It may not seem that working in the finance and banking industry would require extensive legal knowledge. However, for those in banking roles that center on regulatory compliance, legal expertise can prove invaluable.
If you are currently in a law-adjacent banking position, strengthening your legal knowledge by pursuing a Master of Legal Studies (M.L.S.) can be a strong decision for your professional life.
The Role of an M.L.S. Degree in Navigating Financial Services Regulations
Across the United States as well as globally, the finance and banking industries are strictly regulated. An M.L.S. degree program can help students gain the essential knowledge necessary to understand specific laws and regulations that affect the industry, along with the regulating bodies that govern them.
Understanding the M.L.S. Curriculum: A Focus on Financial Laws
More specifically, an M.L.S. degree program with a dedicated financial/banking track will include coursework on the various financial laws in place that those in law-adjacent banking roles need to know. These regulations exist not just to protect consumers but also to ensure transparency and stability while mitigating legal risk in finance.
The Intersection of Legal Expertise and Financial Services Law
Many finance and banking regulations can be complex, and legal frameworks must be regularly updated and revised to reflect the latest innovations and technologies. With a solid understanding of these legal frameworks, law-adjacent banking professionals can be prepared to navigate the intricacies of these evolving laws while keeping their own institutions in compliance. This may mean adapting institutional practices to maintain regulatory compliance and communicating these changes to stakeholders.
Key Regulatory Bodies and Legislation in the U.S. Financial Sector
The banking sector in the United States is governed by a number of regulatory bodies, each with its own distinct roles and responsibilities. Those in law-adjacent banking positions (including bank managers and compliance officers) are tasked with understanding these regulatory agencies and the laws they enact.
Overview of the SEC, CFPB, and Other Regulatory Agencies
At the federal level, some of the most notable regulatory bodies in the U.S. banking sector include the:
- Securities and Exchange Commission (SEC) - This commission oversees and enforces federal securities laws, regulates stock exchanges, and creates rules designed to protect investors.
- Consumer Financial Protection Bureau (CFPB) - This agency creates financial laws designed to protect consumers from deceptive or abusive practices while promoting financial education.
- Federal Reserve System - Also known as "the Fed," this is the central bank of the United States responsible for overseeing the country's monetary policies.
- Federal Deposit Insurance Corporation (FDIC) - This independent agency insures deposits and supervises financial institutions to ensure consumer protection.
Significant Financial Laws Affecting the Industry
In addition to being familiar with the country's key regulatory bodies in banking, professionals in law-adjacent banking roles must understand some financial laws and regulations governing their work. Following these regulations is critical to remaining in compliance while avoiding potential penalties, fines, and legal troubles.
Banking laws to be aware of in this profession include the:
- Bank Secrecy Act (BSA) - Enacted in 1970, this law requires banks and other financial institutions to take certain measures to protect against money laundering and similar financial crimes. Under this law, for example, banks must keep records of all cash transactions exceeding $10,000 and report any signs of financial crime immediately.
- Gramm-Leach-Bliley Act (GLBA) - Under this 1999 law, banks and financial institutions must take certain measures to protect consumer data and confidentiality by disclosing their own information-sharing practices and offering consumers the ability to opt out of having their data shared with third parties.
- Fair Credit Reporting Act (FCRA) - This law regulates how banks and other financial institutions can use consumer credit reports to make decisions (including lending decisions). It also includes provisions that allow consumers to dispute perceived errors in their own credit reports.
- Dodd-Frame Wall Street Reform and Consumer Protection Act - Enacted after the 2008 financial crisis, this law imposes safeguards on banks and other financial institutions to reduce systemic risk, curb abusive lending, and strengthen consumer protections.
How an M.L.S. Degree Prepares You for Compliance and Risk Management
For those working as banking compliance officers, managers, or brokerage consultants, an M.L.S. degree program can provide the legal understanding needed to improve institutional performance and avoid potential compliance issues.
Compliance Strategies and Best Practices in Financial Services
For example, M.L.S. coursework in banking and finance may cover common compliance strategies and best practices that those working in financial services can follow in their own work. This might include tried-and-true strategies for implementing strong internal controls for risk-mitigation purposes, plus techniques for crafting clear procedures for banking employees.
Mitigating Legal Risks in Finance: Tools and Techniques
These days, compliance officers and other banking professionals are also leveraging innovative tools and techniques to optimize their risk mitigation and compliance strategies. Compliance monitoring software, for instance, can be used to pinpoint potential "red flags" before they turn into compliance violations. Meanwhile, an M.L.S. program could help law-adjacent banking professionals use data analytics, artificial intelligence (AI), and similar tools to identify and mitigate potential compliance risks.
The Benefits of Earning an M.L.S. Degree for Financial Services Professionals
Aside from the enhanced knowledge and legal understanding that banking professionals could gain from an M.L.S. degree program, there are other potential benefits to consider.
Gaining a Competitive Edge in the Banking Industry
Compared to banking professionals without an M.L.S. education, experts holding an M.L.S. can enjoy a competitive edge in the industry. With an advanced degree, these professionals may be in a better position to improve organizational compliance and risk-mitigation practices while setting themselves apart.
Advancing Legal Expertise for Greater Career Opportunities
Finally, having an advanced degree as a banking professional could set you up for advancement opportunities down the road. Whether you are interested in moving up the career ladder as a compliance officer or bank manager, an M.L.S. degree program can equip you with the essential legal expertise needed to thrive in many roles.
Learn More in an M.L.S. Program at Miami Law
In an industry characterized by complex compliance laws and regulatory frameworks, possessing foundational legal skills and knowledge can make all the difference. The right M.L.S. program will empower you to build the legal understanding of financial services law, consumer financial protection law, and other banking regulations that can inform your everyday work.
At the University of Miami School of Law, our online Master of Legal Studies degree is delivered with a mix of core courses and electives to suit your needs. We even offer a dedicated finance track, which incorporates coursework in relevant banking topics such as legal risk in finance, U.S. banking regulations, information privacy law, and more.
Contact us today to learn more about our online M.L.S. finance and wealth management track curriculum, or begin completing your application for admission.
Sources
- https://admissions.law.miami.edu/academics/MLS/
- https://news.miami.edu/law/stories/2024/04/how-an-mls-degree-can-accelerate-careers-in-the-banking-and-brokerage-industries.html
- https://admissions.law.miami.edu/academics/mls/curriculum/#finance/
- https://www.researchgate.net/publication/390091441_The_Future_of_Regulatory_Compliance_in_Banking_Embracing_Technology
- https://www.researchgate.net/publication/381045225_Artificial_Intelligence_in_Enhancing_Regulatory_Compliance_and_Risk_Management
- https://obamawhitehouse.archives.gov/economy/middle-class/dodd-frank-wall-street-reform
- https://www.sec.gov/about
- https://www.consumerfinance.gov/about-us/the-bureau/
- https://www.ftc.gov/legal-library/browse/statutes/fair-credit-reporting-act
- https://www.federalregister.gov/agencies/federal-deposit-insurance-corporation
- https://www.federalreserve.gov/aboutthefed/fedexplained/who-we-are.htm
- https://www.occ.treas.gov/topics/supervision-and-examination/bsa/index-bsa.html
