Treasury Department identifies Chinse nationals as opioid traffickers

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) identified Chinese national Fujing Zheng and the Zheng Drug Trafficking Organization (DTO) as significant foreign narcotics traffickers. © Shutterstock OFAC also designated one additional Chinese national, Guanghua Zheng, for his support to the Zheng DTO’s drug trafficking activities, as well as Qinsheng Pharmaceutical Co. Ltd., […]

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The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) identified Chinese national Fujing Zheng and the Zheng Drug Trafficking Organization (DTO) as significant foreign narcotics traffickers.

© Shutterstock

OFAC also designated one additional Chinese national, Guanghua Zheng, for his support to the Zheng DTO’s drug trafficking activities, as well as Qinsheng Pharmaceutical Co. Ltd., for being owned or controlled by Fujing Zheng. OFAC also identified Xiaobing Yan (Yan) as a significant foreign narcotics trafficker. These actions are pursuant to the Kingpin Act.

“The Chinese kingpins that OFAC designated today run an international drug trafficking operation that manufactures and sells lethal narcotics, directly contributing to the crisis of opioid addiction, overdoses, and death in the United States. Zheng and Yan have shipped hundreds of packages of synthetic opioids to the U.S., targeting customers through online advertising and sales, and using commercial mail carriers to smuggle their drugs into the United States,” Sigal Mandelker, Under Secretary for Terrorism and Financial Intelligence, said. “OFAC and FinCEN’s (Financial Crimes Enforcement Network) coordinated action with U.S. law enforcement leverages Treasury’s authorities to confront the deadly synthetic opioid crisis plaguing America.”

FinCEN issued an advisory to alert financial institutions to schemes related to the trafficking of fentanyl and other synthetic opioids.

“The Bank Secrecy Act data that FinCEN collects, analyzes, and disseminates provides tremendous insight into the illicit financial networks and individuals fueling America’s deadly opioid crisis,” FinCEN Director Kenneth Blanco, said. “We are making the financial sector aware of tactics and typologies behind illicit schemes to launder the proceeds of these fatal drug sales, including transactions using digital currency and foreign bank accounts. Financial institutions must be on alert to red flags and other indicators of the complex schemes fentanyl traffickers are employing so that financial institutions can report and share relevant information with law enforcement, and ultimately help save lives.”

The Zheng DTO manufactures and distributes hundreds of controlled substances, including fentanyl analogues such as carfentanil, acetyl fentanyl, and furanyl fentanyl. Zheng created numerous websites to advertise and sell illegal drugs and touted its ability to create custom-ordered drugs that can’t be detected by customs and law enforcement officials when shipped through the mail, according to Treasury officials. The Zheng DTO also created analogues of drugs with slightly different chemical structures but the same or even more potent effect. They even manufactured adulterated cancer medication that replaced the active cancer-fighting ingredient with dangerous synthetic drugs, Treasury officials said.

Since 2000, more than 2,200 individuals and entities have been named pursuant to the Kingpin Act for their role in international narcotics trafficking. Penalties range from civil penalties of up to $1,503,470 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million.

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Comptroller of the Currency visits New York neighborhoods

Community Reinvestment Act (CRA) activity and discussions regarding how regulations promote lending, investment, and services took center stage during Comptroller of the Currency Joseph Otting’s tour of New York neighborhoods. Joseph Otting More than 50 community advocates, community development professionals, civil rights organizations and bankers joined Otting and senior staff from the agency on the […]

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Community Reinvestment Act (CRA) activity and discussions regarding how regulations promote lending, investment, and services took center stage during Comptroller of the Currency Joseph Otting’s tour of New York neighborhoods.

Joseph Otting

More than 50 community advocates, community development professionals, civil rights organizations and bankers joined Otting and senior staff from the agency on the third tour this summer of CRA neighborhoods and CRA modernization discussion.

“Here in New York, we saw great examples of community and bank partnerships to conduct CRA activity that helps meet important needs of underserved neighborhoods,” Otting said following the tour. “We also discussed challenges communities, advocates, and bankers face in lending, investing, and providing services that can be addressed in part by modernizing CRA regulations.”

