Fed Releases Review of Silicon Valley Bank Failure

The Federal Reserve released its review of the failure of Silicon Valley Bank. The four key takeaways are: 1. Silicon Valley Bank’s board of directors and management failed to manage their risks. 2. Supervisors did not fully appreciate the extent of the vulnerabilities as Silicon Valley Bank grew in size and complexity. 3. When supervisors did identify vulnerabilities, they did not take sufficient steps to ensure that Silicon Valley Bank fixed those problems quickly enough. 4. The Board’s tailoring approach in response to the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) and a shift in the stance of supervisory policy impeded effective supervision by reducing standards, increasing complexity, and promoting a less assertive supervisory approach. 

Regulators Issue Joint Statement on Bias in Automated Systems

The CFPB, along with the DOJ, EEOC & FTC, published a Joint Statement on the enforcement efforts against discrimination and bias in automated systems. The Statement says that while automated systems rely on vast amounts of data to find patterns or correlations, they may also have the potential to produce outcomes that result in unlawful discrimination. 

CFPB Issues Opinion on Time Barred Debt

The CFPB issued an Advisory Opinion, Fair Debt Collection Practices Act (Regulation F); Time-Barred Debt, which clarifies that a covered debt collector who brings or threatens to bring a state court foreclosure action to collect a time-barred mortgage debt may violate the Fair Debt Collection Practices Act and its implementing regulation. The CFPB says that the advisory opinion was issued in light of a series of actions by debt collectors attempting to foreclose on silent second mortgages, also known as zombie mortgages, that consumers thought were satisfied long ago and that may be unenforceable in court.

FDIC Issues 11 Orders in March 2023

The FDIC issued 11 orders in March 2023. The administrative enforcement actions in those orders consisted of four prohibition orders, three orders terminating deposit insurance, two consent orders, one order to pay civil money penalty (CMP), and one order terminating consent order.