Consumer Bankers Association comments on CFPB complaint process

The Consumer Bankers Association (CBA) recently submitted comments on the Consumer Financial Protection Bureau’s (CFPB) consumer complaint and inquiry handling process. © Shutterstock The Bureau has solicited comments and requests for information regarding the subjects. In its letter to the Bureau, CBA officials referenced ways to make the process more efficient for the Bureau, consumers […]

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The Consumer Bankers Association (CBA) recently submitted comments on the Consumer Financial Protection Bureau’s (CFPB) consumer complaint and inquiry handling process.

© Shutterstock

The Bureau has solicited comments and requests for information regarding the subjects.

In its letter to the Bureau, CBA officials referenced ways to make the process more efficient for the Bureau, consumers and financial institutions without exposing consumers to privacy concerns or misrepresenting the Bureau’s role in the complaint process.

One of the CBA’s recommendations was that the Bureau should have consumers classify their submissions as either complaints or inquiries; clear standards for complaints should be established; there should be a complaint reclassification process; and a consumer inquiry process.

“CBA’s members are dedicated to complaint resolution and customer satisfaction and believe the goal of the Bureau’s complaint data collection ought to be to improve industry performance and service quality and to provide consumers with an avenue to deal with complaints when the company is unresponsive or is not providing a satisfactory resolution,” David Pommerehn, CBA’s associate general counsel and vice president, wrote. “It should not be used to create disharmony between consumers and the financial services industry.”

He said the CBA believes the Bureau’s efforts should be to ensure every company has a strong complaint resolution process, assist in the resolution of complaints and red flag potential problems for further evaluation.

Pommerehn said the public release of complaint data on the Bureau’s Complaint Database increases privacy risks to the consumer and offers no value.

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Read more / Original news source: https://financialregnews.com/consumer-bankers-association-comments-cfpb-complaint-process/

Bureau of Consumer Financial Protection Announces Director for the Office of Innovation

Bureau of Consumer
Financial Protection (Bureau) Acting Director Mick Mulvaney today announced he
has selected Paul Watkins to lead the Bureau’s new Office of Innovation. 

Bureau of Consumer Financial Protection (Bureau) Acting Director Mick Mulvaney today announced he has selected Paul Watkins to lead the Bureau’s new Office of Innovation. 

Read more / Original news source: https://www.consumerfinance.gov/about-us/newsroom/bureau-consumer-financial-protection-announces-director-office-innovation/

Subcommittee probes strategies to counter procurement of weapons by terrorists

The House Subcommittee on Terrorism and Illicit Finance held a hearing last week to discuss strategies to disrupt the financing and procurement of weapons by terrorists.© Shutterstock These networks typically use financial mechanisms such as wire transfers, trade finance products, cash, checks, and credit cards to procure weapons. Countering the financing of these weapons are […]

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The House Subcommittee on Terrorism and Illicit Finance held a hearing last week to discuss strategies to disrupt the financing and procurement of weapons by terrorists.

© Shutterstock

These networks typically use financial mechanisms such as wire transfers, trade finance products, cash, checks, and credit cards to procure weapons. Countering the financing of these weapons are a vital focus of U.S. counter-proliferation efforts.

“On the Terrorism and Illicit Finance (TIF) Subcommittee, we are charged with providing the tools and resources our nation’s intelligence and financial communities needs to succeed and be secure,” Subcommittee Chairman Steve Pearce (R-NM) said. “Part of this essential function is learning how hostile actors work to avoid and counter the sanctions and other regulatory actions our nation imposes. Today’s focus was specific to the financial networks that support weapons proliferation.”

The discussion also examined how financial institutions can best identify proliferation activities.

“If we can identify and cut off these funding streams, we can prevent the proliferation of weapons of mass destruction, and I believe we have come one step closer to these efforts today,” Pearce said. “With the takeaways learned at today’s hearing, TIF and the Financial Services committee can better serve and assist the Treasury Department and Financial Institutions with the rules and authorities needed to combat proliferation financing.”

David Albright, founder and president of the Institute for Science and International Security, said many countries perform poorly on preventing proliferation financing. Countering proliferation financing needs to be more integrated into many more aspects of counterproliferation including export controls.

