A New York regulator's plan to hold senior bankers legally responsible for compliance failures conflicts with federal rules and threatens to exacerbate an industry trend to shed risk-fraught accounts wholesale, lobbying groups said. Under the proposal, chief compliance officers (CCOs) or their "functional equivalent" must certify each year to the New York State Department of Financial Services (NYSDFS) that their institutions' programs for detecting, preventing and reporting illicit funds transfers meet 20 minimum standards. Bankers who submit an "incorrect or false" certification could face criminal prosecution, the agency said. The state's proposal could add "disparate and contradictory requirements" to a...
Chief compliance officers and senior managers of New York-chartered financial institutions have begun the process of complying with the state's new transaction-screening rule amid persistent concerns that they could be held individually responsible for potential violations.
State-chartered financial institutions in New York are struggling to identify who among their senior-level employees should attest to the efficacy of their compliance programs under a regulation taking effect in January.
Amid questions from federal officials and criticism from bank lobbyists, New York regulators issued a final rule Thursday largely scrapping initial plans to hold senior compliance executives legally responsible for compliance lapses.
A New York state proposal to hold bank executives liable for compliance lapses could prove stricter than the federal law that inspired it, and prompt senior-level talent to pursue other careers, say critics.
An expected New York State regulatory proposal is likely to raise questions on how much senior bank executives can and should know about their anti-money laundering programs, according to compliance experts.
Virtual currency businesses operating in New York may soon have to obtain special licenses and establish anti-money laundering, cyber security and consumer protection programs, the state's banking regulator announced Thursday.