Contents of the Treasury Notes blog, from www.treasury.gov.
26 октября 2016, 17:30

The Sixth Counter ISIL Finance Meeting Convenes in Kuwait

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This Monday in Kuwait, we concluded the sixth meeting of the Counter ISIL Finance Group (CIFG). The CIFG, which the United States co-chairs with Italy and Saudi Arabia, was established in January 2015 as one of the five working groups within the Global Coalition to Counter ISIL, a broad international group formed to degrade and ultimately defeat ISIL. The CIFG is a critical forum in which members seek to understand ISIL’s financial and economic activities and to develop and coordinate countermeasures internationally.   At yesterday’s event, we were honored to welcome delegations from over 35 countries—including officials from central banks, finance ministries, financial intelligence units, and foreign ministries—and four multilateral organizations. The meeting provided an opportunity for Coalition members to update one another on progress disrupting ISIL’s sources of revenues and its access to the international financial system, and the discussions sharpened our understanding of ISIL’s financial infrastructure. Detailed briefings were provided on Coalition efforts to target ISIL’s oil industry, as well as the international community’s understanding of ISIL’s financial relationships with its affiliate groups abroad. The meeting also served as a venue to share best practices and lessons learned for regulating exchange houses and money transfer companies, significant channels through which ISIL can move funds. Finally, CIFG members sought to anticipate the possible future trajectory of ISIL’s finances as Coalition military efforts force ISIL out of territory, shrinking its access to resources and populations to extort. This meeting follows our last plenary meeting in Rome in April of this year, where the CIFG’s four outcome-oriented project groups met to tackle a wide-range of issues related to counter-ISIL finance including ISIL’s cross-border illicit financial flows, oil and gas exploitation, financial connections with affiliates, and the looting and sale of antiquities. The CIFG also met in February 2016 in a historic joint meeting with the Financial Action Task Force (FATF) to develop a greater understanding within the international community of how ISIL raises and moves funds and examine measures that can be taken against it.  The work we do in the CIFG is essential. The CIFG has made important contributions in constraining ISIL’s finances in the nearly two years that have passed since its establishment. We will continue our work to deprive ISIL of revenue and to make the international financial system a hostile environment for ISIL.  Daniel L. Glaser is the Assistant Secretary for Terrorist Financing at the U.S. Department of the Treasury.​

