Office of the Comptroller of the Currency (OCC)
OCC To Consider Fintech Charter Applications
The Office of the Comptroller of the Currency (OCC) recently announced its decision to accept applications for special purpose bank status from financial technology companies, also known as ‘fintechs.’ Fintech charter approval will be contingent upon meeting capital liquidity, consumer protection, and risk management requirements.
OCC Issues Rules To Relax Regulatory Burden
As required by the 1996 Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA), the Office of the Comptroller of the Currency (OCC) issued rules to discontinue or decrease regulatory paperwork requirements as part of its supervision of national banks and federal savings associations. Among the 11 changes or revisions are the elimination of unnecessary regulatory reporting for federal savings associations and acceptance of electronic filings as stipulated under the Security Act of 1933 and the Securities and Exchange Acts of 1934.
Securities and Exchange Commission (SEC)
California Firm Fined For Violating Federal Swap Registration Laws
The Securities and Exchange Commission fined a California-based firm $80,000 for failure to comply with federal registration requirements for securities-based swaps and offer them on a national securities exchange instead of online. By selling unregistered swaps online, the firm denied the investors the required disclosures for the swap sales. Similarly, the firm’s failure to use the national securities exchange, investors also engaged in these swap sales without any consumer protections.
Federal Deposit Insurance Corporation
FDIC Finalizes Large Bank Failure Disbursements Rule
The recordkeeping rule designed to facilitate prompt FDIC disbursements to insured depositors, as required by law, in the event of a large depository institution failure (IDI) is now final. This new rule takes effect on April 1, 2017. IDIs with two million accounts or more are required to comply. Under this new record retention rule, IDIs must develop systems that can accurately and efficiently identify insured and uninsured accounts by owner and account holding. Similarly, this data must be reliable, as it is the basis for FDIC payout calculations and deposit insurance coverage determinations.
The Federal Bank Regulators Extend Examination Cycle to 18 Months For Banks and Savings Associations
Well-capitalized and well-managed banks and savings associations, with assets less than $1 billion dollars, will now be scheduled for regulatory reviews every 18 months instead of 12, resulting from an interagency agreement among the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board (FRB), and the Office of the Comptroller of the Currency (OCC). This agreement is designed to lessen the financial burden of compliance reviews for these financial institutions.
Other Regulatory Bodies
U. S. Commodity Futures Trading Commission
CFTC Levies $450M Civil Money Penalty Against European Swap Dealer
The U. S. Commodity Futures Trading Commission (CFTC) fined a European swap dealer for failing to report swap dealer transactions required under the Commodity Exchange Act (CEA) and CFTC statutes. As a result, the CTFC levied a $450M civil money penalty against the European bank for non-compliance.