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Cyber-security: FDIC Issues Warning on “Shellshock” and “Bash”

On September 29, 2014, the FDIC, on behalf of the Federal Financial Institutions Examination Council, issued an alert to banks on recently discovered material vulnerabilities in the security of the GNU Bourne-again shell system software -- nicknamed “Bash” -- commonly used by bank servers and computers. Researchers reported the newly discovered vulnerability -- nicknamed “Shellshock” -- in Bash versions 1.14 through 4.3 on September 24, 2014.

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Financial Institutions . . . In the News

  • Mortgage refinancing is available to many homeowners through HARP, but Americans are skeptical.  (MPBN 8.26.14)
  • Coordinated hacker attacks struck JP Morgan and other banks.  (New York Times 8.27.14)
  • Bank of America is close to a $16-17 billion settlement with Justice Department over sale of mortgage-backed securities.  (Portland Press Herald 8.6.14)
  • Maine ranks 30th in nation for mortgage closing costs.  (Mainebiz 8.4.14)
  • FAME increases loan-insurance by 50% or up to $375,000 for commercial borrowing.  (Portland Press Herald 8.4.14)
  • U.S. Senators introduce legislation to provide regulatory relief to small financial institutions and credit unions.  (Insurance 7.13.14)
  • Why the economy is still stifled after the housing collapse.  (MPBN 7.24.14)
  • U.S. House votes to change banking laws related to the marijuana industry.  (MSN 7.17.14)
  • Maine Supreme Court rules MERS’ has limited ability to assign mortgages in Bank of America, N.A. v. Greenleaf.  ( 7.16.14)

Tips for Merchants and Consumers Facing a Data Breach

The high-profile data breach at Target made international news. But small and midsized businesses face the majority of cyber attacks and are even more likely to have employees mishandle data than large enterprises.

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CFPB Issues Advisory on Bitcoin, Virtual Currencies

On August 11, 2014, the Consumer Financial Protection Bureau released a Consumer Advisory about virtual currencies.  The Advisory followed a directive by the U.S. Government Accountability Office for the CFPB to conduct a close examination of the world of virtual currencies.  The complete Advisory can be found here.

The Advisory includes a description of virtual currencies (which include the ubiquitous Bitcoin) and how virtual currency exchanges and investments work.  It goes on to provide multiple warnings and risk factors relating to investments in Bitcoin and similar currencies, including:

  • The lack of government and regulatory oversight and protection,
  • Volatile exchange rates and extreme price fluctuations, and
  • The dangers posed by computer hackers and investment scams. 

Even where an investment in digital money is “legitimate,” there may still be hidden costs involved.

In the Advisory, the CFPB notes that the SEC has already released warnings about fraudulent virtual currency investment schemes, including a virtual currency alert and an investor alert regarding bitcoin.

The CFPB will now be accepting consumer complaints relating to virtual currency issues.


Maine Updates Truth-In-Savings, Funds Availability Rule

Maine’s Truth-in-Savings and Funds Availability Rule is getting an overhaul. 

On August 6, 2014, Maine’s Bureau of Financial Institutions announced that changes to Chapter 118, Funds Availability and Truth-in-Savings had been finalized and will go into effect on September 1, 2014.  The final rule repeals and replaces former Chapter 18 of the Bureau’s rules.

According to the Bureau, the primary purpose of the newly revised rule is to incorporate by reference:

  • Regulation CC of the Federal Reserve Board regarding Funds Availability
  • Regulation DD of the Consumer Financial Protection Bureau regarding Truth-in-Savings
  • Part 707 governed by the National Credit Union Administration regarding Funds Availability and Truth-in-Savings.

According to Chapter 118, all of the provisions of these federal rules have been incorporated by reference into Maine regulation, with two exceptions:  (1) the definition of “business day,” and (2) the respective enforcement and liability provisions, as described in the rule.  The rule also includes model language regarding complaint resolution that should be included in the “schedule of account charges” or similar “literature” used to describe fees on an account.

The Superintendent’ Notice of the final rule is available here.  According to the notice, no interested parties filed comments on the proposed rule.

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