Financial institutions today, 2020 May

Inside this issue:

Fraud Against

2

Unemployment

Insurance Programs

FinCEN Advisory on 2 Medical Scams Related to COVID-19

Georgia Hemp Job 2 Aid

Action on

3

Applications

The s pecific docume nts that co mp ris e the G uidance a re: Examinati on F req uency, Proces s ing, an d Turna ro und Goals Developme nt of Pol icies by F inancial Ins tit utio ns
News and topics of interest to financial institutions regulated by the Department of Banking and Finance
May 2020
Commissioner Kevin Hagler Elected Chairman of the Conference of State Bank Supervisors
On May 18, 2020, the Conference of State Bank Supervisors (CSBS) elected Commissioner Kevin Hagler as the new chairman of the CSBS Board of Directors. CSBS also elected new officers for 2020-21 and announced new committee chair appointments during the organization's annual membership meeting, held virtually due to the COVID-19 pandemic. Commissioner Hagler's first comments as chairman addressed the anticipated direction of CSBS during this tenure, which has been significantly influenced by the pandemic. The Commissioner's comments can be viewed here. A full list of newlyinstalled officers, at-large board members, and committee chairs can be accessed here.
FDIC Issues Proposed Rule to Mitigate the Deposit Insurance Assessment Effect of Participation in the Paycheck Protection Program (PPP), the PPP Lending Facility, and the Money Market Mutual Fund Liquidity Facility
The Federal Deposit Insurance Corporation (FDIC) approved a notice of proposed rulemaking that would mitigate the deposit insurance assessment effects on banks participating in the Paycheck Protection Program (PPP) established by the U.S. Small Business Administration (SBA) and the Paycheck Protection Program Lending Facility (PPPLF) and Money Market Mutual Fund Liquidity Facility (MMLF) established by the Board of Governors of the Federal Reserve System.
The PPP, PPPLF and MMLF were put in place to provide financing to small businesses, liquidity to small business lenders and the broader credit markets, and to help stabilize the financial system in a time of significant economic strain. At the same time, PPP loans are fully guaranteed by the SBA, and transactions made with the PPPLF and MMLF are conducted with the Federal Reserve on a non-recourse basis. The FDIC's action will ensure that banks will not be subject to significantly higher deposit insurance assessments for participating in these programs. A link to the proposed rule is listed below.
https://www.fdic.gov/news/board/2020/2020-05-12-notational-fr.pdf
Interagency Policy Statement on Allowances for Credit Losses and Interagency Guidance on Credit Risk Review Systems
Federal financial regulatory agencies have approved a policy statement on allowances for credit losses. The statement will promote consistency in the interpretation and application of the Financial Accounting Standards Board's credit losses accounting standard, which introduces the current expected credit losses (CECL) methodology.
The interagency policy statement describes the measurement of expected credit losses using the CECL methodology and updates concepts and practices detailed in existing supervisory guidance that remain applicable.

Page 2 May 2020
The Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency issued the interagency policy statement, which will be effective at the time of each institution's adoption of the credit losses accounting standard.
The agencies also finalized interagency guidance on credit review systems. The guidance presents principles for establishing a system of independent, ongoing credit risk review in accordance with safety and soundness standards. A link to the Interagency Policy Statement on Allowances for Credit Losses and Interagency Guidance on Credit Review Systems are listed below.
Interagency Policy Statement on Allowances for Credit Losses
Interagency Guidance on Credit Review Systems
Fraud Against Unemployment Insurance Programs
The United States Secret Service has received reporting of a well-organized Nigerian fraud ring exploiting the COVID-19 crisis to commit large-scale fraud against state unemployment insurance programs. The primary state targeted so far is Washington, while there is also evidence of attacks in North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida. It is extremely likely every state is vulnerable to this scheme and will be targeted if they have not been already.
In the state of Washington, individuals residing out-of-state are receiving multiple ACH deposits from the State of Washington Unemployment Benefit Program, all in different individuals' names with no connection to the account holder. A substantial amount of the fraudulent benefits submitted have used PII from first responders, government personnel, and school employees. It is assumed the fraud ring behind this possess a substantial PII database to submit the volume of applications observed thus far.
This fraud network is believed to consist of hundreds, if not thousands, of mules with potential losses in the hundreds of millions of dollars. The financial institutions targeted have been at all levels including community banks, credit unions, and large national banks. The notice from the United States Secret Service can be accessed here.
FinCEN Advisory on Medical Scams Related to COVID-19
Bank Secrecy Act data, as well as information from other federal agencies, foreign government partners, and public sources indicate possible illicit activities related to the COVID-19 pandemic related to: (1) fraudulent cures, tests, vaccines, and services; (2) non-delivery scams; and (3) price gouging and hoarding of medical-related items, such as face masks and hand sanitizer. FinCEN has published red flag indicators to help financial institutions identify COVID-19-related medical scams, and to assist financial institutions in detecting, preventing, and reporting suspicious transactions associated with the COVID-19 pandemic.
As no single red flag is necessarily indicative of illicit or suspicious activity, financial institutions should consider contextual information and the surrounding facts and circumstances, such as a customer's historical financial activity, whether the transactions are in line with prevailing business practices, and whether the customer exhibits multiple indicators, before determining if a transaction is suspicious or otherwise indicative of fraudulent COVID-19-related activities. A link to the FinCEN Advisory and potential red flags can be accessed here.
Georgia Hemp Job Aid
The Department of Banking and Finance has issued guidance for financial institutions on industrial hemp that was legalized at the federal level by the 2018 Farm Bill. The 2018 Farm Bill gave the US Department of Agriculture (USDA) the authority to regulate hemp production and the ability to delegate such authority to individual states so long as those states have a regulatory plan approved by USDA. The Georgia Hemp Farming Act, which was signed into law on May 10, 2019, provides that the Georgia Department of Agriculture (GDA) regulates the production and processing of hemp within the State. O.C.G.A. 2-23-1 et seq. A link to the guidance on the Department's website can be accessed here.

