CFPB Study on Overdraft Fees
On July 31st, the Consumer Financial Protection Bureau published a report on the impact on consumers who opt in to overdraft services for debit card and ATM transactions. The study found that the majority of debit card overdraft fees are incurred on transactions of $24 or less and that the majority of overdrafts are repaid within three days. A consumer who borrowed $24 for three days and who pays the median overdraft fee of $34 pays an annual percentage rate of 17,000 percent. CFPB Press Release.
Bank Secrecy Act Beneficial Ownership Amendments Proposed
On July 30th, the Financial Crimes Enforcement Network published proposed amendments to Bank Secrecy Act regulations that would clarify and strengthen customer due diligence obligations of banks and other financial institutions (including brokers or dealers in securities, mutual funds, futures commission merchants, and introducing brokers in commodities). The proposed amendments would add a new requirement that these entities know and verify the identities of the beneficial owners who own, control, and profit from the companies they service. Comments should be submitted within 60 days after publication in the Federal Register, which is expected shortly. Treasury Department Press Release.
On July 29th, the Treasury Department announced additional sanctions against Russia for its continued efforts to destabilize eastern Ukraine. The sanctions prohibit U.S. persons from providing new financing to three major Russian financial institutions, Bank of Moscow, Russian Agricultural Bank, and VTB Bank OAO. The Treasury Department also designated one Russian state-owned defense technology firm pursuant to Executive Order 13661. The Treasury Department has not blocked the property or interests in property of these banks, nor prohibited transactions with them beyond certain specific restrictions. However, the scope of prohibited activities and the number of sanctioned financial institutions may be expanded. Treasury Department July 29, 2014 Press Release. The European Union has imposed similar prohibitions. E.U. Press Release. On July 16th, the Office of Foreign Assets Control published a list of sanctioned sectors and firms. See also Treasury Department July 16, 2014 Press Release. On July 28th, the Treasury Department updated its frequently asked questions and answers to provide guidance on complying with the Russian sanctions. The guidance concerning Russia begins at question 370. On July 31st, Bloomberg summarized additional measures imposed by the European Union against individual Russians with close ties President Vladimir Putin. The U.S. is also considering new limitations on derivatives trading and short-term loans. Additional Measures.