U.S. lawmakers called on regulators Thursday to review potential conflicts of interest involving third-party companies hired to evaluate banks' compliance with lending, capitalization and anti-money laundering rules. Led by Sen. Sherrod Brown (D-OH), members of the Senate Banking Committee criticized senior U.S. regulators for their alleged failure to effectively monitor the consultancies. The hearing followed a March report by the U.S. Government Accountability Office (GAO) critical of the use of consultants prior to a $10 billion settlement with financial institutions for improper foreclosure practices. "In the financial crisis and its aftermath, we have seen case after case of wrongdoing at...
Recent regulatory guidance on banks use of consultants for anti-money laundering remediation work places a renewed focus on the personal connections that can affect the independence of consultants, according to compliance professionals.
Financial consultants are weighing ways to shield their auditors from undue influence by clients in the wake of a monetary settlement by New York State and congressional testimony by federal regulators.
U.S. investigators looking into potential sanctions violations by Standard Chartered Bank will likely expedite their case following allegations by New York officials that the bank's executives permitted compliance violations, say sources.