20 октября 2016, 22:35

Labor Market Transitions of Young Adults

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​ Today, we’re releasing the second Economic Security Brief examining the security of American households.  This brief focuses on changes in how young adults are transitioning into the labor market.  What happens to them once they leave school?  How much do they earn?  How long are they unemployed or entirely out of the labor force?  Have those trends changed over time?   To do this, we look at two cohorts from the National Longitudinal Survey of Youth (NLSY) – those coming of age in the late 1970s and those coming of age in the late 1990s.  These surveys follow individuals over the early parts of their careers and therefore allow us to better understand how educational decisions and the transition to the labor market are evolving across generations, including changes in earnings, homeownership and partnership.  Our analysis includes an examination of non-traditional college students - those who attend college but not immediately after high school - which is an increasingly important group that is often overlooked in studies of the transition to the labor market.   First, we look at how earnings have changed for full-time workers.  Figure 1 shows the evolution of labor earnings over time for the two different cohorts.  The x-axis measures years since leaving school, so Year 0 is the first time individuals are observed as not being enrolled in school.  The education categories reflect not just college completion, but also the path to get there.  The “Traditional BA” group is students who completed a Bachelor’s degree without any gap in enrollment before or during college and excludes graduate degree holders.  “Non-traditional completers” completed an Associate’s or Bachelor’s degree but had an enrollment gap before completion.  “Non-completers” attended college (possibly right after high school) but did not complete a degree.  The “HS only” group never attended college.   Figure 1: Labor Earnings through Year 10, Men   Notes: Based on the 1979 and 1997 National Longitudinal Surveys of Youth.  Includes only full-time full year workers, defined as working at least 35 hours a week for 50 weeks a year. Squares denote education-year combinations where more than half of the observations were during a recession.  Averages include only positive reported salaries.  Completion status determined by last observed highest educational attainment, typically ages 19 to 25 in both cohorts.  Traditional BAs are students who completed a BA without any gap in enrollment before or during college and excludes graduate degree holders.  Non-traditional completers completed an AA or BA but had an enrollment gap before completion.  Non-completers attended with or without continuous enrollment but did not complete a degree.  The HS only group never attended college.   Looking first at men, the salaries for full-time workers at each level of education in the 1997 cohort start at lower levels in inflation-adjusted dollars than those of the 1979 one.  In the 1979 cohort, three of the four education categories earn about $40,000 upon labor market entry, but this figure has dropped to about $30,000 in the 1997 cohort.  Traditional BAs in the 1997 cohort start at about $40,000, but it is difficult to tell whether this is a drop from the 1979 cohort since the early cohort’s starting value is imprecisely estimated.  By Year 10, incomes for Traditional BAs and high school only look relatively similar across cohorts, suggesting that even though starting incomes were lower in the more recent cohort, they grew fast enough to reach about the same level by Year 10.    Figure 2: Labor Earnings through Year 10, women  Notes: Based on the 1979 and 1997 National Longitudinal Surveys of Youth.  Includes only full-time full year workers, defined as working at least 35 hours a week for 50 weeks a year. Squares denote education-year combinations where more than half of the observations were during a recession.  Averages include only positive reported salaries.  Completion status determined by last observed highest educational attainment, typically ages 19 to 25 in both cohorts.  Traditional BAs are students who completed a BA without any gap in enrollment before or during college and excludes graduate degree holders.  Non-traditional completers completed an AA or BA but had an enrollment gap before completion.  Non-completers attended with or without continuous enrollment but did not complete a degree.  The HS only group never attended college.   For women, the story is relatively similar.  Starting incomes were somewhat lower in the 1997 cohort, but Year 10 incomes among Traditional BAs and high school only were approximately the same.  This implies that the gender gap in earnings within each education level is similar within each cohort.  Traditional BA women earn about 77 percent of Traditional BA men through Year 10 in the 1979 cohort, compared to 80 percent in the 1997 cohort.  High school only women in the 1979 cohort earned 69 percent of what similarly educated men earned, and slightly more (73 percent) in the 1997 cohort.   While the patterns of salary changes look similar between men and women, there are clear differences by education.  As discussed earlier, Traditional BA workers earn significantly more than other types of college attendees, and this is true in every panel.  What has changed is that the outcomes among those other college attendees: the earnings of Non-traditional Completers have diverged from those of Non-completers in the 1997 cohort, even though they were very similar in the 1979 cohort.  In the 1979 cohort, both Non-traditional Completers and Non-completers earned more than workers with a terminal high school diploma.  In the 1997 cohort, however, the earnings trajectories for Non-traditional Completers were closer to that of Traditional BA workers while that of Non-completers looked more like high school only workers.  After Year 10, this gap between Non-traditional Completers and Non-completers is unlikely to close since the earnings gaps typically widened with labor market experience, as we will discuss at the end of this brief.   Earnings, however, are only one labor market outcome, and changes in how young adults transition into the labor market more broadly also affect economic security.  Once they leave school, how much time do young adults spend unemployed or out of the labor force entirely instead of working?  Have those tendencies changed over time?  For this analysis, we look at the average number of years individuals spend employed, unemployed, and out of the labor force in the first six years after leaving school.       Figure 3 shows how young adults are spending the first several years after leaving school.  Overall, there are few differences in labor market attachment between the 1979 and 1997 cohorts, with both spending about one-third of a year unemployed, one year out of the labor force, and 4.5 years employed.  The overall pattern, however, masks differences between men and women.  Young men now spend more time out of the labor force than before, while women have become more likely to work.  As a result, the 1997 cohort has similar, though not identical, labor force participation patterns for young men and women.    The brief also discusses the degree to which salaries change from one year to the next and changes in two non-labor market indicators of adulthood (homeownership and living with a spouse).  As has been widely documented elsewhere, homeownership rates among young adults have fallen substantially, and we find this to be true in the NLSYs as well.  Spousal cohabitation has also fallen between the two cohorts, but the declines are much more muted if we include those who live with a partner.  This suggests that living situations among young adults may not be changing as much as declining marriage rates may suggest.   As the brief shows, in terms of labor market earnings and attachment, young adults as a whole do not look that different from those a generation ago. However, they do differ in terms of education (and education-related borrowing) and non-working aspects that may affect economic security in general.  Labor force attachment has weakened considerably among men, especially those without any higher education, and the labor market outcomes of college non-completers appear to be diverging from those who leave school temporarily but eventually complete a degree.  That’s why the Administration continues to work to make education affordable and accessible to all. We have put forward a variety of Budget proposals that would increase access to education, from early childhood programs to making federal student loan payments more affordable. It also includes proposals to help workers get the training and skills they need, which will translate into higher wages. These and other steps can help make the middle class more secure and growth more inclusive in our country.   The full version of the brief can be found here.     Tara Watson is the Deputy Assistant Secretary for Microeconomic Analysis at the U.S. Department of the Treasury.  

18 октября 2016, 22:47

Recognizing National Retirement Security Week (Oct. 16-22)

