Archives for July 2019

Federal Bank Regulators Issue Joint Statement on Risk-Focused Approach to AML/BSA Compliance Programs

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a joint statement to emphasize their risk-focused approach to examinations of banks’ Bank Secrecy Act/anti-money laundering (BSA/AML) compliance programs. Although the joint statement does not alter long-standing BSA/AML compliance standards, it highlights the need for financial institutions of all sizes to determine their internal and external risk profile and implement a risk-based BSA/AML compliance program that reflects the realities of the risks faced by particular financial institution. In light of the recent focus on BSA/AML compliance, banks and financial institutions should review their BSA/AML compliance programs on a regular basis, update their enterprise-wide risk profile, and review/enhance their BSA/AML compliance program to ensure that it adequately addresses the relevant risks.

The full text of the Joint Statement on Risk-Focused Bank Secrecy Act/Anti-Money Laundering Supervision is set forth below.
Joint Statement on Risk-Focused Bank Secrecy Act-Anti-Money Laundering Supervision

Federal Court Strikes Putative Class Allegations in Action Alleging TCPA Violations

cream-colored rotary phoneOn July 17, 2019, the United States District Court for the Central District of California order striking putative class action allegations from the complaint for failure to comply with L.R. 23-3.  In Fabricant v. Goldwater Bank, N.A., Case No. 2:19-cv-00164-DFS-JC, the plaintiff brought a claim for violation of the Telephone Consumer Protection Act (TCPA) on behalf of himself and other similarly situated individuals, alleging that he was contacted on numerous occasions by the defendant without consent and in violation of the TCPA.  After the case had been pending for more than 120 days, Goldwater Bank, N.A. moved to strike the putative class allegations from the Complaint based on plaintiff’s failure to comply with L.R. 23-3, which requires that class action plaintiffs move for class certification within 90 days of serving a class action complaint.  Plaintiff argued that the L.R. 23-3 was invalidated by the Ninth Circuit’s recent decision in ABS Entertainment v. CBS Corp., 908 F.3d 405, 427 (9th Cir. 2018).  The Court rejected Plaintiff’s argument that L.R. 23-3 was invalidated, explaining

While ABS Entertainment does prohibit blind enforcement of a

90-day requirement for filing a class certification motion, the

Ninth Circuit did not hold that class action plaintiffs were free to

ignore it with impunity. The Court finds that it does not excuse

Plaintiff’s complete failure to comply with the Rule or to seek

relief from it. In ABS Entertainment, the District Court had, for

no stated reason, rejected a stipulation between the parties for an

extension of the 90-day period. Perhaps unsurprisingly, the Ninth

Circuit found that enforcement of a 90-day period for filing of a

class certification motion in all cases regardless of the case and

the wishes of the parties is unreasonable. In this case, the 90-day

period remains in the Local Rules of this District.

Fabricant, Case No. 2:19-cv-00164-DFS-JC.  Fabricant subsequently sought review of the order striking the putative class allegations from the U.S. Court of Appeals for the Ninth Circuit pursuant to Fed. R. Civ. P. 23(f).  Although Plaintiff’s request for interlocutory appeal is still pending, the district court’s decision provided much-needed clarity on the validity of L.R. 23-3 and highlights a potential procedural pitfall in high-stakes, class action litigation.

Goldwater Bank, N.A. is represented in this matter by a team of lawyers at Wagner Hicks PLLC, including lead counsel Sean C. Wagner, Benjamin D. Hicks, and Frank R. Martin.

The complete text of the Order granting Goldwater Bank, N.A.’s Motion to Strike is set forth below.