Wolters Kluwer’s Compliance Solutions has released its latest Regulatory Violations Intelligence Index, tracking notable increases in regulatory violations within the U.S. financial services sector. Covering the first half of 2024, the Index reveals an uptick in violations for two key categories: Consumer Protection and Financial Offenses. At the same time, penalties fell sharply, highlighting volatility in enforcement and signaling a shifting regulatory landscape.
Major Findings on Violations and Penalties
According to the Index, 199 total violations were recorded in the first half of 2024, an increase from the 136 violations in the second half of 2023. However, the total penalty value saw a marked decrease, with fines totaling $1.876 billion in the first half of 2024—a 76% drop from $7.977 billion reported in the second half of 2023. This fluctuation in penalties reflects changing enforcement dynamics and emphasizes the need for ongoing vigilance within the financial services industry.
Category-Specific Trends
Violations related to consumer protection remained relatively steady, with 66 enforcement actions in the first half of 2024, a slight increase from 64 in the second half of 2023. However, penalty amounts fell by 63%, despite significant agency actions concerning redlining and discriminatory lending.
The financial violations category experienced the largest surge, with 132 violations in the first half of this year—a 128% increase over the 58 recorded in the second half of 2023. While the volume of violations rose, penalty values saw a 70% decline, reflecting outlier actions in digital currency and alternative assets from the previous period.
In contrast, competition-related violations declined drastically, with only one action issued in the first half of 2024, compared to 41 in the second half of 2023. Penalties for these violations dropped to $2 million, down from $324 million, signaling a reversion to historical trends.
Regulatory Landscape Implications
Vikram Savkar, Executive VP at Wolters Kluwer, emphasized the evolving nature of regulatory oversight, with penalty variances tied to factors like whistleblower reports and enterprise failures. These findings indicate that enforcement remains fluid, and compliance programs must adapt to the regulatory shifts highlighted in Wolters Kluwer’s Index.
Looking Forward
As financial violations increase while penalties decline, the report underscores the importance of robust compliance practices in navigating regulatory demands. Financial institutions are urged to remain attentive to the changing landscape to mitigate risks effectively.
Click here for more on the Wolters Kluwer report and click here to download the Regulatory Violations Intelligence Index in its entirety.
