods from 2018 to 2020. The complaint further states that defendant’s home mortgage lending activities was disproportionately focused on white areas, with the company generating loan applications in Black and Hispanic neighborhoods at a rate below that of its peer institutions. Despite data showing these disparities, defendant allegedly failed to take substantial steps to address the redlining risk before October 2022, other than instructing loan officers not to discriminate.
Defendant issued a response to the settlement on its website, stating among other things that it was unaware of the allegations in the agencies’ complaint until after the settlement was reached; that the complaint “significantly mischaracterizes the matter at issue and appears to be intentionally inflammatory in nature”; and that certain of the language used in the complaint was “mutually rejected by the parties prior to settlement…which suggest bad faith by part of the government.”
The associated proposed consent order, if approved by the court, would require defendant to pay a $1.9 million civil penalty to the CFPB’s victims relief fund. Additionally, defendant would be required to provide $7 million for a loan subsidy program to offer affordable home purchase, refinance, and home improvement loans in the impacted areas. The program may include lower interest rates, down payment assistance, closing cost assistance, or payment of initial mortgage insurance premiums. Furthermore, defendant would be required to invest at least $1 million to open or acquire a new loan production office or full-service retail office in a majority-Black neighborhood in Birmingham. The company must also allocate at least $500,000 for advertising and outreach, at least $250,000 for consumer financial education, and at least $250,000 for partnerships with community-based or governmental organizations to serve neighborhoods previously allegedly redlined by the company. Finally, the agencies noted that defendant cooperated with the investigation.
DOJ settles with credit union in redlining action
On October 10, the DOJ announced its first redlining settlement against a credit union. The credit union agreed to pay over $6.5 million to resolve allegations of lending discrimination by redlining predominantly Black and Hispanic neighborhoods in and around Philadelphia.
According to the complaint, from at least 2017 through 2021, the credit union allegedly failed to provide mortgage lending services to majority-Black and Hispanic neighborhoods and discouraged residents from obtaining home loans. The credit union’s mortgage lending was allegedly disproportionately focused on white areas, with peer lenders generating mortgage applications and originating loans in Black and Hispanic neighborhoods at significantly higher rates. The complaint also notes that the credit union’s branches are almost exclusively located in majority-White neighborhoods, with none in Philadelphia, which contains a significant portion of the majority-Black and Hispanic neighborhoods in the market area.
Under the proposed consent order, the credit union will invest $6.52 million to increase credit opportunities for communities of color in and around Philadelphia — $6 million in a loan subsidy fund, $250,000 on community partnerships for financial education and foreclosure prevention, $270,000 for advertising and outreach, and the opening of three new branches in predominantly Black and Hispanic neighborhoods. Additionally, the credit union will hire a community lending officer and retain independent consultants to enhance its fair lending program. Finally, the DOJ noted that the credit union, which has assets of approximately $6 billion and operates 24 branches in Greater Philadelphia, cooperated with the investigation.
U.K.’s Financial Conduct Authority charges individual operating crypto ATMs
On September 10, the U.K. Financial Conduct Authority (FCA) announced that it charged an individual with, among other things, unlawfully operating a network of unregistered crypto-asset ATMs. Allegedly, the individual managed ATMs that processed 2.6 million pounds ($3.4 million) in crypto-asset transactions from December 2021 to September 2023. This is the FCA’s first criminal prosecution related to unregistered crypto-asset activities under the U.K. Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
The FCA has been working in partnership with law enforcement agencies to disrupt crypto-asset ATMs operating illegally across the U.K. In 2023, the FCA disrupted 26 machines that were operating unlawfully. The FCA stated that there are no legal crypto-asset ATM operators in the U.K. and continues to tell consumers that crypto-assets are unregulated and considered high-risk.
Illinois enacts the Uniform Money Transmission Modernization Act
On August 9, the Governor of Illinois signed SB 3412 (the “Act”) into law, creating a new regulatory framework for money transmission. This Act, named the Uniform Money Transmission Modernization Act, replaces the previous Transmitters of Money Act. The Act aims to standardize and modernize the regulation, licensing, and supervision of money transmission activities across states. The Act protects the public from financial crimes, reduces regulatory burdens, and ensures the safety of customer funds. The Act introduces specific licensing requirements, such as applicants providing detailed financial and operational information. It mandates that licensees maintain a tangible net worth and permissible investments to safeguard customer funds. Additionally, it outlines the roles and responsibilities of authorized delegates, ensuring compliance with state and federal laws.
