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US enforcement rollback on G-SIBs signals tolerance of ‘bad behavior’
📝Editor’s Note
This week brings a striking shift: U.S. regulators appear to be softening enforcement against large global banks. How might this recalibration affect compliance teams in financial institutions—and what should smaller players infer from this change?
📊 Featured Analysis
US enforcement rollback on G-SIBs signals tolerance of ‘bad behavior’
U.S. authorities are stepping back from long-running penalties and consent orders against major global systemically important banks (G-SIBs). Regulators including the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) have ceased enforcement actions against several high-profile banks such as Citibank, Bank of America and Wells Fargo. At the same time, the Federal Reserve is planning major cuts—up to 30 per cent—in its regulatory staffing.
For compliance professionals this signals a potential inflection point. Institutions must reconsider whether long-standing enforcement norms remain reliable. The risk environment may shift: if major banks absorb relaxed scrutiny, smaller institutions may face pressure to step up their own controls to avoid becoming the next enforcement target. In practical terms, firms should reassess the strength of their remedial action programmes, internal escalation protocols and supervisory relationships. Being audit-ready is more important than ever—even if enforcement appears less aggressive
Key takeaway: A less forceful regulatory posture by large-bank supervisors creates both risk and opportunity for compliance teams: those who react proactively will gain advantage.
✅ Best Practice Spotlight
Reassessing Compliance Discipline in a Softer Enforcement Climate
Regularly review your institution’s historical enforcement records (consent orders, penalties) and adjust your “lessons learned” logs accordingly.
Conduct a gap analysis of supervisory staffing changes and how those might affect oversight dynamics.
Enhance your internal escalation mechanisms so that potential supervision signals (e.g., being named in adverse media or regulatory press) trigger timely response.
Treat enforcement softening as a stress-test scenario: simulate what happens if you lose a major consent-order mitigation pathway.
Reinforce documentation protocols: clear trails of risk acceptance decisions, remediation timetables and internal approvals will remain a defence even if external enforcement slows.
🛠️ Tool of the Week
Compliance for Start-ups
This article explains how start-ups can build lean yet effective compliance programs using Vanta
Key Highlights
Use automation to monitor foundational controls (for example: user access, encryption, patching) rather than manual spreadsheets.
Integrate compliance tasks with existing tech-stack components rather than creating parallel processes, keeping costs down.
Start early: delaying compliance efforts invites “catch-up risk” — costly rework, lost investor trust, deferred audits.
This is particularly useful for start-ups but also for larger firms seeking to simplify certain segments of their compliance burden.
🌟 Leader Spotlight
Miloer Exchange is all set for its Money Services Business (MSB)
Miloer Exchange has secured registration as a Money Services Business (MSB) with the Financial Crimes Enforcement Network (FinCEN) in the U.S., marking a significant compliance milestone. The MSB registration commits the platform to advanced AML/KYC controls, transaction monitoring and audit-trail requirements. For companies in digital assets or cross-border payments, this step signals readiness for institutional-grade markets and highlights that regulatory alignment remains a critical enabler of expansion.
📚 Recommended Reading
🗳️ Your Compliance Take
Results of Tuesday’s poll. A good number of respondents believe they are ready to comply immediately,
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