![]() The forthcoming "access rule" will lay out the guidelines for financial establishments and law enforcement to gain entry into the newly established federal beneficial ownership database. This requirement is part of the first set of regulations issued per the C orporate Transparency Act (CTA). Companies have been given a deadline of January 1, 2025, to file reports with FinCEN on the individuals who own or control them. In September 2022, a new rule to take effect on January 1, 2024, was issued to enforce this requirement. According to the CTA, a "reporting company" must submit specific beneficial ownership details to the Financial Crimes Enforcement Network. Given how much work needs to go into modernizing CRA regulations, it may still be a topic of discussion when talking about these changes well into 2024.īSA beneficial owner requirements. In 2020, the Corporate Transparency Act was officially enacted as part of the National Defense Authorization Act to ensure greater accountability and transparency in business operations. Although the expectation is that a final interagency regulation will be published in 2023, it's still being determined when this will ultimately happen. Banks that fall between these two categories can be classified as Intermediate-level institutions and will experience changes somewhere in the middle. ![]() The proposal would drastically shift the duties of large banks (banks with greater than $2 billion in assets) regarding CRA compliance, whereas minor banks will remain mostly unaffected. In May 2022, three major banking regulators ( OCC, Federal Reserve, and FDIC) issued a joint proposed rule to revolutionize CRA standards for retail banks in this modern era. ![]() Revised Community Reinvestment Act rulemaking. This journey has been long and arduous, with many unforeseen detours (like the OCC regulations that were later scrapped). Additionally, it is essential to determine which data points need to be collected and submitted under this new policy. Before the final regulation is established, a few matters must be addressed, such as deciding upon an adequate threshold for reporting and what constitutes a "small business" according to precise standards. ![]() Compliance officers, commercial lenders, and technology staff are all bracing for the upcoming flurry of activity as they strive to meet the new requirements. This new subpart promises an unprecedented level of fairness and equality previously unavailable. It will require lenders to collect data on their loans and provide transparency in the form of public disclosures regarding said loans. Section 1071 of Regulation B has been established to promote more significant lending opportunities for women and minority-owned businesses. As a result, banks are expected to see several new regulatory changes that will have an impact on their operations, including:ĭodd-Frank Act 1071. After over a decade of waiting, this day will finally come. The banking industry is one of the most heavily regulated industries in the world, and this will continue to be the case in 2023. By following these roadmaps, institutions can proactively anticipate any changes before they happen. Even though activity or outcomes may be delayed, the proposals give financial institutions a plan to prepare for future shifts in 2023. In 2022, several consequential draft regulations arose, such as Dodd-Frank Act Section 1071 rules, amendments to Community Reinvestment Act statutes, and beneficial owner guidelines outlined in Bank Secrecy Act legislation - to name but a few. This potential for change means that legislative progress is still ongoing. Even with a diverse Congress, consumer protection laws have the potential to be enacted and create change. However, despite a divided Congress, there remains hope for cannabis banking legislation to be passed, offering yet another step toward full marijuana legalization. Organizations that do will be well-positioned for success in the years to come.ĭespite Congress's plans after the upcoming mid-term elections, institutions will not likely observe a remarkable financial regulation pass in 2023. It's time to get ahead of the curve and embrace the changes that 2023 brings. The future of compliance is here, and it's up to each financial institution to ensure it's ready for whatever comes. It's an exciting time in the world of compliance, and with the right tools and strategies, financial institutions can all be prepared for what lies ahead. As a result, compliance officers and attorneys must stay up-to-date on regulatory changes, industry standards, and technological advances to manage their compliance programs effectively. 2023 is in full swing now, and the compliance landscape will continue to evolve at an ever-increasing pace.
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