Financial Institutions

Tuesday, 14 September 2021

Fair lending continues to be a regulatory hot button

Written by Beth Behrend

The Biden Administration has committed to increased oversight and enforcement of several fair lending regulations, and the Consumer Financial Protection Bureau (CFPB) has recently recruited attorneys to assist with the aggressive stance. All financial institutions should expect additional scrutiny as the CFPB focuses on artificial intelligence (AI), machine learning (ML), and other new technologies used for underwriting, pricing, collections, and other purposes. Here’s an overview of what’s happening: Equal Credit Opportunity Act (ECOA) - Following an executive order signed by President Biden, expect increased enforcement of ECOA and Reg B, which disallows creditors from making any statement that would discourage applicants on a prohibited basis from making or pursuing a credit application. The CFPB recently expanded ECOA protections to prohibit discrimination based on sexual orientation or gender (LGBTQ+ Americans)...

Tuesday, 14 September 2021

FedNow℠ real-time payments to launch in 2023

Written by Jessica Dore

The FedNow Service will bring safe and efficient real-time payments (RTPs) to financial institutions of every size and in every community across the U.S., 24/7/365. When a financial institution opts to fully participate in FedNow Service, customers will be able to send RTPs online and recipients will have immediate access to funds...

Tuesday, 14 September 2021

Cybersecurity strengthens operational resilience

Written by Jessica Dore

The Biden administration issued an unusually broad executive order in May addressing cyberattacks against federal government agencies (including the Federal Reserve, FDIC, and OCC) and companies that contract with them, noting these “incidents share commonalities, including insufficient cybersecurity defenses that leave public and private sector entities more vulnerable.” As a result, examiners may look more deeply into financial institutions and their third-party relationships (TPRs) that provide, for example, debit cards for government benefits in an effort to ensure processes, procedures, and technologies are firmly in place to avert an attack. Economic growth is forecast to reach 6.3% in 2021 assuming people continue to get vaccinated, COVID-related restrictions ease, and more confident consumers increase spending...

Tuesday, 14 September 2021

Monitoring for fraud and anti-money laundering in a post-COVID environment

Written by Beth Behrend

In 2020, financial institutions as well as investment, asset management, and insurance firms experienced an 18% increase in costs associated with complying with rules designed to fight financial crimes – a task made even more challenging due to the rise of COVID-related fraud. According to the 1,015 survey respondents who participated in the LexisNexis Risk Solutions True Cost of Financial Crime Compliance Study, global compliance costs rose to $213.9 billion last year, with U.S...

Wednesday, 02 June 2021

Proposed Guidance Updates for Tax Sharing Agreements

Written by Lisa Newland

In 1998, the Board, FDIC and OCC adopted an Interagency Policy Statement on Income Tax Allocation agreements (also known as tax sharing agreements) that are used by U.S. corporations with a U.S...

Wednesday, 02 June 2021

Digital Banking Keeps Evolving

Written by Liz Ziesmer

Consumer expectations for convenient, digital banking services coupled with demand for live assistance from a highly trained and knowledgeable banking professional when needed are evolving at a rapid pace and pushing financial institutions to be agile, adopt emerging technologies, innovate and plan several steps ahead. Is the industry keeping pace? The Digital Banking Report, “Innovation in Retail Banking 2020,” found that financial institutions ranked themselves lower in digital transformation, innovation and data analytics maturity in 2020 than they did in 2019, possibly because, by comparison, other industries moved even faster to meet service digital consumers. A successful digital transformation requires a corporate culture paradigm shift to embrace the latest technologies throughout the organization, not silo them into selected business lines or departments or to serve only specific products or services...

Wednesday, 02 June 2021

Banking Regulations for Marijuana Businesses Move Forward

Written by Kristin Pawlowski & Beth Berhend

In April, the U.S. House of Representatives voted 321-101 to approve the Secure and Fair Enforcement (SAFE) Banking Act and send it to the Senate, where Majority Leader Chuck Schumer has expressed some support. The SAFE Banking Act would allow financial institutions to provide services to cannabis companies in states where it is legal without facing the threat of federal penalties and sanctions...

Wednesday, 02 June 2021

Denovo Bill Fosters Bank Formation in Underserved Communities

Written by Liz Ziesmer

Only 54 de novo banks have been chartered since 2010, compared to the more than 1,300 that were charted between 2000 and the financial crisis, according to the Independent Community Bankers of America (ICBA). A recent FDIC report on community banking trends noted that the number of local community banks has decreased from 6,802 in 2011 to 4,750 at the end of 2019; the majority of those that ceased operations were bought by other community banks. Combined, these two trends have left many communities – especially rural communities – without a local bank branch. The Promoting Access to Capital in Underbanked Communities Act of 2021 (H...

Tuesday, 10 November 2020

CFPB: Updated FAQs under the CARES Act and FCRA

Written by The Rehmann Team

Soon after the CARES Act was enacted in early 2020, the CFPB published a Compliance Aid to help address consumer reporting requirements. The Compliance Aid was updated in June 2020. Below are some highlights. Under the CARES Act amendments to the FCRA, a consumer whose account was not previously delinquent is current on their loan if they have received an accommodation and make any payments the accommodation requires...

Tuesday, 10 November 2020

CRA Modernization: What’s Up With The OCC, FRB and FDIC

Written by The Rehmann Team

Changing, updating or issuing a new regulation involves myriad complex issues, such as divergent bank business models, different needs of communities across the country and rapidly changing consumer preferences regarding the ways they want to bank and transact business. This is especially true related to CRA because not only bankers and regulators want to understand and respond to the issues, but also consumer and community advocacy groups, economic councils and those interested in public policy. The OCC issued its final rule on May 20, after two years of stakeholder research, changing the agency’s regulations to implement CRA (Regulation BB) and make CRA examination more consistent and predictable.  The rule includes a list of CRA-qualifying activities and a pre-approval process to confirm that a contemplated activity will receive CRA credit...

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