Archives: Regulatory Compliance

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Federal Reserve Releases Proposals to Tailor Enhanced Prudential Standards

On October 31, 2018, the Board of Governors of the Federal Reserve System (“Board”) released two draft notices of proposed rulemaking (“NPRs”) to tailor its enhanced prudential standards (“EPS”) in accordance with Section 401 of the Economic Growth, Regulatory Relief and Consumer Protection Act (“EGRRCPA”). One NPR, issued by only the Board, would tailor the … Continue Reading

BCFP Reaches Settlement with Small-Dollar Lender in Connection with Allegedly “Abusive” Practice

On October 24, 2018, the Bureau of Consumer Financial Protection (“BCFP” or the “Bureau”) announced that it had reached a settlement with Tennessee-based small-dollar lender and check casher, Cash Express LLC, which agreed to resolve the Bureau’s claims by paying a $200,000 fine and approximately $32,000 in restitution to affected consumers.  The consent order includes … Continue Reading

Financial Stability Oversight Council Rescinds Last Nonbank SIFI Designation

On October 17, 2018, the Financial Stability Oversight Council (“FSOC”) announced that it  voted unanimously to rescind its designation of Prudential Financial, Inc. as a so-called “systemically important financial institution” (“SIFI”).  Section 113 of the Dodd-Frank Wall Street and Consumer Protection Act (“Dodd-Frank Act”) enables FSOC to identify a nonbank financial company for supervision by … Continue Reading

OCC Reaffirms Willingness To Accept and Grant Special Purpose Charters to Fintech Companies

On October 9, 2018, Grovetta Gardineer, the Office of the Comptroller of the Currency’s (“OCC’s”) senior deputy comptroller for compliance and community affairs, reaffirmed the OCC’s willingness to accept applications from fintech companies seeking a special purpose national bank charter and grant such applications if the application meets certain requirements. These remarks, which were made … Continue Reading

Regulators Encourage Lower-risk Banks to Join Forces for Bank Secrecy Act and AML Compliance

On October 3, the Board of Governors of the Federal Reserve System (“Federal Reserve”), the Federal Deposit Insurance Corporation (“FDIC”), the National Credit Union Administration (“NCUA”), the Office of the Comptroller of the Currency (“OCC”), and the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) released an Interagency Statement on Sharing Bank Secrecy Act … Continue Reading

Chairman of the CFTC Releases White Paper on Cross-Border Swaps Reform

On October 1, 2018, Chairman Giancarlo of the Commodity Futures Trading Commission (“CFTC” or “Commission”) released a white paper titled “Cross-Border Swaps Regulation Version 2.0: A Risk-Based Approach with Deference to Comparable Non-U.S. Regulation.” The Chairman previewed both his views on cross-border swaps reform and the paper in speeches delivered in London, Tokyo and Singapore … Continue Reading

OCC Releases Bank Supervision Operating Plan for Fiscal Year 2019

On September 25, 2018, the Office of the Comptroller of the Currency (“OCC”) released its bank supervision operating plan for fiscal year (“FY”) 2019, which begins October 1, 2018, and ends September 30, 2019.  Developed by the OCC’s Committee on Bank Supervision (“CBS”) to align with “The OCC’s Strategic Plan, Fiscal Years 2019-2023” and the … Continue Reading

Federal Banking Agencies Issue Proposed Rule to Implement Changes to Capital Treatment of High-Volatility Commercial Real Estate Loans

On September 18, 2018, the federal banking agencies issued a release with a proposed rule to implement the changes made to the capital treatment of certain high-volatility commercial real estate (“HVCRE”) loans by section 214 of the Economic Growth, Regulatory Reform, and Consumer Protection Act (“EGRRCPA”). The deadline for comments on the proposal is 60 … Continue Reading

Banking Regulators Issue Joint Policy Statement Downplaying the Role of Supervisory Guidance in Enforcement

On September 11, 2018, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Bureau of Consumer Financial Protection (the “Bureau”, and, collectively, the “Agencies”) issued a statement “clarifying the role of supervisory guidance.” The release … Continue Reading

OCC Releases Advanced Notice of Proposed Rulemaking Regarding CRA Framework

On August 28, 2018, the Office of the Comptroller of the Currency (“OCC”) released an advanced notice of proposed rulemaking (“ANPR”) inviting comments on a revised Community Reinvestment Act (“CRA”) framework. In the ANPR, the OCC described its vision for a new CRA framework that would: encourage more lending and investment activity in low and … Continue Reading

CFTC Amends Requirements for Chief Compliance Officers

On August 21, 2018, the Commodity Futures Trading Commission (“CFTC”) adopted rule amendments that modify the requirements for Chief Compliance Officers (“CCO”) of swap dealers (“SD”), major swap participants (“MSP”) and futures commission merchants (“FCM”).  SDs and FCMs should review these rules in detail in order to assess the changes they will have to make … Continue Reading

Arizona Fintech Sandbox Begins Accepting Applications

Arizona recently became the first state in the U.S. to create a “regulatory sandbox” program to facilitate the development of innovative financial products and services. Such products would either incorporate new or emerging technology or reimagine uses of existing technology. The program would exempt participants from certain state financial regulations, but not federal requirements. On … Continue Reading

