Lenders who work closely with unregulated financial companies should conduct a thorough background check on the track record of such companies if they want to avoid being sanctioned by regulators.
The advice comes a few days after federal prosecutors charged debt settlement company Mission Settlement Agency and four individuals with mail and wire fraud. The charges were the result of allegations that the defendants ran a scheme that victimized more than 1,200 people across the United States.
Mission, through its principal Michael Levitis, charged borrowers who owed money on credit cards and loans a $49 fee to cut their debts. But federal prosecutors say Mission failed to reduce the debts of its customers and charged excessive fees for doing little...
A senior Federal Reserve official wants broker-dealers to hold more capital, and be more closely watched by prudential regulators. He opposed as arbitrary recent proposals to sharply raise bank capital or restrict their size and activity. Regulators should instead ensure that capital is in place in the subsidiaries with the highest risk, such as trading, rather than seeking more debt issuance at the group holding company level.
The comments were made by Federal Reserve Bank of Richmond President Jeff Lacker, in a speech to the Council on Foreign Relations on the subject of too-big-to-fail banks.
Lacker cautioned against proposals to address too-big-to-fail banks, ranging from breaking up institutions to sharply increasing their capital requirements. The most recent of such initiatives is the bipartisan bill by U.S. Sens Sherrod Brown and David Vitter. This would require...
Although a federal judge in Brooklyn has not yet signed-off on a deal between HSBC and the Justice Department that would settle allegations that anti-money laundering failures at the bank allowed drug cartels to launder hundreds of millions of dollars, candidates for a lucrative job policing the bank’s compliance with the pact are scrambling to win the work.
Consulting firms are not being considered to lead the work, but may be hired to carry it out once a well-recognized anti-money laundering expert is hired as monitor, a source said.
“We’re talking about a five-year, ironclad, wealthy contract. This is not hustling for billable hours,” said a source familiar with the Justice Department’s search for a so-called independent monitor. “There is an extraordinary amount of political jockeying going on to secure this work.”
There is no reason for the Justice Department to rush its selection process. It cannot name a monitor...
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Former SEC Chairman Harvey Pitt, gave his wide-ranging views on regulatory and risk challenges facing the financial industry in an address on April 25 to a Thomson Reuters Accelus Compliance & Risk Summit in New York.
A transcript of his remarks is provided here by the Compliance Complete News Team.
(This article was produced by the Compliance Complete service of Thomson Reuters...