Editor's Note
The following newsletter provides a roundup summarizing enforcement actions, guidance, rulemakings, and other public statements taken by a federal and/or state financial services regulatory agency, specifically focusing on: (1) the source of the development (regulator, legislative body, etc.), (2) the subject matter (consumer lending, money transmission, capital markets, etc.), and (3) the general issue covered.
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Regulatory Developments
- Conference of State Bank Supervisors. The Role of the Dual-Banking System. On January 19, 2024, CSBS President and CEO Brandon Milhorn gave a keynote speech to the ABA's Banking Law Committee. Topics included in his speech were: the role of CSBS and state supervisors; the trend towards "one-size-fits-all" federal regulatory uniformity; the Basel III endgame proposal; the nonbank regulatory system; and the adoption of new technologies.
- Federal Reserve Board. Interchange Fee Proposal. On January 22, 2024, FRB announced that the comment period on its interchange fee proposal would be extended from February 12, 2024 until May 12, 2024.
- Financial Industry Regulatory Agency. Regulatory Notice. On January 23, 2024, FINRA issued a notice that stated Rule 3110.19, which treats, "a private residence at which an associated person engages in specified supervisory activities, subject to certain safeguards and limitations, as a non-branch location," will take effect on June 1, 2024. The notice also served as the announcement that FINRA adopted Rule 3110.18, regarding a voluntary, three-year, remote inspections pilot program and that May 31, 2024, would be the end date of the regulatory relief set forth in Regulatory Notice 20-08, with respect to the obligation of firms to maintain current information for employment addresses and branch offices on specified uniform registration forms. The new and amended rule text for all above items can be found here.
- New York State Department of Financial Services. Guidance on Assessment of the Character and Fitness of Directors, Senior Officers, and Managers. On January 22, 2024, DFS issued its final guidance to Covered Institutions to notify them of the Department's expectation that they develop, implement, and maintain a framework for the review and assessment of the character and fitness of their directors, senior officers, and managers.
- Office of the Comptroller of the Currency. Proposed Rulemaking and Policy Statement on Bank Mergers. On January 29, 2024, OCC requested comment on a proposal to update its rules for business combinations involving national banks and federal savings associations. The proposal also includes a policy statement to clarify OCC's review of applications under the Bank Merger Act (BMA). Acting Comptroller Michael J. Hsu spoke about the proposal at the University of Michigan School of Business.
Enforcement and Litigation
- Federal Deposit Insurance Commission. False or Misleading Representations. On January 19, 2024, FDIC issued letters demanding five entities and certain associated parties cease and desist from making false and misleading statements about FDIC deposit insurance.
Research and Analysis
- Bank of International Settlement. Interchange Fees, Access Pricing and Sub-Acquirers in Payment Markets. On January 25, 2024, BIS released a working paper, "Interchange fees, access pricing and sub-acquirers in payment markets." The 24-page paper analyzes how introducing sub-acquirers affects the pricing and market structure of the payment industry, and how regulators may increase welfare and competition.
- Congressional Research Service. How Treasury Issues Debt. On January 29, 2024, CRS updated its 21-page report, "How Treasury Issues Debt." The report was last updated on June 14, 2022.
- Department of the Treasury. Office of Foreign Assets Control. On January 19, 2024, OFAC released a video tutorial on how to use OFAC's Sanctions List Search Tool and recommended steps for assessing a potential match to one of OFAC's published sanctions lists.
- Financial Crimes Enforcement Network. Bank Secrecy Act. On January 9, 2024, FinCEN issued a Financial Trend Analysis on information linked to identity-related suspicious activity in calendar year 2021 Bank Secrecy Act reports. The Analysis explores how bad actors exploit identity-related processes involved in processing transactions as well as in opening and accessing accounts.
Jonathan Cristol is a regulatory analyst with Davis Wright Tremaine LLP.