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The Conference of State Bank Supervisors (CSBS) has announced the nationwide roll-out of the State Examination System (SES), the first nationwide platform to bring state regulators and companies into the same technology space for supervision, fostering greater transparency and collaboration. Through SES, state regulators will be able to enhance supervisory oversight of fintechs and other nonbanks while making the process more efficient for regulators and companies alike.

SES is developed and operated by the State Regulatory Register (SRR), a SCBS subsidiary that also operates the Nationwide Multistate Licensing System (NMLS). SES is designed to:

• Support networked supervision among state regulators
• Standardize workflow, business rules and technology across states
• Facilitate secure collaboration between licensees and their regulators
• Help examiners focus more attention on higher-risk cases
• Move state supervision towards more multistate exams and fewer single-state efforts

In a presentation at the ABA Conference for Community Bankers, Federal Reserve Board Governor Michelle W. Bowman discussed the interaction between innovation and regulation for community banks. Ms Bowman discussed clearing a path for innovation, and creating the right regulatory environment. Governor Bowman concluded, “I believe that we can create a regulatory environment in which community banks are empowered to innovate, in which supervisors leverage their own knowledge to help banks understand what to look for in a service provider. It's a regulatory environment in which guidance is clear and supervisors are appropriately flexible, and due diligence and third-party evaluations are appropriately scaled. Every bank must decide for itself whether and how to adapt their business models to new technologies, but supervisors and regulators can facilitate innovation at a few key milestones on that path forward.”

Treasury has issued the 2020 National Strategy for Combating Terrorist and Other Illicit Financing, which provides a roadmap to modernize the U.S. anti-money laundering/countering the financing of terrorism (AML/CFT) regime to make it more effective and efficient. The strategy identifies key threats, vulnerabilities, and priorities for disrupting and preventing illicit finance activities within and transiting the U.S. financial system, and builds upon and updates the 2018 National Strategy for Combating Terrorist and Other Illicit Financing, pursuant to the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA).

The OCC has announced it will host two workshops at the Embassy Suites by Hilton in New Orleans, March 3-4, for directors of national community banks and federal savings associations.

• The Credit Risk workshop on March 3 focuses on credit risk within the loan portfolio, such as identifying trends and recognizing problems. The workshop also covers the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change.
• The Operational Risk workshop on March 4 focuses on the key components of operational risk—people, processes, and systems. The workshop also covers governance, third-party risk, vendor management, and cybersecurity.

The fee for each workshop is $99, and each session is limited to 35 registrants. Online registration is available.

The Clearing House has announced it will increase the general transaction value limit on its RTP® (real time payments) network from $25,000 to $100,000, effective February 1, 2020. Under the new rules, depository institutions on the RTP network are required to accept payments up to $100,000. However, individual participants may set a lower value limit for payments they originate.

In response to the heightened cybersecurity risk facing the financial services industry and other critical business sectors, the FDIC and the OCC have issued an interagency statement on heightened cybersecurity risk. The statement focuses on risk management principles that can reduce the risk of a cyber-attack and minimize business disruptions. FIL-3-2020 has also been issued by the FDIC.

The Department of Homeland Security has indicated there is heightened risk of cyber-attack against U.S. targets because of increased geopolitical tension. The current environment provides an opportunity for banks to re-evaluate the adequacy of safeguards to protect against various types of cybersecurity risk. The Heightened Cybersecurity Risk document highlights principles previously articulated by the FDIC and other banking regulators including: business resilience, authentication, system configuration, security tool, data protection, and employee training. Banks can apply cybersecurity risk management principles and risk mitigation techniques to reduce the risk of a cyber attack's success and minimize the negative impacts of a disruptive and destructive cyber attack

On January 9, the Financial Action Task Force held a supervisor’s forum in Paris, France, to discuss how to supervise and regulate virtual assets and virtual asset service providers (VASPs). This meeting was the first opportunity for supervisors to discuss how to implement these new measures since the FATF finalized them in June 2019. Supervisors play an important role in ensuring that regulated entities, such as banks and financial institutions, implement the FATF’s standards to detect and prevent money laundering and terrorist financing. The FATF Supervisors’ Forum is an initiative of the Chinese Presidency of FATF to promote more effective supervision by national authorities.

The Federal Reserve System has published its third 2019 issue of Consumer Compliance Outlook, which features an article on the fair lending implications of targeted internet marketing.

The Consumer Financial Protection Bureau and the Office of the Utah Attorney General have announced the first joint office hours to be held as part of the American Consumer Financial Innovation Network (ACFIN). Joint office hours, held as part of ACFIN, provide innovators with the opportunity to discuss issues such as financial technology, innovative products or services, regulatory sandboxes, no action letters, and other matters related to financial innovation with officials from the CFPB and state partners. The joint office hours will be held on January 30, 2020, in Salt Lake City, Utah.

Requests for a meeting during the office hours session must be emailed to officeofinnovation@cfpb.gov by January 17, describing the topic(s) for discussion during the meeting.

The National Credit Union Administration has announced it is has sent its annual letter to credit unions listing supervisory priorities as well as updates on regulations and the agency’s modernization programs. The priorities listed were:

• Bank Secrecy Act and anti-money-laundering compliance;
• Consumer financial protection;
• Cybersecurity;
• Credit risk and liquidity risk;
• Continued monitoring of the implementation of the new standard for current expected credit losses, or CECL; and
• Planning for the transition from the London Interbank Offered Rate, or LIBOR, as the benchmark for setting interest rates.