Financial Services Enforcement Actions Tracker

August 2022 Update

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Regulatory Outlook

As anticipated, the first quarter of the year has seen enhanced supervisory oversight, with modifications of existing and proposal of new laws and regulations. The Consumer Financial Protection Bureau (CFPB) is leading the initiative with a significant number of policy changes and enforcement actions that are aggressively being pushed back by the financial services industry—from disputing the regulators’ allegations to refusing to pay large fines or admit wrongdoing.

Guidehouse anticipates more policy changes outside the normal “notice-and-comment” process, which will led to an increase in compliance costs, as well as targeting repeated industry offenders. With continued emphasis on consumer protection, regulators are expected to expand focus and include nonbank financial companies, which are considered to pose risk to consumers.

Federal-Level Enforcement Actions

The following enforcement actions are examples of some of the top federal enforcement actions for Q1 2022.

  1. Bank Secrecy Act

    There were four actions cited as pertaining to the Bank Secrecy Act, totaling $160.4 million in monetary penalties and restitution. These actions were related to the banks’ failure to adopt and implement a Bank Secrecy Act/Anti-Money Laundering compliance program.

  2. Governance Deficiencies

    There were four actions related to Governance Deficiencies, one of which totaled $9 million in monetary penalties and restitution. This action was related to a bank’s failure to comply with rules requiring firms to disclose potential conflicts of interest when issuing research reports.

  3. Unfair, Deceptive or Abusive Acts or Practices (UDAAP)

    There were four actions related to UDAAP, totaling nearly $1.9 million in monetary penalties and restitution. Two of these actions specifically cited violations to the Fair Housing Act, which included the refusal to support an affordable housing development and denying housing based on race.

  4. National Flood Insurance Program

    There were eight actions cited as pertaining to the National Flood Insurance Program, totaling nearly $300,000 in monetary penalties and restitution. One of the actions was in connection with a bank’s pattern or practice of violations of Regulation H: Membership of State Banking Institutions in the Federal Reserve System.

Methodology

Guidehouse’s Financial Services Enforcement Actions Tracker compiles publicly available data from both federal and state regulators regarding quarterly enforcement actions against financial institutions. First published in 2016, the Tracker showcases the types of activities that consumer finance-focused regulators are currently monitoring and helps the audience better address the trends and challenges in today’s regulatory environment.

Special thanks to Perry Clark and Nina Jankovic for contributing to this article.

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