Licensees must submit regular reports, including audited financial statements and records of money transmission activities. The Act grants the Secretary of Financial and Professional Regulation the authority to conduct compliance examinations. It includes provisions for a transition period, allowing current licensees to continue operating under the new regulations upon license renewal. The Act also establishes the Transmitters of Money Act (TOMA) Consumer Protection Fund to provide restitution to consumers who suffer monetary losses due to violations. The new regulations take effect immediately, with certain provisions becoming effective on January 1, 2026.
DOJ announces Corporate Whistleblower Awards Pilot Program
Recently, the DOJ announced the launch of the Corporate Whistleblower Awards Pilot Program, starting on August 1. This initiative aims to address corporate crime by encouraging whistleblowers to submit original information about specific types of corporate misconduct not covered by existing federal programs. The program focuses on crimes involving financial institutions, foreign and domestic corruption, and healthcare fraud targeting private insurers. Whistleblowers may receive a portion of asset forfeitures resulting from successful prosecutions, with awards based on the "net proceeds forfeited." DOJ said the program complements existing voluntary self-disclosure programs and encourages internal reporting within companies. The DOJ plans to regularly evaluate the pilot program and may seek additional legislation to expand its scope.
California’s DFPI orders two crypto-asset companies to stop operations
On June 5, the California DFPI issued two desist and refrain orders against securities firms for allegedly offering unqualified securities under California’s Corporate Securities Law (CSL). The first order was against a company incorporated in the U.K., whereby the DFPI alleged the firm offered and sold unpermitted securities to Californians through its website. Since 2023, these alleged securities were interest-bearing accounts where the firm promised to pay interest on deposited assets that would be deployed into decentralized finance liquidity pools. According to the order, these securities were packaged as investment contracts “that were neither qualified nor exempt from the qualification requirement” of the state’s CSL. The second order was against another crypto-asset firm whereby the firm offered crypto asset interest-bearing accounts beginning in 2023 that were neither qualified nor exempt from the qualification requirement under the CSL, and the DFPI had not permitted the firm to sell securities in California. Both orders required the firms to desist and refrain from selling securities in California until the CSL’s requirements have been met.
CFTC reports on success of whistleblower policy by citing recent $4.5 mil. award
On June 3, the CFTC awarded over $4.5 million to an anonymous whistleblower who provided information and industry expertise as part of an enforcement action. The CFTC noted that the award highlighted the pivotal role whistleblowers play in maintaining the integrity of the futures markets. Ian McGinley, the CFTC's Director of Enforcement, commended the whistleblower for their extensive cooperation with the enforcement staff. Additionally, Brian Young, who leads the CFTC's Whistleblower Office, emphasized that the award program is open to individuals from diverse backgrounds.
The CFTC noted this award solidified the CFTC Whistleblower Program's impact since its inception in 2014. With approximately $370 million awarded to date, the program has been instrumental in numerous enforcement actions that have resulted in over $3.2 billion in sanctions. The program was funded entirely by monetary sanctions paid by violators of the Commodity Exchange Act, ensuring no funds are taken from harmed customers.
Texas issues a cease and desist order against a securities firm
On April 22, the Securities Commission of the State of Texas issued an Emergency Cease and Desist Order pursuant to the Texas Securities Act against respondents for allegedly offering investments in a digital gold vault that “purportedly secured physical gold and generates passive income using fintech and blockchain technology,” and are therefore subject to the Securities Act. The Securities Commission alleged that the investments were being “illegally, deceptively and fraudulently offered in Texas” and issued the Emergency Cease and Desist Order to “stop the scheme and protect the public from immediate and irreparable harm.” Respondents were ordered to immediately cease and desist from: (i) offering any security in Texas until the security is properly registered or exempt from registration; (ii) acting as securities dealers, agents, investment advisors, or investment advisor representatives in Texas until they are registered with the Securities Commissioner or exempt from registration; (ii) engaging in any fraud in connection with the offer for sale of any security in Texas; and (iv) offering securities in Texas through an offer containing a statement that is materially misleading or otherwise likely to deceive the public.
FinCEN renews real estate GTOs
On April 17, FinCEN renewed its Geographic Targeting Orders (GTOs) which require title insurance companies to identify the real owners of shell companies involved in cash real estate purchases. This renewal is effective from April 19, through October 15, and applies to specified counties and cities across various states, including California, Florida, New York, and the District of Columbia. The GTOs aim to gather data on potential illicit activities in the housing market and support regulatory initiatives. The minimum property purchase price for reporting remains at $300,000, except in Baltimore, where it is $50,000. FinCEN is also processing feedback from a February proposed rulemaking on anti-money laundering measures for the residential real estate sector.
FinCEN FAQs regarding the GTOs are available here.