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​ This week, we mark National Retirement Security Week – a time to focus on what Americans can be doing to ensure they have a secure nest egg when they retire. Making the right savings decisions today will pay off in the future. And adequate retirement savings are vital not only for the financial futures of individual households, but also for the health of the economy as a whole.   Since the Great Recession, we have seen positive trends in the savings rate and financial satisfaction among Americans. That said, research also shows that too many people still are not saving enough – or at all. According to a 2016 Federal Reserve Report, 31 percent of non-retired adults have no retirement savings or pension whatsoever. Near-retirement households have median retirement savings of only $14,500, as revealed by a 2015 report from the National Institute of Retirement Security. Visit https://myra.gov/news-media/nrsw.html for more retirement savings statistics. During National Retirement Security Week, and every week, the Treasury Department encourages Americans to take full advantage of their workplace retirement savings options. Often, employer-sponsored savings options, like 401(k) plans, offer certain advantages, such as matching contributions. But these options are not available to everyone. Lack of access to employer-sponsored retirement savings plans affects many working Americans; in fact, one out of every three private industry workers lacks access to retirement benefits at work. Most workers understand the need to save, but there are other barriers that can stand in their way too. For some, fees associated with retirement savings accounts or competing financial priorities, like paying down debt, keep them from saving. myRA is one new and innovative way for working Americans to start saving for a comfortable retirement.  myRA is a retirement savings account developed especially for those who don’t have access to workplace retirement savings plans or who lack other options to save. myRA makes saving simple, safe, and affordable. ·   myRA costs nothing to open and there are no fees ·   There are no minimum contribution or balance requirements ·   Savers can choose how much to contribute1 ·   Accounts safely earn interest, and there’s no risk of losing money2 ·   Savers can withdraw the money they put in without tax and penalty2   For those who don’t have access to plans at work and are looking for an easy way save, myRA is a great option. It takes only a few minutes to sign up at myRA.gov, and contributions can be made directly from paychecks or personal checking or savings accounts. myRA has already helped thousands of people jumpstart their savings journeys. Audrey Groce, special operations manager at Glen’s Garden Market in Washington, D.C., was one of the first savers to open a myRA account. “I get joy out of saving. I am of the mind that if there’s something available that is free and helps me, why not?” says Audrey. Visit myRA.gov/news-media for stories from other savers and businesses that are encouraging their employees to save with myRA.  Open Enrollment Season Open Enrollment Season (October-January) is traditionally the time of year when many people select or make changes to their benefit options, such as healthcare, life insurance, and retirement. Throughout the season, the Treasury Department works with federal agencies, non-profit organizations, and employers in industries with historically low rates of retirement savings plan access – including retail, hospitality, and food service – to educate people on the importance of saving and to introduce myRA. Thinking Ahead to Tax Time Tax season is a key opportunity to build savings, and the Treasury Department collaborates with tax software providers, Volunteer Income Tax Assistance (VITA) programs, and other organizations to encourage tax filers to use their refunds to save with myRA. Filers are encouraged to open myRA accounts, and then to direct a portion of their refunds to their accounts when they file their returns. Eligible filers who save with myRA may be able to claim the Saver’s Tax Credit, which can lower their tax bills or increase their refunds. More Information To sign up for myRA or to learn more, visit myRA.gov. Richard Ludow is the Executive Director of myRA at the US Department of Treasury.   1Annual and lifetime contribution limits and annual earned income limits apply, as do conditions for tax-free withdrawal of earnings. Limits may be adjusted annually for cost-of-living increases. To learn about key features of a Roth IRA and for other requirements and details, go to myRA.gov/roth-ira. 2Withdraw interest earned without tax and penalty five years after your first contribution if you are over age 59 1/2 or meet certain other conditions, such as using the funds for the purchase of your first home. Accounts earn interest at the same rate as investments in the Government Securities Fund, which earned 2.04 percent in 2015 and had an average annual return of 2.94 percent over the ten-year period ending December 2015.  

