WASHINGTON - Sen. Elizabeth Warren, D-Mass., is raising concerns about a new financial services communications tool that critics warn could be used to get around compliance requirements.
The New York State Department of Financial Services wrote a letter last month to Symphony Communications, which is owned by a number of large banks, warning that its new messaging system could be used to "circumvent compliance controls and regulatory review." Warren said in a letter to regulators Monday that she shares that worry.
"My concerns are exacerbated by Symphony's publicly available descriptions of the new communications system, which appear to put companies on notice - with a wink and a nod - that they can use Symphony to reduce compliance and enforcement concerns," Warren wrote to top banking officials.
She noted, for example, that Symphony's website promises that messages are permanently deleted and that procedures are in place to "prevent government spying."
Opponents of the new system warn that efforts to evade public scrutiny could make it harder to catch and punish illegal activity, such as when several banks were found to have fixed Libor interest rates thanks in part to online messages detailing those efforts.
Warren requested a briefing from several financial agencies by Sept. 6 on how Symphony's new system will impact regulatory oversight and whether regulators have held any internal reviews about the program and the banks that want to use it.
The letter was sent to the Consumer Financial Protection Bureau, the Commodity Futures Trading Commission, the Department of Justice, the Federal Deposit Insurance Corp., the Financial Industry Regulatory Authority, and the Securities and Exchange Commission.