As President Trump continues to make key appointments and address the policies of the previous administration, many in banking anxiously await the new administration’s tack on financial regulations. While President Trump’s pro-business campaign promised deregulation encouraging financial growth, it is unlikely Congress will be able to unify behind many measures that would ease regulations on the financial industry. With no real indication of how enforcement of these regulations will look under the new appointments to head the FDIC and OCC, many directors and officers in the financial sector may do well to keep their civil monetary penalty insurance.
With civil monetary penalties (CMPs) assessed against individuals averaging over $79,000 in 2015, many are asking for parity in a regulatory environment where small regional banks have been forced to sell, or have chosen the route of de-risking leaving large sectors of businesses and the independently wealthy unable to find banking services. Many bank directors and officers have chosen to leave their institutions in light of the personal liability exposure associated with the difficult regulatory environment.
Civil monetary penalty insurance can offer some financial insulation from missteps that are bound to occur in the veritable minefield of banking regulations. While many look to the next four years for some relief, it is difficult to forecast what, if any, easing of regulations will occur. For now, the only option may be to prepare for the worst and hope for the best.