18 октября 2016, 05:41

Lessons Learned from Transparency in Corporate Bonds and Swaps

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​ This blog post is the seventh in a series on fixed income market dynamics by the Department of the Treasury to share our perspective on the available data, discuss key structural and cyclical trends, and reiterate our policy priorities. This post examines lessons learned from transparency in other markets. As noted in the Request for Information on the Evolution of the Treasury Market Structure issued earlier this year, Treasury is considering the potential benefits and costs of additional public transparency in the Treasury market.  While we recognize the Treasury market is unique in ways that could affect the applicability of experience from other markets, we are reviewing lessons learned from the introduction or enhancement of transparency in other markets as one part of our comprehensive assessment. This post evaluates experience with public transparency in the corporate bond and swaps markets. Corporate Bonds In July 2002, the National Association of Securities Dealers (NASD), which subsequently became the Financial Industry Regulatory Authority (FINRA), introduced the Trade Reporting and Compliance Engine (TRACE) to improve post-trade transparency in the corporate bond market.  New rules required NASD-member firms to report information about transactions in corporate bonds to TRACE and established public dissemination of that transaction information. Due to concerns that market participants would be unwilling to execute “block” trades if they were fully disclosed, the rules withheld the true size of “block” trades from public dissemination.  Public transparency was phased in over the following three and a half years by gradually reducing the permitted time to report and expanding the types of bonds disseminated.  The phased rollout of public transparency was designed in part to build market confidence as well as facilitate independent analysis of the effects of transparency. Subsequently, there has been considerable academic analysis of the introduction of TRACE and its effects on the corporate bond market.  Academic studies evaluated the effects of transparency by comparing market conditions before and after each phase-in of additional transparency.  NASD, in consultation with independent economists, also designed and conducted a controlled experiment on the effects of dissemination by selecting pairs of similar bonds and randomly disseminating data on only one bond in the pair, leaving the other as a control.  These studies assessed the effect of transparency on several factors including price dispersion, transaction costs, trade size, and trading volume.  While the specific focus and findings of each study differ, several themes stand out.  First, public transparency significantly reduced price dispersion and transaction costs in corporate bonds, especially for the most liquid securities.  This finding was corroborated by four separate studies (one, two, three, four) using different methodologies and covering different time periods.  This effect held even for institutional investors, whom some had argued beforehand already had sufficient knowledge of the corporate bond market.  Two of the studies estimated that transactions costs were cut roughly in half, resulting in annual transaction costs savings of $1 billion for investors.  Second, public transparency likely resulted in positive externalities to the trading “ecosystem,” including reduced barriers to entry and decreased concentration of business in the largest dealers (studies: one, two) as well as greater consistency in the valuations used by mutual funds when marking-to-market their corporate bond portfolio holdings.  Public transparency also furthered public understanding and objective analysis of the corporate bond market by providing a quality dataset for researchers.  Third, while many have expressed concerns that public transparency reduced liquidity provision in corporate bonds, often anecdotally or in theoretical studies, to date the topic has received limited empirical assessment.  One empirical study showed that the introduction of public transparency for infrequently traded high yield bonds initially resulted in a reduction in traded volumes, though there was no effect for other corporate bonds.   On the other hand, another study showed that dealer capital commitments did not decline when additional transparency was introduced.  More research is likely needed in this area.  Swaps There have also been studies on the effects of increased pre- and post-trade transparency for interest rate swaps and credit default swaps (CDS).  After the financial crisis, regulatory reforms required that certain standardized swap agreements trade on transparent platforms called swap execution facilities (SEFs) and that parties to those swaps report transaction data to publicly accessible swap data repositories (SDRs).  Initial studies suggest these changes have improved overall market liquidity.  A recent Bank of England study concluded that the SEF mandate for interest rate swaps in the United States has improved liquidity and significantly reduced execution costs compared to similar markets in Europe.   A 2014 report by the International Organization of Securities Commissions showed that post-trade transparency in the CDS market had reduced transaction costs without a reduction in market activity.  Public transparency in swaps is still relatively new, and we will continue to evaluate the effects of transparency in these markets as more evidence becomes available. Conclusion Evidence from corporate bond and swaps markets suggests that public transparency in those markets has likely reduced transactions costs and provided other benefits, while the net effect on market makers is unclear and would benefit from further evaluation.   Of course, the Treasury market differs from the corporate bond and swaps markets in many important ways, and reviewing historical experience in these markets is just one part of our comprehensive assessment of the potential costs and benefits of additional public transparency in the Treasury market.  We look forward to continuing the discussion with market participants on these important issues as part of our review of the Treasury market. James Clark is the Deputy Assistant Secretary for Federal Finance, and Brian Smith is a senior policy advisor in the Office of Capital Markets at the U.S. Treasury Department.​​

13 октября 2016, 17:16

Treasury Issues New Small Business Program Evaluations

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Treasury today issued program evaluation reports for the State Small Business Credit Initiative (SSBCI) and the Small Business Lending Fund (SBLF) detailing how the programs have provided critical resources to small businesses and communities across the country and helped strengthen the economy at the local level.  It's remarkable how far we’ve come since September 2010, when the Small Business Jobs Act first authorized SSBCI and SBLF at Treasury.  During the financial crisis, small businesses were severely constrained in terms of access to capital and credit.  Through the course of recovery, SSBCI and SBLF have collectively resulted in over $27 billion of additional capital for America’s small businesses, including an increase of $18.7 billion in small business lending reported by SBLF participants and $8.4 billion in SSBCI- supported small business lending and investing.  By enhancing small business access to credit and capital, these two programs have boosted the economic recovery and supported more than 90,000 small businesses in communities across America. Today’s reports highlight this achievement and summarize how the programs key design features worked to provide innovative and flexible solutions for small businesses, financial institutions, and state and local economies. Through SSBCI, the Treasury Department disbursed more than $1.3 billion in funds to 57 participating states, municipalities, and territories.  States have broad flexibility in how they choose to implement SSBCI programs to address the spectrum of small business financing needs from loans for microbusinesses and equipment purchases for small manufacturers to equity capital for early stage technology businesses.  Through the end of 2015, SSBCI funds spurred more than $8.4 billion in private sector lending and investments to small businesses.  States have generated $8 in new lending and investments for every $1 of federal support and business owners reported that these funds will help them retain or create more than 190,400 jobs. Importantly, many states chose to target businesses in diverse communities that often have trouble accessing capital.   More than 40 percent of lending and investment transactions are located in low to moderate income areas across the country, totaling $2.9 billion in new capital lent or invested in those communities.    With SBLF, Treasury invested more than $4 billion in 332 community banks and Community Development Loan Funds operating in more than 3,000 locations across 47 states and the District of Columbia.  The program encouraged community banks to increase their lending to small businesses through a powerful incentive structure – the more they lent to small businesses the lower the rate they paid Treasury – that worked.  Since the program’s inception, the total increase in small business lending reported by SBLF participants is $18.7 billion, and more than 90 percent of SBLF participants increased their small business lending over the course of their participation in the program.  SBLF helped give more Main Street entrepreneurs the opportunity to expand their businesses, invest in their local communities, and create new jobs.      America’s 28 million small businesses employ half of our country’s private sector workforce and have created nearly 2 out of every 3 new jobs over the last two decades.  Yet for many of the smallest businesses, youngest businesses, and businesses in underserved communities, accessing capital to start and grow is a daily challenge that continues despite the economic recovery.  Our hope is that these reports demonstrate the pivotal role SSBCI and SBLF played in supporting small businesses and local communities across the country and provide evidence to support the need for ongoing Federal funding for unique and innovative small business financing programs.  Please click on the links below to view the reports.  SSBCI Program Evaluation 10/13/2016 SSBCI Program Evaluation 2016 – Executive Summary PDF 10/13/2016 SSBCI Program Evaluation 2016 – Full Report PDF 10/13/2016 SSBCI Program Evaluation 2016 – Appendices PDF SBLF Final Impact Report Jessica Milano is Deputy Assistant Secretary for Small Business, Community Development, and Housing at the U.S Treasury Department​.​​

