It’s Midyear—
Where Are We?
CompaRed to last yeaR this time, the regulatory environment is less hectic, although the thunderstorm of new proposals (i.e., where you want to run for cover) has subsided. It seems like the torrential winds (regulatory changes) have begun to calm somewhat, although clearly we
are looking at an extended rainy season (e.g., the fallout of implementing new final
rules, policy statements).
What’s;Happening?
Anticipation about the future of regulatory compliance oversight is mounting. Will we have one regulator or
continue with a variation of the current
scheme? Well, I had hoped to have the
answer to this question in this edition,
but even with the Senate’s latest action
we aren’t there yet. Wow, can we really
be that far away?
Industry feedback also suggests that
examiners are intensifying their efforts to
identify viable focal points for fair lending
reviews. Prohibited bases being considered run the gamut and loan modifications are an emerging focal point. Given
the complexity of processing modification applications monitoring for consistency in practices is a good first step.
The current consumer protection
regulatory scheme is advancing heightened supervisory and enforcement strategies. Let’s take a look at a few examples.
Given the
complexity
Federal Reserve policies for assessing consumer compliance risk at bank
holding companies and consumer compliance supervision of their nonbank-ing subsidiaries are well underway. In
of processing
modification
applications
September 2009 examiners were charged
with completing consumer compliance risk assessments by the end of the
fourth quarter of 2009. Correspondingly
supervisory plans for 2010 were due by
monitoring for
consistency in
practices is a
March 31, 2010, with necessary supervisory work scheduled by June 30, 2010.
good first step.
What we have heard is that in conjunction with these processes, bank holding
companies are getting questions such as,
“Do you have a firm wide fair lending
program? In response, many bankers are
asking, “Why are examiners asking me
for my ‘firm wide’ fair lending risk management program? Do I need that?” The
prudent answer is Yes.
Long established regulations continue to get attention.
■ ■ Bank Secrecy Act (BSA): This law
may not be in the news in the way
that it once was, but bank processes
and documentation continue to get
intense examiner focus. This focus is
underscored by the updated guidance
manual issued by the agencies in April
to, among other things, provide guid-
ance on how to determine whether
a violation is systemic or recurring,
as opposed to a technical or isolated
violation; enhanced the discussion
of methods to identify, research, and
report suspicious activity, to reflect the
FFIEC guidance, Risk Management of
Remote Deposit Capture.
