Daniela O'Leary-Gill

Heads up, bank board members and risk managers! The FDIC is proposing new guidelines on risk management for large banks. This could impact your institution if it has over $10 billion in assets. The guidelines cover areas like board oversight, committee structure, and communication. Guidelines - similar to these - previously issued by the US Department of the Treasury and the Federal Reserve Board have found there way into many industries beyond banking and financial services. Get a head start on compliance by reviewing (or starting!) your ERM Program https://bit.ly/3CSCwXM #riskmanagement #banking #FDIC #ERM

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Heads up, #CreditUnion #Audit & #Risk Professionals! Our Chief Service Officer, Darron Dunn, and Senior Director of Audit Services, Carrie Dudley Helmle, are headed to ACUARP's Annual Conference this month. You can catch us in Chicago at Booth #18 or join Carrie's breakout session on Internal Fraud Investigations on June 19 at 3:30 p.m. Hope to see you there! ASSOCIATION OF CREDIT UNION AUDIT AND RISK PROFESSIONALS (ACUARP) #InternalAudits #AuditManagement #RiskManagement

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New blog post: CECL implementation is creating new norms for banks and credit unions. Learn which model inputs your financial institution should be evaluating to ensure you're maintaining a proactive approach to CECL. Read today: https://lnkd.in/eSHWeF-t Thanks to Zach Englert for sharing! Empyrean Solutions

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Sharing this article by our Director of Research in advance of Bank Director's Audit & Risk Conference next week in Chicago.

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Federal Reserve Board conducted a pilot climate scenario analysis (CSA) exercise in 2023 to learn about large banking organizations’ climate risk-management practices and challenges and to enhance the ability of large banking organizations and supervisors to identify, estimate, monitor, and manage climate-related financial risks. The exercise was conducted with six large bank holding companies: Bank of America; Citi; Goldman Sachs; JPMorgan Chase & Co.; Morgan Stanley; and Wells Fargo. #climatetransition #climateriskmanagement #financialrisks #datachallenges #modelingchallenges #leadership

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The Consumer Financial Protection Bureau has released the first part of its 1033 rule - How it will recognize standards setting organizations. I'll have more to say after I've digested this portion of the rule. For now, from the CFPB's press release: To be recognized by the CFPB, the standard setters must apply to the CFPB and display the following attributes: ◼ Openness: The CFPB will not recognize any standard-setting organization that is rigged in favor of any set of industry players. The process must be open to all interested parties, including public interest groups, app developers, and a broad range of financial firms with a stake in open banking. ◼ Transparency: Procedures must be transparent to participants and publicly available. ◼ Balanced decision-making: The decision-making power to set standards must be balanced across all interested parties, including consumer and other public interest groups. There must also be meaningful representation for large and small commercial entities. No single special interest can dominate the decision-making process. ◼ Consensus: Standards development must proceed by consensus, though not necessarily unanimity. Comments and objections must be considered using fair and impartial processes. ◼ Due process and appeals: The standard-setting body must use documented and publicly available policies and procedures, provide adequate notice of meetings, sufficient time to review drafts and prepare views and objections, access to views and objections of other participants, and a fair and impartial process for resolving conflicting views. An appeals process is also available for the impartial handling of procedural appeals. https://lnkd.in/evJJ9KpC

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The OCC supports National Financial Capability Month and its focus on financial literacy. View the OCC’s Financial Literacy Resource Directory for trusted information consumers and communities can use to make important financial decisions. https://lnkd.in/enT8Kcbd

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In the world of community banking and credit unions, the concept of compliance extends far beyond the mere adherence to laws and regulations. ✔️📑 ✨Creating a culture of compliance is about cultivating an environment where ethical standards and regulatory adherence are woven into the very fabric of the organization. At the heart of this transformative process is leadership. 🚀 📌 Continue reading here: https://hubs.li/Q02ttf-T0 #Compliance #CommunityBanking #RegulatoryCompliance #ComplianceCulture

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On May 9, the Consumer Financial Protection Bureau (CFPB) published a report (Report) on credit card rewards and framed it as an “Issue Spotlight.” The Report identifies four areas of concern with respect to the management and servicing of credit card rewards programs. Each of the four areas relates to “consumers not receiving the rewards they were promised.” The CFPB identified these areas after it reviewed and analyzed over 1,200 consumer complaints “involving credit card rewards programs in 2023…a more than 70 percent increase over pre-pandemic levels.” For additional context and key takeaways, read our recent client alert, “Lessons from the CFPB Credit Card Rewards Report,” authored by partner Andrew Owens, on our website: https://lnkd.in/gwyF5QXS. 

