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On January 5, 2016, the Trump Transition team announced the names of the four individuals assigned to lead the President-elect’s CFPB “Landing Team.” Generally, each landing team is tasked with collect information on each agency—ranging from the agency's budget and policies to the status of various rulemakings and the current administration's priorities—all with the overarching purpose of facilitating an orderly transfer of power at the federal financial regulators. The CFPB Landing Team includes:
- Paul Atkins, former GOP Commissioner for the SEC and current CEO of Patomak Global Partners LLC, which provides consulting services concerning financial services industry matters, regulatory compliance, risk and crisis management, public affairs, independent reviews, litigation support, and strategy.
- Kyle Hauptman, Senior Development Manager and occasional writer about financial & political issues for the American Enterprise Institute (AEI), member of the SEC’s Advisory Committee on Small and Emerging Companies, and former chief economic adviser on the issues of Financial Markets, Housing to the Romney For President (RFP) campaign.
- Consuala “CJ” Jordan, a public relations executive and Republican political consultant who is currently CEO of The Jordan Management Group, LLC, a full service Government Relations and Public Affairs Firm, specializing in strategic business development.
- Julie B. Lindsay, Managing Director and General Counsel of Capital Markets and Corporate Reporting at Citigroup Inc., and former Counsel to Commissioner Glassman at the SEC.
On January 11, the GAO announced the release of its report providing an update on the status and condition of Treasury’s TARP-funded housing programs as of October 31, 2016. According to the report, Treasury had disbursed nearly 60 percent or $22.6 billion of the $37.51 billion assigned to TARP for the purpose of helping struggling homeowners avoid foreclosure. The report also notes that the GAO’s latest review yielded no new recommendations and that only five of the 29 recommendations GAO has previously made related to the TARP-funded housing programs remain open or not fully implemented. The report states that the GAO will continue to monitor and assess the status of these recommendations.
On January 13, the FTC announced that Chairwoman Edith Ramirez will be stepping down effective February 10. Chairwoman Ramirez was appointed by President Barack Obama and has served as a commissioner since April 2010. She became chairwoman in March 2013, after former FTC Chairman Jon Leibowitz resigned. Her departure means that President-elect Donald Trump will have the chance to fill three vacancies at the agency.
The European Commission announced the release of its Proposal for a Regulation of the European Parliament and of the Council on Privacy and Electronic Communications (Proposed Regulation), which is set to repeal Directive 2002/58/EC (ePrivacy Directive). The Proposed Regulation—as discussed previously on InfoBytes—is intended to update the current rules to keep up with technical developments and adapting them to the General Data Protection Regulation (GDPR).
Among other things, the Proposed Regulation will expand the scope of the ePrivacy rules to include internet-based voice and internet-messaging services, and to cover the content of communications, including metadata such as the time and location of a call. Furthermore, with regards to cookies, the Proposed Regulation does not require the consent of the user for non-privacy intrusive cookies, which either improve internet experience or measure the number of visitors to a specific website. The proposed Regulation also includes an opt-in requirement for telemarketing calls, unless national laws provide the recipient with a right to object. The Proposed Regulation also contains language extending the remedies currently provided under the GDPR.
Once passed, the Proposed Regulation would become effective on May 25, 2018. Links to other related documents and information may be accessed through the following links:
- Proposal for a Regulation of the European Parliament and of the Council
- Ex-post REFIT evaluation of the ePrivacy Directive 2002/58/EC
- Executive summary of the ex-post REFIT evaluation
- Impact Assessment - part 1
- Impact Assessment - part 2
- Impact Assessment - part 3
- Summary of the Impact Assessment
On January 12, the CFPB published a final rule adjusting upward the maximum amount of each civil penalty within its jurisdiction, as required by provisions of the Inflation Adjustment Act and OMB Guidance. As explained in the rule, the new penalty amounts for 2017 are calculated by multiplying the corresponding 2016 penalty by a “cost-of-living adjustment” multiplier—which for 2017 has been set by the OMB at 1.01636—and then rounding to the nearest dollar. The new penalty amounts apply to civil penalties assessed after January 15, 2017.
On January 10, the CFPB issued a notice of proposed rulemaking concerning amendments to its existing Supplemental Standards of Ethical Conduct for Employees. Among other things, the proposed rule would amend CFPB Ethics Regulations that address: (i) outside employment for covered employees; (ii) Bureau employee ownership or control of certain securities; (iii) restrictions on seeking, obtaining, or renegotiating credit; and (iv) disqualification requirements based on existing indebtedness. The proposed rule is also intended to clarify certain definitions. Comments on the proposal must be received on or before February 9.
On January 12, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced the release of its report on TARP’s “Hardest Hit Fund” (HHF). Created in 2010, the HHF provides a temporary safety net to help save the homes of unemployed and underemployed Americans in 19 states deemed to be the hardest-hit areas of the country. Among other things, the report noted that a majority of the more than 160,000 people denied funds through the program earned less than $30,000. The report notes that SIGTARP is unable to determine why denial rates for homeowners making less than $30,000 are so high, in part, because state agencies' records are non-existent, missing, or incomplete. Indeed, according to the report, some state agencies were unable to provide “even basic aggregate information about why homeowners were denied, let alone a specific reason for each person turned away.” The report emphasized, among other things, the need for all such records-related deficiencies be “immediately remedied.” The report also recommended that state agencies “remove unnecessary restrictions for participation in the program.”
On January 10, it was announced that two additional defendants, owners of Florida and Texas-based energy companies, had pleaded guilty to foreign bribery charges related to a scheme to corruptly secure energy contracts from Venezuela’s state-owned oil company.
