July 2, 2020

It’s not surprising that our current coronavirus pandemic has compelled some financial institutions to reduce staff, furlough or reassign staff at a time when applications for government relief programs are flooding in, increasing banks’ compliance risks, the Office of the Comptroller of the Currency (OCC) recently stated.

On Monday the OCC, which supervises and regulates banks and savings associations, said in a report that it would consider the impact of pandemic-related challenges on compliance as it conducts examinations and weighs enforcement.

The current pandemic could create challenges for many financial institutions to stand by a host of compliance policies, procedures and requirements ranging from data privacy and fair lending to efforts to combat AML, the OCC said.

It has been seen that many banks participating in the federal stimulus program for small businesses have expressed concerns that they could end up in regulatory or legal cross-hairs down the road for approving substandard loans because they let slide certain vital due diligence in an effort to disburse stimulus funds more quickly to businesses pummeled by the pandemic.  Some, however, are doing more due diligence than the stimulus program requires.

Short application processing needs for relief programs such as the Cares Act, which included direct aid ranging from forgivable business loans to cash payments for households, hospitals, cities and states, only elevate the potential risk especially if understaffed banks can’t process requests promptly, the OCC said in the report.  The applications quantity and required application-processing speed could lead to compliance shortcuts, according to the report.

Author: Tom J. Canova, Co-Founder, CMO, Modevity

KYC Support / Customer Due Diligence


#Compliance, #AML, #KYC, #OCC, #FinacialServices, #Banks, #SavignsandLoans, #ComptrolleroftheCurrency, #BankingFraud,#BankingRegulators, #BankingFraud


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July 2, 2020