Page 3
ACTION ON APPLICATIONS FOR THE MONTH

May 2020

The following is a summary of official action taken by the Department on applications by Georgia statechartered financial institutions under Title 7, Chapter 1 of the O.C.G.A. and petitions for certificate of incorporation of financial institutions and other matters of interest during the month of May 2020:

APPLICATIONS FOR DE NOVO INSTITUTIONS

FINANCIAL INSTITUTION
Craft Bank Atlanta, GA

APPROVAL DATE
05-18-2020

BEGIN BUSINESS DATE

Classic City Bank Athens, GA

Pending APPLICATIONS TO ESTABLISH A BRANCH OFFICE

FINANCIAL INSTITUTION BRANCH OFFICE

Delta Community Credit Union Atlanta, GA

2900 Chapel Hill Road Douglasville, GA 30135 Douglas County

APPROVAL DATE
05-06-2020

BEGIN BUSINESS DATE

Planters First Bank Cordele, GA

369 South Houston Lake Road Warner Robins, GA 31088 Houston County

05-26-2020

Citizens Bank & Trust Company Eastman, GA

2100 Pooler Parkway Pooler, GA 31322 Chatham County

05-18-2020

PeoplesSouth Bank Colquitt, GA

The intersection of Panama City Beach Parkway and North Glade Trail Panama City Beach, FL 32407 Bay County

03-03-2020

APPLICATIONS FOR CREDIT UNION CONVERSION

FINANCIAL INSTITUION
Marshland Community Federal Credit Union Brunswick, GA 31520

APPROVAL DATE
05-28-2020

EFFECTIVE DATE

United 1st Federal Credit Union Kingsland, GA

Pending

Interstate Unlimited Federal Credit Union Jesup, GA

Pending

APPLICATIONS FOR RESERVATION OF NAME

PROPOSED NAME Interstate Credit Union

COUNTY Wayne

APPLICANT Ms. Stacie Branch President/CEO 705 West Cherry Street Jesup, GA 31545

Page 4
ACTION ON APPLICATIONS FOR THE MONTH CONTINUED

APPLICATIONS TO FORM A BANK HOLDING COMPANY

FINANCIAL INSTITUION
ST HLDGS, Inc. Wilmington, DE
FINANCIAL INSTITUTION (SURVIVOR) United Community Bank Blairsville, GA

APPROVAL DATE Pending

FINANCIAL INSTITUTION MERGERS

MERGED INSTITUTION
Seaside National Bank & Trust Orlando, FL

APPROVAL DATE Pending

HALLCO Community Credit Union Habersham Federal Credit Union

Gainesville, GA

Clarkesville, GA

01-23-2020

Georgia's Own Credit Union Atlanta, GA

Three Rivers Credit Union Bainbridge, GA

10-23-2019

May 2020
EFFECTIVE DATE
EFFECTIVE DATE
05-01-2020

APPLICATIONS TO ACQUIRE A FINANCIAL INSTITUTION

HOLDING COMPANY
ST HLDGS, INC. Wilmington, DE

TO ACQUIRE Rochelle State Bank

APPROVAL DATE Pending

EFFECTIVE DATE

FINANCIAL INSTITUTION
Ameris Bank Atlanta, GA

APPLICATIONS TO CHANGE LOCATION

CHANGE LOCATION OF
From: 1708 Old Trolley Road, Suite C Summerville SC, 29485 Dorchester County

APPROVAL DATE
05-06-2020

BEGIN BUSINESS DATE

To: 140 North Main Street Summerville, SC Dorchester County

Page 5

May 2020

The Department is the state agency that regulates and examines Georgia state-chartered banks, state-chartered credit unions, state-chartered trust companies, international banking organizations, and bank holding companies that own Georgia state-chartered financial institutions. The Department also has responsibility for the supervision, regulation, and examination of Merchant Acquirer Limited Purpose Banks chartered in Georgia.
In addition, the Department has regulatory and/or licensing authority over mortgage brokers, lenders and processors, mortgage loan originators, check cashers, sellers-issuers of payment instruments, and money transmitters.
Our Mission is to promote safe, sound, competitive financial services in Georgia through innovative, responsive regulation and supervision.
Our Vision is to be a willing and able partner with our regulated entities in order to support vibrant economic growth and prosperity in Georgia.
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Department of Banking and Finance 2990 Brandywine Road, Suite 200 Atlanta, Georgia 30341-5565 Phone: (770) 986-1633 Fax: (770) 986-1654 or 1655