February 16, 2023
MO Division Reminds Banks About Wire Transfers
The Missouri Division of Finance has asked MBA to notify banks about two recent exam findings related to wire transfer fraud. In the past week, the division has conducted examinations at two banks where wire fraud has been found and losses incurred. The first instance stems from a customer’s account being hacked and a third party spoofing the customer’s account and having a wire sent internationally for $459,000. The bank apparently failed to use standard call back verification procedures because the spoofed email included the customer’s wire specific PIN number. The second case involved a bank employee’s email account being spoofed. This transfer was for $257,000. The bank in the second case, while having procedures for customer-initiated requests, did not have procedures for internally requested wires. These cases are being shared by the division so banks can ensure practices are as solid as policies.
MBA, Bankers Urge FinCEN to Withdraw Registry Access Proposal
MBA, along with the American Bankers Association and state bankers associations, urged the Financial Crimes Enforcement Network to withdraw its proposal regarding access to the registry of beneficial ownership information, calling the proposal “fatally flawed.” FinCEN established the registry last fall pursuant to the Corporate Transparency Act part of the Anti-Money Laundering Act of 2020, which requires the agency to create a registry of the beneficial owners of legal entities formed or registered in the U.S. while minimizing the compliance burden on the regulated community.
The associations said that FinCEN’s proposal allows banks to access beneficial ownership information in the registry only for purposes of complying with the 2016 customer due diligence rule and not for broader CDD purposes. If banks use the beneficial ownership information in the registry, banks will need to spend resources walling off that information from information obtained directly from customers to prevent the registry’s information from being used for the broader purposes of risk mitigation and Bank Secrecy Act compliance. The associations also criticized the proposal for prohibiting banks from sharing beneficial ownership information outside U.S., which would prevent banks from sharing that information with bank personnel located in foreign jurisdictions.
In their comment letter rebuking FinCEN’s proposal, Congressman Blaine Luetkemeyer and House Financial Services Committee Chairman Patrick McHenry, R-N.C., said the proposal “deviates from the statute and congressional intent.”
OFCCP Again Extends Deadline to Object to Release of Diversity Data
The Office of Federal Contract Compliance Programs has once again extended the deadline for federal contractors to object to the release of the contractor’s diversity data found in the company’s EEO-1 Type 2 reports. The deadline is now Friday, March 3.
As previously shared by MBA, several Missouri banks are listed among the list of contractors whose EEO-1 Type 2 data that OFCCP intends to release. OFCCP encourages companies to review the list and to contact the agency by Friday, March 3, if your bank is listed in error.
In its announcement of this latest extension, OFCCP stated that it would post an updated list of nonobjectors no later than Feb. 17. This updated list will remove contractors that OFCCP has identified as incorrectly included on the list that the agency released Feb. 2. OFCCP also will remove all contractors that submitted objections after the publication of the Feb. 2 list until Feb. 10 while OFCCP evaluates these objections. After the close of the response period March 3, OFCCP will publish a second updated list by March 10, which will remove contractors that submitted objections after Feb. 10 and by March 3 while OFCCP evaluates these objections. Contractors will then have one final opportunity to contact OFCCP no later than March 17 if they believe their company was improperly listed.