US regulators to focus on consumer protection, says survey
A new impact report from Aite Group finds US regulators are set to focus on consumer protection.
BOSTON – Concentration by US state regulators on consumer protection is set to increase compliance demands for financial services firms, according to a new report by the Aite Group, an independent research and consultancy firm.
The report, entitled ‘Looking Ahead: An Analysis of Pending State Legislation and Financial Institutions’, looks at US state legislature level, where there are more than 176 pending bills focusing on mortgages, 183 looking into banking practices and 233 looking into the problem of identity theft.
There are more than 1,300 bills relating to financial service providers, and they could potentially affect banks, credit unions and other firms offering services such as deposit accounts, lending, credit cards and mortgages.
The report expects between 5% and 20% of the bills to pass, and for consumer protection issues to remain on the agenda.
New York was the standout leader with 284 pending bills. Some 32% of those relate to mortgages, 26% to banking operations and 16% to credit cards.
Analysis of US regulation is easiest at the federal level, where a limited number of bodies with highly developed infrastructures, but the sheer volume and relative independence of legislation at state level makes for a more daunting task.
Eva Weber, Aite Group analyst and author of the report, says: “While concerns over the current economic climate and the possibility that subprime mortgage lending will lead the country into recession have resulted in sabre rattling by the US Congress and federal regulators, several states are already putting laws in place to protect their citizens.”
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