“To-date, the international community has primarily addressed state-based proliferation activity via controlling certain goods and sanctioning bad actors,” Tom Keating, director, Center for Financial Crime and Securities Studies, Royal United Services Institute, said. “Yet this approach is fragmented, poorly enforced and too narrowly focused… proliferators such as North Korea employ an array of funding operations, such as repairing and servicing military equipment; training police forces; and building statues, and a range of commercial trading activities which involve both a logistical and financial operation… focusing merely on goods, either preventing their sale or interdicting their transfer once purchased, is just one part of establishing an effective response. Proliferators depend on access to financial assets and services, and the international financial system has become a critical lifeline for the regime. Detecting and stopping financial access will complicate and obstruct the wider operations of proliferation network. In sum, the global architecture for disrupting proliferation finance requires improved design and implementation.”

Emanuele Ottolenghi, a senior fellow at the Foundation for Defense of Democracies, said the Treasury Department plays a key role in this effort.

“Its sanctions and designations over the years have helped name and expose Iranian efforts to circumvent sanctions,” Ottolenghi said. “[But] this is a cat-and-mouse game. A constant update of sanctions and rigorous enforcement is, therefore, a key part of Treasury’s ongoing effort.”

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Read more / Original news source: https://financialregnews.com/subcommittee-probes-strategies-counter-procurement-weapons-terrorists/

Report examines dark web credit card sales

Data garnered by a cybersecurity research firm showed the number of credit cards for sale on the dark web has roughly quadrupled over the past two years.© Shutterstock Officials said a new report from IntSights, which examined threats facing financial institutions, determined the credit card sales represent a 135 percent increase from the first half […]

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Data garnered by a cybersecurity research firm showed the number of credit cards for sale on the dark web has roughly quadrupled over the past two years.

© Shutterstock

Officials said a new report from IntSights, which examined threats facing financial institutions, determined the credit card sales represent a 135 percent increase from the first half of 2017 through the first half of 2018.

IntSights’ report incorporated last year’s Equifax data breach, officials said, which revealed the personal financial information of more than 147 million Americans, as one of the most notable data breaches.

A National Association of Federal Credit Unions (NAFCU) Economic and CU Monitor survey after the breach announcement revealed 63 percent of credit unions were concerned about another Equifax-type data breach.

IntSights personnel said the report also noted that, rather than hacking into corporate systems, cybercriminals are now creating fake mobile banking applications and social media pages under the guise of credible financial institutions to obtain consumers’ financial information. Fake applications have fooled more than one-third of mobile banking users.

NAFCU serves as a leading advocate of data security and is working to ensure entities holding or collecting consumers’ personal financial information are held to similar standards as credit unions.

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Read more / Original news source: https://financialregnews.com/report-examines-dark-web-credit-card-sales/

FINRA reports record volume of market activity in first half of 2018

The Financial Industry Regulatory Authority (FINRA) reported a 62 percent increase in daily market activity in the first six months of 2018 compared to the same period a year earlier.© Shutterstock FINRA saw a record 57.9 billion electronic records per day, on average, during the period. This has been one of the most volatile markets […]

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The Financial Industry Regulatory Authority (FINRA) reported a 62 percent increase in daily market activity in the first six months of 2018 compared to the same period a year earlier.

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FINRA saw a record 57.9 billion electronic records per day, on average, during the period. This has been one of the most volatile markets in years, said FINRA. As many as 101 billion electronic messages have come through FINRA’s regulatory platform in a single day, which is nearly triple the average daily volume experienced in 2017.  Further, the 10 highest-volume days on record have occurred this year, with four of them occurring the week of Feb. 5, the same day the Dow plunged 1,175 points.

FINRA says it’s cloud strategy enabled it to handle the record-setting volume without issue.

“Processing and analyzing this record activity efficiently and effectively is essential for FINRA to do our job of protecting investors and ensuring market integrity,” FINRA President and CEO Robert Cook said. “Cloud storage and processing have made it possible for FINRA to not only stay ahead of growing volume but also perform increasingly sophisticated surveillance across U.S. securities markets.”