According to admissions contained here and here, they conspired with other previously charged defendants from 2008 through 2012 to pay bribes and other things of value, including recreational travel, meals, and entertainment to the company’s officials to obtain energy contracts or receive payment for previously awarded contracts. Some of the bribes were paid to the company’s official’s relative to conceal the nature, source, and ownership of the bribe.
In total, eight individuals have now pleaded guilty in cases related to the government’s investigation into bribery at the company. The government’s investigation is ongoing. Previous FCPA Scorecard coverage on the company’s investigations can be found here.
On January 10, the DOJ announced the unsealing of an indictment charging four individuals, including the nephew and brother of former UN Secretary-General with violations of the FCPA and other offenses in connection with the attempted $800 million sale of a commercial building known as Landmark 72 in Hanoi, Vietnam. According to the government, the brother and nephew conspired to bribe a governmental official of an unnamed Middle Eastern country to get his country to purchase the building from a Korea-based company, where the brother was then a senior executive. To facilitate the sale of Landmark 72, the Korea-based company hired the nephew to secure an investor for the deal.
According to the allegations, the brother and nephew agreed to pay the foreign official $500,000 initially, and $2 million upon completion of the sale, through the co-defendant, who had falsely held himself out as an agent of the foreign official; the fourth individual allegedly assisted in obtaining the initial $500,000. In a twist, according to the DOJ, the co-defendant then stole the money and used it for personal expenses instead of paying any bribes. After the Landmark 72 deal failed to go through, the nephew allegedly lied and provided forged emails from the foreign official and other documents to the Korea-based company regarding the status of the deal and stole approximately $225,000 that was advanced by the Korea-based company to cover brokerage expenses.
American Multinational Food Company and British Multinational Confectionery Company Settle FCPA Charges with SEC for $13 Million Related to India Chocolate Factory
On January 6, the British company and the American multinational food company, agreed to pay $13 million to settle the SEC’s allegations related to an agent’s interactions with Indian officials regarding a chocolate factory in India. The charges relate to payments made by the British company’s India unit in 2010 to a local agent who provided consultation services and dealt with Indian governmental officials to obtain clearances and licenses to increase production at the British company’s Baddi plant. The SEC alleged, and both companies neither admitted nor denied, that the British company violated the books and records and internal controls provisions of the FCPA.
According to the SEC, the British company failed to perform appropriate due diligence on the agent and to monitor the agent’s actions, creating a risk that payments could be used for improper purposes. While the agent submitted invoices claiming that he prepared various license applications, the SEC claimed that these license applications were actually prepared by the British company’s other employees. The SEC noted in its decision that the American company had completed its own internal investigation that led to the British company ending its relationship with the agent and that the American company both cooperated with the SEC’s investigation and undertook “extensive remedial actions with respect to [the British company].”
- Benjamin W. Hutten to discuss "BSA program reporting, management and board of directors responsibilities" at the Georgia Bankers Association BSA Experience Program
- Hank Asbill to discuss "Ethical guidance in conducting internal investigations – The intersection of Yates and Upjohn" at the American Bar Association Southeastern White Collar Crime Institute
- H Joshua Kotin to discuss "Recent developments in fair lending and avoiding the pitfalls" at the Arkansas Community Bankers/Bankers Assurance 2019 Compliance Conference
- Brandy A. Hood to discuss "RESPA Section 8/referrals: How do you stay compliant?" at the New England Mortgage Bankers Conference
- Daniel P. Stipano to discuss "Risk management in enforcement actions: Managing risk or micromanaging it" at the American Bar Association Business Law Section Annual Meeting
- Valerie L. Hletko to discuss "Banking on guns ‘n drugs: Social policy meets financial services" at the American Bar Association Business Law Section Annual Meeting
- Daniel P. Stipano to discuss "Navigating the conflicting federal and state laws for doing business with cannabis companies" at the American Bar Association Business Law Section Annual Meeting
- Tim Lange to discuss "Services and value" at the North American Collection Agency Regulatory Association Annual Conference
- Katherine L. Halliday to discuss "UDAP, UDAAP & the Map rule compliance basics" at the Mortgage Bankers Association Regulatory Compliance Conference
- Amanda R. Lawrence to discuss "Data privacy litigation" at the Mortgage Bankers Association Regulatory Compliance Conference
- Brandy A. Hood to discuss "How to ace your TRID exam" at the Mortgage Bankers Association Regulatory Compliance Conference
- Melissa Klimkiewicz to discuss "Navigating FHA rules and regs" at the Mortgage Bankers Association Regulatory Compliance Conference
- Jeffrey P. Naimon to discuss "Washington regulatory overview" at the Mortgage Bankers Association Regulatory Compliance Conference
- Jonice Gray Tucker to discuss "HMDA data is out, now what?" at the Mortgage Bankers Association Regulatory Compliance Conference
- Daniel P. Stipano to discuss "Assessing the CDD final rule: A year of transitions" at the ACAMS AML & Financial Crime Conference
- Daniel P. Stipano to discuss "Lessons learned from recent enforcement actions and CMPs" at the ACAMS AML & Financial Crime Conference
- Kathryn L. Ryan to discuss "The state’s role in fintech: Providing an industry framework for innovation" at Lend360
- Jeffrey P. Naimon to discuss "Truth in lending" at the American Bar Association National Institute on Consumer Financial Services Basics
- Daniel P. Stipano to discuss "Lessons learned from recent enforcement actions" at the Institute of International Bankers Risk Management and Regulatory Examination/Compliance Seminar
- Jonice Gray Tucker to discuss "Fintech regulatory developments, crypto-assets, blockchain and digital banking, and consumer issues" at the Practising Law Institute Banking Law Institute
- Amanda R. Lawrence to discuss "How to balance a successful (and stressful) career with greater personal well-being" at the American Bar Association Women in Litigation Joint CLE Conference