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CCH Business News Update prepared for John Smith: You are receiving this email because you signed up for free Report Letters and news through CCH Business News Update. If you would like to unsubscribe or modify your preferences, click here. Headlines and links down this email alert: State Banking Law ReporterScope of Alabama Small Loan Act Expanded; Fees Increased, State Banking Law, (June 1, 2002) Municipal Pensions Excluded from Alabama Mini-Code, State Banking Law, (June 1, 2002) Continuing Education Course Added for Alabama Mortgage Brokers, State Banking Law, (June 1, 2002) Connecticut Clarifies Definition of Prepaid Finance Charge, State Banking Law, (June 1, 2002) Reporting and Assessment Requirements for Connecticut Banks Eased, State Banking Law, (June 1, 2002) Florida Governor Signs Fair Lending Act, State Banking Law, (June 1, 2002) Public Records Exemption Made for Florida Unclaimed Property Reports, State Banking Law, (June 1, 2002) Additional Clarifications Made to Florida Probate Code , State Banking Law, (June 1, 2002) Georgia Targets Abusive Lending Practices, State Banking Law, (June 1, 2002) Maryland Waives Estate Administration Fees for Terrorist Attack Victims, State Banking Law, (June 1, 2002) Michigan Enacts Anti-Terrorism Reporting Requirements, State Banking Law, (June 1, 2002) Mutual Holding Companies Authorized in Michigan, State Banking Law, (June 1, 2002) Limitation on New York Check Casher Exemption Subject to Expiration, State Banking Law, (June 1, 2002) Tennessee Expands Authorized Activities for Out-of-State Trust Institutions, State Banking Law, (June 1, 2002) Virginia Authorizes Bank Franchise Tax Deduction for Goodwill, State Banking Law, (June 1, 2002) Mortgage Release Procedures in Virginia Expanded, State Banking Law, (June 1, 2002) Connecticut Department of Banking Proposes Amendments to Regulations Governing Foreign Banks, State Banking Law, (June 1, 2002) Predatory Lending Regulations Proposed for District of Columbia Home Loan Protection Act, State Banking Law, (June 1, 2002) Deferred Presentment Database Rules Adopted in Florida, State Banking Law, (June 1, 2002) Indiana UCCC Dollar Amounts Increased, State Banking Law, (June 1, 2002) Maine Regulation Governing Deposit Account Disclosures Amended, State Banking Law, (June 1, 2002) Massachusetts Division of Banks Proposes Amendments to High Cost Home Loan Regulations, State Banking Law, (June 1, 2002) Amendments to New Jersey Parity Rules Proposed, State Banking Law, (June 1, 2002) Audit Requirements for New Jersey Savings and Loan Associations Remain Unchanged, State Banking Law, (June 1, 2002) New York Banking Department Proposes Amendments to High Cost Home Loan Regulation, State Banking Law, (June 1, 2002) New York Banking Department Redesignates Privacy Compliance Officer, State Banking Law, (June 1, 2002) Connecticut Legislative Update, State Banking Law, (June 1, 2002) Illinois Legislative Update, State Banking Law, (June 1, 2002) New York Legislative Update, State Banking Law, (June 1, 2002) Sarbanes Unveils New Predatory Lending Legislation , State Banking Law, (June 1, 2002) OTS Proposes Revisions to Parity Act Regulations, State Banking Law, (June 1, 2002) OCC Warns of Gang and Teller Collusion Schemes , State Banking Law, (June 1, 2002) FOMC Leaves Interest Rate Target Unchanged, State Banking Law, (June 1, 2002) State Interest Rate Changes Reflected, State Banking Law, (June 1, 2002) Scope of Alabama Small Loan Act Expanded; Fees Increased, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The maximum loan amount for
loans subject to the Small Loan Act has been increased from $749 to $999.99. In
addition to the interest and charges allowed under the Act, lenders may charge
an account maintenance fee of $3 for each month of the scheduled period of
repayment of the loan if the monthly repayment amount is at least $30. The annual license fee for businesses regulated under the Act was increased from $400 to $500. The increased fee is estimated to generate approximately $5,000 annually to be deposited into the Banking Assessment Fees Fund. The law (Act 305) was approved and became effective April 15, 2002. Alabama, ¶40-1804, ¶40-1805, ¶40-1810, ¶40-1813, ¶40-1815, ¶40-1818 Municipal Pensions Excluded from Alabama Mini-Code, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter An amendment to the Consumer Credit Act clarifies that municipal pension systems created under Alabama law are not subject to the Act. Previously, exclusions from the Act were limited to certain real estate transactions, commercial credit transactions and fiduciary transactions.