During the tour, Otting outlined how CRA regulations could be improved in four ways: clarifying what counts for CRA credit, updating where activity qualifies, making evaluations of bank CRA performance more objective, and reporting results in a more timely and transparent manner.

“I thank everyone who has participated on this and other tours for sharing their stories, ideas, and frustrations,” Otting said. “I am encouraged by this discussion and the half dozen others we have had this summer with hundreds of stakeholders about CRA. The conversations confirm broad support for making CRA work better for everyone, for clarifying what activity counts for CRA, updating where it counts, evaluating CRA performance in a more transparent way, and making reporting more timely and transparent.”

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OCC Hosts Risk Governance and Credit Risk Workshops in Chicago

The Office of the Comptroller of the Currency (OCC) will host two workshops at the OCC Central District Office in Chicago, October 1 and 2, for directors of national community banks and federal savings associations supervised by the OCC.

The Office of the Comptroller of the Currency (OCC) will host two workshops at the OCC Central District Office in Chicago, October 1 and 2, for directors of national community banks and federal savings associations supervised by the OCC.

Read more / Original news source: https://www.occ.gov/news-issuances/news-releases/2019/nr-occ-2019-96.html?utm_source=RSS_feed&utm_medium=RSS

FDIC approves changes to Volcker Rule

The Federal Deposit Insurance Corporation (FDIC) approved a rule to change the requirements the Volcker Rule, which prohibits banks from engaging in proprietary trading and from owning or controlling hedge funds or private equity funds.© Shutterstock The Volcker Rule was established as part of the Dodd-Frank Act. It was a key provision that was designed […]

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The Federal Deposit Insurance Corporation (FDIC) approved a rule to change the requirements the Volcker Rule, which prohibits banks from engaging in proprietary trading and from owning or controlling hedge funds or private equity funds.

© Shutterstock

The Volcker Rule was established as part of the Dodd-Frank Act. It was a key provision that was designed to curb the type of speculative investments that led to the financial crisis of 2007-2008.

The new changes would alter the rule’s compliance requirements based on the size of a firm’s trading assets and liabilities. The most stringent requirements would be applied to banks with the most trading activity. It would also retain the short-term intent prong of the “trading account” definition only for banks that are not subject to the market risk capital rule prong. Further, it would replace the rebuttable presumption that instruments held for fewer than 60 days are covered under the short-term intent prong with a rebuttable presumption that instruments held for 60 days or longer are not covered.

In addition, the rule changes stipulate that banks that trade within internal risk limits are engaged in permissible market making or underwriting activity. It also streamlines the criteria that apply when a bank seeks to rely on the hedging exemption from the proprietary trading prohibition. Finally, it limits the impact of the rule on the foreign activities of foreign banking organizations and simplifies the trading activity information that banks are required to provide to the agencies.

“One of the post-crisis reforms that has been most challenging to implement for regulators and industry is the Volcker Rule, which restricts banks from engaging in proprietary trading and from owning hedge funds and private equity funds. Distinguishing between what qualifies as proprietary trading and what does not has proven to be extremely difficult. Meanwhile, banks that do relatively little trading are required to go through substantial compliance exercises to ensure that activities that have long been considered traditional banking activities do not run afoul of the Volcker Rule,” FDIC Chair Jelena McWilliams said.

The rule changes, if approved by all federal regulators, would be effective Jan. 1, 2020 with a compliance date of Jan. 1, 2021. The Office of the Comptroller of the Currency also approved the changes. The Federal Reserve Board, Securities and Exchange Commission, and Commodity Futures Trading Commission have not yet weighed in.

The American Bankers Association applauded the proposed reforms to the Volcker Rule.

“These improvements will allow bank supervisors to focus on systemic risk while providing the tailored and precise oversight that was the Volcker Rule’s original purpose,” Rob Nichols, ABA president and CEO, said. “We also applaud regulators for dropping the proposed accounting test, which was overly broad and unworkable. The decision to instead make meaningful improvements to the 60-day rebuttable presumption is consistent with the agencies’ focus on bright-line rules. We look forward to providing additional input that would simplify and streamline restrictions on covered fund investments while excluding funds that are clearly outside the Volcker Rule’s intent. These further reforms and exclusions will benefit a wide range of bank customers while improving efficiencies at banks subject to the rule.”

