Chief compliance officers and senior managers of New York-chartered financial institutions have begun the process of complying with the state's new transaction-screening rule amid persistent concerns that they could be held individually responsible for potential violations.
State-chartered financial institutions in New York are struggling to identify who among their senior-level employees should attest to the efficacy of their compliance programs under a regulation taking effect in January.
Amid questions from federal officials and criticism from bank lobbyists, New York regulators issued a final rule Thursday largely scrapping initial plans to hold senior compliance executives legally responsible for compliance lapses.
Federal officials on Monday voiced concerns about New York's plans to finalize a rule that would hold top compliance officers liable for regulatory lapses at their financial institutions.
A New York state proposal to hold bank executives liable for compliance lapses could prove stricter than the federal law that inspired it, and prompt senior-level talent to pursue other careers, say critics.
An expected New York State regulatory proposal is likely to raise questions on how much senior bank executives can and should know about their anti-money laundering programs, according to compliance experts.
Virtual currency businesses operating in New York may soon have to obtain special licenses and establish anti-money laundering, cyber security and consumer protection programs, the state's banking regulator announced Thursday.