In this Issue. The Federal Deposit Insurance Corporation (FDIC) issued a final rule pursuant to special assessment; the Financial Crimes Enforcement Network (FinCEN) amended its beneficial ownership information (BOI) reporting rule to extend the filing deadline for initial BOI reports; the FDIC extended the comment period on a proposed rule to require large banks to maintain long-term debt; the Board of Governors of the Federal Reserve System (Federal Reserve) announced pricing for payment services the Federal Reserve Banks provide to banks and credit unions; and FinCEN announced the largest settlement in US Treasury Department history with a virtual asset exchange for violations of US anti-money laundering laws. These and other developments are discussed in more detail below.
Regulatory Developments
FDIC Board of Directors Issues a Final Rule Pursuant to
Special Assessment
On November 16, the FDIC Board of Directors approved a final rule to implement a special
assessment to recover the loss to the Deposit Insurance Fund (DIF)
associated with protecting uninsured depositors following the
closures of Silicon Valley Bank and Signature Bank. The FDIC
estimates that of the total cost of the failures of Silicon Valley
Bank and Signature Bank, approximately $16.3 billion was
attributable to the protection of uninsured depositors. The rule
will permit the FDIC to collect a special assessment at an annual
rate of 13.4 basis points beginning with the first quarterly
assessment period of 2024 (i.e., January 1 through March 31, 2024)
with an invoice payment date of June 28, 2024, and will continue to
collect special assessments for an anticipated total of eight
quarterly assessment periods. The base for the special assessment
is equal to an insured depository institution's (IDI's)
estimated uninsured deposits for the December 31, 2022, reporting
period, adjusted to exclude the first $5 billion in estimated
uninsured deposits from the IDI, or at the banking organization
level for IDIs that are part of a holding company with one or more
subsidiary IDIs. It is estimated that a total of 114 banking
organizations will be subject to the special assessment, and no
banking organizations with total assets under $5 billion will pay
the special assessment.
"The final rule applies the special assessment to the types of banking organizations that benefitted most from the protection of uninsured depositors, while ensuring equitable, transparent, and consistent treatment based on amounts of uninsured deposits."
‒ Martin J. Gruenberg, Chairman, FDIC
Corporate Transparency Act (CTA) Compliance Update:
Beneficial Ownership Information Reporting Deadline Extension for
Reporting Companies Created or Registered in 2024
On November 29, FinCEN amended its BOI reporting rule to
extend the filing deadline for initial BOI reports to 90 calendar
days for reporting companies formed or registered on or after
January 1, 2024, and before January 1, 2025. Reporting companies
formed or registered on or after January 1, 2025 will have 30
calendar days to file their initial BOI reports. See the Goodwin Corporate Transparency Act Knowledge Center
for more information and CTA compliance resources.
FDIC Announces Extension of Comment Period on Long-Term
Debt Proposed Rule
On November 22, the FDIC announced an extension of comment period
deadline for the federal bank regulatory agencies' proposed
rule on long-term debt from November 30, 2023, to January 16, 2024.
The proposed rule, published in the Federal
Register in September 2023, is applicable to certain large
depository institution holding companies, US intermediate holding
companies of foreign banking organizations and insured depository
institutions (collectively, the "covered institutions")
and requires such covered institutions to maintain outstanding a
minimum amount of long-term debt. The purpose of the proposed rule
is to provide the covered institutions with financial stability and
to reduce the risk of loss to uninsured depositors in the case of a
failure. Additional information on the proposed rule can be found
here.
Federal Reserve Announces Pricing For Payment Services
the Federal Reserve Banks Provide to Banks and Credit
Unions
On November 17, the Federal Reserve announced pricing for payment services that
the Federal Reserve Banks (Reserve Banks) provide to banks and
credit unions, such as the clearing of checks, automated clearing
house (ACH) transactions, and wholesale payment and settlement
services, which will go into effect January 2, 2024. The Federal
Reserve is required by law to establish fees to recover the costs,
including imputed costs, of providing payment services over the
long run. The Reserve Banks will maintain the prior year's fee
schedule for the FedNow Service, inclusive of discounts. The entire
2024 fee schedule is here, and will also be published on
FRBservices.org.
Litigation and Enforcement Developments
FinCEN Announces Largest Settlement in US Treasury
Department History with Virtual Asset Exchange for Violations of US
Anti-Money Laundering Laws
On November 22, the US Department of the Treasury announced the largest settlements in history
of $3.4 billion with virtual currency exchange Binance for
violations of US anti-money laundering and sanctions laws. Through
FinCEN and the Office of Foreign Assets Control (OFAC), the
Department of the Treasury settled with Binance over claims of
violation of the Bank Secrecy Act and multiple sanctions programs,
including failure to implement programs to prevent and report
suspicious transactions with terrorists and matching trades between
US users and those in sanctioned jurisdictions. In addition to
monetary penalties, the settlement with FinCEN imposes a five-year
monitorship, requires significant compliance undertakings,
including a complete exit from the United States, and requires
Binance to identify and report to FinCEN suspicious transactions
that it processed and willfully failed to report. The OFAC
settlement agreement requires Binance and its senior management to
commit to implementing a range of compliance measures and internal
controls.
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