FDIC Issues Guidance on NSF Fees
Re-Presentment NSF Fees - The FDIC issued guidance to address certain consumer compliance risks associated with assessing multiple non-sufficient funds (NSF) fees arising from the re-presentment of the same unpaid transaction. During consumer compliance examinations, the FDIC found that some disclosures provided to customers did not fully or clearly describe the institution’s re-presentment practice, including not explaining that the same unpaid transaction might result in multiple NSF fees if an item was presented more than once.
Insider Lending Violations
Insider Lending Violation – The Federal Reserve fined a Maryland bank $9.5 million for violation of the Fed’s insider lending regulation for improperly extending credit to entities owned or controlled by its CEO and Chairman. The Board found deficient internal controls over insider lending practices between 2015 and 2018, which allowed the bank to extend credit totaling nearly $100 million to entities that the CEO owned or controlled, including certain family trusts, without making appropriate disclosures to, or obtaining required approvals from, a majority of the bank's board of directors. These internal control deficiencies also extended to the bank's supervision of lending staff, who permitted the CEO to participate in matters in which he had a conflict of interest. The Board also cited the bank for third-party risk management deficiencies over the same period that resulted in inadequate oversight of contracts between the bank and a local government official.
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