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Classified in: Science and technology
Subject: Economic News/Analysis

Wolters Kluwer Expert Points to Potential Risks 2023 Bank Failures Pose for Non-bank Lenders


After this spring's rapid collapse of Silicon Valley Bank, Signature Bank and First Republic Bank, the banking industry is closely measuring the possible regulatory after-effects. Those impacts may include closer regulatory scrutiny for both traditional and non-bank lenders, according to Wolters Kluwer Compliance Solutions expert Kevin Wilzbach.

"Depository institutions can expect closer scrutiny of financial positions and investment strategies. We'll almost certainly see a push for more oversight by both federal and state authorities of risk management at nonbanks ? not just mortgage banks, but fintechs, hedge funds, crypto, etc.," Wilzbach argues in his article, "How Bank Failures May Soon Impact Non-Bank Lenders," published by National Mortgage News.

"The Financial Stability Oversight Council has already proposed rules that would facilitate the designation of nonbanks as systemically important, subjecting them to Federal Reserve supervision, and an ?analytic framework' that it would use when evaluating a company's ?potential risk or threat to U.S. financial stability,'" he writes.

Wilzbach also discusses how fair lending practices, servicing loss mitigation efforts and unfair, deceptive, and abusive practices will likely be under increased focus.

"Data and analytics and advanced compliance systems are essential in preventing ?failures' in the broadest sense of that term ? not only catastrophic financial events, but major, significant compliance problems that can create reputational damage. Data is a strategic asset, enabling deep insight into customer behavior, and informed decision-making," Wilzbach notes. "It also is essential in meeting compliance obligations, a core element in risk management and can be a competitive differentiator. Better data and analytics and dashboards can provide greater transparency for your C-Suite and Board. Data can also provide early warning signs for major lending issues, such as redlining, appraisal bias or to identify practices that could be deemed unfair or abusive."

National Mortgage News is an award-winning, comprehensive digital information resource serving the entire residential mortgage industry, including depositories, nonbank lenders and servicers, brokerage firms, vendors, and regulators.

Wolters Kluwer Compliance Solutions is a market leader and trusted provider of risk management and regulatory compliance solutions and services to U.S. banks, credit unions, insurers and securities firms. The business, which sits within Wolters Kluwer's Financial & Corporate Compliance (FCC) division, helps these financial institutions efficiently manage risk and regulatory compliance obligations, and gain the insights needed to focus on better serving their customers and growing their business. Wolters Kluwer FCC is also home to CT Corporation, the leading provider of registered agent services, incorporation services, and legal entity compliance.

About Wolters Kluwer

Wolters Kluwer (EURONEXT: WKL) is a global leader in information, software, and services for professionals in healthcare, tax and accounting, financial and corporate compliance, legal and regulatory, and corporate performance and ESG. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services.

Wolters Kluwer reported 2022 annual revenues of ?5.5 billion. The group serves customers in over 180 countries, maintains operations in over 40 countries, and employs approximately 20,900 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.

For more information, visit www.wolterskluwer.com, follow us on LinkedIn, Twitter, Facebook, and YouTube.


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