Tag:OCC
FIRM Act Sent to Senate to Vote on Eliminating the Use of Reputational Risk in Banking
On March 6, 2025, the Chairman of the United States Senate Committee on Banking, Housing, and Urban Affairs, Senator Tim Scott, introduced a bill designed to eliminate reputational risk as a component of regulatory supervision in banking. The Financial Integrity and Regulation Management Act, or FIRM Act, is the latest edition in the Senate’s efforts to reduce the potential influence of banking regulators in perpetuating debanking schemes of various industries. The bill has received praise and support from many leaders and industry groups in the banking industry including a letter of support from a coalition of 26 state financial officers and comments in favor of the bill submitted by the American Bankers Association (ABA). On March 13, 2025, the Senate Banking Committee voted in favor of sending the bill to the Senate to begin congressional voting. While it remains debatable if reputational risk is being misused to politically influence the types of clients that banks service, it is clear that reputational risk in regulatory exams is an unnecessary extension of strategic risk that should be removed from examinations to close the door to any possibilities of political misuse.
Compliance Spotlight: Joseph Adamczyk, OCC
Joseph Adamczyk, ’01 is the Senior Vice President and Chief Compliance Officer at OCC (Options Clearing Corporation). OCC is the world’s largest equity derivatives clearing organization, and works to promote stability and financial integrity in the marketplace. Mr. Adamczyk holds a J.D. from Loyola University Chicago School of Law, an MBA from the University of Chicago, and a B.S. in Business Administration from DePaul University.
Trump Administration Deregulates Financial Services
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 Since taking office, numerous regulations spanning everything from energy to health care have been repealed or weakened.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.
Financial Institutions Join Forces for Vendor Management Compliance
Financial institutions often rely on outside vendors to provide information technology services. While doing so often provides economic efficiency and quicker technological innovation, the risks associated with outsourcing information technology services are significant. Institutions must develop strong vendor management programs to ensure the safety of their customer’s personal information. Several large financial institutions have come together to create a new consortium to perform vendor and partner due diligence.
Fight over the CFPB’s Arbitration Rule Exposes Rift Between Federal Regulators
Since its inception in 2010, The Consumer Financial Protection Bureau (CFPB) has garnered its fair share of criticism and controversy. The regulator was created by the Dodd-Frank legislation to curb the practices and risks, which brought about the financial crisis of 2007-2008. The CFPB is often criticized by the banks and firms it regulates, but now a fellow federal regulator is casting doubt on the CFPB’s new rule concerning mandatory arbitration clauses found in contracts for commonly used banking products, such as checking accounts and credit cards. The rule is also opposed by Congress, which is working on measures to repeal the rule, and several financial industry and lobbying groups who are suing the CFPB.