Cov Financial Services

Developments in the Financial Services Industry

On March 12, 2019, the CFPB released the 18th edition of its Supervisory Highlights report. The report covers supervision activities completed between June 2018 and November 2018 and discusses supervisory observations related to automobile loan servicing, mortgage servicing, remittances, and deposits. The report also summarizes the CFPB’s previously announced public enforcement actions and guidance during the covered period. The 18th edition of Supervisory Highlights is the first report issued under Director Kathy Kraninger’s leadership and…
On March 6, 2019, the Federal Reserve issued a final rule to exempt from the qualitative component of the Comprehensive Capital Analysis and Review (“CCAR”) exercise large firms that have participated in CCAR for four consecutive years and have passed the final year’s qualitative component without objection.  The final rule serves to provide an immediate exemption for all domestic bank holding companies currently subject to CCAR, and to phase out the qualitative objection for U.S.…
On March 5, 2019 the Federal Trade Commission (“FTC”) published requests for comment on proposed amendments to two key rules under the Gramm-Leach-Bliley Act (“GLBA”).  Most significantly, the FTC is proposing to add more detailed requirements to the Safeguards Rule, which governs the information security programs financial institutions must implement to protect customer data. In addition, the FTC is proposing to expand the definition of “financial institution” under the Safeguards Rule and the Privacy Rule…
On February 27, 2019, the CFPB announced the release of a report identifying key facts, trends, and patterns in elder financial exploitation and abuse.  The Bureau’s report is based on an analysis of 180,000 Suspicious Activity Reports (“SARs”) filed with the Financial Crimes Enforcement Network (“FinCEN”) by banks, credit unions, and other financial services providers between 2013 and 2017 relating to elder financial exploitation.  The Bureau estimated that the SARs documented a tiny fraction –…
On February 27th, Reps. Brenda Lawrence (D-Mich.) and Ro Khanna (D-Calif.) introduced a resolution emphasizing the need to ethically develop artificial intelligence (“AI”). H. RES. 153, titled “Supporting the development of guidelines for ethical development of artificial intelligence,” calls on the government to work with stakeholders to ensure that AI is developed in a “safe, responsible, and democratic” fashion. The resolution has nine Democratic sponsors and was referred to the House Committee on Science,…
The Bureau of Consumer Financial Protection (the “CFPB” or “Bureau”) announced a trio of policies in September and December of 2018 intended to provide regulatory relief to banks and fintech companies developing new financial products and innovative disclosure methods, as part of its ongoing effort to promote innovation in financial technology. In public comments on the Bureau’s policy initiatives, consumer groups and some state attorneys general voiced concerns that the policies may harm consumers, while…
On February 13, the European Commission published a list of 23 jurisdictions that it views as posing “significant threats to the financial system of the [European] Union” in the area of anti-money laundering and counter-terrorist financing (“AML/CFT”).  On the same day, the U.S. Treasury Department issued a press statement in which it advised that it “does not expect U.S. financial institutions to take the European Commission’s list into account in their AML/CFT policies and procedures.”…
On February 12, 2019, for the first time in its history, the Commodity Futures Trading Commission (“CFTC”) announced the release of 2019 examination priorities for each of its regulatory Divisions.  CFTC Chairman J. Christopher Giancarlo stated that “[t]his first-ever publication of division examination priorities is in line with Project KISS and other agency initiatives to improve the relationship between the agency and the entities it regulates, while promoting a culture of compliance at our registrants.” …
On February 11, 2019, President Trump signed an Executive Order (“EO”), “Maintaining American Leadership in Artificial Intelligence,” that launches a coordinated federal government strategy for Artificial Intelligence (the “AI Initiative”).  Among other things, the AI Initiative aims to solidify American leadership in AI by empowering federal agencies to drive breakthroughs in AI research and development (“R&D”) (including by making data computing resources available to the AI research community), to establish technological standards to support…
On February 6, 2019, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) released its much-anticipated proposed amendments to the payday lending rule. The proposed revision is Kathy Kraninger’s first major regulatory initiative since becoming the director of the CFPB. The Bureau issued two notices of proposed rulemaking that would (i) repeal the mandatory underwriting provisions in the payday lending rule and (ii) delay the compliance date for these provisions until November 19, 2020, which would…