Washington Report 360 | January 3, 2020

Key Highlights

• Focus on leveraged lending will continue as highlighted by the FSB report and FDIC supervisory insights.
• Continued regulatory LIBOR transition concerns to meet the 2021 requirement (FSB report and new NY DFS requirement).
• FinCEN is expected to focus its investigative powers on terrorist financing, human trafficking, and fraud.
• The SECURE Act became law and expands access to multi-employer plans and participation for part-time employees.
• COSO will issue guidance in 2020 on internal controls for blockchain, compliance risk management principles, and risk appetite statements; COSO issued guidance for managing cyber risks in mid-December.

Financial services regulatory and policy news

Banking

• FRB issued 2019 payments study finding increases in card and ACH payments
  FRB, December 19, 2019
• FRB approved modifications to support enhancements to same-day ACH service
  FRB, December 23, 2019
• FRB examined credit offers to small businesses by online lenders 
  FRB, December 19, 2019
• FRB, OCC, and FDIC issued an interagency statement regarding Regulation O (loans to executive officers, directors, and principal shareholders)
  FDIC, December 27, 2019
• FDIC Supervisory Insights focused on leveraged lending 
  FDIC, December 23, 2019
• FDIC updated its risk management manual on examination policies to include documentation modules
  FDIC, December 20, 2019
• FDIC rescinded four statements of policy 
  FDIC, December 31, 2019
• CFPB issued its report to Congress on TILA, EFTA, and the CARD Act
  CFPB, December 18, 2019
• CFPB issued its annual report on Financial Literacy
  CFPB, December 23, 2019

Capital Markets

• SEC proposed to modify auditor independence rules
  SEC, December 30, 2019

Other

• The President signed the SECURE Act as part of a year-end appropriations bill
  Congress.gov, December 20, 2019
• FSB report assessed vulnerabilities with leveraged loans and collateralized loan obligations
  Financial Stability Board, December 19, 2019
• FSB report set out need to reduce risks to financial stability from LIBOR transition
  Financial Stability Board, December 18, 2019
• NY DFS announced requirement for regulated entities to submit plans for LIBOR transition
  New York Department of Financial Services, December 23, 2019
• Senate Banking Committee requested comment addressing concerns with cannabis banking legislation
  Senate Banking Committee, December 18, 2019

Industry news

• Treasury’s Financial Crimes Unit ramps up foreign targeting, investigations 
  WSJ, December 29, 2019
• COSO to issue guidance on blockchain
  WSJ, December 27, 2019
• How the Justice Department incentivizes companies to invest in compliance  
  WSJ, December 24, 2019
• The 2020 legislative docket: AML reform, GSEs, oversight of regulators
  American Banker, January 1, 2020
• CFPB challenge is one of the 7 big Supreme Court cases to watch in 2020
  The Hill, January 1, 2020
• California denies license to point-of-sale lender - expected to influence other lenders
  American Banker, December 30, 2019
• Governments in Europe find workarounds to bail out ailing banks  
  WSJ, January 2, 2020
• CFTC case could show extent of the government’s ability to go after market manipulation  
  WSJ, January 3, 2020