Trading creates a variety of electronic records that FINRA monitors for regulatory purposes. FINRA receives order and trade data every day about 41,000 investment products from 17 securities exchanges, more than 60 alternative trading systems, and almost 1,400 broker-dealer firms. This data all comes in different formats, so FINRA staff creates a single, virtual view of the market for any given security. Analysts run some 200 algorithmic “patterns” to look for potential threat scenarios like market manipulation, customer protection, market conduct, trade reporting or other violations. They also look for insider trading.

“With a traditional data-center approach, capacity is limited to that of the servers in a data center. Had we stayed with that approach, the volume from any one of these exceptional days could have taken us days to finish processing,” FINRA CIO and Executive Vice President Steve Randich said. “With cloud storage and processing, our staff has access to petabytes of data in seconds or minutes, even during consecutive days of record-breaking activity.”

In 2014 FINRA decided to move 90 percent of its processing and storage work to the cloud by the end of 2016.

“As a self-regulatory organization we can – and as illustrated in this case, we did – make multi-year investments that support an innovative regulatory approach,” Randich said. “We are committed to continue looking past the next corner to be ready for the road ahead.”

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Read more / Original news source: https://financialregnews.com/finra-reports-record-volume-market-activity-first-half-2018/

NVCA lauds DEAL Act advancement

The National Venture Capital Association (NVCA) recently praised the benefits of the House Committee on Financial Services advancement of the Developing and Empowering our Aspiring Leaders (DEAL) Act by a voice vote.© Shutterstock NVCA officials said the measure, sponsored by Rep. Trey Hollingsworth (R-IN), encourages capital formation for startups by directing the Securities and Exchange […]

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The National Venture Capital Association (NVCA) recently praised the benefits of the House Committee on Financial Services advancement of the Developing and Empowering our Aspiring Leaders (DEAL) Act by a voice vote.

© Shutterstock

NVCA officials said the measure, sponsored by Rep. Trey Hollingsworth (R-IN), encourages capital formation for startups by directing the Securities and Exchange Commission (SEC) to make a percentage of secondary investments qualifying for purposes of the definition of a venture capital (VC) fund.

“The DEAL Act would alleviate pressures on VC firms and encourage more equity investment into U.S. startups,” NVCA President and CEO Bobby Franklin said. “We are grateful for Congressman Hollingsworth’s strong leadership and his efforts to support the environment for patient capital investment and long-term company growth.”

Under current guidelines, officials said to qualify under the venture capital fund definition and register with the SEC as Exempt Reporting Advisors (ERAs), VCs must ensure that more than 80 percent of their activities are in qualifying investments, which are defined only as direct investments in private companies.

The alternative, officials said, is that they must become Registered Investment Advisors (RIAs), a designation meant solely for private equity and hedge funds, which adds a number of costs and challenges for VC firms.

NVCA said as companies have stayed private longer, secondary investments have become more prominent in VC financing rounds, noting VC investments in cryptocurrencies and fund of fund investments are not currently considered qualifying investments.

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Read more / Original news source: https://financialregnews.com/nvca-lauds-deal-act-advancement/

House advances eight financial services bills

The U.S. House of Representatives advanced eight bills from the Financial Services Committee this week, including a bill that provides greater Congressional oversight on international insurance standard negotiations.© Shutterstock The International Insurance Standards Act of 2017 (H.R. 4537), sponsored by Rep. Sean Duffy (R-WI), preserves the state-based system of insurance regulation while ensuring Congressional oversight […]

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The U.S. House of Representatives advanced eight bills from the Financial Services Committee this week, including a bill that provides greater Congressional oversight on international insurance standard negotiations.

© Shutterstock

The International Insurance Standards Act of 2017 (H.R. 4537), sponsored by Rep. Sean Duffy (R-WI), preserves the state-based system of insurance regulation while ensuring Congressional oversight on international insurance standard negotiations.

Another bill introduced by Duffy, the Housing Choice Voucher Mobility Demonstration Act of 2018 (H.R. 5793), encourages families receiving housing choice voucher assistance to move to lower-poverty areas and expand access to opportunity areas.

