In a letter to Treasury Secretary Steven Mnuchin yesterday, a group of bipartisan lawmakers urged Treasury to prioritize policy changes that would increase coordination between regulatory agencies conducting bank examinations to help reduce the compliance burden on financial institutions.
“Financial holding companies and their affiliates are annually subject to a number of different examinations, including capital adequacy, liquidity, cybersecurity, vendor management, the Volcker Rule, Bank Secrecy Act/Anti-Money Laundering requirements, and business continuity planning,” the lawmakers wrote. “Institutions subject to multiple exams on the same issue results in a never-ending cycle of examinations, which diverts critical resources and detracts from the real work of the institution to serve its customers, develop innovative ideas and defend against cyberattacks.”
In its recent report on financial regulation, Treasury raised similar concerns about the examination process and made recommendations on how it could be better streamlined. The lawmakers said that they intend to evaluate the department’s recommendation for assigning a lead regulator on issues where agencies have conflicting or overlapping jurisdiction, adding that the agencies themselves should also take action to address the issue. They also welcomed Treasury’s recommendation for increased coordination, transparency and accountability between the regulatory agencies.