Week In Compliance: Everybody’s a Terrorist!

You’re a Terrorist, and You’re a Terrorist, and You’re a Terrorist!State Department designates additional terrorist fighters. And there are many. Find it HERE.

Leniency Granted! – Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) will be lenient in enforcement of TRID. TRID is TILA-RESPA Integrated Disclosure. TILA is Truth In Lending Act. RESPA is Real Estate Settlement Procedures Act of 1974. The examinations for compliance with TRID will primarily focus on “overall efforts” over itemized compliance. This language comes from identical letter from the CFPB and the OCC, which can be found HERE. – Nikki Smith, Federal Title & Escrow Company

Fraudster hound you for debts you never had! – These two companies and an additional person, Broadway Global Master Inc., In-Arabia Solutions Inc. and Kirit Patel, settled with the Federal Trade Commission for allegations of defrauding consumers to pay debts stemming from payday loans. This probably doesn’t affect you since you probably don’t get payday loans, but if you do, don’t work with these people. – Dodd-Frank Update

Millennials are optimistic for absolutely no reason! – “Millennials expressed the most optimism” despite living paycheck-to-paycheck. – ABA Banking Journal

“It is striking that most of the erosion in community banks’ share over the past decade has been concentrated among the very smallest loans.”  – Governor Lael Brainard at The Third Annual Community Banking Research and Policy Conference

Former CFO of Siemens Argentina pleaded guilty to conspiring to violate the anti-bribery, internal controls, and books and records provisions of the FCPA, and to commit wire fraud. – Richard Cassin, The FCPA Blog

Grant Thornton India and Grant Thornton Australia charged for breaking auditor independence. – SEC (HERE & HERE)

credit: Wikipedia

Bill Gates sues Petrobas, complaining of “pervasive bribery and money laundering scheme.” – Jonathan Stempel, Reuters

Jobs In Compliance

Opinion: Regulatory Creep, The New Kind 

No, regulatory creep isn’t someone stalking you. That’s when more and more regulations are imposed over time, usually as a result of disaster, and the regulations end up doing more harm than good. I am not anti-regulation, but there is a new type of regulatory creep going on. The new type of regulatory creep hasn’t so much to do with so many regulations but simply the complexity of them. I am a financial regulatory compliance expert and while the growth in the profession is good for me, this particular type of growth is bad for the economy and, therefore, bad for my profession on the long run. We are getting very close to making everything possibly illegal or subject to a prescriptive policy or procedure. A major part of this is the legal system we have, which I will address it by saying that we have letter-based laws rather than spirit-based laws. For example, rather than punishing a financial advisor for not seeking out for the best interest of his client before seeking out the best interest for himself (which is the standard for lawyers and accountants), we specifically allow them to be brokers AND dealers. The purpose was to reduce the cost of transactions. I won’t go into the economics of this, but economically it makes sense… for 1915, not 2015. The actual cost of financial transactions through our centralized counterparty system in our markets is less than a penny per transaction. As a matter of fact, the fraction is so small and continues to decrease that I cannot recall if it is in the 100th of a penny or 1,000th of a penny. This is the reason why online brokers can charge $4 per transaction. Add the broker’s cost, and the transaction still comes out to less than a $1, depending on the scale of the broker and the volume of business. The point is this: why do we treat financial advisors like employees first rather than professionals first. This will allow a whole sections of law to disappear. Look at the laws governing lawyers, as an example. Not much there. They are self-regulated and they can kick people out of the profession and they have a high bar of entry. It might be a little too high. We really need para-legal professionals, which, despite their claims, paralegals are not really paraprofessionals the way EMTs and Physician Assistants are in the medical profession. By shifting our laws to focus on the goals of regulated activities, we will develop a practice of prosecuting individuals and firms will reduce taking risk because they can’t shift the cost of noncompliance onto the shareholders, which is what is happening when firms pay for noncompliance rather than individuals. The shift will also make compliance much easier, as well as spotting noncompliance.


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Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses. He is a member of ACAMS and ACFE. 

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