Financial Services Spotlight

Roy Andersen

Roy focuses on bank regulatory and compliance matters, including international banks and their branches and agencies in New York. He has been involved in the formation of these offices, including drafting, filing and supporting the necessary applications. Upon establishment, he has advised on the application of Federal and New York laws with respect to their activities and operations. For over ten years, Roy was responsible for and worked closely with the large compliance teams at two foreign banks.

Recent Posts

Whistleblower Policies

Posted by Roy Andersen on Jan 25, 2019 10:56:17 AM

On January 7, 2019, the New York State Department of Financial Services (the "DFS") issued new guidance on whistleblowing programs ("WP") to all entities regulated by the DFS regardless of industry, size or number of employees—hello representative offices, bit licensees and money services companies.

The DFS defines whistleblowing as:

reporting of information reasonably believed to constitute illegality, fraud, unfair or unethical conduct, mismanagement, abuse of power, unsafe or dangerous activity or other wrongful conduct including conduct that might affect safety, soundness or reputation

Anybody can be a whistleblower including employees (and ex-employees), vendors, outside counsel (!) and customers.

While the DFS recognized that a whistleblower program has to be tailored to the characteristics of the regulated entity; nevertheless, all regulated entities should design and have a WP as an "essential" part of a compliance program. 

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Topics: Whistleblowers, New York State Department of Financial Services, DFS, whistleblowing programs

What Does the Dodd-Frank Relief Bill mean for Enhanced Prudential Standards for Foreign Banks?

Posted by Roy Andersen on May 25, 2018 7:49:06 AM

On May 23, Congress passed a bill to revise Dodd-Frank to reduce regulatory burdens on banks. Just as with the original Dodd-Frank Act, the real work will have to be done by the banking agencies and thus months will have to elapse before we see real changes. Like most legislation, this bill is approximately 200 pages long and contains a host of changes, covering activities at banks from community organizations up to the largest banks. The major change affecting many foreign banks in the U.S. is with respect to enhanced prudential standards.

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FFIEC Examination Procedures for the Beneficial Ownership Rule

Posted by Roy Andersen on May 16, 2018 3:04:27 PM

The FFIEC has updated its BSA/AML manual effective May 5, 2018, to add a section on the new legal entity due diligence requirements and to update the section of the manual on customer due diligence generally. The Fed published an SR Letter containing these updates for the legal entity beneficial ownership rule that became effective last week on May 11. 

The Fed noted that the FFIEC examination procedures will be used by all federal and state examiners. This memorandum summarizes the requirements of the beneficial ownership rule and what the regulatory examinations will cover. All bank procedures should cover these items at a minimum.

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Topics: FFIEC, Bank Regulations, Federal Reserve

Customer Due Diligence and FinCEN’s Frequently Asked Questions

Posted by Roy Andersen on May 9, 2018 12:04:14 PM

As you are aware, FinCEN’s Customer Due Diligence rules are effective in two days. In a nutshell, these rules require banks to obtain and verify the identity of the beneficial owners of new business customers. The rules are not easy to understand when applied to complicated ownership structures and there has not been any help published by the banking agencies. FinCEN, however, did publish some FAQs about a month ago and these clarify certain aspects of the rules and should be incorporated into bank policies and procedures. 

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Topics: Financial Crimes Enforcement Network, CDD, Customer Due Diligence Rules

How Does the Fed Want to Regulate Foreign Banks?

Posted by Roy Andersen on Mar 12, 2018 10:50:11 AM

On March 5, 2018, the Fed’s new Vice Chairman for Supervision, Randal Quarles, spoke at the Institute of International Bankers annual conference. He wanted to express his thoughts on the appropriate regulatory environment for foreign banks in the U.S.

He suggested that large foreign banks with complex U.S. operations contributed to instability in the U.S. during the financial crisis and required extraordinary support from the regulators. These same banks expanded dramatically just before the crisis, but the regulators did not adjust to the risks created by these activities. He suggested that these banks needed greater “resiliency” to meet challenging times.

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Topics: Financial Regulation, Federal Reserve

Bank Corporate Governance—Fed lowers Boom on Wells’ Directors

Posted by Roy Andersen on Feb 6, 2018 10:52:00 AM

On February 2, 2018, the Fed announced that it issued a consent Cease and Desist order with Wells Fargo—the bank holding company. The Fed’s press release noted that Wells is replacing 4 directors within this year (out of 17 that signed the C&D), but this reconfiguration is not a formal requirement of the C&D. Press reports imply that the Fed was behind these changes. Of course, Wells is as closely supervised by the Fed as any bank could be; nonetheless, the Fed takes no responsibility for the errors at Wells and shows no humility in passing out blame. It is without precedent for the Fed to write personal letters to former directors (as summarized below), roundly rebuke them and then publish the letters.  

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Topics: Wells Fargo, Corporate governance, Regulation YY

Review of Regulatory Responses to the Resolution Plans from the Big Foreign Banks

Posted by Roy Andersen on Jan 30, 2018 12:00:00 PM

Yesterday, the Fed and FDIC released their letters to the bigger foreign banks, i.e. the banks just below the UBS-level. The Fed’s letters were in response to the resolution plans filed in December of 2015. In these letters, the Fed and FDIC expressed what they expected in the next round of resolution plans from these banks due at the end of this year. The Fed conceded that even though these banks are huge, their U.S. activities are of "limited complexity." Only HSBC was given a laundry list of new items that the regulators expected to see in the 2018 Plan

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Topics: Regulatory Filings, FDIC, foreign banks, Resolution Plans

October and November Developments

Posted by Roy Andersen on Dec 8, 2017 8:40:22 AM

Overview

For the first time in my memory, the Congress passed a joint resolution to disapprove a final regulation of a federal agency—in this case the CFPB and the rule was related to arbitration clauses in contracts for consumer financial products. In addition, the agencies amended certain definitions under CRA and these changes should be reflected in CRA policies and procedures at banks. Both the OCC and FDIC published final rules on requirements for Qualified Financial Contracts and introduced required language for larger banks.

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Topics: CFPB, FDIC, Qualified Financial Contracts, Mortgage Servicing, QVC

Object Lesson on How Not to Respond to Consent and Enforcement Actions

Posted by Roy Andersen on Aug 31, 2017 11:53:18 AM

Last week, the DFS announced an enforcement action and charges against the NY Branch of Habib Bank, a Pakistani bank that had been doing business in NY for almost 40 years.

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May, June and July Developments

Posted by Roy Andersen on Aug 9, 2017 1:44:12 PM

With a straight face, President Trump has issued an executive order on June 20th that would expand Apprenticeship opportunities in the US in order to expand jobs. The CFTC has adopted some final rules on records administration and its whistleblower program. It has also introduced a new project to evaluate its system of rules to see where simplification is warranted. FinCEN is moving against a Chinese bank that helps North Korea.

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Topics: OFAC, CFTC, FDIC, FinCEN, Qualified Financial Contracts, NCUA, Consumer Financial Products

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About the Spotlight


The Financial Services Spotlight examines the regulatory and technology developments impacting banks, asset managers and other financial services providers—where challenges meet opportunities.

The material on this site is for general information only and is not legal advice. No liability is accepted for any loss or damage which may result from reliance on it. Always consult a qualified lawyer about a specific legal problem.

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