The law (Act 307) was approved and became effective April 16, 2002. Alabama, ¶40-1931Continuing Education Course Added for Alabama Mortgage Brokers, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Mortgage brokers licensed under the Mortgage Brokers Licensing Act may satisfy the continuing education requirements of the Act by attending requisite courses approved by the National Minority Mortgage Bankers Association or the Alabama Bankers Association. Previously, brokers were limited to courses approved by the Alabama Mortgage Bankers Association, the Education Committee of the National Association of Mortgage Brokers, or the Alabama Mortgage Brokers Association.
Connecticut Clarifies Definition of Prepaid Finance Charge, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Amendments to the Connecticut Abusive Home Loan Lending Practices Act clarify that prepaid finance charges include those items that are considered a finance charge under federal Regulation Z. Fees and commissions for insurance products or unrelated goods or services are prepaid finance charges if they are prepaid with the proceeds of the loan or extension of credit and financed as part of the principal amount of the loan or extension of credit. "Interim interest" and fees, premiums and other amounts paid to governmental agencies, and amounts that are required to be escrowed by governmental agencies are not prepaid finance charges. A conforming amendment makes the prepaid finance charge definition applicable to secondary mortgage loans. The law (P.A. 12) was approved and became effective April 22, 2002. Connecticut, ¶40-521, ¶49-1003, ¶49-1005 Reporting and Assessment Requirements for Connecticut Banks Eased, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter In an effort to ease the regulatory burden on Connecticut banks, the legislature has acted on a Department of Banking proposal to eliminate report publication requirements and reduce assessments and examination fees. Capital stock banks will no longer be required to publish reports of their condition and income since this information is readily available from other sources. Mutual banks will be required to publish their reports once, rather than twice, a year. Connecticut banks subject to assessments by other states as a result of interstate branching operations will no longer be assessed twice on the same assets. The commissioner is authorized to reduce the annual assessment of expenses required to be collected from these banks up to the amount of any assessment collected by another state in which the bank maintains any type of branch.
The fee for trust department examinations has been reduced from $150 per day for the examiner in charge and $100 per day for each assisting examiner to the actual cost of the examination. The reduction more accurately reflects the actual examination expenses of the Department.
Florida Governor Signs Fair Lending Act, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Governor Jeb Bush signed into law the Florida Fair Lending Act adding Florida to the list of states prohibiting abusive lending practices. The Act imposes restrictions on high-cost home loans--loans covered by the federal Home Ownership and Equity Protection Act (HOEPA).
Under HOEPA, special disclosures are required if a home mortgage transaction exceeds specified fees or interest rates. Loans at rates that exceed the yield on described Treasury securities by more than 10 percent or that carry fees of more than 8 percent of the total loan amount or $400, whichever is greater, currently trigger the HOEPA protections. The $400 amount is adjusted for inflation annually, and is set at $480 for 2002. Recent amendments to Reg Z--Truth in Lending (12 CFR 226) reduce the rate-based trigger by 2 percentage points for first-lien loans and revise the fee-based trigger to include some insurance premiums or similar credit protection product costs paid at closing.
In addition to specific disclosure requirements, the Florida Act restricts lenders with respect to a number of lending practices or terms, including: l prepayment penalties; l increased interest rate after default; l balloon payments; l negative amortization; l lending without regard to a borrower's ability to repay;l payments to home contractors; l acceleration clauses; l refinancing within an 18-month period l recommending or encouraging default; l door-to-door loan solicitation; l late payment fees; l deferral fees; and l foreclosure upon default. The Department of Banking and Finance is responsible for administering and enforcing the Act. The Act prohibits Florida counties and municipalities from enacting and enforcing ordinances, resolutions, and rules regulating financial or lending activities by institutions or entities regulated by the Department or other specified state or federal governmental agencies. The law (Ch. 57) was approved April 22, 2002, and is effective October 2, 2002. Florida, ¶49-1001--¶49-1011 Public Records Exemption Made for Florida Unclaimed Property Reports, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Social security numbers and financial account numbers contained in unclaimed property reports held by the Department of Banking and Finance are exempt from public inspection and copying as otherwise allowed by the Florida Constitution and public records law. The exemption was necessary to prevent identity theft and related crimes in which the numbers could be used in forged documents to demonstrate entitlement to abandoned property. An Attorney General opinion issued in 1973 stated that abandoned property records maintained by the Department were public records.