“I’m pleased to see these important Financial Services Committee measures pass the House today and applaud the hard work of their sponsors. These bills are vital in achieving the committee’s goal of alleviating burdensome regulations on our nation’s capital markets to help Main Street businesses expand, create jobs, and spark innovation. They also focus on improving access to affordable financial services and products for people and families by expanding housing options for those in lower-poverty areas,” Financial Services Committee Chairman Jeb Hensarling (R-TX) said.

The House also advanced the Larry Doby Congressional Gold Medal Act (H.R. 1861), sponsored by Rep. James Renacci (R-OH), which presents a Congressional Gold Medal in honor of Larry Doby, the first black player in the American League. It is in recognition of his achievements and contributions to baseball, civil rights, and the Armed Forces during World War II.

The Options Markets Stability Act (H.R. 5749), sponsored by Rep. Randy Hultgren (R-IL), requires regulators to implement a risk-adjusted approach to value certain derivatives to reflect exposure better and promote market-making activity.

The Main Street Growth Act (H.R. 5877), sponsored by Rep. Tom Emmer (R-MN), allows for venture exchanges at venues that are tailored to the needs of small and emerging growth companies.

Additionally, the Building Up Independent Lives and Dreams (BUILD) Act (H.R. 5953), introduced by Rep. Barry Loudermilk (R-GA), allows certain charitable mortgage loan transactions to qualify for the use of the truth in lending (TIL), good faith estimate (GFE), and HUD-1 forms.

The Modernizing Disclosures for Investors Act (H.R. 5970), sponsored by Rep. Ann Wagner (R-MO), requires the Securities and Exchange Commission to do a cost-benefit analysis of emerging growth companies’ use of SEC Form 10-Q. The SEC must also make recommendations for decreasing costs, increasing transparency, and increasing efficiency of quarterly financial reporting by emerging growth companies.

Finally, the Improving Investment Research for Small and Emerging Issuers Act (H.R. 6139), introduced by Rep. Bill Huizenga (R-MI), requires the SEC to evaluate the issues affecting the reliance upon investment research into small issuers.

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Read more / Original news source: https://financialregnews.com/house-advances-eight-financial-services-bills/

KPMG, SAS to aid accounting standard transition

KPMG LLP and SAS, a leader in analytics, recently announced a partnership to help banks transition to a new accounting standard expected to drastically change how financial institutions estimate, reserve and report on losses.© Shutterstock The two firms said current expected credit loss (CECL) was introduced by the Financial Accounting Standards Board (FASB) as the […]

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KPMG LLP and SAS, a leader in analytics, recently announced a partnership to help banks transition to a new accounting standard expected to drastically change how financial institutions estimate, reserve and report on losses.

© Shutterstock

The two firms said current expected credit loss (CECL) was introduced by the Financial Accounting Standards Board (FASB) as the new benchmark recognition and measurement of credit losses for loans and debt securities.

The revision is part of an effort to ensure better loss coverage while noting the standards take effect in stages beginning January 2020.

“These changes are significant in how banks manage risk and financial data, build their analytic platforms and share information between departments,” Troy Haines, senior vice president and head of the risk management division at SAS, said. “By aligning with KPMG in the United States, we are helping customers improve business performance and turn risk and compliance requirements into opportunities.”

KPMG officials said the alliance delivers industry-leading services and technology to help banks navigate the new guidelines.

“It will provide CECL and IFRS 9 offerings that combine the capabilities and resources of two market-leading providers: KPMG with enablement services including in-depth accounting, finance, tax, modeling and risk specialization, and SAS with the dedicated expected credit loss software platform,” Ed Bayer, Risk Analytics Advisory managing director at KPMG, said.

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Read more / Original news source: https://financialregnews.com/kpmg-sas-aid-accounting-standard-transition/

Federal Reserve Board issues enforcement action with United Bank Limited and former employee of Hinsdale Bank & Trust and announces termination of enforcement action with United Bank Limited

Federal Reserve Board issues enforcement action with United Bank Limited and former employee of Hinsdale Bank & Trust and announces termination of enforcement action with United Bank Limited

Federal Reserve Board issues enforcement action with United Bank Limited and former employee of Hinsdale Bank & Trust and announces termination of enforcement action with United Bank Limited

Read more / Original news source: https://www.federalreserve.gov/newsevents/pressreleases/enforcement20180712a.htm