US regulators issue consumer reports
The Consumer Financial Protection Bureau (CFPB) has released its Consumer Response Annual report for the period January to December 2022. The report analyzes complaints submitted by consumers during this period. The CFPB received approximately 1,287,000 consumer complaints and sent more than 820,000 complaints to approximately 3,200 companies for review and response.
Meanwhile, the Federal Deposit Insurance Corporation’s (FDIC) Division of Depositor and Consumer Protection has published its Consumer Compliance Supervisory Highlights which provides an overview of consumer compliance issues identified through the FDIC’s supervision of state non-member banks and thrifts in 2022
The report includes:
- A summary of the overall results of the FDIC’s consumer compliance examinations of supervised institutions in 2022;
- A description of the most frequently cited violations and other consumer compliance examination observations;
- Information on regulatory developments;
- A summary of consumer compliance resources and information available to financial institutions; and
- An overview of consumer complaint trends.
HK SFC issues new thematic risk report
Hong Kong’s Securities and Futures Commission (SFC) has issued a new report looking at three specific areas of risk:
- Operational risk management for trading activities
- Remote booking risk management for trading activities
- Data risk management
The new report summarizes the industry practices in risk governance, oversight and management in each of the three risk areas, together with examples of good practices and areas for improvement observed from the thematic review and other supervisory activities. The SFC’s expected standards for licensed corporations to mitigate these specific risks are also set out in this report.
SEC charges hedge fund trader with insider trading
The Securities and Exchange Commission (SEC) has filed insider trading charges against Sean Wygovsky, a former trader at a Canadian asset management firm, and Christopher Matthaei, a former partner at a US broker-dealer. The charges allege that the two individuals used non-public information to earn more than $3.4 million in illicit profits from at least seven merger announcements involving Special Purpose Acquisition Companies (SPACs). According to the complaint, Wygovsky used encrypted messaging to tip off Matthaei about upcoming mergers, which Matthaei allegedly traded on. The SEC’s complaint charges both individuals with violating the antifraud provisions of the federal securities laws and seeks permanent injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties against Matthaei and Wygovsky, and an officer and director bar against Matthaei. Wygovsky has consented to a bifurcated settlement, subject to court approval, under which he will be permanently enjoined from violating the federal securities laws.
OCC speech: Hsu stresses fairness
Acting Comptroller of the Currency Michael J. Hsu has emphasized the Office of the Comptroller of the Currency’s (OCC) continued focus on the safety, soundness and fairness of the federal banking system and its work to elevate fairness in banking in a speech at the National Community Reinvestment Coalition’s Just Economy Conference.
The speech addressed a number of issues including reforming bank overdraft protection programs; fighting discrimination and bias in the banking industry and expanding inclusion and opportunity, pointing out the importance of the Community Reinvestment Act.
EBA issues customer due diligence guidelines
The new guidelines are as a result of research carried out into de-risking (decisions made by credit and financial institutions to refuse to enter into or to terminate business relationships with individual customers or categories of customers associated with higher money laundering and terrorist financing (ML/TF) risk) and the unwarranted effect that can have on certain clients – such as not-for-profit organizations.
The new guidelines introduce steps institutions should take to facilitate access to financial services by those categories of customers that the EBA’s analysis had highlighted as particularly vulnerable to unwarranted de-risking.
UK financial ombudsman issues plans
The Financial Ombudsman Service, created as part of the Financial Services and Markets Act 2000, has issued plans for the 2023/24 period. The plans focus on the following areas:
- Developing digital portals for both respondent businesses and complainants
- Ensuring quality and timely outcomes
- Building the workforce of the future
- Developing our funding model
- Developing data and insight to improve our performance
The report also notes that the FOS is expecting a short-term uptick in complaints despite the new FCA consumer duty regime, as the new regime is implemented in the summer.
A selected summary of key developments for regulated financial institutions
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