RFS - Financial Industry Oversight Lesson

Financial Industry Oversight

Banking is among the most regulated industries in the U.S. Banks are regulated by state governments as well as several federal agencies. Some of the agencies that are given oversight of the financial industry include:

  • Federal Reserve - the Fed supervises and regulates a variety of financial institutions in order to make sure banks handle customer money safely and fairly.
  • Office of the Comptroller of the Currency - the OCC is the primary regulator of banks chartered under the National Bank Act.
  • Federal Trade Commission - the FTC protects consumer information and privacy. It works to make sure sensitive bank customer information is safe.
  • Federal Deposit Insurance Corporation - the FDIC insures deposits in insured banks and works to make sure these banks handle the funds safely and according to regulations.
  • Office of Thrift Supervision - the OTS supervises and regulates savings and loan associations across the country.
  • Securities and Exchange Commission - the SEC's mission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
  • Financial Industry Regulatory Authority - FINRA is dedicated to investor protection and market integrity through effective and efficient regulation of the securities industry.
  • Office of the State Insurance Commissioner - part of the U.S. insurance regulatory framework which is a highly coordinated state-based national system designed to protect policyholders and to serve the greater public interest through the effective regulation of the U.S. insurance marketplace.

Banking Regulations

While Glass-Steagall and Gramm-Leach-Bliley were major legislation affecting banking, a number of other banking laws have been passed. In the timeline below, we will list some of those laws.

While online banking is subject to the same laws as brick and mortar banks, specific issues arise from the use of the internet as a banking site. As the internet removes the geographic boundaries of the bank, the question arises as to who can regulate the bank. Without regulation, practices such as money laundering and phishing occur more frequently.

In 2001, the U. S. Patriot Act was created to prevent the use of the U.S. financial system for personal gain by corrupt foreign officials. Companion legislation to the Bank Secrecy Act of 1970, the Patriot Act, was further amended in 2010 to provide for additional information sharing between financial institutions and government agencies to deter money laundering and terrorist activity. Review the links below to learn more about the U. S. Patriot Act and its provisions.

Self-Assessment

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