Community Banker Alert
To: PACB Members
From: Frank A. Pinto, President/CEO
Subject: Federal Reserve New Policy Announcement
Date: September 16, 2009
The Federal Reserve has announced a policy for conducting consumer compliance supervision of nonbank subsidiaries of bank holding companies and foreign banking organizations.
The Federal Reserve's new policy is designed to enhance the Fed's understanding of the consumer compliance risk profile of nonbank subsidiaries and to guide the Federal Reserve's supervisory activities for such entities with respect to their compliance with the consumer protection laws and regulations the Federal Reserve has authority to enforce.
The Federal Reserve's supervisory activities may include continuous monitoring, discovery reviews, target or full-scope examinations with transaction testing, as appropriate, and the investigation of consumer complaints. In some instances, the Federal Reserve may conduct on-site discovery reviews to inform the consumer compliance risk assessment. Consumer compliance examinations will result in ratings based on the Consumer Compliance Risk Management rating system, the results of which will be transmitted to the nonbank subsidiary and the bank holding company or foreign banking organization.
A copy of the related Press Release is available at: http://federalreserve.gov/newsevents/press/bcreg/20090915a.htm.
A copy of the related Policy Letter can be obtained online at: http://federalreserve.gov/boarddocs/caletters/2009/0908/caltr0908.htm.