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Comptroller of the Currency Visits New York Neighborhoods Supported by the Community Reinvestment Act, Discusses Opportunities to Do More

Comptroller of the Currency Joseph Otting today participated in a tour of New York neighborhoods to see firsthand the success of Community Reinvestment Act (CRA) activity and discuss how CRA regulations can promote more lending, investment, and service…

Comptroller of the Currency Joseph Otting today participated in a tour of New York neighborhoods to see firsthand the success of Community Reinvestment Act (CRA) activity and discuss how CRA regulations can promote more lending, investment, and services, where they are needed most.

Read more / Original news source: https://www.occ.gov/news-issuances/news-releases/2019/nr-occ-2019-95.html?utm_source=RSS_feed&utm_medium=RSS

Comptroller of the Currency Visits New York Neighborhoods Supported by the Community Reinvestment Act, Discusses Opportunities to Do More

Comptroller of the Currency Joseph Otting today participated in a tour of New York neighborhoods to see firsthand the success of Community Reinvestment Act (CRA) activity and discuss how CRA regulations can promote more lending, investment, and service…

Comptroller of the Currency Joseph Otting today participated in a tour of New York neighborhoods to see firsthand the success of Community Reinvestment Act (CRA) activity and discuss how CRA regulations can promote more lending, investment, and services, where they are needed most.

Read more / Original news source: https://www.occ.gov/news-issuances/news-releases/2019/nr-occ-2019-95.html

ABA analysis examines security ratings

A recent American Bankers Association (ABA) white paper explains the pros and cons of security ratings, how the ratings work, and how financial institutions should use them.© Shutterstock “As we see more security ratings hit the market, we want to ensure that banks and others understand how they fit into a broader risk management program,” […]

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A recent American Bankers Association (ABA) white paper explains the pros and cons of security ratings, how the ratings work, and how financial institutions should use them.

© Shutterstock

“As we see more security ratings hit the market, we want to ensure that banks and others understand how they fit into a broader risk management program,” Paul Benda, senior vice president, risk and cybersecurity policy at ABA, said regarding Security Ratings: A Tool as Part of a Risk Management Program. “A robust plan includes multiple tools in the toolbox, and if used appropriately, security ratings can be one of those tools.”

The paper maintains security ratings can provide insight and serve as a starting point when evaluating a firm’s cybersecurity program, but the association said ratings could not offer a full picture of an organization’s cybersecurity program, because the providers rely on a combination of data points collected or purchased from public and private sources and are unable to evaluate a firm’s internal infrastructure and controls.

“Cybersecurity remains a top priority for banks across the country, and we are continuously looking for ways to improve effectiveness and efficiency,” Benda said. “There are many resources out there, so understanding how they work is key.”

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Proposed SEC changes receive praise from legislator

Sen. Mark R. Warner (D-VA) is lauding the Securities and Exchange Commission’s (SEC) recent proposal to modernize the reporting and disclosure of human capital management practices. © Shutterstock Proponents of the action maintain human capital management disclosures lend insight into how companies compensate, train, retain and incentivize employees, adding several studies have determined human capital […]

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Sen. Mark R. Warner (D-VA) is lauding the Securities and Exchange Commission’s (SEC) recent proposal to modernize the reporting and disclosure of human capital management practices.

© Shutterstock

Proponents of the action maintain human capital management disclosures lend insight into how companies compensate, train, retain and incentivize employees, adding several studies have determined human capital management disclosures are an important predictor of a company’s long-term success in a changing economy.

“I’m excited to see the SEC take this important step to recognize the significance of human capital management and the role it plays in the 21st-century economy,” Warner said. “Many of the ideas outlined in the proposed rule would go a long way in providing investors with the information they need to evaluate whether a company is making the appropriate investments in its workforce.”

Warner said he is looking forward to working with the SEC to develop a human capital disclosure regime for companies to help promote workforce training and investment, as well as long-term economic growth.

The SEC’s current human capital disclosure requirements are extremely limited, per proponents of the revisions adding the guidelines require disclosing only the number of employees, their median compensation, and CEO compensation. Last month Warner forwarded correspondence encouraging the SEC to heed the calls of investors and utilize its rulemaking authority to require companies across the board to provide further details relating to human capital management.

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