What Kind of Training is Out There and Who Needs It?
It’s easy to assume that only certain industries need to train their employees. It’s definitely a necessity for certain lines of work, especially government-regulated industries with specific compliance training needs. Other businesses may be mandated to use training courses, though. But what kind of training is out there?
Financial Industry Compliance Training
One of the major reasons that certain businesses need compliance training is because the government requires it for that industry. A good example of this would be banks and other financial institutions. These financial institutions have to train employees and executives alike. The government requires these institutions to train their employees in specific and general areas. Some of the training required can be about in-depth financial regulations and other training may be simpler but just as vital. For example, training a bank teller to spot potential warning signs of fraud is just as important as a bank’s officers knowing about the latest regulations regarding loans.
HR Compliance Training
Another type of training often required or, at least, recommended by government bodies is HR compliance training. This type of training often focuses on teaching employees and executive about diversity, sexual harassment, discrimination, and similar issues in the workplace. There’s no single industry that uses this type of training. Many businesses, even federal and local governments require their employees to take this type of training. Even if it’s not required by law, many businesses make it part of their own initiatives to use this kind of training. There are very few industries that couldn’t benefit from a better understanding of ethical issues in the workplace.
Professional Skills Training
Outside of required training, many businesses use courses to teach their staff important professional skills. Professional skills training is often an important part of the onboarding process for many businesses. This type of training isn’t usually mandated by government bodies but can definitely help a business hone their employee’s skills and teach them valuable lessons about everything from anger management to answering calls.
If you’re interested in financial compliance training, HR compliance training, or professional skills training for your business, Banker’s Academy can help. With a focus on the financial industry, we stay abreast of the latest in banking regulations and compliance requirements and can provide you with relevant and thorough training for your institution. Contact us today for more information.
Changes to the Volcker Rule
On August 20th, the Office of the Comptroller of the Currency (OCC) announced that they, along with the Federal Deposit Insurance Corporation (FDIC), had approved amendments to the Volcker Rule, an important regulation that prevents certain financial institutions from participating in proprietary, or “prop”, trading and limits their involvement with covered funds. The new amendment, which is expected to be approved by other federal regulators soon, would ease some of these exclusions and eliminate a “rebuttal presumption” that labels financial instruments being held for less than sixty days “prop” trading.
The Volcker Rule came about as a response to the financial crises that the US has endured. Following the Great Depression and the Great Recession, regulators tried to find ways to prevent federally insured banks from making certain types of potentially risky investments. The Volcker Rule came on the heels of the Great Recession as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, creating rules for implementing section 13 of Bank Holding Company Act of 1956, which is an act of congress that restricts bank holding companies from certain actions.
The Volcker Rule came into effect in April of 2014 with full compliance required before July 21, 2015. However, things quickly became complicated as discerning the difference between regular trading and “prop” trading became difficult. The Volcker Rule has subsequently proven to be one of the harder regulations to implement and in 2018, the Federal Reserve Board unanimously decided to push forward the proposal loosening some of the Volcker Rule’s restrictions. The goal was to streamline the requirements of the rule, making compliance much easier, specifically for banks that do very little trading.
These changes to the Volcker Rule would not remove the restrictions placed but relax them to allow certain institutions to more easily comply with The Rule. With another potential recession looming on the horizon, it will be interesting to see how the Volcker Rule may or may not change over the coming months and years.
The ever-changing landscape of financial regulation makes it difficult for banks to keep to relevant compliance training. As rules change, your compliance training should be changing too. Our team at Banker’s Academy are experts in compliance training and do our best to stay ahead of the curve as banking regulations change. That’s why you need to be sure you’re trusting your compliance training to us. If you’re interested in effective, relevant compliance training for your financial institution, contact our team today!
The Federal Reserve
Federal Reserve Board barred CEO of NBRS Financial from Working in the Banking Industry
The Federal Reserve Board recently barred the former president and CEO of NBRS Financial from working in the banking industry.
The Board found that the former president and CEO had been involved in self-dealing transactions with bank loans and was keeping information from the NBRS board of directors. The Board considers these practices as unsafe and unsound, violating the law, as well as a failure in his duties to NBRS Financial.
The Board issued this prohibition order by default and the former CEO did not respond to the notice of enforcement.
Federal Reserve Board Will Begin TDF Testing in August
The Federal Reserve has been periodically testing the Term Deposit Facility (TDF). The purpose of this testing is to ensure the TDF is ready and giving qualified institutions opportunities to familiarize themselves with deposit practices.
The Federal Reserve began one of these operations on August 23rd, which included multiple actions, all of which can be found here.
The Office of the Comptroller of the Currency (OCC)
The OCC Issues Enforcement Actions
The Office of the Comptroller of the Currency issued several enforcement actions. These actions included the following: Cease and Desist Orders, Civil Money Penalty Orders, and Removal/Prohibition Orders.
For a full list of the institutions and banks, as well as the full copies of the final actions, view the full press release from the OCC.
Other Regulatory Bodies
FINRA Issues First Annual Industry Snapshot
To increase awareness about the industries and practices that FINRA regulates, they release an Annual Industry Snapshot. This Snapshot includes important data regarding the brokerage firms, registered individuals and market activity that FINRA regulates. See the full Snapshot here.
There are big changes coming out of the Federal Reserve for financial institutions. The Federal Reserve will be easing the Volcker Rule in an upcoming decision.
The rule was created almost five years ago as a part of the Dodd-Frank financial regulation law that reduced the risk-taking on Wall Street. A major contributor to the 2008 financial crisis was how financial institutions used customers’ funds in high risk trades.
The aim of the Volcker Rule was to reduce that kind of behavior and ideally, prevent another financial crisis and bank bailouts funded by taxpayers.
The Federal Reserve is preparing to ease a rule aimed at defusing the kind of risk-taking on Wall Street that played a role in triggering the 2008 financial meltdown.
The Federal Reserve is instituting a series of changes to the rule in the hope that it will make complying for financial institutions easier and simpler.
The majority of the rule will remain, and continue to stop the trading of depository funds of customers.
Some critics fear the changes will go too far and we’ll end up in a similar situation as 2008. They worry the checks placed on Wall Street for their questionable trading practices will be watered down to the point they are no longer effective or will work as intended.
Regulation of Wall Street is a highly politicized issue, and with Republicans in control of Congress and the White House, these kinds of deregulatory changes will be a talking point for Democrats for the upcoming mid-term elections.
Many voters are still recovering from the losses they suffered in 2008, despite the economic gains of the last few years.
However, it seems the major change is the omission of a word from a part of the Volcker Rule. The removal of the word – “demonstrably” -- from the section is intended to ease the burden on financial institutions to show regulators how their trades act as hedges.
Under the current iteration of the rule, financial institutions can only count complex trades as hedges if they can “reasonably be expected to demonstrably reduce or otherwise significantly mitigate the specific, identifiable risk(s).”
Furthermore, it is expected that the Federal Reserve will allow foreign banks to practice higher risk trades, as long as, that any trading done in the U.S. is in compliance with the Volcker Rule.