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Senate-passed Regulatory Reform Offers Real Benefits to Depository Institutions under $10 Billion in Assets

March 15, 2018

Authors

Robert Klingler

Senate-passed Regulatory Reform Offers Real Benefits to Depository Institutions under $10 Billion in Assets

March 15, 2018

by: Robert Klingler

On March 14, 2018, the Senate passed, 67-31, the Economic Growth, Regulatory Relief and Consumer Protection Act, or S. 2155.  While it may lack a catchy name, its substance is of potentially great importance to community banks.

The following summary focuses on the impact of the bill for depository institutions with less than $10 billion in consolidated assets.  The bill would also

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Dodd-Frank Act Reforms

March 23, 2017

Authors

Robert Klingler

Dodd-Frank Act Reforms

March 23, 2017

by: Robert Klingler

Much of the discussion we’re having with our clients and other professionals relates to the prospects for financial regulatory reform.  To that end, and looking at it from the political rather than industry perspective, Bryan Cave’s Public Policy and Government Affairs Team has put together a brief client alert examining the political, legislative and regulatory issues currently under consideration.

In his first weeks

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The OCC Rises, the FSOC Dies, and Other Regulatory Predictions

November 17, 2016

Authors

Dan Wheeler

The OCC Rises, the FSOC Dies, and Other Regulatory Predictions

November 17, 2016

by: Dan Wheeler

Eight bold regulatory predictions on the direction of U.S. Banking and Fintech regulation in light of the election results.

1.   The era of “outside the law” Federal regulation is over. Critics of the CFPB (exclusively Republicans) have criticized and challenged the agency’s structure and tactics.  These challenges include criticism of the agency’s broad jurisdiction and rulemaking power as an unconstitutional delegation by Congress of its legislative power.  Members of Congress and private litigants have assailed the CFPB’s reliance on enforcement actions instead of true rulemaking as undercutting due process and basic fairness.  Republicans have been united in believing that

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Second Circuit Adopts Broad Interpretation of Dodd-Frank’s Anti-Retaliation Provision

November 4, 2015

Authors

Bryan Cave Leighton Paisner

Second Circuit Adopts Broad Interpretation of Dodd-Frank’s Anti-Retaliation Provision

November 4, 2015

by: Bryan Cave Leighton Paisner

On September 10, 2015, a divided Second Circuit appeals court held in Berman v. Neo@Ogilvy LLC, that an employee who reports wrongdoing internally to management is considered a “whistleblower” under the Dodd-Frank Act, thereby strengthening retaliation protections for employee whistleblowers.

There has been a history of tension between the Dodd-Frank statutory definition of “whistleblower” and the applicability of the Dodd-Frank anti-retaliation provisions to employees who report suspected misconduct internally.    The Act defines a “whistleblower” as “any individual who provides…information relating to a violation of the securities laws to the Commission…”  However, section 78u-6(h)(1)(A)(iii) of the Act prohibits retaliation against “a

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Regulators Provide Creative Volcker Rule Fix for TruPS

January 14, 2014

Authors

Robert Klingler

Regulators Provide Creative Volcker Rule Fix for TruPS

January 14, 2014

by: Robert Klingler

In facing Congressional and industry backlash related to the effect of the Volcker Rule on TruPS CDOs, federal regulators were expected to choose between two options.  Door 1 was to provide an exemption for TruPS CDOs held by all institutions.  Door 2 was to provide an exemption only for TruPS CDOs held by banks with less than $15 billion in assets, consistent with the Collins Amendment to Dodd-Frank.

The regulators chose neither door, instead opening Door 3: the regulators have exempted TruPS CDOs for all institutions, so long as the TruPS CDO primarily holds TruPS of banks with less than

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Regulators Poised to Remove TRuPS CDOs from Volcker Rule Grasp

January 3, 2014

Authors

Robert Klingler

Regulators Poised to Remove TRuPS CDOs from Volcker Rule Grasp

January 3, 2014

by: Robert Klingler

According to a story in the American Banker (subscription required), the federal banking regulators are looking at exempting all existing collateralized debt obligations backed by trust-preferred securities from compliance with the Volcker Rule.

From a technical perspective, it seems likely that the regulators would effect such an exemption by excluding the debt tranches of CDO’s backed by TRuPS from the definition of an “ownership interest” under the Volcker Rule, thereby allowing continued ownership by banking entities.  Whether the revision is limited to existing TRuPS CDO’s or all is likely largely irrelevant, as the elimination of preferred capital treatment for

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Banking Regulators Agree to (Re)Examine TRuPS CDOs and the Volcker Rule

December 27, 2013

Authors

Robert Klingler

Banking Regulators Agree to (Re)Examine TRuPS CDOs and the Volcker Rule

December 27, 2013

by: Robert Klingler

In a late Christmas present (or perhaps it was just delayed in delivery), the federal banking agencies and the SEC (although apparently not the Commodity Future Trading Commission) announced they would be reviewing whether it would be appropriate to exempt CDOs backed by Trust Preferred Securities from the Volcker Rule’s ban on covered funds.

The agencies have stated that they intend to address the matter no later than January 15, 2014, and believe that, consistent with GAAP, any actions taken in January 2014 should be effective in addressing year-end financial statements so long as such actions are taken before

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Ambiguity Regarding TRuPS CDOs and the Volcker Rule

December 23, 2013

Authors

Robert Klingler

Ambiguity Regarding TRuPS CDOs and the Volcker Rule

December 23, 2013

by: Robert Klingler

On December 19, 2013, the Federal Reserve, FDIC and OCC issued an Interagency FAQ Regarding Collateralized Debt Obligations Backed by Trust Preferred Securities under the Final Volcker Rule.  While roundly criticized by most trade associations and others following the industry as constituting “Frequently Asked Questions Without Answers,” the FAQ does provide additional potential insight on whether banks will ultimately need to dispose of their investments in CDOs backed by TRuPS portfolios (as well as other CDOs).

The greatest weakness in the FAQ, and a generally nasty side-effect of issuing final Volcker Rules shortly before calendar (and thus fiscal) year-ends,

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Volcker Rule Adds Another Nail in TRUPs’ Coffin

December 16, 2013

Authors

Robert Klingler

Volcker Rule Adds Another Nail in TRUPs’ Coffin

December 16, 2013

by: Robert Klingler

On December 10, 2013, the final Volcker Rule was adopted by the federal banking regulators, the SEC, and the CFTC to implement Section 619 of the Dodd-Frank Act.  The Volcker Rule generally prohibits banking entities from engaging in “proprietary trading” and making investments and conducting certain other activities with “private equity funds and hedge funds.”

One unintended consequence appears to be the treatment of Collateralized Debt Obligations (CDOs) backed by Trust Preferred Securities (TRUPs) as “covered funds” under the Volcker Rule.  As a covered fund, banking entities of all sizes will no longer be able to own TRUPs CDOs as

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Regulators Propose Statement on Diversity Policies

December 10, 2013

Authors

Marilyn Fish and Aiten McPherson

Regulators Propose Statement on Diversity Policies

December 10, 2013

by: Marilyn Fish and Aiten McPherson

Throughout 2012 a series of roundtable discussions were held in order to assess the current diversity programs and polices in place within the financial industry. As a result of these talks, six financial agencies: the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Consumer Financial Protection Bureau, and the Securities and Exchange Commission (the “Agencies”), proposed a set of diversity and inclusion standards. These standards, titled the “Proposed Interagency Policy Statement Establishing Joint Standards for Assessing the Diversity Policies

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