The European Parliament publishes a study on financial technology and competition law

On July 9, 2018, the Economic Affairs Committee of the European Parliament (the “EP”) published a study identifying potential competition law concerns in the financial technology (“FinTech”) sector (the “Study”). This Study follows the Consumer Financial Services Action Plan launched by the European Commission in March 2017, which aimed to promote greater choice and better access to financial services … Continue Reading

Market Trends 2017/18: Securities Regulation and Enforcement

The enforcement and regulatory priorities of the Securities and Exchange Commission (SEC) have begun to come into focus now that SEC Chairman Jay Clayton has been in office for over a year. Courts have also issued decisions that will significantly impact securities enforcement moving forward. This practice note discusses the Supreme Court’s recent decision holding that … Continue Reading

German Federal Financial Supervisory Authority Publishes Guidance on the Regulatory Framework for Cloud Services

The German Federal Financial Supervisory Authority (“BaFin”) recently published an article that provides guidance on the regulatory framework for cloud computing.  This is a follow-up to the circular letter Minimum Requirements for Risk Management (“MaRisk”), which was published in German in October 2017 and the circular letter Supervisory Requirements for IT in Financial Institutions (“BAIT”), … Continue Reading

FS-ISAC Launches Information Sharing Forum for Government Entities

On June 11, 2018, the Financial Services Information Sharing and Analysis Center (“FS-ISAC”) announced the launch of the CERES Forum, an information sharing initiative for central banks, regulators, and supervisors designed to strengthen responses to cyber and physical threats.  The new forum will become operational on July 1, 2018. Although FS-ISAC primarily comprises private financial … Continue Reading

CFTC Issues Advisory Regarding Virtual Currency Derivatives

Earlier this week, the CFTC published a staff advisory regarding virtual currency derivative product listings. The guidance sets forth five areas of focus for exchanges and clearinghouses in listing a new virtual currency derivatives contract pursuant to Commission Regulation 40.2 or 40.3, including: (1) enhanced market surveillance, (2) coordination with CFTC staff, (3) large trader … Continue Reading

Office of the Comptroller of the Currency Encourages Banks to Meet Consumer’s Needs for Short-Term, Small-Dollar Credit; BCFP Voices Approval

Yesterday, the Office of the Comptroller of the Currency issued a bulletin encouraging national banks and federal savings associations to make short-term, small-dollar installment loans that are both safe and affordable available to consumers. The bulletin observes that despite the need, many banks have withdrawn from this market, forcing consumers to turn to non-bank lenders. … Continue Reading

Customer Due Diligence Rule — Key Practical Resources

FinCEN’s Customer Due Diligence Rule for Financial Institutions (the “CDD Rule”) became effective yesterday.  The rule, which was published by FinCEN on May 2016 (and slightly amended on September 29, 2017) is described in this Covington client alert.  It requires covered financial institutions to: (i) adopt due diligence procedures to identify and verify a legal … Continue Reading

Bureau of Consumer Financial Protection Amends Timing Provisions of Federal “Know Before You Owe” Rule

On April 26, 2018, the Bureau of Consumer Financial Protection (the “Bureau”) finalized an amendment to the “Know Before You Owe” mortgage disclosure rule (also known as the TILA-RESPA Rule), which it proposed in July 2017 and which we previously described in this blog. The amendment eliminates uncertainty regarding a timing restriction in the TILA-RESPA … Continue Reading

Cboe Contributes to Ongoing Discussion Regarding Cryptocurrency ETPs

Last month, Cboe Global Markets, Inc. (“Cboe”) responded to a staff letter on cryptocurrency funds and related investment products published by the SEC earlier this year. The SEC staff letter recognized that proponents of cryptocurrencies have identified a range of potential benefits and that innovation is important, but the SEC also identified a number of … Continue Reading

Treasury Releases Recommendations to Reform CRA Framework

On April 3, 2018, the Department of the Treasury (“Treasury”) released its much-anticipated recommendations to reform the Community Reinvestment Act (“CRA”). The report, which is addressed to the federal banking agencies, outlines a number of proposed regulatory and administrative changes to (i) the CRA’s performance evaluation criteria, and (ii) the federal banking agencies’ approach to … Continue Reading

CFPB Issues Request for Information on Its Consumer Financial Education Programs

On April 4, 2018, the Consumer Financial Protection Bureau (“CFPB”) released its latest Request for Information (“RFI”), which seeks comments on the “overall efficiency and effectiveness” of the CFPB’s consumer financial education programs. Generally, the CFPB is requesting comment on its focus on various topics, programs, and delivery channels and methods (presumably to identify if … Continue Reading

CFPB Issues RFI On Its Guidance and Implementation Support

On March 28, 2018, the Consumer Financial Protection Bureau (“CFPB”) issued a Request for Information (“RFI”) regarding the effectiveness and accessibility of its guidance materials and activities, including implementation support.  Specifically, the RFI asks for information about the following aspects of the CFPB’s methods of providing guidance to the public: Regulatory Inquiries Function: This function allows … Continue Reading
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