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A noteworthy read: Among other things, this year's Semi-Annual Risk Perspective by the OCC dedicates a special section to firm-wide resilience. The report underscores the critical need for banks to cultivate a robust risk culture that can proactively identify potential risks, particularly in anticipation of stressful periods. Regards Two Fifth Consulting

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Underscoring the importance of managing third-party risks effectively, the Fed Board of Governors, FDIC & OCC recently released a new TPRM guide for community banks. Following in the footsteps of the final interagency guidance on TPRM last summer, the latest guide again highlights the importance of identifying and monitoring risks across the third-party life cycle. TRaiCE can help community banks navigate the complexities of third-party risk management by enhancing existing due diligence processes and providing continuous monitoring of third-party business health.   Want to know more? Check out our case study on how TRaiCE helped a West Coast chartered community bank strengthen its TPRM 👇🏼 https://lnkd.in/d3NSBTbA https://lnkd.in/gs7BNMhn

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After receiving pressure from Senator Durbin to lean in travel-related credit card #rewards, the CFPB and Department of Transportation released a report and held a "hearing" yesterday on the same. The thrust of the CFPB's argument is that travel rewards can be complex and potentially confusing for consumers. In doing so, however, the CFPB focuses on only a segment of the credit card market and discounts the importance of consumer choice and competition. The CFPB's own CARD Act Report explains that “rewards programs remain a key feature of credit cards, affecting consumer product choice and serving as a competitive battleground for issuers.” There are over 4,000 credit card issuers -- and (although the CFPB stopped publishing this number) the average consumer has nearly 4 credit cards. That means that consumers that don't want complex reward cards (e.g., me) don't have to use complex reward cards. We have tons of different options for simple cash-back cards. In contrast, consumers that may enjoy the challenge of finding the right combination of points to maximize their benefits (e.g., basically every bank examiner I've ever met) can choose cards that let them do so. Even after enrolling a consumer, card issuers compete fiercely to be top of wallet for each and every transaction. I've got a card I use at Amazon; a card I use at other stores; a card I use because I like travel lounges; and a card I use because I like getting on flights in the earlier boarding groups. If you're an American Airlines customer, for instance, you can choose AA co-brand cards from MULTIPLE different banks. In an effort to meet Senator Durbin's pressure, the CFPB zeroes in on particular "trees" in its search for a problem with the rewards card market. But it should have taken the time to show the broader forest as well. In particular, the CFPB leans in on reward-related complaints, presumably because Senator Durbin explicitly directed them to in his press release (see the comments). But if the CFPB had shared their math, they would show that credit card rewards were less than 0.0009 of the total complaints they received in 2023. We encourage the Bureau to follow its actual data when prioritizing its efforts, writing its headlines, and shaping its policies. #factsmatter #thisisnthowanyofthisissupposedtowork https://lnkd.in/emTwUnei

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Women make up more than half the total number of employees working in banking but only 7.5% of bank CEOs are women. This imbalance might mean missed opportunities. Jennifer Docherty, CEO of Bank on Women Inc., said “If we don’t have leadership teams that reflect our communities, we’re not able to access markets effectively,” during American Bankers Association Women and Allies Forum. 73% of women are unhappy with their financial services, creating an opportunity for banks to better understand and position themselves. Commitment to change starts with the bank’s board of directors, says Mary Kay Bates, who today is CEO of Bank Midwest, One Place. A gender balanced board is more likely to result in a gender balanced executive team. Tyler Clinch, CEO at First Community Bank of East TN points to the importance of being mentored and sponsored. “My [former] CEO taught me so much, [and] when he was ready to retire, he told the board ‘You need to promote Tyler.’ It was a seamless transition.” Lisa J. Oliver, CEO of The Cooperative Bank of Cape Cod explains that women who are asserting themselves as leaders are sometimes called out as "too aggressive." Today, she embraces a different communication style that invites dialogue. “If I can change the way I speak and be confident in what I’m saying, and believe in my point, but express it in a way that invites dialogue, it’s perceived completely differently,” she says. Sarah Long, CEO of Delaware Bankers Association recommends that women should be proactive and ask for advancement. "And if you keep asking and the answer is ’no,’ you may not be where you should be. You may be in the wrong role, you may be in the wrong organization. It may not be a fit for what you’re looking for.” Kudos to Jennifer Huffman for moderating! You can read more words of wisdom in the attached article.

