Following the 2016 Wells Fargo scandal in which the bank opened millions of unauthorized bank and credit card accounts to collect fees, federal regulators have worked to address and respond to the corporation’s illegal conduct. On February 2nd, 2018, the U.S. Federal Reserve imposed unprecedented restrictions against Wells Fargo & Co. when it capped the bank’s growth for 2018 such that it could not exceed the total assets owned at the end of 2017. This restriction marks a substantial departure from previous penalties issued for improper compliance. Changes in policies and procedures and this novel punishment reflect a notable shift in the national bank’s expectations of corporate directors.
Corporate compliance professionals will often define compliance as “doing the right thing.” Indeed, both compliance professionals and scholars agree that ethics are an important aspect of effective compliance programs. This is particularly true when it comes to compliance with forced labor regulations. Using forced labor can be appealing to companies seeking to reduce their operating costs and increase profits. However, in the face of a toxic business culture that values maximizing profits, compliance professionals must convince their colleagues that forced labor is not worth the savings in operating costs.
On June 19, 2017, the Supreme Court, in an 8-0 ruling, found that the government can no longer sensor trademarks on the grounds that they may be offensive. In Matal v. Tam, the Supreme Court Justices found the seventy-one year old rule allowing the government to refuse offensive trademarks to be unconstitutional and to violate free speech and first amendment rights. The justices were unable to agree on exactly what legal standard was to apply to the present case or future cases. The revocation of this seventy-one year old rule that has affected the registration of many marks over the years is bound to have an effect on the future of trademark law and trademark litigation. Immediately following the Supreme Court’s decision, the United States Patent and Trademark Office (USPTO) was inundated with requests to register offensive trademarks.
In October 2015, the tenth revision of the International Classification of Diseases (ICD-10) was implemented in the United States. Three years earlier, however, ICD had already begun beta testing for its eleventh revision (ICD-11). The ICD-10 implementation came after repeated delays and substantial requirements for healthcare organizations to reach compliance with the new codes. The United States trudged through training and compliance struggles as it transitioned to ICD-10. The threat of ICD-11’s release in 2018 promises to have drastic and far-reaching effects on the compliance actions of healthcare organizations.
Regulation in the financial sector is critical to preventing crimes that include fraud, money laundering tax evasion, human trafficking, aiding drug trafficking, and even financing terrorism. Despite the importance of regulation and banking institutions’ compliance with such regulations, many laws regarding money laundering are outdated and prevent efficient prevention of such crimes. Additionally, enforcement against large financial institutions is a difficult matter because of the harm that penalizing them could have on the economy.
Flying home from a baseball game is much more of a reality than we think. In the fourth quarter of 2016, Uber released a white paper detailing a roadmap of their proposed adventure into the air taxi business—the autonomous air taxi business and in doing so, they headlined conceptual aircraft ideas using vertical takeoff and landing (“VTOL”) technology. The paper outlines Uber’s plans for the next 10 years, including the compliance milestones and hurdles involved in achieving what seems like science fiction. Living like the Jetsons requires a deep dive into the various compliance issues that surround such a life.
Recently, Google added new functionality to the Google Arts & Culture app that allows users to snap a selfie and find artwork from around the world that resembles the user. The app very quickly rose to the top of the charts as users around the United States took plenty of photos. Almost everywhere around the United States at least. Illinois and a few other states have laws that prohibit the collection or use of biometric (iris, fingerprint, etc.) data by businesses except under certain circumstances. The Google Arts & Culture app uses biometric data to compare a user’s image to the Mona Lisa (or any other portrait).
Beginning January, 2018, U.S. citizens with unpaid taxes may find their U.S. passport applications denied and their existing passports revoked. The I.R.S. announced that it will begin implementation of procedures to notify the State Department of taxpayers the I.R.S. certifies as owing a “seriously delinquent tax debt.” This may come as a rude awakening to many Americans, although both the press and television news issued warnings going back more than a year ago.
The Trump administration has established a new division within the Department of Health and Human Services (HHS) called the Conscience and Religious Freedom Division. The stated purpose of this office is to “restore federal enforcement of our nation’s laws that protect the fundamental and unalienable rights of conscience and religious freedom.”
One day after the creation of this division, HHS proposed a new rule, providing further protections to healthcare workers who object to providing certain types of care to patients—including elective sterilization, gender reassignment surgery, or emergency contraception—based on their personal religious beliefs. Additionally, the Trump administration issued a new directive, reversing an Obama administration directive which prohibited states from refusing to send federal funds to qualified providers. This new division, new rule, and new directive serve to ensure the already-existing rights of physicians, nurses, and healthcare staff at the expense of their patients.
The Trump administration is delivering on its promise to deregulate America. Since taking office, numerous regulations spanning everything from energy to health care have been repealed or weakened. The financial services industry is not immune to the deregulation movement. The Trump administration is acting through appointments, executive agencies, and legislation to deregulate the financial services industry. Proponents of deregulation claim the movement is needed after Dodd-Frank and strict post-financial crisis regulation. However, in deregulating financial services, the Trump Administration—and compliance professionals—should proceed cautiously.