The law (Ch. 64) was approved and became effective April 22, 2002. Florida, ¶45-4217 Additional Clarifications Made to Florida Probate Code , State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Amendments to the Probate Code clarify various provisions governing trust and probate administration as part of a continuing effort to modernize the Code and facilitate probate and trust administration by clarifying the duties and rights of all interested persons.
The law (Ch. 82) was approved and became effective April 23, 2002. Florida, ¶40-1546, ¶42-303, ¶42-1 205, ¶42-1210, ¶42-2107, ¶42-2702, ¶42-5115, ¶42-5116, ¶42-5209, ¶42-5303, ¶42-5303.5, ¶42-5307 Georgia Targets Abusive Lending Practices, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Acting on one of Governor Roy Barnes' legislative initiatives, Georgia joined the growing list of states targeting abusive lending practices by enacting the Georgia Fair Lending Act.
Unlike its counterpart in Florida, the Georgia Fair Lending Act imposes certain restrictions on all home loans as defined in the Act. Home loan restrictions include: refinancings that constitute "flipping;" financing credit insurance or debt cancellation coverage; recommending or encouraging default; unauthorized late payment charges; and, fees for providing a payoff statement or release.
A high-cost home loan is one that meets or exceeds the interest or fee thresholds set out in the Home Ownership and Equity Protection Act of 1994 (HOEPA). A high-cost home loan is subject to several additional restrictions. Practices or loan terms that are restricted or prohibited include: l prepayment penalties; l balloon payments; l negative amortization; l increased interest rate following a default; l advance payments; l arbitration clauses; l lending without credit counseling; l lending without regard to a borrower's ability to repay; l payments to home contractors; l deferral or renewal fees; l foreclosure; and l acceleration. The Act provides for various civil remedies and criminal penalties. The state attorney general, district attorneys and the Commissioner of Banking and Finance are responsible for the Act's enforcement. Municipalities and counties in the state are prohibited from enacting any ordinance or law regulating the terms of home loans. The law (Act 488) was approved April 22, 2002, and is effective October 1, 2002. Maryland Waives Estate Administration Fees for Terrorist Attack Victims, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Probate fees authorized under the Estates and Trusts Article are being waived for the estates of individuals killed in the September 11th terrorist attacks. These estates also are exempt from the state inheritance tax. The fee waiver and tax exemption do not apply to the estate of any person determined to be a perpetrator of one of the attacks. The laws (Chs. 97 and 98) were approved and became effective April 25, 2002, and apply retroactively. Maryland, ¶42-202.6 Michigan Enacts Anti-Terrorism Reporting Requirements, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Beginning May 1, 2002, banks, credit unions, savings and loan associations, and savings banks must provide the Department of State Police a copy of each transaction report filed with the Secretary of the Treasury pursuant to the USA Patriot Act. The additional reporting requirements are intended to more quickly alert law enforcement officials regarding possible money laundering activities occurring in the state and to promote cooperation between financial institutions and law enforcement agencies in preventing financial counterfeiting, smuggling and money laundering. The laws (P.A. 183, P.A. 184, P.A. 185 and P.A. 247) were approved April 23, 2002, and became effective May 1, 2002.
Mutual Holding Companies Authorized in Michigan, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Mutual savings banks are now authorized to reorganize for the purpose of establishing a mutual holding company. The plan of reorganization must be approved by the Office of Thrift Supervision, which must grant a federal charter to a newly created mutual holding company. The plan also must be approved by the Office of Financial and Insurance Services, the bank's board of directors and the bank's members.
