The Financial Crimes Enforcement Network recently issued new frequently asked questions regarding its customer due diligence (CDD) rule. The CDD rule applies to banks, among others, and includes four core elements of CDD, each of which should be included in anti-money laundering programmes.
The Board of Governors of the Federal Reserve System has announced revisions to the Annual Report of Foreign Banking Organisations (FR Y-7) which will enable foreign banking organisations (FBOs) to certify their compliance with US risk committee and home country capital stress testing requirements under Regulation YY. The FR Y-7 is an annual report submitted by qualifying FBOs to provide financial, organisational, shareholder and managerial information to the board.
The US Court of Appeals for the Ninth Circuit recently held that California's statute prohibiting credit card surcharges violated the First Amendment as applied to the proposed surcharge practices of the merchant-plaintiffs. The Ninth Circuit used the same reasoning as a recent Supreme Court case to hold that California's surcharge ban regulated speech rather than conduct, therefore posing First Amendment concerns.
The Consumer Financial Protection Bureau recently released a set of consumer protection principles designed to protect consumer interests in the market for services built around consumer-approved use of financial information. The principles are targeted at so-called 'data aggregation' or 'screen scraping' services that collect customer information in order to provide financial planning or other services.
The US Office of the Comptroller of the Currency (OCC) recently released a notice seeking public input regarding how to revise the Volcker Rule. The notice cites a report released by the US Treasury Department, which included recommendations for significant changes to the rule. Although the OCC did not propose specific changes to the rule in its notice, it stated that the information that it is soliciting could support the revisions to the final rule advanced in the Treasury report and elsewhere.
The Consumer Financial Protection Bureau recently issued proposed amendments to its final rule to expand existing consumer protections for electronic fund transfers to pre-paid accounts. Among other things, the proposal would modify the final rule to exempt pre-paid account issuers from the error resolution and limitation of liability provisions with respect to unregistered cardholders and provide more flexibility to issuers of digital wallet accounts that are covered by the final rule.
The Treasury Department recently released its long-awaited report to reform the US financial system. The report includes dozens of recommendations to reform laws, treaties, regulations, guidance, reporting and recordkeeping requirements and other government policies that inhibit federal regulation of the financial system in a manner consistent with the set of core principles enunciated by President Trump in Executive Order 13772.
The Office of the Comptroller of the Currency recently issued a set of frequently asked questions (FAQs) to supplement its 2013 bulletin on third-party relationship risk management. The FAQs affirm the bulletin's broad applicability, while re-emphasising the need for third-party relationship oversight to be risk based and tailored to individual institutions' needs and delving into several more detailed compliance questions.
The former chief compliance officer of MoneyGram, Thomas E Haider, and the Financial Crimes Enforcement Network (FinCEN) have jointly filed a stipulation and order of settlement and dismissal in the US District Court of Minnesota. This follows FinCEN's earlier-filed complaint against Haider seeking to hold him personally liable for MoneyGram's violations of the Bank Secrecy Act and its implementing regulations.
President Trump recently issued two executive actions which constitute the first official statements on how his frequent criticism of the Dodd-Frank Act and the broader financial regulatory climate following the financial crisis may be translated into actual reform efforts. The executive order sets out core principles for regulatory reform without making any specific policy recommendations, while the memorandum directs the Department of Labour to re-examine its 2016 Fiduciary Duty Rule.
The Office of the Comptroller of the Currency (OCC) has confirmed its intention to explore issuing limited-purpose national bank charters to financial technology (fintech) firms engaged in banking activities, commonly called 'fintech charters'. Earlier this year, the OCC had signalled this possibility; now, through the release of a policy paper and a speech by the comptroller, it has taken a more formal step.
The Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation recently issued a joint advanced notice of proposed rulemaking regarding enhanced cyber-risk management standards for certain entities. The enhanced standards would establish increased supervisory expectations for the entities and services that potentially pose a heightened cyber-risk to the safety and soundness of the financial sector.
In a significant setback for the Consumer Financial Protection Bureau, a panel of the DC Circuit recently held that its structure violates the Constitution and invalidated its order to impose a $109 million civil penalty and broad injunctive relief on mortgage lender PHH for alleged violations of the Real Estate Settlement Procedures Act.
The Consumer Financial Protection Bureau recently issued its final rule to extend consumer protections to most pre-paid accounts and to extend certain other protections for credit cards to pre-paid accounts that are associated with certain lines of credit or overdraft credit plans. The rule will cover reloadable and non-reloadable plastic pre-paid cards, certain mobile wallets and electronic accounts that hold pre-paid value and the financial institutions that issue such pre-paid accounts.
The Office of the Comptroller of the Currency recently published a notice of proposed rulemaking and a request for public comment introducing a regulatory regime to govern the receivership of national banks. While the proposed rule would apply to the existing pool of 52 uninsured national trust banks, its broader impact would be to establish a receivership regime that supports the creation of new forms of limited purpose, uninsured banks for the financial technology industry.
The Federal Deposit Insurance Corporation recently issued proposed examination guidance on third-party lending arrangements. The proposed guidance would apply broadly to any lending arrangement where a third party performs a significant aspect of the lending process and may affect a swathe of loan programmes, including private-label and co-branded credit cards and marketplace, automobile and basic mortgage lending.
The Federal Reserve System recently issued an order extending the Volcker Rule conformance period with respect to investments in, and relationships with, covered and foreign funds that were in place before December 31 2013 (legacy covered funds). The extension reiterates the intention that banking entities must plan how they will conform or divest legacy covered fund investments and relationships well in advance of the end of the extension.
The New York State Department of Financial Services recently issued a final rule setting out the minimum requirements for transaction monitoring and filtering programmes used by regulated institutions to monitor potential Bank Secrecy Act and anti-money laundering violations, suspicious activity reporting and sanctions violations. It also requires regulated institutions to confirm annually that all necessary steps have been taken to ensure compliance.
The Federal Reserve System has issued supervisory guidance for assessing risk management at supervised institutions with total consolidated assets of less than $50 billion. The guidance sets out various factors that examiners and staff will consider when assessing the adequacy of a covered institution's risk management controls and deciding on the overall risk management rating.
The Financial Crimes Enforcement Network has published a final rule that formalises new and existing customer due diligence requirements for banks (including branches and agencies of foreign banks in the United States), broker-dealers in securities, mutual funds, futures commission merchants and introducing brokers in commodities. This is intended to promote a more level playing field across and within financial sectors.