Compliance Resources to Help you Stay Current

The Flood Disaster Protection Act (FDPA) was enacted in 1973 by Congress in order to protect homes which are most vulnerable. Congress also created The National Flood Insurance Program (NFIP) in 1968 through the National Flood Insurance Act of 1968. The program enables property owners in participating communities to purchase insurance protection from the government against losses from flooding.

RESPA is a (Housing and Urban Development) HUD consumer protection statute designed to help homebuyers be better shoppers in the home buying process, and is enforced by HUD. It covers loans secured with a mortgage placed on a one-to-four family residential property. RESPA was originally passed by U.S Congress in 1974. The latest RESPA regulations were published on November 17, 2008 and are scheduled to go into effect on January 1, 2010.

The Fair Credit Reporting Act (FCRA), Public Law No. 91-508, was enacted in 1970 to promote accuracy, fairness, and the privacy of personal information assembled by Credit Reporting Agencies (CRAs). Recent amendments to the Act expanded an individual’s rights and placed additional requirements on CRAs. Businesses that supply information about individuals to CRAs and those that use consumer reports also have new responsibilities under the law.

The Gramm–Leach–Bliley Act (GLB), also known as the Financial Services Modernization Act of 1999, was signed into law by President Bill Clinton and it repealed part of the Glass–Steagall Act of 1933. The Act opened up the market among banking, securities and insurance companies. It requires financial institutions – companies that offer consumers financial products or services like loans, financial or investment advice, or insurance – to explain their information-sharing practices to their customers and to safeguard sensitive data.

Purpose Served by the Act

The Home Mortgage Disclosure Act (HMDA), enacted by the U.S Congress in 1975 and implemented by the Federal Reserve Board's Regulation C, requires depository institutions and certain for-profit, non-depository institutions to collect, report to federal agencies, and disclose to the public data about:

Part 229 furnishes, amongst other things, standard instructions for filing forms under Securities Act of 1933. Part 229 is part of Chapter II that deals with the Securities & Exchange Commission. This chapter appears under Title 17 of the Electronic Code of Federal Regulations that deals with Commodity and Securities Exchanges. The following Table furnishes the requirements of the important items under Part 229:

The Economic Sanction Enforcement Guideline is a publication of the U.S. Treasury Department's Office of The Foreign Asset Control ("OFAC"). The OFAC uses these Guidelines to decide the enforcement for violations of U.S. economic sanction programs. In a nutshell these Guidelines elaborate on OFAC’s enforcement policy and procedures to enforce existing substantive rules.

On Jan 14, 2011, the Securities & Exchange Commission (SEC) charged an upstate New York-based penny stock promoter Christopher Wheeler and his affiliated website OTCStockExchange.com with fraud for failing to disclose that he was paid by certain issuers to promote their stock. Simultaneously he liquidated millions of his own shares and profited by at least USD 2.95 million.  

According to SEC, Wheeler received compensation at various times in 2007 and 2008 to promote several thinly-traded penny stocks on his website.  The website claimed it had compiled a long list of successful stock picks which afforded an opportunity to investors to make a fortune.  Wheeler featured the issuers’ stock on his website, recommending that investors purchase the securities.  He posted lofty price predictions for the stock without any reasonable basis.  The promotional efforts often led to dramatic but temporary increases in the volume of shares traded and the price of the issuers’ securities.  Once the prices went up, Wheeler dumped shares from his personal brokerage account onto the market.  

Regulations

Wheeler and OTCStockExchange.com concealed from investors that Wheeler was paid to hype the very stocks that he was unloading from his own account.  Securities laws require stock promoters to disclose their compensation so investors can make informed decisions about the credibility of the information they are being provided. Wheeler’s failure to disclose that he was paid by certain issuers to promote their stock thus violated the securities laws.  

The SEC's complaint seeks a final judgment permanently enjoining Wheeler and OTCStockExchange.com from future violations of the federal securities laws, and an order permanently barring Wheeler from participating in any offering of penny stock, requiring the defendants to pay financial penalties, and requiring the defendants and North Coast to disgorge all ill-gotten gains plus prejudgment interest.

Source:

http://www.sec.gov/news/press/2011/2011-12.htm

The Public Company Accounting Oversight Board (PCAOB) released a regulatory compliance program overseeing the audits of brokers and dealers. This is its proposed interim inspection program. During the meeting held just before the release, the PCAOB initiated the regulation of audit securities of brokers and dealers. The meeting also addressed the issue of the support fee to fund that board’s extended broker-dealer oversight responsibility.

The Australia Greens Party has promulgated laws which have enforced restraints on the ability of the nation’s biggest banks to increase the interest rates on mortgages.
 

Citigroup has decided to repay the government provided bailout money. This decision to repay has risen from the fact that the government had imposed stringent conditions on the payout. Citigroup is looking to go about this payment in two phases. It will raise investor money worth $20 million and gradually the Treasury Department will sell its stake with Citigroup worth $25 million over the next year. Wells Fargo is another of the large bank which has decided to repay the federal rescue money. All of the nine banks which recieved federal bailout funds have repaid their fed loans.

During the past few years, the global finance industry has seen an unprecedented surge in regulatory requirements, forcing a greater focus on the way organizations manage risk, especially financial risk. Regulators and credit rating agencies are demanding more transparency. At the same time, stakeholders and senior management are pressing for enhanced business value. Most firms have typically created fragmented and silo-based risk management and control programs. These siloed risk management programs are, however, not scalable; the technology supporting them is insufficient; and they do not merge into a common framework.