The legislation, which was supported by the Office of Financial and Insurance Services and the Michigan League of Community Banks, also authorizes the incorporation of savings bank subsidiaries. The law (P.A. 263) was approved and became effective May 1, 2002. Michigan, ¶40-1706A Limitation on New York Check Casher Exemption Subject to Expiration, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The law limiting the check casher exemption for national banks and other regulated entities will expire three years after its effective date. Laws of New York, 2001, Chapter 591, which became effective February 8, 2002, prohibits national banks and other financial institutions regulated by the banking law from conducting a check cashing business at a separate location unless licensed as a check casher. [State Banking Law, Report No. 9, February 27, 2002] The law enacting the sunset provision (Ch. 29) was approved and became effective April 9, 2002. New York, ¶40-374 Tennessee Expands Authorized Activities for Out-of-State Trust Institutions, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Out-of-state trust institutions that do not maintain an office in the state are authorized to engage in other fiduciary related activities in the state, including marketing, soliciting and operating through a trust representative. However, the home state of the out-of-state trust institution must permit Tennessee trust institutions to engage in similar activities in that state. The law (Ch. 656) was approved and is effective April 24, 2002.
Virginia Authorizes Bank Franchise Tax Deduction for Goodwill, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter In an effort to relieve banks of an unintended increase in capital subject to the bank franchise tax, the General Assembly has added a deduction for goodwill created in connection with an acquisition or merger. The General Assembly's action stems from a recently issued Financial Accounting Standards Board statement governing the method of accounting for acquisitions and mergers. The deduction is limited to 90% of the goodwill and is available for bank franchise taxes payable on or after January 1, 2002. The law (Ch. 667), was approved April 6, 2002, and is effective July 1, 2002.
Mortgage Release Procedures in Virginia Expanded, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Settlement agents will be able to release mortgages in accordance with new procedures established by the General Assembly. The settlement agent must deliver a notice to the lien creditor together with a copy of the payoff letter and release. The lien creditor has 90 days to notify the settlement agent that another release has been recorded, the obligation secured by the mortgage has not been paid or to otherwise object to the release of the mortgage. The procedures apply to transactions involving up to four residential dwelling units. The measure also clarifies that a release of a deed of trust may be delivered by courier. Additional legislation clarifies provisions governing the delivery of a certificate of full or partial satisfaction. The laws (Ch. 845 and Ch. 862), were approved April 17, 2002, and are effective July 1, 2002. Virginia, ¶43-453 Connecticut Department of Banking Proposes Amendments to Regulations Governing Foreign Banks, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The Connecticut Department of Banks has proposed to increase the asset pledge requirements for state branches and state agencies of foreign banks in Connecticut. The action is intended to ensure that there are adequate assets available for creditors in the event of liquidation based on a supervisory assessment of risk factors. The Department's action is reported at ¶100-045.
Predatory Lending Regulations Proposed for District of Columbia Home Loan Protection Act, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The Commissioner of Banking and Financial Institutions for the District of Columbia has proposed regulations to implement the Home Loan Protection Emergency Act of 2002. The Emergency Act became effective March 1, 2002. [State Banking Law, Report No. 10, March 20, 2002]
The Department's action is reported at ¶100-049. Deferred Presentment Database Rules Adopted in Florida, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The Florida Department of Banking and Finance has adopted rules governing the use by deferred presentment providers of the transactional database authorized by the Deferred Presentment Act. The rules describe how a deferred presentment provider may obtain access to the database and set forth requirements for entering transactions into the database, the availability of the database, the fees that will be charged for use of the database, procedures for database dispute resolution and confidentiality provisions of database information.
Indiana UCCC Dollar Amounts Increased, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The Department of Financial Institutions has announced that effective July 1, 2002, the dollar amounts in the Uniform Consumer Credit Code subject to adjustment will be increased by 10 percent of the original amounts. The minimum credit service charge and loan finance charge will be $36; the delinquency charge limits for credit sales and consumer loans will be $16; and the graduated rate scales for credit sales and supervised loans will be $960 and $3,200.
Maine Regulation Governing Deposit Account Disclosures Amended, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The Bureau of Financial Institutions has amended its regulation governing advance disclosure of deposit account charges. The amendments incorporate additional regulatory changes at the federal level that have occurred since the regulation was last amended in 1993. The revision also eliminates the requirement that financial institutions forward schedules of new or increased deposit account charges to the Bureau.
Massachusetts Division of Banks Proposes Amendments to High Cost Home Loan Regulations, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The Division of Banks is proposing to amend its high cost home loan regulations to conform to changes made to federal Regulation Z. The amendments include: disclosure requirements relating to balloon payments and the total amount borrowed; restrictions on acceleration clauses; and technical changes and clarifications. A public hearing on the proposed amendments was scheduled for May 9, 2002. The Division required any written comments to be submitted to it by May 23, 2002.
