CCOs show resilience in early survey data; compliance-blind NRA in crosshairs

Nailed It

Chief Compliance Officers: It’s still early in our second annual “Inside the Mind of the CCO” survey, which is available here for you to participate in, but there’s one trend we’ve identified so far that deserves a mention. Among the CCOs or CECOs who have taken the survey and have had to accept either a significant or minor pay cut due to the pandemic, 70 percent have also seen their budgets and/or staff reduced as well. Nevertheless, more than 90 percent of them reported they still enjoy their jobs, despite having to do those jobs for less money and with fewer resources. Nowhere else but compliance would you get an answer like that. —Dave Lefort

OCC and Varo Bank: Digital-only banking has its regulatory stamp of approval. The Office of the Comptroller of the Currency (OCC) approved a national bank charter July 31 for Varo Bank, the first-ever charter granted to a completely digital banking platform. Varo Bank’s founder, Colin Walsh, called it a “thrilling milestone.” Based in San Francisco, Varo Bank launched digital banking services in 2017 in partnership with Bancorp Bank and had previously secured regulatory approvals from the Federal Deposit Insurance Corporation and Federal Reserve Bank. Several other digital-only banking platforms—including Square and SoFi—also have national bank license applications in the pipeline, according to Finextra. The true test for the OCC and other financial regulators will come as digital banking technology continues to push the boundaries of what’s possible. How will regulators push back? —Aaron Nicodemus

Akamai Technologies, Wayfair, more: The Massachusetts-based technology firms are laying out a 10-year strategic plan to diversify their workforces, hoping to move away from their white-male majority and double the percentage of Black and Latinx people they employ. A coalition of 60 companies, including Akamai Technologies and Wayfair, announced the goal on Monday, led by the Mass Technology Leadership Council. Companies pledge to track and report data on whom they hire and promote, diversify their boards of directors, and improve recruiting efforts. —Aly McDevitt 

Failed It

National Rifle Association: One of the most politically polarizing associations in the United States is under fire this week (pun intended) after the New York Attorney General sued the organization for a decades-long pattern of alleged fraud. The suit calls out the CEO and several top leaders by name, accusing them of puffing up expense reports with illegitimate trips and purchases to the tune of $64 million over three years. Among the internal controls failures cited by the New York AG is the lack of a chief compliance officer … or even a compliance department. In fact, the person tasked with dealing with “compliance issues,” according to the suit, was suspended last October pending an investigation into his own improper use of money. It’s not likely a coincidence that this comes to light in an election year … expect it to get ugly in a hurry. —Dave Lefort

Information Commissioner’s Office: The EU’s General Data Protection Regulation took effect in May 2018, but it was really put on the map when the ICO in July 2019 proposed a record £183.4 million (U.S. $230 million) fine against British Airways under the privacy law with regard to a data breach. Now, BA’s parent company has said in a recent results announcement it estimates paying only $26 million of that fine following an appeals/negotiation process. The ICO understandably said it would take the effects of the coronavirus pandemic into account when working with BA on the fine, but a nearly 90 percent reduction of the original proposal massively damages the regulator’s credibility in determining fine amounts and the GDPR as a whole. —Kyle Brasseur

Major League Baseball: Just two weeks into the shortened season, two teams—the Miami Marlins and St. Louis Cardinals—have experienced major coronavirus outbreaks among players and staff. Eight of the league’s 30 teams have had to postpone games as a result, leaving professional baseball’s shortened season teetering on the brink. Meanwhile, MLB has posted jobs for seasonal gameday compliance monitors in Boston, Kansas City, Minneapolis, and Seattle and says it will hire one for every team. Ooh, get paid an hourly wage to watch for rule violations like sign stealing and equipment tampering. These monitors will probably be tasked with enforcing MLB’s coronavirus safety protocols. How much respect do you think wealthy professional baseball players will afford a punch-clock rules enforcer who only works on gameday? —Aaron Nicodemus

McDonald’s, Marriott, more: The Center for Public Integrity (CPI), in partnership with NBC News, has released data showing that nearly 700 companies, including fast food giant McDonald’s and hotel chain Marriott, did not pay for sick leave for employees during the coronavirus pandemic in violation of the Families First Coronavirus Response Act. According to information that CPI and NBC received from the Freedom of Information Act, the companies owe $690,000 to 527 employees. —DeAnn Orie

DoorDash: To show their “commitment to protecting Dashers on the front lines,” DoorDash is providing its gig workers in San Francisco a whopping 78¢ per day for wiping down high-touch surfaces in their vehicles. This daily deposit comes not from the bottom of DoorDash’s heart but from its obligation to comply with San Francisco’s emergency ordinance concerning front line employee protections. DoorDash is required to compensate gig workers for disinfecting high-touch surfaces while working during the pandemic. Three quarters and three pennies … how generous; and that’s only because they were obligated. If you’re a DoorDash user anywhere, consider increasing your tip. —Aly McDevitt

Kodak: The technology and pharmaceutical company is being investigated by the Securities and Exchange Commission regarding the announcement of a $765 million government loan to make pharmaceuticals at its U.S. factories, the Wall Street Journal reported. The SEC probe is said to be focused on the circumstances surrounding Kodak’s government deal—most notably its disclosure of the loan. The timing of the announcement, which was shared with the media without any mention of an embargo before being publicly acknowledged, led to a surge in Kodak stock that earned the company’s executive chairman the potential to gain more than $95 million, the WSJ reported. The loan details aren’t finalized, but there’s no going back regarding whatever the SEC fines in relation to it. —Kyle Brasseur