What were state banking regulators focused on last year? A new report from the Conference of State Bank Supervisors (CSBS) reveals that state regulators "increased coordination and collaboration between state regulators and other stakeholders, fostered and developed research and analytical tools, developed innovative solutions for a rapidly changing financial services industry, and provided education and training for examiners and supervisors."
The report touts the CSBS's 2015 accomplishments. Composed of banking regulators from all 50 states, as well as the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands, members of the CSBS supervise almost 4,850 state-chartered financial institutions along with other nonbank financial services providers.
Over the course of 2015, CSBS advocated for legislation supporting community banks that was approved by Congress. For example, the group pushed for the increase from $500 million to $1 billion as the threshold for well-capitalized banks eligible for an 18-month exam cycle. A provision requiring at least one Federal Reserve Governor to have demonstrated primary community bank experience, and a measure that allowed community banks to more easily qualify for rural or underserved designations pursuant to the Ability to Pay rule of the Consumer Financial Protection Bureau (CFPB).
The group focused on improving supervisory processes for both bank and non-depository institutions as well as education and training. To that end, CSBS collaborated with the Federal Financial Institutions Examination Council (FFIEC) for a line-item review of the Call Report to find opportunities to reduce the reporting burden for community banks and conducted case studies to evaluate the impact of community banks on the local economy.
Efforts on the non-depository supervision front included the establishment of a new committee to encourage policy discussions with other non-depository regulators and a Model Framework for State Regulation of Certain Virtual Currency Activities.
The Multi-State Mortgage Committee continued its work on mortgage exams while the Multi-State Money Service Businesses Examination Task Force executed 68 joint exams with the CFPB and Financial Crimes Enforcement Network (FinCEN) of money service businesses licensed in more than 40 states.
Working on a "major issue facing the financial services industry," CSBS launched a new initiative in 2015. The Executive Leadership of Cybersecurity is meant to drive home the message to banks that cybersecurity is "more than a 'back office' issue, but an executive issue that requires CEO and Board level attention," the organization said.
To read the CSBS 2015 Annual Report, click here.
Why it matters
"As the financial services industry continues its rapid progress and change, CSBS and state regulators remain committed to being at the forefront of supervision," CSBS Chairman and Commissioner of Banks at the Massachusetts Division of Banks Chairman David J. Cotney said in a press release about the report. "I look forward to CSBS continuing its work in the coming years. We've made significant progress in 2015, and there is still much more to do in 2016 and beyond."