Tag:financial regulation
Generative AI- The Next Frontier in Fighting Financial Crime
Artificial intelligence (AI) is the latest tool in a financial institution’s arsenal to restrict the flow of money being channeled to fund illegal activities worldwide. As criminals get more innovative and sophisticated in using the latest technology to evade detection of their financial crimes, financial institutions must follow suit and utilize similar technology to root out these crimes or risk facing regulatory sanctions. Money laundering generally refers to financial transactions in which criminals, including terrorist organizations, attempt to disguise the proceeds of their illicit activities by making the funds appear to have come from a legitimate source. However, this is not a new phenomenon. Congress passed the Bank Secrecy Act (BSA) in 1970 to ensure financial institutions follow a set of guidelines known as KYC (Know Your Customer/Client) to detect and prevent money laundering through their systems.
CFPB Takes Aim at Credit Card Late Fees in Latest Rule to Eliminate ‘Junk Fees’
In January 2022, the Consumer Financial Protection Bureau (CFPB) set out to increase transparency in the pricing of financial services products by implementing rules to eliminate ‘junk fees’ that often obscure the true price of financial products. Through this initiative, the CFPB analyzed the impact of numerous types of fees across banking while simultaneously attracting the scrutiny of banking advocacy organizations such as the American Banking Association (ABA) and the US Chamber of Commerce. These advocacy organizations have challenged the constitutionality of the CFPB funding structure. The CFPB examines all categories of financial products in the search for ‘junk fees’, including recently uncovering paper bank statement fees for statements that were never printed or mailed, add-on products being charged to paid-off auto loan accounts, undisclosed fees imposed on international money transfers, and bank operating systems double-dipping on non-sufficient funds fees. While litigation has recently settled in the Supreme Court to determine that the CFPB is constitutionally funded under the Appropriations Clause, the most recent rule by the CFPB to limit ‘junk fees’ imposed on credit card accounts remains on hold following a decision to grant a Preliminary Injunction by the US District Court for the Northern District of Texas.
SEC Launches Largest Regulatory Blitz Since the Great Recession, and Wall Street Readies for War: Part Two of a Two Part Series
Welcome back! Part One of this two-part series discussed the regulatory background of private funds and the increasing importance of private funds industry regulation today, particularly for retired and retiring Americans. Part Two of the series takes a closer look at the final new rules implemented by Securities and Exchange Commission (SEC) Chair Gary Gensler. The Chair released the new rules in August affecting private funds advisors and investors. This article also discusses Wall Street’s response to the new regulations and ends with its possible implications for the industry.
College Tuition Payment Plans Are Putting Student Borrowers at Risk
Doria Keys Associate Editor Loyola University Chicago School of Law, JD 2025 College is typically the first instance in which many Americans encounter debt collection, lending, and credit reporting. The most common way that students borrow is by acquiring student loans, either from the U.S. Department of Education or from private financial institutions. A less …
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SEC Launches Largest Regulatory Blitz Since the Great Recession, and Wall Street Readies for War: Part One of a Two Part Series
Securities and Exchange Commission (SEC) Chair, Gary Gensler, has introduced more regulatory proposals impacting market participants than former SEC Chair, Mary Schapiro, did in the same time frame following the Great Recession almost fifteen years ago. The SEC has formally adopted 22 of 47 regulatory proposals since 2021, and in August released extensive final rules targeting private funds. The new regulations in part require private fund advisors to increase disclosure to their investors regarding fees, expenses, and other terms of their relationship. Other new rules prohibit preferential treatment of some investors that may materially affect other investors in the same fund.
Agency Officials Trade Stock in Companies their Agencies Oversee
More than 2,500 government officials ranging from the Commerce Department to the Treasury Department reported owning stock in companies whose share prices correspond to decisions made by their respective agencies. With obvious conflicts of interest arising, what has happened, and what are some major takeaways from this investigative report?
Facing the Fire: A Lesson on Whistleblower Protections
For compliance programs to be effective, bad behavior must be reported internally to management and an avenue must exist to report externally to regulators and the media. For whistleblowers to be willing to come forward, it is critical that they are protected.
Preventing the Engine of Doom: A Lesson on Financial Crisis
The Great Financial Crisis of 2008 was a story of greed. In markets where incentives lead to bad behavior, disparately affecting a great deal of society, we rely on regulatory oversight. A domino effect of decisions spanning decades resulted in a global economic disaster, but it could have been prevented with effective regulators.
Insider Trading Isn’t Illegal if You Are a Member of Congress
Jon Ossoff, the freshman Senator from Georgia, has made it clear that he intends to put forth a bill that would ban members of Congress from trading individual stocks. This is a policy that seems likely to fail, but that doesn’t make it any less necessary. It is estimated that members of Congress and their families bought and sold over $500 million worth of assets. That’s not to say that all these trades were based on information not available to the general public, but it is clear that there is a massive conflict of interest in allowing law makers to trade stocks when their job is intrinsically tied to making decisions that affect the price of stocks.
Price Control Legislation for Generic Drugs – A Delaware Case Study
Price Control Legislation for Generic Drugs – A Delaware Case Study Andrew Thompson Associate Editor Loyola University Chicago School of Law, JD 2023 Earlier, I wrote here about how American drug prices are approximately 256 to 344 percent higher than prices in OCED member markets. Federal legislators confronting patent extensions, pay-for-delay agreements, and other tools …
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