The impact of the Obama administration on the financial services industry will likely be new rules, additional regulations and increased enforcement actions, according to experts at one compliance firm.
Under the current administration, financial regulators have gained a sense of empowerment, Wolters Kluwer Financial Services said today in a statement. But that empowerment will likely translate into “a broad array of new rules and agencies, as well as stepped-up enforcement actions in 2010.”
MortgageDaily.com tracked 263 regulatory actions against financial institutions during the second quarter, up from 177 first-quarter actions.
The changes are already taking place, with new legislation tied to regulatory reform being debated by Congress, the Minneapolis-based firm said.
“There is a race in Washington D.C. right now,” Wolters executive Edward Kramer said in the statement. “It’s a race by legislators and regulators to see who can do more to protect the American consumer.”
Kramer pointed to the proposed Consumer Financial Protection Agency, which would have significant authority over community banks, regional banks and credit unions. The proposed agency could even preempt the financial institution’s primary regulator.
Wolters also noted that regulators are conducting more stringent exams. They are additionally teaming up with the Federal Trade Commission.
Senior Wolters attorney Ted Dreyer highlighted a new model privacy notice expected be ready in 2010 that spells out how an institution is protecting personal information and how to opt-out of some information sharing.
The weak economy is also likely to lead many institutions to take more risk-prevention steps.
Kevin Byrne, regulatory consultant at the mortgage compliance firm, explained that rising employee fraud against financial institutions has increased as a result of the ailing economy.