06 октября 2016, 18:03

Helping Countries Strengthen their AML/CFT and Prudential Regimes

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​ As finance officials from around the world gather in Washington for the annual meetings of the International Monetary Fund (IMF) and World Bank, facilitating continued access to the global financial system, including through correspondent banking relationships, remains an issue of shared interest.  The U.S. Treasury Department will participate in a number of multilateral events and bilateral discussions where the twin objectives of financial transparency and financial inclusion will be front and center.  These activities will take place against the backdrop of Treasury’s continued international engagement with the G-20, the Financial Action Task Force, and the Financial Stability Board, and through regional public-private dialogues on these issues.  The goal of this multifaceted effort is to ensure a well-functioning, accessible, transparent, resilient financial system.   An important aspect of this work is providing technical assistance to countries that are committed to building strong anti-money laundering/countering the financing of terrorism (AML/CFT) and prudential oversight regimes—regimes that rely on clear requirements, effective supervision, and meaningful and proportionate enforcement.  Last month, G-20 Leaders called on member countries along with the IMF and World Bank to intensify their support of expanded technical assistance directed at these efforts.  To that end, the Treasury Department’s Office of Technical Assistance (OTA) is initiating new projects and proactively assessing requests for assistance from countries that have expressed concerns about a decline in access to correspondent banking relationships in their countries, coupled with a commitment to enhance their AML/CFT regime.  For example, in Belize, OTA will help to develop the capacity of the financial intelligence unit as the central focus of that country’s AML/CFT regime.  Similarly, a recently completed OTA assessment of the Eastern Caribbean Central Bank, which supervises banks in eight Caribbean countries, concluded that there is potential for an effective AML/CFT technical assistance engagement there.  And, in Somalia, OTA will build out its existing technical assistance engagement with the Central Bank of Somalia with the aim of facilitating remittance flows via safe and secure channels.  In all, OTA is currently executing 30 projects globally focused on helping countries strengthen their AML/CFT and prudential banking supervision regimes.   Taken together, these initiatives underscore the commitment of the Treasury Department and the U.S. government to advance the causes of financial transparency and financial inclusion, as we work to further advance a safe and sound financial system.    Larry McDonald is the Deputy Assistant Secretary for Technical Assistance Policy and Michael Pisa is a Senior Policy Expert in the Office of International Affairs at the U.S. Department of the Treasury.   ###

