Post by Asairia on Apr 17, 2019 17:10:49 GMT
WORLD ASSEMBLY GENERAL ASSEMBLY
FAIR DEPOSITORY STANDARDS ACT
DELEGATE IS VOTING: AGAINST ☒
FINAL RESULTS:
2,862 FOR
13,219 AGAINST
Overview
The Fair Depository Standards Act seeks to, "Protect from predatory practices of institutions; and further mandate regulation for standards expected to protect consumer deposits."
About the Proposal
The author, Lusane of The North Pacific, has proposed the following legislation:
NOTING the World Assembly has a responsibility to ensure the vital protections of consumers in member nations.
BELIEVING an organizational body is essential to spearheading policy change in regards to the practices of financial institutions, investment brokerages, and lenders.
NOTICING a need to further legislation to regulate the practices of institutions that could render harm to a consumer's financial health.
SEEKING to protect from predatory practices of institutions; and further mandate regulation for standards expected to protect consumer deposits.
The World Assembly, therefore;
DEFINES financial institutions as public or private, physical or electronically controlled corporations or government institutions, licensed or unlicensed, according to regulations in the applicable member nation; in which qualifies under at least one of the following:
1. transacts, trades, or holds funds for a consumer in relation to a deposit based account of any type.
2. transacts, trades, or holds funds for a government or institution in relation to a deposit based account of any type.
DEFINES investment brokerages as public or private, physical or electronically controlled corporations or government institutions, licensed or unlicensed, according to regulations in the applicable member nation; in which qualifies under at least one of the following:
1. with a purpose to hold or invest consumer funds in any brokerage with the intent to accrue dividends.
2. with a purpose to hold or invest government funds in any brokerage with the intent to accrue dividends.
DEFINES lenders as public or private, physical or electronically controlled corporations or government institutions, licensed or unlicensed, according to regulations in the applicable member nation; in which qualifies under the following:
1. issues collateralized credit products or loans in which a security interest in the form of currency is placed in a transactional account.
DEFINING financial institutions, investment brokerages, and lenders; hereinafter, collectively as “institutions”.
ESTABLISHES the Depository Regulators Committee (“DRC”), a regulatory body under the World Assembly to supervise and render inspections and audits of member nation institutions for direct compliance with regulation for the protection of the consumer;
ESTABLISHES that the DRC shall have the jurisdiction, with reasonable evidence to enact disciplinary actions, fines, or closures of institutions if they are found in violation of the provisions of this Act on a situational basis.
CLARIFIES that institutions will be permitted to appeal any disciplinary actions to an independent agency, and further, be permitted to submit evidence in their defense and provide reasoning for a circumstance in order to revert any action taken.
The World Assembly, therefore:
REQUIRES institutions to hold capital reserve equal to or above nine and one-half percent of their depositor's accounts total value, to limit consumer exposure to insolvency.
REQUIRES institutions to establish uniform disclosure conditions for interest accrued by and paid to consumers on depository accounts and collateralized holdings accounts.
A. further: this provision shall require a statement made to the depositors upon account opening for applicable interest rates and how they are paid or accrued.
REQUIRES institutions to submit to random audits from the DRC, in response to an inquest brought by an applicable member nation.
PROHIBITS institutions from placing holds, freezes, or closures on depository accounts without reason.
REQUIRES institutions implement systems to combat data errors in regards to account ledgers and information.
REQUIRES institutions to keep accurate, up to date information for the institution's value, and share information with their depositors and the DRC in an annual report.
ENCOURAGES member nations to establish regulation in their jurisdiction to establish further consumer protections.
BELIEVING an organizational body is essential to spearheading policy change in regards to the practices of financial institutions, investment brokerages, and lenders.
NOTICING a need to further legislation to regulate the practices of institutions that could render harm to a consumer's financial health.
SEEKING to protect from predatory practices of institutions; and further mandate regulation for standards expected to protect consumer deposits.
The World Assembly, therefore;
DEFINES financial institutions as public or private, physical or electronically controlled corporations or government institutions, licensed or unlicensed, according to regulations in the applicable member nation; in which qualifies under at least one of the following:
1. transacts, trades, or holds funds for a consumer in relation to a deposit based account of any type.
2. transacts, trades, or holds funds for a government or institution in relation to a deposit based account of any type.
DEFINES investment brokerages as public or private, physical or electronically controlled corporations or government institutions, licensed or unlicensed, according to regulations in the applicable member nation; in which qualifies under at least one of the following:
1. with a purpose to hold or invest consumer funds in any brokerage with the intent to accrue dividends.
2. with a purpose to hold or invest government funds in any brokerage with the intent to accrue dividends.
DEFINES lenders as public or private, physical or electronically controlled corporations or government institutions, licensed or unlicensed, according to regulations in the applicable member nation; in which qualifies under the following:
1. issues collateralized credit products or loans in which a security interest in the form of currency is placed in a transactional account.
DEFINING financial institutions, investment brokerages, and lenders; hereinafter, collectively as “institutions”.
ESTABLISHES the Depository Regulators Committee (“DRC”), a regulatory body under the World Assembly to supervise and render inspections and audits of member nation institutions for direct compliance with regulation for the protection of the consumer;
ESTABLISHES that the DRC shall have the jurisdiction, with reasonable evidence to enact disciplinary actions, fines, or closures of institutions if they are found in violation of the provisions of this Act on a situational basis.
CLARIFIES that institutions will be permitted to appeal any disciplinary actions to an independent agency, and further, be permitted to submit evidence in their defense and provide reasoning for a circumstance in order to revert any action taken.
The World Assembly, therefore:
REQUIRES institutions to hold capital reserve equal to or above nine and one-half percent of their depositor's accounts total value, to limit consumer exposure to insolvency.
REQUIRES institutions to establish uniform disclosure conditions for interest accrued by and paid to consumers on depository accounts and collateralized holdings accounts.
A. further: this provision shall require a statement made to the depositors upon account opening for applicable interest rates and how they are paid or accrued.
REQUIRES institutions to submit to random audits from the DRC, in response to an inquest brought by an applicable member nation.
PROHIBITS institutions from placing holds, freezes, or closures on depository accounts without reason.
REQUIRES institutions implement systems to combat data errors in regards to account ledgers and information.
REQUIRES institutions to keep accurate, up to date information for the institution's value, and share information with their depositors and the DRC in an annual report.
ENCOURAGES member nations to establish regulation in their jurisdiction to establish further consumer protections.
My Decision
My greatest issue with this proposal is that it is incomplete. When it comes to creating standardized definitions and protections, I'm all for this; however, when it comes to the proposed method of establishment of the Depository Regulators Committee, I have serious doubts.
I have often said that partial protection is better than no protection, and while I stand by that statement, this proposal is one of the exceptions. The author creates a Depository Regulators Committee to, "Supervise and render inspections and audits of member nation institutions for direct compliance with regulation for the protection of the consumer," but fails to provide them with the power to decide how this is done nor the ability to establish the regulations that need to be complied with. If the idea behind this body's creation is to simply make sure financial institutions are obeying national regulations, then let the respective bodies in the member states deal with that and not an international committee. To me, the DRC would be best suited to create international guidelines and handle international compliance issues rather than trying to keep tabs on every institution, big and small. While I hate siding with the national sovereignty crowd, this just feels like a major overreach and a waste of resources. I am perfectly fine with the DRC being involved with large, international financial institutions, but as it currently reads? No. The proposed version of the Depository Regulators Committee doesn't have the the means needed to fulfill its mandate, and I fear it will become bogged down trying to micromanage financial institutions of all sizes.
I have cast my vote against this resolution.
Current Delegate support at time of publication.