Wednesday, January 19, 2022

To access specific issuances, go to our Top Stories section, where you'll find links to all the relevant documents.
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CFPB bans Brightspeed Solutions and former CEO
The CFPB on Tuesday announced it has filed a proposed final judgment and order to resolve a March 2021 lawsuit brought by the CFPB against BrightSpeed Solutions and its founder Kevin Howard. The CFPB alleges that between 2016 and 2018, BrightSpeed and Howard knowingly assisted companies profiting from fraudulent services and products. BrightSpeed and Howard processed payments for companies that claimed to offer technical-support services and products to consumers over the internet, but in reality, the companies tricked consumers into purchasing expensive and unnecessary antivirus software or services.

Many of the targeted consumers were older adults unaware of clickbait scams and that the software and services they purchased were actually available for free. If entered by the court, the order would require BrightSpeed and Howard to pay a civil penalty of $500,000 and permanently bar them from multiple consumer financial products and services industries.

Chicago-based BrightSpeed was a privately owned, third-party payment processor founded in 2015 and operated by Howard. It ceased operations in March 2019. From 2016 to 2018, BrightSpeed and Howard processed remotely created check payments for more than 100 client companies totaling more than $70 million. The CFPB alleges that many of BrightSpeed's client companies purported to provide antivirus software and technical-support services to consumers, particularly older adults, but they instead scammed consumers into purchasing unnecessary and expensive computer software and services for amounts as high as $2,000. The client companies allegedly sold their products and services through fraudulent telemarketing schemes and received payments through remotely created checks processed by BrightSpeed.

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OCC conditionally approves SoFi Bank, N.A.
The Office of the Comptroller of the Currency yesterday conditionally approved applications from Social Finance Inc. (SoFi) to create SoFi Bank, National Association (SoFi Bank, N.A.), as a full service national bank headquartered in Cottonwood Heights, Utah. As part of the transaction, SoFi Bank, N.A. will acquire Golden Pacific Bank, National Association, a national bank insured by the Federal Deposit Insurance Corporation.

After completing this transaction, SoFi Bank, N.A., will have $5.3 billion in total assets and $718 million in capital at the end of the first year of operation, and will continue to offer a range of local commercial-focused loan offerings and deposit products previously offered by Golden Pacific. The bank will also provide a fully digital, mobile-first national lending platform for consumers across the country. The conditions imposed require specific capital contributions, adherence to an Operating Agreement, and confirmation that the resulting bank will not engage in any crypto-asset activities or services. In addition, the parent company of SoFi Bank, N.A., SoFi Technologies, has applied to the Federal Reserve to become a bank holding company and therefore subject to consolidated supervision.

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Fed issues C&D to Nano Banc and holding companies
The Board of Governors of the Federal Reserve System has issued an Order to Cease and Desist to Nano Banc and its holding companies, Allegiant United Holdings, LLC and Nano Financial Holdings, Inc., all of Irvine, California. According to the Order, the bank is operating without a permanent chief executive officer and chief financial officer, or a sufficient number of board members. In December 2021, the California Department of Financial Institutions ordered the bank's board to increase the number of directors to comply with state law.

The Fed Board's order requires that the holding companies and bank propose qualified candidates to fill its executive officer positions and enough qualified directors to meet California legal requirements, with a majority being outside directors. The bank must also address cited violations of Regulations O and W, and submit for approval written policies and procedures for compliance with those regulations and with sections 23A and 23B of the Federal Reserve Act.

The bank must also submit for approval written lending and credit administration policies. Pending approval of those policies by the San Francisco Federal Reserve Bank, the bank may not directly or indirectly approve, extend, modify or renew any "covered loan" without prior approval of the Reserve Bank. "Covered loans" comprises loans classified as "loss," "doubtful," or "substandard" in the most recent Report of Examination; loans made to insiders; commercial real estate loans; commercial and industrial loans; and loans to finance commercial real estate, construction, and land development activities (not secured by real estate).

The bank must also take specified action with regard to compensation governance, policies, , and internal controls.

IN THE NEWS
AccuSystems published an article about new account onboarding. Read the article.

OFAC sanctions Hizballah financiers in Lebanon
On Tuesday, the Department of the Treasury announced that OFAC has designated three Hizballah-linked financial facilitators—Adel Diab, Ali Mohamad Daoun, and Jihad Salem Alame—and their Lebanon-based travel company, Dar Al Salam for Travel & Tourism, under Executive Order 13224, which targets terrorists, leaders, and officials of terrorist groups, and those providing support to terrorists or acts of terrorism.

Identification information on the designated individuals and entity can be found in the January 18, 2022, BankersOnline OFAC Update.

Overcharged LendingClub members to receive $10M+
The Federal Trade Commission has announced it is returning more than $10 million to consumers who were charged undisclosed fees by online lender LendingClub Corporation.

The FTC sued LendingClub in April 2018, charging that the company falsely promised loan applicants that they would receive a specific loan amount with "no hidden fees," when in reality the company deducted hundreds or even thousands of dollars in hidden up-front fees from the loans. The FTC also alleged that LendingClub told consumers they were approved for loans when they were not and took money from consumers' bank accounts without authorization. More…

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