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  • HUD Issues Guidance Based On Equal Access Rule

    Consumer Finance

    On July 13, HUD announced guidance regarding discrimination on the basis of sexual orientation, gender identity, and marital status.  The guidance on Multifamily Assisted and Insured Housing Programs was intended to clarify the 2012 Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity Rule (“Equal Access Rule”). HUD clarified that, in addition to individual program eligibility requirements established by HUD, a determination of eligibility for housing that is assisted by HUD or subject to a mortgage insured by the FHA “will be made available without regard to actual or perceived sexual orientation, gender identity, or marital status.” The guidance also clarifies that owners, administrators, and other recipients and sub-recipients of HUD funds associated with HUD-assisted housing or housing whose financing is insured by HUD may not inquire about the sexual orientation or gender identity of an applicant for, or occupant of, such housing, and notes that the rule is applicable whether such housing is renter or owner occupied.  HUD noted that future Management and Occupancy Reviews may include a review for compliance with the Equal Access Rule.  The guidance was coordinated with the July 13 White House Conference on Aging, with the White House emphasizing that the Equal Access Rule also applies to Section 202 Supportive Housing for the Elderly.

    HUD FHA Discrimination

  • SEC Settles with Post It-Eating Middleman in Law Firm Insider Trading Case

    Financial Crimes

    On July 13, the SEC announced a settlement with Frank Tamayo, who acted as a middleman in a $5.6 million insider trading scheme.   According to the SEC, a law firm clerk used the firm’s internal databases to access confidential information concerning clients’ pending corporate transactions, and tipped Tamayo at coffee shops to the pending transactions.  Tamayo wrote ticker symbols of target companies on a Post-It note or napkin, met a stockbroker in Grand Central Terminal’s main concourse, flashed the Post-It or napkin to the stockbroker, and then immediately chewed up and swallowed it.  Tamayo also conveyed additional information about the pending deals, in total passing information on over a dozen companies.  The stockbroker then traded in the shares of the subject companies on behalf of the co-conspirators and other customers. The settlement involved no monetary penalties based on Tamayo’s extensive cooperation with the SEC.  A $1 million disgorgement as part of the settlement can be satisfied by forfeiture or restitution in a parallel criminal proceeding pending in the District of New Jersey, where Tamayo has already pleaded guilty.

    SEC Financial Crimes

  • OFAC Provides Overview of Agreement with Iran Regarding Sanctions Relief

    Federal Issues

    On July 14, OFAC released a statement regarding the agreement reached with Iran over its nuclear program. Following months of diplomacy, OFAC stated that the P5 + 1 reached a Joint Comprehensive Plan of Action (JCPOA) with Iran regarding Iran’s nuclear program to ensure that it is exclusively peaceful going forward. Once the International Atomic Energy Agency (IAEA) verifies that Iran has implemented key nuclear-related measures described in the JCPOA (“Implementation Day”), “U.S. sanctions relief will be provided through the suspension and eventual termination of nuclear-related secondary sanctions.” The P5 + 1 and Iran also concluded on July 14 that the sanctions relief provided for in the JPOA of November 24, 2013 would be extended through Implementation Day; until further notice, the JPOA sanctions relief will be the only Iran-related sanctions relief in effect. The White House issued a description of the agreement to demonstrate how the long-term comprehensive nuclear deal with Iran “will verifiably prevent Iran from acquiring a nuclear weapon and ensure that Iran’s nuclear program will be exclusively peaceful going forward.” Finally, as decided on July 14, licenses with the following credentials will remain in effect in accordance with their terms until Implementation Day: (i) Issued by OFAC’s Second Amended Statement of Licensing Policy on Activities Related to the Safety of Iran’s Civil Aviation Industry; and (ii) set to expire on or before July 14, 2015. OFAC stated that the U.S. government will publish detailed guidance related to the JCPOA prior to Implementation Day, and will issue revised guidance on the continued JPOA relief shortly.

    Sanctions OFAC

  • CFPB Readies Guidance to Help Prevent Elder Financial Exploitation

    Consumer Finance

    On July 13, CFPB Director Richard Cordray delivered remarks at the White House Conference on Aging, expressing the need to protect older consumers in light of recent studies that have found that financial exploitation is the most prevalent form of elder abuse. Accordingly, Cordray revealed that the Bureau intends to issue an advisory “later this year” to assist financial institutions with preventing, recognizing, and reporting elder financial abuse, adding that “[f]inancial institutions are especially well-positioned” to prevent fraud, scams, or theft that victimize seniors.

