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Regulatory & Risk Management Burden Grows Heavier for U.S. Banks and Credit Unions

“U.S. banks and credit unions are carrying a much heavier regulatory and risk management burden than they were a year ago. That’s according to the results of the latest Regulatory & Risk Management Indicator for the U.S. banking industry issued today by Wolters Kluwer Financial Services, a comprehensive provider of risk management, compliance, finance and audit solutions and services. The Indicator began with a baseline score of 100 in January 2013 when Wolters Kluwer Financial Services surveyed nearly 400 U.S. banks and credit unions. It rose to a score of 121 in January 2014 when the company surveyed approximately the same number of financial institutions. Driving the increased score were mounting pressures expressed by banks and credit unions in all seven of the Indicator’s compliance and risk management factor categories as well as more than $8 billion in new regulatory fines and settlements at the federal level in the last three months of 2013. To calculate its Regulatory & Risk Management Indicator, Wolters Kluwer Financial Services uses 10 main factors, seven of which revolve around direct input from banks and credit unions on their top compliance and risk management concerns and three of which are based on regulatory data the company compiles. In particular, financial institutions participating in the Indicator demonstrated a significantly heightened concern over the Consumer Financial Protection Bureau’s recently finalized Qualified Mortgage, Qualified Residential Mortgage and mortgage servicing requirements and guidelines. In fact, only a third of respondents said they planned to offer non-QM home loans following the implementation of the CFPB’s new rules.”

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