Q2 2024 marked a notable period in financial regulatory actions, with a significant increase in fines from $10.5 million in Q1 to $16.5 million.
According to Corlytics, this uptick in penalties was primarily focused on unfair treatment of customers, signaling a robust regulatory stance on consumer protection across multiple jurisdictions.
Susie Mackenzie, Head of Legal and Regulatory Analysis at Corlytics, summarized the quarter as relatively quiet in terms of the number and amount of fines, yet highlighted the specific attention given to consumer mistreatment by regulators in both the U.S. and Europe.
In the United States, the Consumer Financial Protection Bureau (CFPB) took decisive actions against the Sutherland Group and Chime Financial. The Sutherland Group faced penalties for sending misleading “due and payable” notices that wrongfully suggested borrowers were in default. Chime Financial was reprimanded for not refunding consumers promptly, reflecting a growing impatience with financial institutions that fail to respect consumer rights timely.
Meanwhile, across the Atlantic, the UK’s Financial Conduct Authority (FCA) imposed a fine on HSBC for failing to appropriately treat customers experiencing financial hardships. The FCA also turned its attention to Citigroup Global Markets, imposing fines for deficiencies in trading systems and controls, a move echoed by Germany’s BaFin and the UK’s Prudential Regulation Authority (PRA).
A significant development involved Link Fund Solutions, the manager of the beleaguered Woodford Equity Income Fund. After a thorough investigation, the FCA condemned Link for its mishandling of the fund, which suffered severe liquidity issues leading to substantial investor losses. Although a hefty £50 million fine was justified, it was ultimately not imposed to avoid diminishing the repayment to investors under a separate arrangement.
The regulatory landscape in Q2 2024 highlighted a clear focus on issues such as consumer treatment, conduct of business obligations, and market conduct, with ancillary concerns regarding privacy, cybersecurity, financial crime, and prudential obligations.
These actions underline a comprehensive approach by authorities to ensure fair treatment and transparency within the financial sector, signaling ongoing vigilance and enforcement to protect consumers and maintain market integrity.
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