    CFPB Consumer Finance Elder Financial Exploitation

  • FinCEN Issues Geographic Targeting Order to Combat Stolen Identity Tax Refund Fraud in South Florida

    Privacy, Cyber Risk & Data Security

    On July 13, FinCEN issued a Geographic Targeting Order (GTO) requiring check cashers in two South Florida counties to strengthen identification requirements for customers cashing certain Federal tax refund checks. According to FinCEN, Miami-Dade and Broward Counties have become a haven for criminals who, using stolen identities, file fraudulent Federal tax returns and then cash the refund checks at a local check casher. Effective August 3 through January 30, 2016, the GTO will require check cashers located in those counties to obtain additional identifying information from customers seeking to cash Federal tax refund checks (including refund anticipation loan checks from third parties) that exceed $1,000. Issued in coordination with the IRS and the U.S. Attorney’s Office for the Southern District of Florida, the GTO will require customers to provide the following: (i) a valid government-issued identification; (ii) a digital photograph at the time of the transaction; (iii) a valid phone number; and (iv) a thumbprint. The GTO is intended to put a “roadblock in the path of those who would steal another person’s identity,” making it more difficult for the criminals to evade anti-money laundering controls and “reap the rewards of their actions.”

    FinCEN Check Cashing

  • Rhode Island Modifies its Fair Housing Practices Act to Include Military Status Under Discrimination Protections

    Consumer Finance

    On July 9, Governor Raimondo signed S.0241, which amends the Rhode Island Fair Housing Practices Act to include discrimination based on a person’s military status as a prohibited and unlawful housing and credit granting practice. Protected classes now include veterans with an honorable discharge (or an honorable or general administrative discharge), and active servicemembers in the Armed Forces.  The amendments are effective immediately.

     

     

    Fair Housing Servicemembers

  • CFPB Director Set to Testify at Senate Banking Hearing on July 15

    Consumer Finance

    On July 15, CFPB Director Richard Cordray will deliver testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs focusing on “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.” The hearing is scheduled to begin at 10 a.m.

    CFPB U.S. Senate

  • Update: OFAC Releases Guidance on the Continuation of Certain Temporary Sanctions Relief Under the JPOA

    Federal Issues

    On July 10, the P5 + 1, and Iran agreed to extend the JPOA for three days to further negotiations in reaching a comprehensive solution surrounding Iran’s nuclear program. As a result, OFAC issued updated guidance informing that all JPOA sanctions relief detailed in the Guidance, FAQs, and Statement of License Policy issued in November 2014 has been extended through July 13, 2015. This updated guidance replaces guidance previously issued by OFAC on July 7, 2015.

     

    Sanctions OFAC

  • FCC Announces $3.5 Million Settlement with Carriers to Resolve Consumer Privacy Investigation

    Privacy, Cyber Risk & Data Security

    On July 9, the FCC announced a $3.5 million settlement with carriers TerraCom, Inc. and YourTel America, Inc. to resolve an investigation into the exposure of personal information of over 300,000 of their customers online via unprotected servers used by their vendors to store customer information.  The exposed information included names, addresses, Social Security numbers, driver’s licenses, and other pieces of sensitive information that were viewable by anyone with access to a search engine.  Section 222(a) of the Communications Act imposes on carriers a duty to protect the confidentiality of “proprietary information of… customers” and the FCC Enforcement Bureau viewed this incident as a violation of that duty, as well as its duty under Section 201(b) to employ “just and reasonable” data security practices to protect the confidentiality of consumers’ proprietary information. Under the settlement, TerraCom and YourTel are required to (i) designate a senior corporate manager with certified privacy expertise, (ii) conduct a privacy risk assessment, (iii) put in place a written information security program and data breach response plan, (iv) maintain “reasonable oversight” of third-party vendors, and (v) offer privacy and security training.  FCC-regulated entities should review their privacy and data security practices to ensure that they are taking appropriate steps to protect their customers’ proprietary information.

     

    FCC Enforcement Privacy/Cyber Risk & Data Security

  • White House Provides Update on 2015 Cybersecurity Initiatives

    Privacy, Cyber Risk & Data Security

    On July 9, the White House released a fact sheet regarding the Administration’s 2015 cybersecurity efforts “both domestic and international, to improve our cyber defenses, enhance our response capabilities, and upgrade our incident management tools.” More specifically, these include (i) supporting the private sector; (ii) enhancing federal cybersecurity; (iii) developing new policies and capabilities to identify, defend against, and counter malicious cyber actors; and (iv) engaging internationally. Among the private sector achievements is new legislative proposals; the Department of Defense and Department of Homeland  (DHS) opening offices in Silicon Valley; and the increase in information sharing between the private sector and government, including DHS’s initiative to develop an automated system for sharing cyber threat indicators. The federal achievements include continual cross-agency efforts to improve how the government conducts background investigations. The new policy achievements includes imposing financial sanctions on those participating in malicious cyber-enabled activities threatening national security, strengthening national defense, and creating new cybersecurity laws.  Finally, the international accomplishments include the President’s efforts to bolster international commitments and law enforcement, and to strengthen the country’s global leadership role in cybersecurity.

    Privacy/Cyber Risk & Data Security Obama

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