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03 октября 2016, 23:48

Culture of Compliance and Casinos

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    Two years ago, Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an   “Advisory to U.S. Financial Institutions on Promoting a Culture of Compliance.”  Since issuing that advisory we know that many financial institutions have taken positive steps to improve their compliance culture, but there is more to be done.   FinCEN writes and enforces the rules that financial institutions – including depository institutions such as banks, and also money services businesses and casinos – need to follow to guard against money laundering, terrorist financing, and other financial crime.  FinCEN also collects reports from financial institutions and acts as the bridge to share that information with law enforcement and regulatory investigators.    In order to maintain an effective national anti-money laundering (AML) and countering the financing of terrorism (CFT) regime, FinCEN works with financial institutions to ensure they have the appropriate systems and procedures in place. While many AML/CFT compliance deficiencies identified by U.S. authorities are corrected through cautionary letters or other guidance by the regulators to the institution’s management without the need for an enforcement action or penalty, two recent FinCEN penalties against casinos underscore our focus on instituting a culture of compliance within financial institutions.  Just this week, on October 3rd, FinCEN issued a $12 million penalty against Cantor Gaming of Nevada.  That action followed a $2.8 million penalty FinCEN issued against Hawaiian Gardens Casino of California on July 15.   To fight money laundering effectively, an organization must have trained individuals at every level and provide those individuals with the proper resources and systems needed to carry out their compliance duties.  Perhaps most importantly, compliance staff need support from the leaders of their organizations.    That wasn’t the case with Cantor Gaming and Hawaiian Gardens.  Both casinos failed to train and support their staffs.  Both casinos failed to properly file, or just did not file, the Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTR), which contain valuable information used to fight financial crimes financial crimes.  Employees, and even senior managers, actually helped customers avoid having SARs and CTRs filed as the law requires.  A former Vice President of Cantor Gaming even pled guilty to a felony count of illegal gambling conspiracy in 2013 for his role as part of an illegal gambling operation. The leaders of any financial institution would benefit from reading the penalty assessments against Cantor Gaming and Hawaiian Gardens.  FinCEN reserves its penalties for the most egregious violations of its rules.     Despite these two cases, casinos appear to be steadily improving their anti-money laundering efforts.  For example, in 2010 casinos filed fewer than 14,000 SARs with FinCEN.  In 2015, casinos filed almost 50,000 SARs.  Those numbers tell us that casinos are paying more attention to their AML/CFT responsibilities.    FinCEN subject matter experts regularly attend casino industry conferences to speak about the latest illicit finance issues relevant to the industry. These experts have noted increased attendance, and interest, in panels that focus on anti-money laundering issues.  We certainly recognize and encourage these positive efforts.   A good compliance culture is one where doing the right thing is rewarded, and where “looking the other way” has consequences. FinCEN will continue to work with the casino sector on its compliance efforts, in order to ensure each casino is taking the appropriate actions to protect the gaming industry – and the greater U.S. financial system – from abuse.   Jamal El-Hindi is the Acting Director of the Financial Crimes Enforcement Network.   ###

03 октября 2016, 22:44

3 Conclusions on TARP 8 Years Later

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Eight years ago today, the Emergency Economic Stabilization Act of 2008 became law, putting the Troubled Asset Relief Program (TARP) into effect. Over the months and years that followed, Treasury has managed this unprecedented program to stabilize the economy and strengthen the recovery in ways few thought possible on October 3, 2008. On this eighth anniversary, we are reminded that this program was not only central to avoiding a financial collapse and getting the economy growing again, but that it also returned more money to taxpayers than they invested. To date, a total of $433.7 billion has been disbursed under TARP. As of August 31, cumulative collections under TARP, together with Treasury’s additional proceeds from the sale of non-TARP shares of AIG, total $442.1 billion, exceeding disbursements by $8.4 billion. A program that some once feared would lose taxpayers hundreds of billions of dollars has generated a positive return. That’s a testament to TARP’s implementation but also to the other support provided to get the economy growing—including the Recovery Act and a dozen additional fiscal measures passed from 2009 to 2012. But American taxpayers got more than just their money back with TARP too. Through Making Home Affordable (MHA), nearly 2.7 million assistance actions have helped homeowners avoid foreclosure, which in turn helped millions of their neighbors and communities by stabilizing home prices that typically fall with foreclosures. The Home Affordable Modification Program (HAMP) – the first and largest MHA program – has helped to establish a standard for mortgage modifications focused on payment reduction that has been adopted by the industry and will help homeowners avoid foreclosure long after HAMP retires. The Hardest Hit Fund (HHF) program was created in 2010 to provide $7.6 billion in TARP funds in targeted assistance to 18 states and the District of Columbia deemed hardest hit by the economic and housing market downturn. Recognizing the success of the program in stabilizing neighborhoods in these hard hit communities, Congress gave Treasury the authority to allocate an additional $2 billion late last year and the program will now continue to the end of 2020. While the housing market has strengthened across the country, HHF provides much-needed funding that will continue to help these hardest-hit communities recover. While no more taxpayer money is being invested in banks under TARP, taxpayers are still receiving a return from the investments they made to stabilize the American banking system. TARP’s bank programs have recovered $275 billion through repayments and other income, $30 billion more than originally invested. We continue to exit our investments and replace temporary government support with private capital. Under the Capital Purchase Program, Treasury invested in 707 financial institutions, 695 of which have exited the program. The impact of TARP doesn’t stop there. TARP investments helped to jumpstart the credit markets and save an estimated one million jobs in the American auto industry – an industry seeing record sales in recent years. As we look back on these results eight years later, with many of the TARP programs wound down, and assess the legacy of this historic government action, there are three clear takeaways: 1) TARP was instrumental in turning a collapsing economy around; 2) Treasury disbursed less in TARP support than was initially anticipated and even generated a positive return for taxpayers; and 3) TARP housing programs helped millions of Americans get back on their feet after the greatest economic downturn since the Great Depression and will continue to help homeowners in the years to come. Rob Runyan is a spokesperson at the U.S. Treasury Department.​​​

