Amid potentially ground-breaking actions related to data privacy and technological innovations in the financial sector, multiple federal agencies are also analyzing other regulatory matters, including those pertaining to non-compete agreements and fair lending standards.
Learn about these recent developments and more in this roundup:
FTC appeals court decision halting non-compete rule
The Federal Trade Commission (FTC) filed a notice of appeal in the Fifth Circuit of the Northern District of Texas, challenging the court’s decision to set aside the agency’s rule banning most non-compete clauses in contracts between employers and employees. The FTC approved the rule in April via a 3-2 vote only to be sued by the U.S. Chamber of Commerce later in the month. The agency promulgated the rule based on the belief it would help workers in terms of wages and benefits. The U.S. Chamber and other business entities asserted non-compete agreements are legitimate tools for businesses concerned with protecting trade secrets and investments in employee training. The rule initially was to take effect in early September. Learn more about the rule and the lawsuit here.
NCUA briefed on FOM rules, cybersecurity during meeting
The National Credit Union Administration (NCUA) Board was briefed on proposed field of membership rule updates and rising cybersecurity concerns during its most recent meeting. The board heard a presentation about potential charter modernization updates, including those related to specific timelines, increased transparency in applications, and enhancements to the new charter management system meant to ease the formation of new credit unions, especially those serving underserved populations. Regarding cybersecurity, the briefing featured details about the rise in ransomware attacks and third-party vendor-related incidents since the NCUA’s cyber incident notification rule took effect in September 2023. Find more details here.
FHFA proposes new rule to improve FHLBank corporate governance
The Federal Housing Finance Agency (FHFA) proposed a new rule meant to enhance corporate governance of the Federal Home Loan Banks’ (FHLBanks) with respect to their boards of directors and executive management practices. The proposal aims to ensure board members possess skills in areas like artificial intelligence, community development financial institution (CDFI) models, climate risk, and IT security, among others. The proposed rule also is intended to strengthen qualifications for independent directors to prioritize experience benefitting consumers and communities. Learn more about the proposal here.
Federal Reserve governors talk fintech innovations at conference
Federal Reserve officials underscored the importance of understanding fintech innovations for effective regulatory oversight during the Federal Reserve Bank of Philadelphia’s annual fintech conference. Fed Gov. Michelle Bowman delivered the opening remarks, asserting regulators should recognize the benefits and risks associated with new technologies as they integrate fintech into existing regulatory frameworks. She proposed a three-pronged approach: developing a thorough knowledge of emerging technologies, maintaining openness to innovation, and embedding these innovations within updated policies. Read Bowman’s full remarks here.