In this issue....
Midterm election results will change the House Financial Services Committee chair; the committee’s agenda is expected to prioritize issues of affordable housing and consumer protection, including the CFPB. Also following the midterms, the newly divided Congress is likely to result in a reduction to new legislative actions, particularly those without bi-partisan support.
The Federal Reserve adopted a new supervisory ratings system for large financial institutions (BHCs and certain SLHCs with $100 billion in total consolidated assets and U.S. IHCs of FBOs with $50 billion or more in total consolidated assets) to evaluate capital planning and positions, liquidity risk management, and governance and controls beginning in 2019.
The SEC adopted amendments to Rule 606 of Regulation NMS to require broker-dealers to disclose additional information on rebates and fees concerning their firm’s handling of customer orders.
A federal court granted a request to delay the August 2019 compliance date for the CFPB's payday lending rule (CFPB has said it will reconsider the rule); Colorado voters approved Proposition 111, which puts a 36% limit on interest rates for payday loans and prohibits origination and monthly maintenance fees.
The CFTC chair outlined his views on effective regulation during a time of transformation in data and technology, noting that market regulators must become "quant-driven agencies."
The SEC reported that it brought 821 enforcement actions in FY2018 resulting in more than $3.9 billion in disgorgement and penalties; the actions focused largely on investment advisory issues, securities offerings, issuer reporting/accounting and auditing, market manipulation, insider trading, and broker-dealer misconduct.
The SEC Investor Advisory Committee released recommendations for the SEC’s proposed Regulation Best Interest, including that the best interest standard should be characterized as a fiduciary duty. The SEC released the results of related investor testing on its proposed Form CRS Relationship Summary.
The Federal Financial Institutions Examination Council (FFIEC) issued a statement on cyber-related sanctions that reminds financial institutions to consider the effect of these sanctions on financial institutions’ operations.