26 сентября 2016, 21:36

Now That’s Progressive! : Closing the income inequality gap through the tax code

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​ A progressive tax system – in which those with the highest incomes who are most able to pay taxes, pay a greater percentage of their income than those with lower incomes – has been a key principle of the American income tax system.  However, in the years prior to 2008, changes in tax policy sharply reduced the progressivity of the tax code.  On Friday, the White House Council of Economic Advisors published a report highlighting how this Administration has actively worked to reverse that trend.  Since President Obama’s inauguration in January 2009, the Tax Code has become increasingly more progressive and fair. In fact, over the last seven and a half years, the average tax bill has decreased by several hundred dollars for low- and middle-income families, while taxpayers in the top 1 and 0.1 percent have seen a substantial increase in their taxes.  This has partly reversed a trend of increased income inequality since the late 1970s, with the Administration’s actions offsetting the increased after-tax income inequality by approximately 20 percent.  Today, Treasury is releasing a reportexamining the effects of recent tax law changes on inequality.     A number of tax law changes since 2009 have had an important positive effect on American families.  For example, as part of the Recovery Act championed by the Administration, these changes increased the Earned Income Tax Credit (EITC) and the Child Tax Credit to assist low-income working families and established the American Opportunity Tax Credit to make college more affordable for low and middle-income families.  All three of those tax credits were made permanent this past year after two previous temporary extensions.  Financial assistance provided by the Affordable Care Act has helped make health insurance more affordable for middle-class families and, in conjunction with the rest of the Affordable Care Act, has resulted in 20 million additional Americans gaining access to quality, affordable health care.   The Administration proposed legislation and advocated for proposals that were enacted into law that help make sure the wealthy and well-connected are paying their fair share.  As part of the American Taxpayer Relief Act in 2012, the Administration secured legislation that increased income tax rates on the highest-income individuals, raised estate tax rates, limited itemized deductions for high-income individuals, and increased the maximum tax rate on long-term capital gains and dividend income.  Parts of the ACA also imposed additional Medicare payroll taxes and established a 3.8 percent tax on net investment income for high-income individuals.    In conducting our analysis for today’s report, Treasury combined the effects of all changes in tax law during the Obama Administration and compared that to the hypothetical situation where the tax law had remained static since 2008.  Treasury found that those in the bottom third of the income distribution saved an average of about $700 to $800 in taxes each year.  Individuals with income in the middle third of the income distribution, saved roughly $200 annually.  On the flip side, individuals in the top third of the income distribution experienced a net tax increase of $1,000 and the wealthiest 0.1 percent of Americans experienced an annual tax increase of $550,000.  All these effects are the result of tax legislation enacted since the beginning of 2009.   These changes illustrate the powerful impact that progressive tax policy can have on the distribution of income and how further changes could reduce income inequality further.  Indeed, the Administration’s FY 2017 budget includes several proposals that would substantially increase the progressivity of the tax system.  These include benefits for lower-income families such as an expanded EITC for workers without children and enhanced refundability of the American Opportunity Tax Credit, as well as proposals to ensure high-income families pay their fair share, such as the proposal to eliminate the tax breaks for inherited capital assets.  While we have seen significant progress during the Obama Administration, these proposals would further close the income inequality divide.   To learn more, read the Treasury Department’s full report here.     Mark J. Mazur is the Assistant Secretary for Tax Policy at the U.S. Department of the Treasury. ###

21 сентября 2016, 17:59

Friday: Tune In To The Live Webcast of the Freedman's Bank Forum

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  ​On Friday, September 23, 2016, the U.S. Treasury Department will host the Freedman's Bank Forum to explore ways to build an economy that works for all Americans. The Forum will be webcast live on the Treasury’s website, and we invite you join us.  This Forum will bring together public, private, and nonprofit leaders to discuss strategies to improve jobs, economic opportunity, financial inclusion, and shared prosperity for all communities. The speakers and panelists will cover recent progress and new opportunities for the Obama Administration and private, non-profit, and local government sectors in fostering broad-based economic growth. They will also consider what more can be done on a variety of fronts to address economic disparities.  This Forum's name is a tribute to the Freedman's Savings and Trust Company, which was created to provide economic opportunity for newly emancipated African-Americans more than 150 years ago, and which was commemorated by the Treasury Department earlier this year. The Freedman’s Bank Forum aligns with the historical significance of the bank and its original mission – to promote economic integration and financial inclusion. Additionally, the Forum coincides with a series of events throughout the Nation’s Capital that will mark the opening of the National Museum of African American History and Culture.  A live webcast will be available here from 9:00 am – 12:30 pm EDT, on Friday, September 23, 2016.   Freedman’s Bank Forum Agenda 9:00 a.m. – 9:20 a.m.                 In Conversation with Secretary Jacob J. Lew moderated by Sharon Epperson, Senior Personal Finance Correspondent, CNBC 9:20 a.m. – 9:30 a.m.                 Roger W. Ferguson, Jr., President and CEO, TIAA 9:30 a.m. – 10:30 a.m.               Panel 1: Building Jobs and Opportunity for Communities of Color Moderator: Deputy Secretary Raskin Panelists: ·         Curley M. Dossman, Jr., Chairman of the Board, 100 Black Men of America, Inc. ·         John W. Rogers, Jr., Chairman, CEO, & Chief Investment Officer, Ariel Investments ·         Raj Chetty, Professor of Economics, Stanford 10:30 a.m. – 10:50 a.m.             Break 10:50 a.m. – 11:50 p.m.             Panel 2: Financial Inclusion and Shared Prosperity Moderator: Derek T. Dingle, Senior Vice President & Chief Content Officer, Black Enterprise                                                 Panelists: ·         John Hope Bryant, Founder, Chairman, and CEO, Operation HOPE ·         The Honorable Kasim Reed, Mayor of Atlanta Georgia ·         Kim Saunders, Founder, President and CEO, Eads Group; Board Member, National Bankers Association 11:50 p.m. – 12:00 p.m.             The Honorable Andrew J. Young, Chair, Andrew J. Young Foundation Dan Cruz is a spokesperson at the US Department of Treasury.

