Tag:Banking Regulation
SEC Looks to Modernize the Fund Names Rule
On May 25th, 2022, the Securities and Exchange Commission (SEC) issued a proposal to the Investment Company Act of 1940 Rule 35d-1 which expands on a rule that mostly regulates fund names. The SEC has decided to take these measures to combat “greenwashing”; a marketing ploy used by fund investors to draw in socially conscious investors for investments that are anything but sustainable. The SEC believes investors lack comparable, consistent, reliable information on ESG products. This article will discuss these new proposals and what they mean for important stakeholders.
Should Small Business Owner’s Allow Payments of Cryptocurrencies?
Cryptocurrency is a relatively new form of currency that has risen in popularity worldwide. Since the pandemic struck, many small businesses have begun to accept cryptocurrency as a form of payment for their goods and services. There is much debate regarding taxation and auditing of cryptocurrency transactions in small businesses, along with weighing the cost and benefit of providing this alternative payment method.
Banks to Receive Looser Capital and Liquidity Requirements in a New Fed Proposal
On October 31, 2018 the Federal Reserve (the “Fed”) announced a proposal for looser capital and liquidity requirements for some U.S. banks. This announcement is in line with the latest moves to reduce regulatory burdens on community and regional financial institutions, but marks one of the most significant rollbacks of bank regulations since the Trump administration took office. The proposed changes will divide big banks into four categories based on their size and other risk factors. The proposal will generally affect large U.S. lenders, yet leave some of the largest banks untouched.
Small Banks and Credit Unions Given the Opportunity to Pool Resources to Prevent Anti-Money Laundering
In a recent effort to strengthen the money-laundering defenses across the U.S. financial system, small banks and credit unions are being given the option to pool their resources. In a statement issued by the federal depository institutions regulators and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) the federal regulators detail that certain banks and credit unions can enter into collaborative agreements to pool resources for anti-money-laundering compliance purposes. The new regulation will help smaller community banks address the risk of financial crime while keeping the costs low and ultimately help prevent money-laundering.
Challenges and Opportunities in Regulating the Banking Industry
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.
Congressional Repeal of Consumer Protection Rule Creates Bar to Class-Action Suits Against Banks
In July of 2017, the Consumer Financial Protection Bureau (“CFPB”) Director, Richard Cordray, implemented a rule regulating the ability of banks to prohibit class-action lawsuits from being placed within the fine print of their consumer contracts. By the end of July, the House of Representatives voted to repeal the rule under the Congressional Review Act, which allows lawmakers to overturn any recently issued regulation by an executive agency. The Senate subsequently voted to repeal the rule after a 50-51 vote, where Mike Pence cast his vote to break the 50-50 tie. On November 1st, 2017, President Trump signed the bill repealing the regulation.