Banks still reel from compliance costs

From The Australian Business Review –

” The tide might not be turning. Hopes that regulatory and compliance costs at the biggest US banks might begin to retreat after years of rising may be premature.

As several recent stumbles make clear, banks still have more work to do to get right with regulators. Examples abound. The Office of the Comptroller of the Currency recently determined that six US banks, including JPMorgan Chase and Wells Fargo, had ­failed to satisfy a 2011 order to fix foreclosure practices. As a consequence, the banks face ­restrictions on purchases of mortgage-servicing rights.

Bank of America, which got a passing grade from the OCC on its foreclosure fix, was told by the Federal Reserve this year that its “stress test” performance had showed that management wasn’t forward looking enough. BofA has said it will spend $US100 million ($128.7m) to improve its stress-test abilities.

The fact big banks still are running afoul of regulators raises doubts about the idea lenders can quickly cut back on the billions of dollars of additional costs they have incurred since the financial crisis.”

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Technical Glitch at Royal Bank of Scotland: Alarm for Others?

From Zacks –

“Troubles do not seem to end at The Royal Bank of Scotland Group plc (RBS - Snapshot Report). The company, presently under investigation by the U.S. Department of Justice for alleged manipulation of foreign exchange rates, was hit by a massive technical collapse on Jun 16.

Reportedly, failure of the company’s “batch-processing systems” prohibited the ingesting of a payment’s file from a third-party provider. Subsequently, the system failed to process roughly 600,000 direct debit and credit transactions. Additionally, the technological glitch has affected customers not only at Royal Bank of Scotland but also at its subsidiaries – National Westminster Bank Plc (Natwest) and Ulster Bank Ltd. The mishap will be subject to investigations by Financial Conduct Authority (“FCA”) and the Prudential Regulation Authority (“PRA”) in UK.”

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Banks did not do enough to police FIFA transactions, says global agency

From Business Insider –

“A global group of government anti-money-laundering agencies said that financial institutions have not done enough to police suspicious financial activity by officials at soccer’s global governing body FIFA, and cautioned banks to step up scrutiny.

The warning from the Paris-based Financial Action Task Force came in the wake of last month’s indictment by the U.S. of nine current and former FIFA officials and five business executives on a series of corruption charges, including bribery, money laundering and wire fraud.

With the U.S. investigation continuing to widen, and a separate Swiss probe gearing up into whether there was corruption involved in FIFA’s awarding of the hosting rights to Russia and Qatar for the next soccer World Cups in 2018 and 2022, the warning will add to banks’ concern about handling certain soccer accounts for organizations and individuals.”

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