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15 сентября 2016, 20:47

Treasury-Funded Evaluation of My Classroom Economy Curriculum Makes the Grade

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​ The Treasury Department’s Financial Empowerment Innovation Fund supports the development, testing, and evaluation of new products and services that make safe and affordable financial services available to more Americans.  We are pleased to share today the results of a recent research contract that was funded by the Treasury Innovation Fund.   The Center for Financial Security at the University of Wisconsin-Madison today released results of a rigorous evaluation of the My Classroom Economy curriculum, an innovative method for teaching elementary school students the fundamentals of financial decision-making.    An important area of Innovation Fund research focuses on methods that strengthen consumers’ abilities for making informed and effective financial choices.  Treasury has a particular interest in testing and evaluating innovative classroom based curricula and other strategies that help young people become savvy consumers of financial services.   Using the My Classroom Economy approach, teachers embed financial topics and financial decision-making in the everyday classroom approach.   Rather than teaching financial topics as a stand-alone subject, the teachers establish a classroom-based economy that is integrated into many aspects of the day.  Teachers assign student jobs from which the students earn classroom “dollars.”  Students use the classroom dollars to pay for basic items such as to rent or purchase their desks and to purchase items from a school store.   The research findings are positive, with participating youth increasing their financial knowledge and budgeting behavior. The research also found that youth whose teachers used the My Classroom Economy method were more likely to engage in financial behavior outside of school, such as having bank or credit union accounts.   In addition, the evaluation found that the My Classroom Economy approach is appealing to teachers because it is easily integrated into the school day without taking time away from core learning requirements and does not require extensive teacher training.   The My Classroom Economy evaluation was implemented in the 2015-2016 school year at 24 elementary schools in the School District of Palm Beach County, Florida.  A total of 1,972 students in 115 classrooms, along with their teachers and parents participated in the research project.   This research builds on previous Treasury-funded studies on new approaches for increasing financial capability skills including the 2014 “Financial Education and Account Access Among Elementary Students” study which found positive effects of a separate elementary school curriculum in which students were provided access to bank accounts.     More Information   The Center for Financial Security will host a special webinar to announce the evaluation findings and discuss the research at noon - 1:00 p.m. CST on Wednesday, September 21, 2016.  Please register today,  and tune in to the free webinar to learn more about the project.   Download the Research Brief and the Final Research Report for more details.    The My Classroom Economy curriculum is available free of charge and is downloadable from www.myclassroomeconomy.org   Melissa Koide is the Deputy Assistant Secretary for Consumer Policy at the U.S. Department of the Treasury​.

15 сентября 2016, 18:20

The Collapse of Lehman Revisited: Eight Years of Progress Toward a Stronger Economy and Financial System

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Today marks eight years since the collapse of Lehman Brothers – a bankruptcy that sent shockwaves through the global financial system and helped thrust our economy into the worst recession since the Great Depression. It was an unprecedented failure brought on by shoddy mortgage practices, poor underwriting standards, and a financial system that had become increasingly divorced from the business of serving everyday Americans.  Eight years later, our economy has turned around and we’ve made enormous progress creating a more stable and secure financial system. Our businesses have added more than 15 million jobs since early 2010. The unemployment rate has dropped to 4.9 percent. Wages have increased at an annual rate of 2.8 percent this year. And as we learned from this week’s Census report, in 2015, real median household income grew 5.2 percent, the fastest rate on record. A key reason our financial system has become stronger since the crisis is the Dodd-Frank Wall Street Reform and Consumer Protection Act – the most sweeping set of reforms to the financial system since the Great Depression. Today, banks have added more than $700 billion in capital to help guard against unexpected losses.  The derivatives market has been pulled out of the shadows. The Consumer Financial Protection Bureau (CFPB) has put in place new safeguards and saved consumers billions. The Financial Stability Oversight Council (FSOC) is looking across the system to respond to emerging threats to financial stability.  These are clear markers of progress, but more work remains. Enacting Wall Street Reform wasn’t simply an accomplishment – it was a commitment. As recent enforcement actions by the CFPB make clear, we have to remain vigilant and continue to guard against efforts to chip away at the reforms and protections we’ve put in place. The fact is, for all the progress we’ve made since the crisis, some remain determined to turn back the clock to 2008.   That’s why as we mark this anniversary, we will continue to defend against any measures that would leave our country more vulnerable to another financial crisis, and we remain focused on creating a strong and safe financial system that supports economic growth. You can read more about the progress we’ve made here. ​​​Rob Friedlander is a Spokesperson at the Treasury Department​.