How Standard Chartered changes the rules for foreign banks

Author: | Published: 4 Sep 2012

The New York Department of Financial Services’ (DFS) August 6 order against the New York subsidiary of Standard Chartered and subsequent $340 million settlement is thought to have changed the rules of regulatory compliance for foreign banks.

The order has left foreign banks uncertain of what to think now that state-level regulators have a roadmap for pursuing claims resulting from attempts to circumvent federal laws.

“This tells me that the state regulators apparently are not working in concert with federal regulators,” Venable partner Edward Wilson said. “It means the foreign banks have to be more careful.”

Wilson added that foreign banks’ liability can now come from a state regulator to which they may not have previously paid much attention.

The DFS order was based on alleged violations of New York state banking laws requiring accurate reporting of transaction originators and beneficiaries, which were either...