Amendments to New Jersey Parity Rules Proposed, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The Department of Banking and Insurance is proposing to amend and repeal regulations governing state bank parity with national banks consistent with the state's Parity Act. The rules apply to all New Jersey chartered banks and savings banks, assuring competitive parity with their Federal and out-of-State counterparts. Comments may be submitted until June 14, 2002, and should be directed to Karen Garfing, Assistant Commissioner Regulatory Affairs, New Jersey Department of Banking and Insurance, PO Box 325, Trenton, NJ 08625-0325, Fax: (609) 292-0896, e-mail: Legsregs@dobi.state.nj.us.
The Departments action is reported at ¶100-046. Audit Requirements for New Jersey Savings and Loan Associations Remain Unchanged, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The Department of Banking and Insurance has readopted without change rules governing audit requirements for savings and loan associations. These rules were scheduled to expire on May 3, 2002. The readoption was supported by the New Jersey League-Community and Savings Bankers. New Jersey, ¶50-2901.1--¶50-2901.9 New York Banking Department Proposes Amendments to High Cost Home Loan Regulation, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The Banking Department is proposing amendments to its High Cost Home Regulation that will prohibit the financing of single premium credit insurance and make other technical corrections. In presenting the amendments to the Banking Board, Superintendent Elizabeth McCaul said, "Experience has shown us that amendments need to be made to strengthen the regulation. Today's proposed amendments will do just that. They will increase the protection Part 41 provides for New Yorkers from unscrupulous lenders. Governor Pataki's leadership made Part 41 possible. I am very proud of the role New York has taken and will continue to take in eradicating abusive lending practices from the sub prime residential mortgage market." Upon the filing of the amendments in the State Register, there will be a 45-day public comment period. The Department's action is reported at ¶100-047.
New York Banking Department Redesignates Privacy Compliance Officer, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The Banking Department has designated the Secretary of the Banking Board as its Privacy Compliance Officer. The Secretary replaces the Deputy Superintendent of Banks in charge of the Research and Studies Division. New York, ¶54-114 Connecticut Legislative Update, State Banking Law, (June 1, 2002)House Bill 5316, which modernizes the Connecticut Credit Union law, was passed by the House April 24, 2002, and by the Senate on May 6, 2002. House Bill 5457 governs the payment of mortgage loan proceeds by wire transfer. The bill would prevent a delay in the closing of a home purchase transaction by establishing time-limits for the wire transfer. The bill passed the House on April 30, 2002, and passed the Senate on May 6, 2002.
Illinois Legislative Update, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter House Bill 4409 would amend the Illinois Banking Act by requiring banks to encumber or surrender accounts or assets held by the bank on behalf of any responsible relative who is subject to a child support lien. House Bill 4952 changes lending limits for Illinois state banks.
The status of these measures is more fully reported in the CCH STATE BANKING LAW REPORTER, Pending Legislation Status Table. Charts, ¶3-200 New York Legislative Update, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Assembly Bill 1545 would require banks to send written a notice to each person appearing to be the owner of property valued at less than $100 listed in the annual report of abandoned property. The bill passed the Assembly on April 29, 2002, and is in the Senate Finance Committee.
