Regulatory bodies charged with ensuring financial stability,
both domestically and globally, have unveiled their priorities for the year. Many
of these should not come as a surprise to those familiar with the most
significant matters concerning financial markets over the past year.
See below for details about what regulators have on their
radar, as well as information about recent enforcement actions and a program set
up by the Federal Reserve to address liquidity issues.
OCC announces enforcement actions for January
The Office of the Comptroller of the Currency (OCC) recently
released enforcement actions issued against national banks and federal savings
associations and individuals currently and formerly affiliated with banks supervised
by the OCC. The actions include cease-and-desist orders against three
subsidiary banks and formal agreements with one national bank and one savings
and loan institution for unsafe and unsound practices. The actions involve rate
risk management issues at the respective banks, stemming from deficiencies in
their investment strategies and/or inadequate capital liquidity, among other
issues.
The agency also published five separate actions against individuals,
three of whom stand accused of conspiring to commit money laundering, as well
as information about the $15 million civil money penalty U.S. Bank was ordered
to pay over frozen
accounts containing unemployment benefits. Look for more details here
and in upcoming articles by Dodd Frank Update.
NCUA releases supervisory priorities for 2024
The National Credit Union Administration published its supervisory
priorities for 2024. These include credit risk, liquidity risk, interest rate
risk, cybersecurity and consumer financial protection, with a focus on overdraft
programs, fair lending and auto financing. Additionally, the agency also
indicated plans to increase its activities concerning Bank Secrecy Act
compliance and support for small credit unions and minority depository
institutions. Find more details here.
Fed says BTFP will cease lending in March
The Federal Reserve’s Bank Term Funding Program will stop originating
loans on March 11 as scheduled, the agency announced. The program was
established in March 2023 as an additional source of liquidity for eligible
institutions. It helped provide additional stability to the banking system and additional
support for the economy in response to institutional liquidity issues, which
led to multiple bank failures. After March 11, banks and other depository
institutions can continue to access the Fed’s discount window to meet liquidity
needs. More details are available here.
Financial Stability Board releases 2024 agenda
The Financial Stability Board, an international body established
to monitor and make recommendations about the global financial system, recently
outlined its ongoing and upcoming initiatives for 2024, including a schedule
for key publications. The board’s major focus is on improving how financial
institutions handle crises, similar to what the U.S. saw in March 2023. The
board plans to study deposit behavior, the impact of technology and social
media, interest rates, liquidity risk and other factors. Learn more here.