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The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation collectively issued the "Interagency Guidance on Third-Party Relationships: Risk Management" The OCC’s TPRM Guidance provides a wealth of resources for community banks of all sizes. Click to read some of the key highlights #TPRM #OCC #TPRMGuidance #communitybanks

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New guidance from a trio of regulators designed to aid community banks in their management of third-party relationships is a welcome sign in the industry. Partner and U.S. Head of Community Banking, John Soffronoff tells Banking Dive the guidelines provide a good roadmap for community banks to evaluate their third-party relationships throughout their entire lifecycle. Click on the image below to learn more about what John has to say ⬇️ #Communitybanking #Risk #Financialservices

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This weekend's Five Best in the Wall Street Journal focuses on philanthropy, so it may be a good time to talk a little about what that term means in the UHNW/Family Wealth space. CHARITY VS PHILANTHROPY. What's the difference? I think of charity as a short-term, emotional reaction to a pressing issue (and I don't mean that in a bad way). You encounter a heart-breaking situation - whether through the media or via friends or co-workers - and you want to give some money to help alleviate the problem. To be clear, this type of giving is awesome! But it is in stark contrast to philanthropy, which is longer term, more intentional, and more focused on planning. WHAT KIND OF PLANNING? There are lots of elements here. Some are definitely tax-related, in terms of figuring out the appropriate philanthropic vehicle to accomplish your objectives. I have written about some of these vehicles in the past (Donor Advised Funds, Foundations, and Charitable Gift Annuities are just three types). But many other elements simply relate to donor preference, and I would argue that these elements are MORE important than the tax ones. These elements raise questions such as: -What areas do you feel passionately about? Maybe it's education, or the eradication of a specific disease, or homelessness. You can also get very specific here (education in a certain geographic area? homelessness among a certain population?). -What organizations are best positioned to address the above areas? This includes an analysis of whether a given organization is "effective." Is it really doing what it set out to do? How is its success to be measured? Is the organization well-run from a financial perspective? -Over what timeframe do you want to make philanthropic gifts? And note that there is no right answer here. (I disagree with George Eastman's quote, referenced in the attached article, that "[m]en who leave their money to be distributed by others are pie-faced mutts.") MAKING IT A FAMILY AFFAIR. Wealthy families worry a lot about instilling in their children and grandchildren a sense of both purpose and stewardship; family-centered philanthropy can help on both fronts. For instance, setting up a family foundation can allow younger generations to learn about investing and money management while also letting them pursue their own philanthropic interests. ***** On a related note: philanthropic planning is also a key component of Fifth Third's Family Wealth offering. To that end, watch this space -- a big announcement is coming in the next couple of weeks! #philanthropy #charity #philanthropicplanning

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“Governance: A Blueprint for Financial Institution Leaders” is coming next week! CXOs, board members, and other leaders won’t want to miss this webinar for insights on: 🔸 Regulatory expectations 🔸 Governance roles & responsibilities 🔸 Risk mitigation 🔸 Aligning with strategic goals Register here: https://lnkd.in/gdR_nMJe #governance #webinar #financialinstitutions

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Republic First Bank's collapse underscores the importance of #governance & performance in #banking. At #BDAudit24, experts share insights on navigating risk, #regulation & #deposit strategy. https://lnkd.in/eKByh5eC Explore more resources from Bank Director on these critical topics: https://lnkd.in/ek7tut58 https://lnkd.in/es2A42mX

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