Compliance Insights Latest: The Future of Financial Regulation Still Unclear; Meanwhile, New Rules March On

Steven Stachowicz, Managing Director Risk and Compliance

The recent election results weigh heavily on the minds of financial services professionals. All manner of questions have been raised regarding potential related regulatory impacts. Currently, there is ambiguity and speculation as to what changes are in store, when they will come, and the extent to which they will occur. What is certain is that change is inevitable, at least based upon what can be gleaned from the campaign trail and the agenda of the existing Congress.

We address some of the immediate reactions to the recent elections in our November edition of Compliance Insights. We will continue to monitor developments as they unfold, and provide our perspective in future editions. In the meantime, refer to Protiviti’s recent flash report for a more detailed, cross-industry perspective on the impacts of the recent elections.

Aside from the election, the November edition of Compliance Insights examines a new rule from the Consumer Financial Protection Bureau, finalized in October, that significantly changes the regulatory environment for prepaid accounts — including general-purpose reloadable and non-reloadable cards, such as payroll cards, student financial aid disbursement cards, tax refund cards, certain federal, state and local government benefit cards, and electronic wallets that store funds. The new rule, due to be implemented at the end of 2017, requires new disclosures to be provided to consumers at the time of purchase, including fees, terms and other comparative information; periodic statements listing recent transactions; dispute resolution procedures; and new protections if the prepaid account contains credit features. The article is on page 2 of the newsletter.

Also in October, the Department of Labor released the first in a planned series of FAQ documents to provide guidance on the implementation of its Fiduciary Rule, issued in April 2016. The rule was issued as an investor protection measure to identify, eliminate and mitigate against investment adviser conflicts of interest that could result in advice not aligned with clients’ best interests. The new rule redefines how retirement investment advice is communicated to investors, how and when adviser relationships are established, and how adviser compensation for products and services is earned. See page 5 in Compliance Insights for some of the specific questions addressed.

Other recent regulatory news we cover in our November edition:

  • The Financial Crimes Enforcement Network published an advisory and FAQs to help financial institutions comply with cybersecurity reporting obligations under the Bank Secrecy Act.
  • The Office of the Comptroller of the Currency published guidance on the periodic risk re-evaluation of foreign correspondent banking applicable to all national banks with foreign correspondent banking relationships.

We discuss all of these new developments, including our take on the financial regulations’ future, in detail in the full edition of Compliance Insights. Read it here.