The Federal Financial Institutions Examination Council (“FFIEC”) has issued proposed guidance on compliance issues and risk management in the use of social media (the "Proposed Guidance"). The term "social media" as used in the Proposed Guidance applies to "interactive online communication" where users "generate and share content." (i.e., Facebook, Yelp, LinkedIn, YouTube, etc.) Financial institutions are increasingly using social media to generate new business and develop stronger relationships with customers. The Proposed Guidance is intended to assist financial institutions in identifying and addressing potential areas of risk, including compliance, legal, operational and reputational risk...
Section 19 of the Federal Deposit Insurance Act requires FDIC-insured institutions to obtain prior written consent from the FDIC before employing persons who have been convicted of or entered into a pre-trial diversion program for criminal offenses involving dishonesty, breach of trust, or money laundering. An exception to this requirement exists, however, for certain types of de minimis offenses, for which prior written consent is not required.
The Federal Deposit Insurance Corporation (FDIC) recently announced the official launch of its Regulatory Calendar for Community Banks. The online calendar is intended to help community banks stay up-to-date with changes in federal banking laws, regulations, and supervisory guidance. The calendar will include notices of rulemakings, effective dates for regulations, and guidance issued by various federal regulators of interest to FDIC-regulated entities. The calendar will also provide information on FDIC outreach initiatives and other regulatory information of interest. Links to underlying documents and resources will be provided in the calendar entries. The calendar release follows the FDIC’s publication of an earlier beta version last summer that was used to solicit public feedback.
Examinations of High-Yield Accounts by FDIC Gives Insight into Compliance Issues in New Product Development
An article in the winter edition of the FDIC’s Supervisory Insights Journal discusses a number of common regulatory violations found in advertising, website, and disclosure materials used with high-yield checking accounts. In addition, the article provides insight into how and why compliance issues arise in the development of new financial products, such as potential violations of Truth-in-Savings and Section 5 of the FTC Act (Unfair or Deceptive Trade Practices).
For the second year in a row, the winter edition of the FDIC’s Supervisory Insights Journal includes an article discussing the risks associated with mobile payment services. Last year’s article, which focused primarily on security and fraud concerns, was reviewed in a blog post last December. This year’s article highlights a broader range of risks associated with mobile payments. These risks arise in part from the fact that mobile payments require interactions between numerous entities in the payment process. In addition, much of the innovation in the market is driven by young, entrepreneurial companies that may not be familiar with the supervisory framework applicable to depository institutions.