Data privacy and anti-money laundering (AML) safeguards are at the forefront of regulatory discussions within the financial sector. Coincidentally, news of the historic enforcement action against TD Bank for AML deficiencies broke just after the deadline for comments on proposed updates to federal regulations dealing with such obligations.
Read about these matters and more in this roundup:
CBA tells members what to watch for in upcoming CFPB rulemaking
The financial sector is expecting the Consumer Financial Protection Bureau (CFPB) to issue a final rule implementing Section 1033 of the Dodd-Frank Act pertaining to consumer data rights, which will have major implications for the future of open finance, also referred to as “open banking,” and outline several requirements for data providers, including banks, to adhere to when sharing consumers’ data with third parties. Banks have urged regulators to extend the compliance timelines as well as suggested other changes to the proposed provisions.
In anticipation of this rulemaking, the Consumer Bankers Association published a blog post reiterating its support of the underlying principles of open banking, as well as its contention that the CFPB’s assertion that the rulemaking, and open banking in general, are necessary developments to increase competition in the marketplace is lacking adequate justifications and is based on a flawed cost-benefit analysis. Read about the trade group’s perspective here.
ICBA comments on AML/CFT regulatory proposal
The Independent Community Bankers of America responded to the federal banking agencies’ request for information about proposed updates to anti-money-laundering (AML) and countering-the-financing-of-terrorism (CFT) programs would create additional burdens on banks without any demonstrable benefit to combatting illicit activity.
Specifically, the community banking lobby asserted the proposed revisions would increase or fail to alleviate compliance burdens and costs by impeding banks’ efforts to establish effective, risk-based, and reasonably designed AML/CFT programs; hinder risk-related resource allocation; invalidate the competency, training, and expertise of Bank Secrecy Act officers who happen to have other positions in a bank; and fail to address issues related to the practice of robotic and mechanical compliance. Read the full comment letter here.
BPI supports FDIC proposal on ILC regulation
The Bank Policy Institute (BPI) expressed support for the Federal Deposit Insurance Corp.’s proposed rule to tighten regulatory restrictions governing industrial loan companies (ILC) and their parent companies. BPI’s comment letter noted ILCs are state-chartered institutions largely indistinguishable from banks, aside from being owned by commercial entities, such as car companies or internet retailers, not subject to federal regulation or supervision. As a result, unlike regulated bank holding companies, ILC parents can engage in commercial activities. Increased scrutiny over ILCs and their parent companies is also vocally supported by community banking advocates for many of the same reasons. Read more about BPI’s perspective here.
MBA names new leaders to oversee affordable housing, DEI initiatives
The Mortgage Bankers Association (MBA) announced a pair of promotions within its executive leadership team. Amber Lawrence was promoted to vice president of diversity, equity, and inclusion (DEI) and Wendy Penn was named vice president for affordable housing initiatives.
Lawrence will lead organization-wide strategic DEI programs, assist teams in implementing equitable practices, coordinate with other leaders in developing policies designed to promote inclusivity, and lead member-facing DEI initiatives.
Penn will oversee MBA’s continuing work in developing market-based solutions and strategic initiatives geared toward improving affordability with respect to homeownership and rental housing. Learn more about both leaders here and here.