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We looked at the impact of regulations at financial institutions


Today, we’re releasing findings from a study we conducted on the operational effects of certain regulations for banks, in order to better understand the day-to-day activities they perform to comply with regulations.

We chose a narrow scope for the study, in the expectation that depth over breadth would create findings of lasting value. We looked at ongoing operational activities at seven banks, ranging in asset size from under $1 billion to over $100 billion. We focused on how the banks worked to comply with certain regulations that apply to retail checking accounts, savings accounts, debit cards, and overdraft services. Most of the rules for these products have not changed for several years, which made them good candidates for a study of ongoing operational activities.  The rules we examined in the study are Regulations DD (implementing the Truth in Savings Act), E (Electronic Fund Transfer Act), P (Gramm-Leach-Bliley Act financial privacy requirements), V (Fair Credit Reporting Act), and relevant sections of the Fair Credit Reporting Act.

We interviewed about 200 employees and executives at seven participating banks. The interviews focused on identifying all of the banks’ operational activities and processes to comply with the regulations in question.

The case studies revealed that implementation activities among the seven participants were most concentrated in Operations and Information Technology business functions. Human Resources, Compliance, and Retail functions were also impacted more than other operational functions. The study also documents processes and efforts used to implement several common types of regulation, including authorization rights (e.g., “opt-in” vs. “opt-out”), error resolution requirements, disclosure mandates, and advertising standards.

As part of this foundational study, we built tools for investigating compliance activities, which stakeholders may find useful. Both the tools and the findings in the study improve our understanding of regulatory impacts, and may advance the public’s ability to contribute meaningfully to the regulatory process.

Read the report here.

We welcome opportunities to work with interested parties to build on this research and enrich the body of available evidence in this field. We also hope that industry participants and consumer advocates are able to find ways to use our findings and methods to support their own participation in the regulatory process.

  • Alphavisor

    Technology has come a long way the last few years to help w compliance and other regulatory issues. And, the costs have dropped drastically.

  • Jerry Green

    I searched the CFPB complaint data base and did not find my complaint 120125-000129 submitted 1/25/2012. The review of my complaint was completed, but the review indicated that nothing was performed that I had not already achieved by submitting complaints to Wells Fargo, TicketsNow, the State of Virginia Attorney General’s office, Senator Jim Webb and the OCC, FCC, and FTC all of which rubberstamped the Wells Fargo justification for rejecting my dispute claim with Wells Fargo for allowing a VISA vendor to access my Wells Fargo account to withdraw money for an unauthorized on-line transaction. I offered the same protest that many others had posted on the Internet, but the complaint had no traction. All my action simply demonstrated that banks don’t consider their fiduciary relationship toward account holders: checking, credit card, savings and IRAs to be significant enough to prevent fraudulent access to a customer’s account dispite verifiable evidence of the fraudulence of the on-line VISA transaction. It is apparent that the bank regulations governing this fraudulent practice are written to safeguard the banks at the expense of the bank customer.
    Since my complaint was submitted before Richard Cordray was appointed to office, do I need to resubmit the complaint to see if the CFPB under Richard Cordray’s direction indeed protects the customer instead of continuing to allow discriminatory bank regulations to fleece the public and allow banks to deny their fiduciary responsibilities to their account holders. Banks need to be held accountable for allowing fraudulent VISA vendors to steal from their account holders by hiding behind regulations and practices that discriminate against their account holders by providing fraudulent access and thief from accounts that the bank should be safeguarding.

  • Don Ramon

    So I imagine that you will be doing this same study for Mortgage Lending Regulations?

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