Sarbanes Unveils New Predatory Lending Legislation , State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter Paul Sarbanes, D-Md., Chairman of the U.S. Senate Banking Committee, announced new legislation to combat predatory lending. The legislation, The Predatory Lending Consumer Protection Act of 2002, is designed to restrict abusive lending practices, expand consumer protections and strengthen enforcement of existing protections by enhancing civil remedies and statutory penalties. The bill would restrict a number of elements common to subprime loans, such as prepayment penalties and balloon payments. Prepayment penalties often are so high that borrowers cannot take advantage of lower interest rates to refinance their loans, according to Sarbanes. In extreme cases, predatory refinancing can reduce a borrower's home equity. Sarbanes said that predatory lenders often target borrowers that have a substantial amount of equity in their homes but are burdened with a large amount of debt, making them vulnerable to solicitations for home equity loans. The lenders will underwrite a loan based on the value of a borrower's property without establishing the borrower's ability to repay the loan. The brokers or lenders charge extremely high points and origination fees and pack other products into the loan, including up-front premiums for credit insurance. The financing of these fees greatly increases the balance of the loan, leaving the borrower with exorbitant monthly payments. In many cases, borrowers end up losing their homes when they cannot make the high payments, the Senator said. OTS Proposes Revisions to Parity Act Regulations, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The Office of Thrift Supervision is proposing to remove prepayment and late fee rules from the list of OTS regulations that preempt state law under the Alternative Mortgage Transaction Parity Act (Parity Act). The Parity Act, adopted in 1982, grants certain state-chartered housing creditors parity with federally-chartered lenders when making alternative mortgages. An alternative mortgage is a loan with payment features, such as variable interest rates or balloon payments, that vary from conventional fixed-rate, fixed-term mortgage loans. OTS is recommending that Congress reconsider the need for the Parity Act, as laws in all states but one have changed since the early 1980s to allow alternative mortgage transactions by state-chartered housing creditors. If the Parity Act is retained, OTS says, Congress may want to permit states another opportunity to opt out of the preemption provided by the Parity Act. The agency also recommends that Congress could require state housing creditors lending under the Parity Act to identify themselves to the states, which then could monitor the housing creditors compliance with the Parity Act. Comments in response to this notice must be received by June 24, 2002. The OTS's notice appeared at 67 Federal Register 20468 on April 25, 2002, and is reported at CCH FEDERAL BANKING LAW REPORTER ¶93-152. OCC Warns of Gang and Teller Collusion Schemes , State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The Office of the Comptroller of the Currency (OCC) has alerted banks of fraud schemes involving organized gangs and newly hired bank tellers. These gangs are aggressively recruiting bank tellers to cash forged savings account withdrawals from customer accounts, and to cash stolen United States Treasury checks. Tellers are reportedly being paid several hundred dollars per transaction to assist in the scheme. Federal law enforcement officials report that organized gangs are using coercion and threats of bodily harm to persuade individuals to assist them. Although tellers already employed by financial institutions are being recruited, more commonly individuals are being encouraged by gang members to apply for teller positions at financial institutions for the sole purpose of providing access to the institution's operating systems and customer access information. Typically, a gang member provides stolen information to the teller who keys the information into the bank's automated systems so it will appear as if a customer visited the teller window. The perpetrators are careful to keep amounts under supervisory approval limits and, as a result, detection is delayed until the victimized customer reports the fraud. According to the OCC, organized gang activity has become more sophisticated and the sphere of influence of some gangs has expanded geographically. The OCC advises banks to exercise care and due diligence in their hiring practices, and to periodically evaluate internal controls over the teller area. The OCC Enforcement and Compliance Division can be contacted for further information.
FOMC Leaves Interest Rate Target Unchanged, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The target for the federal funds rate remained at 1.75 percent after the Federal Open Market Committee ended its meeting on May 7, 2002. The discount rate also was unchanged, holding at 1.25 percent. The FOMC noted that the risks remained balanced with respect to prospects for its long-term goals of price stability and sustainable growth. State Interest Rate Changes Reflected, State Banking Law, (June 1, 2002)By CCH Editorial Staff, State Banking Law Reporter The CCH STATE BANKING LAW REPORTER, State Interest and Usury Laws Chart has been updated to reflect recent interest rate changes in a number of states. Rate changes for May 2002 include the following: l Iowa. The Iowa Department of Banking has set the maximum interest rate on written contracts for the month of May at 7.25 percent, an increase from the April rate of 7 percent. l Kansas. The Kansas Secretary of State has determined that the maximum interest rate on loans secured by real estate mortgages and contracts for deed to real estate is 8.21 percent for May, down from the April limit of 8.59 percent. l Minnesota. The Department of Commerce has set the maximum interest rate on conventional mortgages and contracts for deed at 11.05 percent for the month of May, an increase from the April limit of 10.66 percent. l Pennsylvania. The Department of Banking announced that the maximum lawful rate of interest for residential mortgages for the month of May is 8.25 percent, an increase from the April limit of 7.75 percent. l Tennessee. The Department of Financial Institutions announced that the maximum effective rate of interest for home loans for the month of May is 9.94 percent, an increase from the April limit of 9.57 percent. Charts, ¶1-200 If you have any questions about CCH Business News Update, please contact us:
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