On April 18, the FDIC announced a consent order against a Delaware-based bank alleging that the bank engaged in unsafe and unsound banking practices and violated various federal consumer protection laws, including Section 5 of the FTC Act, the Truth in Lending Act (TILA), and the Servicemembers Civil Relief Act (SCRA). Continue Reading FDIC Orders Bank to Pay $1.225 Billion for Alleged Interchange Fee Misclassification
On March 28, the FDIC issued updated guidance clarifying the process for FDIC-supervised institutions to engage in crypto-related activities. The guidance rescinds and replaces prior instructions issued in 2022 and makes clear that banks no longer need to seek prior FDIC approval before participating in permissible crypto activities.Continue Reading FDIC Updates Crypto Guidance, Removes Pre-Approval Requirement for Banks
On March 28, the Federal Reserve, FDIC, and OCC jointly announced plans to rescind 2023 revisions to the Community Reinvestment Act (CRA) regulations. The agencies stated they would return to the previous regulatory framework existing before the 2023 revisions (See our prior discussion here).Continue Reading Federal Regulators Signal Reversal on 2023 CRA Modernization Rule
On March 24, acting FDIC Chairman Travis Hill informed Congress that the agency is preparing to eliminate the use of “reputation risk” as a basis for supervisory criticism. In a letter to Rep. Dan Meuser (R-Pa.), Hill explained that the FDIC has completed a review of its regulations, guidance, and examination procedures to identify and remove references to reputational concerns in its supervisory framework.Continue Reading FDIC Aims to Eliminate Reputational Risk from Supervision
On March 3, the FDIC announced the withdrawal of its proposed rule on brokered deposits, citing concerns regarding potential disruptions to the financial sector. This move follows significant pushback from industry stakeholders who argued that the proposed changes could have unintended consequences for liquidity management and market stability.Continue Reading FDIC Withdraws Proposed Rule on Brokered Deposits
On February 26, the FDIC withdrew its amicus brief in the 10th Circuit Court of Appeals challenging Colorado’s 2023 opt-out law which aimed to restricting higher-cost online lending. The FDIC’s decision follows a shift in the agency’s leadership and marks a departure from the previous administration’s position supporting Colorado’s interpretation of the Depository Institutions Deregulation and Monetary Control Act (DIDMCA).Continue Reading FDIC Withdraws Support for Colorado’s Opt-Out Law Before Tenth Circuit
The FDIC will shift its focus and priorities under the leadership of its new Acting Chairman, Travis Hill. In a statement released on January 20, 2025, Chairman Hill signaled a potential departure from some of the initiatives of the prior FDIC leadership. In the statement, he explained his key priorities for the agency moving forward, which include:Continue Reading New FDIC Chairman Outlines Agency’s New Priorities
An Oklahoma-based bank has been hit with a consent order from the FDIC after posting significant losses in its first year of operation. On June 28, the FDIC announced that it took an enforcement action against the bank mandating it to increase its capital reserves, revise its business strategy, and implement technology-based audit policies.Continue Reading Oklahoma Bank Faces FDIC Consent Order
On March 28, the FDIC released the spring edition of its consumer compliance supervisory highlights. The FDIC supervises approximately 3,000 state-chartered banks and thrifts that are not members of the Federal Reserve System. Most of these institutions are community banks that provide credit and services locally. Like the CFPB, the FDIC conducts supervisory activities, including examinations, to review institutions’ compliance management systems. Its examination focuses on identifying the greatest potential risk of harm to consumers, based on the business model and products offered by a particular institution. The FDIC’s report highlights consumer compliance issues identified by the agency’s examination of close to 900 institutions in 2023. While the entire report is worth a read, here are some key areas of focus:Continue Reading Takeaways From the FDIC’s Spring 2024 Consumer Compliance Supervisory Highlights
On January 30, a Tennessee-based community bank entered into a consent order with the Federal Deposit Insurance Corp. following the agency’s allegations that the Bank engaged in unsafe or unsound banking practices relating to its third-party risk management practices with its fintech partners. While the order does not list the FDIC’s concerns with the bank’s third-party partnerships, the order requires it to come up with a plan within 60 days to end its relationship with its “significant third-party fintech partners.” In addition, the bank must implement a program to evaluate and manage the risks associated with the fintechs it directly works with, and fintechs with whom its direct partners work. Continue Reading FDIC Issues Consent Order Against Tennessee Bank
On December 21, the Office of Inspector General (OIG) of the FDIC issued its audit memorandum on the FDIC’s Regional Service Provider (RSP) Examination Program. The OIG’s objective was to assess the effectiveness of the FDIC’s RSP Examination Program related to third-party risks to banks, including for compliance with interagency service provider guidance (we discussed this final guidance in a previous blog post here).Continue Reading OIG Issues Audit Memorandum to FDIC’s Regional Service Provider Examination Program, Impacts Fintechs