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Lindsay Henry is a senior counsel in Dykema’s Financial Industry Group. Her experience includes counseling state and national banks, fintech companies and a variety of other financial institutions and financial services providers on regulatory issues and compliance, consumer credit transactions, deposit products, bank mergers and acquisitions, licensing, regulatory applications, technology contracting, payment processing, fair lending and privacy matters, digital banking, mortgage lending and servicing, stored value products and marketplace lending arrangements.

On February 7, 2022, Acting Chairman Martin J. Gruenberg released a statement outlining the FDIC’s 2022 priorities. He also recognized the contributions of former Chairman Jelena McWilliams, who resigned on February 4, 2022.

The FDIC has been the recent subject of uncommon public infighting, as the FDIC board faces internal and external turmoil related to political and intra-agency pressures brought into focus due to the change in presidential administrations. Many on the board support a more pro-active and progressive approach, while Ms. McWilliams favored a more conservative style of oversight. With her resignation, as well as the recent FDIC, Department of Justice (DOJ), and Financial Crimes Enforcement Network actions related to bank oversight, it appears the activist wing has succeeded for now.

Entities operating in the financial services industry should pay close attention to the agenda, and specifically to two of these priorities in particular:Continue Reading FDIC Announces 2022 Priorities in the Wake of Chairman Jelena McWilliams Resignation; Financial Services Entities Should Take Note of FDIC Focus on Bank Mergers and Crypto

On August 11, 2021, the Federal Financial Institutions Examination Council (the “FFIEC”) issued new guidance on risk management principles for access to and authentication of electronic funds transfers for the first time in over a decade, titled Authentication and Access to Financial Institution Services and Systems (the “New Guidance”).[1] The New Guidance effectively replaces the FFIEC’s prior guidance on this topic, including its original guidance issued in 2005, Authentication in an Internet Banking Environment (the “Original Guidance”), and the supplement issued in 2011 in response to increased fraud in Internet-based financial transactions (the “Supplement,”[2] and together with the Original Guidance, the “Guidance”). The Guidance was intended to set regulatory expectations for financial institutions offering Internet-based financial services to both commercial and consumer customers.
Continue Reading An Enhanced Standard of Commercial Reasonableness for Security Procedures? The FFIEC Updates Its Authentication Guidance for Internet-Based Financial Services

We regularly work with financial institutions to navigate the challenges of implementing, maintaining, and using security procedures for commercial customers’ use of treasury management services. Security procedures are an integral part of the relationship between the financial institution and its commercial customers. Financial institutions offer (and frequently require) commercial customers to use the institution’s security procedures, which are agreed to be commercially reasonable, to originate payment orders (e.g., wire transfers and ACH Entries) from the customers’ accounts.

Issues often arise when one or more of a customer’s authorized users is not able to use his standard security procedures to access a financial institution’s physical or electronic payments systems to either originate or confirm a payment order. Due to the COVID-19 outbreak and concern over the implementation of preventative measures, including more companies asking or requiring employees to work remotely, financial institutions should consider which customers may need to update, amend or supplement the ways that its customers can make payments, whether this be through adding authorized users or implementing alternative methods to send payment orders.
Continue Reading Considerations for Financial Institutions Regarding Security Procedures for a Remote Workforce