Financial Services Spotlight

January 2017 Developments

Posted by Roy Andersen on Jan 31, 2017 12:00:00 PM

Overview

A Donald Trump effect was apparent with the January 26th Federal Register-- it was one of the shortest Federal Register volumes seen in some time—even the pre-holiday Registers sport more pages.  The CFPB published a rule requiring incentive programs for sales of consumer products be subject to extraordinary controls adapted to such sales campaigns.  These would be in addition to and perhaps duplicative of the requirements of primary federal regulators. 

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Topics: OFAC, CFPB, CFTC, Sudan Sanctions, Incentive Sales Programs, Loss Absorbing Capacity

November 2016 Developments

Posted by Roy Andersen on Dec 12, 2016 12:00:00 PM

Overview

The CFPB issued another mega-rule on prepaid accounts—subjecting the industry to hundreds of pages of new rules.  Flood insurance rules were changed to accept private flood insurance coverage.  North Korea was named as a country of primary money laundering concern and this triggers certain actions for banks.

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Topics: Sudan, North Korea, Iran, CFTC, Liberia, Regulation I, Consumer Compliance Rating System

August 2016 Second Half Developments

Posted by Roy Andersen on Sep 8, 2016 12:00:00 PM

Overview

The OCC published a proposed rule dealing with qualified financial contracts and their effect on the U.S. financial system.   The proposal is similar to a rule proposed by the Federal Reserve earlier this year.  In essence, QFCs will be required to contain provisions that restrict acceleration and contain contractual stay provisions.  FinCEN is proposing to expand its requirements for AML programs to banks that are not currently subject to federal supervision.

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Topics: Whistleblowers, OCC, CFTC, Federal Housing Finance Agency, AML Program

June 2016 Second Half Developments

Posted by Roy Andersen on Jul 6, 2016 12:00:00 PM

Overview

The CFTC published a proposed rule on clearing interest rate swaps and identified a number of new swaps that would be required to be cleared.   In addition, the CFTC tightened the recordkeeping and reporting of certain swap transactions and the SEC finalized a rule requiring trade acknowledgements.  The FDIC published two rules on the treatment of failed banks with assets related to securitizations and its own requirements to maintain records of how it manages receiverships.

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Topics: North Korea, CFTC, Security-Based Swaps, Regulation Z, Interest Rate Swaps, Western Balkans

June 2016 First Half Developments

Posted by Roy Andersen on Jun 16, 2016 12:00:00 PM

Overview

The Fed has published the proposed enhanced prudential standards for certain large insurance companies in the United States.  These standards are similar to the requirements that have been imposed on large United States based and foreign financial organizations.  It is probable that these proposals will be vigorously opposed by the insurance industry.  FinCEN has taken the rare step of determining that a country is of primary money laundering concern. In this case, North Korea has been so designated.  The banking agencies have re-proposed the rules regarding incentive-based compensation.

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Topics: Belarus, North Korea, CFTC, FSOC, Liquidity Risk Measurement, NSFR, Automated Trading, Hizballah, ANPR

March 2016 Second Half Developments

Posted by Roy Andersen on Apr 6, 2016 12:00:00 PM

Overview

The Fed published a proposed rule that would establish a credit limit for doing business with other large institutions.  In effect, this is a super lending limit for large banks.  It applies at a fairly low level of $50 billion in assets. This is a Dodd-Frank requirement and perhaps part of the rush of the Obama administration to put as many rules as possible over the finish line before a potential change of political will.  The former Federal Bank of the Middle East now known as FBME continues its fight against death sentence effect of the US government determining that a bank is of “primary money laundering concern.” The effect of such a determination can be seen in the Credexbank FinCEN notice whereby the bank was put out of business.   FBME is fighting against this determination and is at least having an independent party determine whether it is indeed engaged in money laundering activities such that it should be put out of business.

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Topics: OFAC, North Korea, Cuba, European Union, CFTC, ESMA, EMIR

February 2016 First Half Developments

Posted by Roy Andersen on Feb 16, 2016 12:00:00 PM

Overview

The BCFP published a Compliance Bulletin to remind banks that they must have reasonable written policies and procedures to insure that any consumer reporting data they pass on to consumer reporting agencies is accurate and complete.  This has been a requirement for some time, but the BCFP has notice an uptick in inaccurate date, particularly with regard to deposit account data.  Banks can expect increased focus on these procedures during the next consumer compliance examination.  After 7 years of review, the CFTC has determined that Korea has sufficient supervisory systems in place to permit certain Korean swaps entities to do business with U.S. persons.  OFAC is abandoning certain reporting requirements in connection with remittance transactions with Cuba.

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Topics: OFAC, Cuba, Currency Transaction, CFTC, BCFP, Korea, Credit Reporting, FDIC, Foreign Regulatory

January 2016 First Half Developments

Posted by Roy Andersen on Jan 15, 2016 12:00:00 PM

The CFTC wants to remove the requirement that certain foreign applicants provide fingerprints, while experts on security are advocating at the same time that there be greater sharing of fingerprint and other data to identify people between the U.S. and foreign countries.  The introduced the formula for this year for determining the banks that will be treated as global systemically important bank companies for purposes of the capital surcharges.

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Topics: Fingerprinting, Capital Surcharges, Global Banking, Foreign Banking, CFTC, Uncleared Swaps

About the Spotlight


The Financial Services Spotlight examines the regulatory and technology developments impacting banks, asset managers and other financial services providers—where challenges meet opportunities.

 

Meet the Authors


Roy C. Andersen, of counsel in Sullivan & Worcester's New York office, is a member of the Corporate Department. Mr. Andersen focuses on bank regulatory and compliance matters, including international banks and their branches and agencies in New York.

Joel Telpner, partner in the firm's New York office, is a seasoned advisor, strategist and problem solver. Mr. Telpner brings more than 30 years of legal experience in a career that includes time as an AmLaw 100 partner, the former U.S. general counsel of a global financial institution, and a venture capitalist. He is recognized for his ability to deftly manage complex financial transactions, especially those involving sophisticated structured finance and derivatives matters and has an extensive and unique combination of transactional and regulatory experience.

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