#2023-4, February 17, 2023

Fed Governor Michelle Bowman:  Fed Not Interested in Dictating Strategy for Banks

The Association and members of the Massachusetts banking industry attended the American Bankers Association’s (ABA) Conference for Community Bankers this week in Orlando, FL.  Federal Reserve Governor Michelle Bowman was a keynote participant at the conference with formal prepared remarks as well as an immediate Question & Answer session with Rob Nichols, President and CEO, ABA, following the speech.

In her remarks, Governor Bowman said the role of a banking supervisor is not to replace the role of a bank’s management and board of directors in driving strategy and calculating risk appetite.  The Governor touched on a wide array of topics, including the agency’s regulatory approach on bank mergers, upcoming revisions to capital frameworks, and the importance of tailoring regulation to match a bank’s risk profile.

To read the Governor’s full remarks, please click here.

Member Advocacy on FinCEN Registry Access Proposal and Congressional Outreach

Earlier this week, the Massachusetts Bankers Association signed onto a letter that urged the Financial Crimes Enforcement Network (FinCEN) to withdraw its proposal regarding access to the registry of beneficial ownership information.  The letter expressed serious concerns that the proposal does not permit banks to access beneficial ownership information for broader Customer Due Diligence (CDD) purposes, amongst other criticisms.  MBA joined the letter drafted by the ABA along with 50 other state associations.

Of note, new Chairman of the House Financial Services Committee Patrick McHenry (R – N.C.) and Rep. Blaine Luetkemeyer (R – MO) wrote a letter addressed to the Secretary of Treasury, Janet Yellen, and FinCEN that expressed “serious concerns” with the proposed rulemaking, as well.  Congressmen McHenry and Luetkemeyer indicated the proposal deviates from congressional intent, and wrote, “It is important to restate this new process was never designed to undermine the requirement that financial institutions identify and verify the beneficial owners of their legal entity customers.” The congressmen also expressed concern with future database updates and the communications process to banks and financial institutions.

To read the ABA and state associations letter, please click here.
To read the letter from Chairman McHenry, please click here.

Member Advisory:  OFCCP Deadline Again Extended to Object to Release of Diversity Data

The Office of Federal Contract Compliance Programs (OFCCP) extended the deadline to object to the release of federal contractor’s diversity data to March 3rd.  This matter concerns a Freedom of Information (FOIA) request from Will Evans, a reporter with the Center for Investigative Reporting, for Equal Employment Opportunity (EEO-1) Commission data.  This EEO-1 Type 2 data encompasses age, gender, race/ethnicity, and other information.  The OFCCP is not releasing salary data.  The OFCCP has posted a list of companies it deems federal contractors, dating back to last fall ’22.  The agency encouraged companies to consult its list and then make a decision on objecting or not.

The Association, in conjunction with our national association partner, the American Bankers Association (ABA), is encouraging members to object on the basis that banks are not federal contractors, and the OFCCP is incorrect in its assertion that banks are federal contractors by virtue of their accepting deposit insurance.  That conclusion is disputed by many and within the legal system.

The ABA issued a Staff Analysis on preparing written responses and objections.  ABA Staff Analyses are a direct member benefit to their members, but we have permission to share this document with any affected or concerned MBA members.  Please contact Ben Craigie or Brad Papalardo with any questions about the ABA Staff Analysis on the FOIA Request and Objection.

The OFCCP portal for this objection process has been updated this week, and can be reviewed by clicking here.  Banks and financial institutions may object directly to the OFCCP via email by clicking here.