"Washington Report 360 | December 6, 2019"

Key Highlights

• Federal banking agencies issued a joint statement on the use of alternative data in credit underwriting, focusing on consumer protection implications and the role of a well-designed compliance risk management program.
• FRB published its annual Supervision and Regulation Report indicating risk management weaknesses persist in the areas of compliance, internal controls, model risk, operational risk, IT (including cybersecurity), and BSA/AML.
• FSOC issued final guidance for designating nonbank SIFIs that uses an activities-based approach.
• Proposed revisions to the CRA regulations are anticipated by year end without full interagency participation; goal is to issue joint final rule.

Financial services regulatory and policy news

Banking

• Five federal agencies issued a statement on alternative data in credit underwriting
  FRB, OCC, FDIC, CFPB, NCUA, December 3, 2019
• State regulators and four federal agencies will not require SARs solely based on hemp-related business activities
  FRB, OCC, FDIC, FinCEN, CSBS, December 3, 2019
• FRB published its annual Supervision and Regulation Report; for largest firms, weaknesses persist in governance and controls
  FRB, November 26, 2019
• FRB published report on branch access in rural communities
  FRB, November 25, 2019
• CFPB proposed rule would increase the remittance rule safe harbor threshold from 100 to 500
  CFPB, December 3, 2019

Capital Markets

• SEC proposed to amend regulation of registered funds and business development companies
  SEC, November 25, 2019
• CFTC finalized amendments to asset manager rules related to family offices and commodity trading advisers
  CFTC, November 25, 2019
  
• CFTC DSIO issued advisory on Chief Compliance Officer Annual Report preparation
  CFTC, Division of Swap Dealer and Intermediary Oversight, December 4, 2019
  
• FINRA selected AWS as the cloud provider for CAT
  Amazon press statement, December 4, 2019
  

Other

• FSOC finalized guidance for designating nonbank financial companies as SIFIs
  FSOC, December 4, 2019
• FSOC published its Annual Report, highlighting the nonbank mortgage sector and LIBOR transition
  FSOC, December 4, 2019
  
• FinCEN reported significant increase in risk of elder financial fraud
  FinCEN, December 4, 2019
  
• Massachusetts proposed a fiduciary conduct standard for broker dealers, investment advisers
  Financial Advisor, December 2, 2019
  
• BCBS proposed revisions to the credit valuation adjustment (CVA) risk framework
  BIS, Basel Committee on Banking Supervision, November 28, 2019
  
• FSB added one new entity to the G-SIB list
  FSB, November 22, 2019
  
• Department of Education suggested spinning off education loans to new independent agency
  Department of Education, December 3, 2019
  

Industry news 

• FDIC "inclined" to join OCC on CRA
  American Banker, December 4, 2019
• Regional banks face bumpy road away from LIBOR
  WSJ, December 4, 2019
• Risk managers grapple with the potential downsides of artificial intelligence
  WSJ, December 2, 2019
• CFTC relying more heavily on criminal prosecutors
  WSJ, November 29, 2019
• FHFA to allow competition in credit scoring models
  American Banker, December 3, 2019
• NSA plans to issue updated guidance on cloud security
  WSJ, December 3, 2019