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Media Mentions – April 25, 2014

With attorneys and staff worldwide, Bryan Cave attorneys are often quoted in the news. Recent mentions of Financial Institutions group attorneys include:

Rinearson in AFP Exchange

New York Partner Judith Rinearson authored an article on the future of bitcoin and virtual currency for the April edition of AFP Exchange magazine, by the Association for Financial Professionals. Her article was part of the publication’s annual payments issue. “Can virtual currencies be regulated in a manner that protects consumers, merchants, our payment systems and national security, while at the same time not ‘killing the golden goose’ through overly burdensome or unfeasible regulatory requirements?” Rinearson wrote. “I believe the answer is yes….However, such regulation should be imposed with a light hand and reasonable steps must be taken quickly.”

Shumaker in Bank Safety & Soundness Advisor

Atlanta Associate Michael Shumaker was quoted extensively April 14 by the Bank Safety & Soundness Advisor concerning top misconceptions in vendor management. After all the talk from regulators over the growing risks and expectations of managing third-party relationships, some banks still seem to think the guidance does not apply to them. “Probably the most important thing for banks to recognize is that things have changed, and that the regulatory expectations of banks with respect to the integration of risk associated with vendor contracts, those expectations have changed,” Shumaker said. “You can outsource the activity, but you cannot outsource the risk. Banks need to recognize that having a vendor conduct the activity does not change their obligation to manage the risk of the activity.”

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Media Mentions – February 28, 2014

With attorneys and staff worldwide, Bryan Cave attorneys are often quoted in the news.  Recent mentions of Financial Institutions group attorneys include:

BankBryanCave.com in Banking and Finance Law Daily

Three recent blog posts from BankBryanCave.com were prominently featured Feb. 13 in Banking and Finance Law Daily. The publication’s “Blog Tracker” column, which highlights the week’s “most insightful, intriguing or entertaining blog posts from the banking and financial services community,” included our recent posts “Will 2014 be the year of UDAP and UDAAP?” by DC Partner John ReVeal and Associate Seyi Iwarere; “Should your bank do business with Bitcoin?” by DC Associate Courtney Stolz; and “Five practical tips to manage your vendor risk…,” by Atlanta Associate Karen Neely Louis  Click the post titles to read more.

Klingler in American Banker

Atlanta Partner Rob Klingler was quoted Jan. 28 by American Banker concerning Broadway Financial, which has struggled in recent years but managed to restructure its debt and recapitalize by bringing together the federal government, private equity, nonprofits and local banks. Today, the U.S. Treasury owns 52 percent of Broadway, or about $8.8 million in common stock. Broadway is one of five companies with common stock held by the Treasury as a result of a Tarp exchange, and is the only one majority owned by the government. Klingler said the Treasury typically moves quickly to cash out of such holdings. He said the stake is unlikely to scare off investors (the Treasury has vowed to be hands-off and vote along with the majority) but the government could have trouble finding investors to buy such a large block of shares.

Shumaker in Bank Safety & Soundness Advisor

Atlanta Associate Michael Shumaker was quoted at length in two front-page articles Feb. 17 in Bank Safety & Soundness Advisor concerning third-party vendor risk. Regulators are pushing for higher third-party due diligence standards, particularly the Office of the Comptroller of the Currency (OCC), which now requires banks to manage what it calls the full “life cycle” of a vendor relationship. “The regulators’ expectations are on a sliding scale,” Shumaker said. “The level and depth of risk management and vendor management for a $50 billion bank is not going to be expected necessarily for a $100 million bank.” A small community bank, he explained, may only have one or two material contracts that it needs to be on top of, such as for data processing and a credit or prepaid card program. Still, he said, having a “rational and structured” approach for entering those contracts not only keeps regulators happy but makes business sense.

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Media Mentions – December 6, 2013

With attorneys and staff worldwide, Bryan Cave attorneys are often quoted in the news.  Recent Media Mentions of Financial Institutions Group attorneys include:

Katherine Koops in Western Independent Banker

Atlanta Counsel Katherine Koops authored an article for the November/December edition of Western Independent Banker regarding the Federal Reserve Board of Governors’ approval of a final rule implementing the Basel III higher minimum capital standards for most banking organizations.  Click here to read her full article on the new capital rules.

Walt Moeling in American Banker

Atlanta partner Walt Moeling was quoted Nov. 27 by American Banker concerning the recent acquisition of Freedom Bank by Heartland Financial USA. Executives at Heartland have remained vague about their reason for the acquisition, but observers say it seems like a trade-off. River Valley Bancorp, the former owner of Freedom, may have used it as payment of a debt to Heartland. If Heartland did take a bank as payment, it may have been a good move because it is dealing with a multibank holding company rather than stakeholders like the Treasury Department or the holders of trust-preferred securities. “It can be an easy way to resolve a debt,” Moeling said. “But when you are dealing with a one-bank holding company, that is all there is, so there is not a lot of room to negotiate. … This also sounds like a cleaner situation – when you throw in Tarp or trups and try to strike a three- or four-way settlement, oh my God, it gets difficult.”

Michael Shumaker in Bank Safety & Soundness Advisor

Atlanta Associate Michael Shumaker was quoted Nov. 4 by the Bank Safety & Soundness Advisor on new third-party vendor guidance from the Office of the Comptroller of the Currency (OCC). The OCC recently published a detailed overhaul of its 12-year-old guidance on third-party relationships, significantly raising expectations for community banks and other institutions while reflecting heightened regulatory concern over the risks that the relationships pose. “The sound of this tome hitting the desk should alert banks and thrifts to the increased regulatory expectations for vendor management,” Shumaker said. “Banks should understand the increased diligence required to manage their third party risk in a safe and sound manner. “Regulators have seen bad performances by vendors during the crisis that increased the risk profile of banks. Now, banks should take a more critical look at their vendor relationships and work to move or re-negotiate the related contracts, when up for renewal, to comply with the guidance.”

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Bryan Cave Lawyers Briefing State Banking Associations on Basel III Proposals

In recent weeks, three Bryan Cave lawyers have briefed state banking association members on the impact the Notices of Proposed Rule Making regarding Basel III could have on banks of all sizes. On July 12, Jonathan Hightower presented via webinar to the Georgia Bankers Association. On August 16, Jonathan Hightower and B.T. Atkinson participated in a live seminar on Basel III presented by the South Carolina Bankers Association that also included presentations by Garry Rank of Elliott Davis, LLP and Jim Mabry of Keefe, Bruyette & Woods. The SCBA program also included a segment advising institutions on how to prepare a comment letter on the proposals for submission to their primary federal banking agency. On August 20, Michael Shumaker and B.T. Atkinson presented via webinar to the North Carolina Bankers Association. In all three programs, bankers were strongly encouraged to submit comments on the proposals by the October 22 deadline, citing specific examples of how the proposed rules could negatively impact their bank. Areas noted for potential comment included:

  • phase-out of trust preferred from Tier 1 capital for institutions having less than $15 billion in assets; 
  • appropriateness of the capital conservation buffer for banking organizations that are not systemically significant; 
  • inclusion of unrealized gains and losses on securities in common equity Tier 1 capital; 
  • whether the exclusion for bank holding companies having total assets of $500 million or less should be increased to $1 billion and include savings and loan holding companies; and 
  • the impact of the proposed risk-weighting of first and second lien mortgages on product availability and the anticipated burdens of implementation.

Links to related Financial Institution Letters:

FIL-25-2012:  Regulatory Capital Rules:  Regulatory Capital, implementation of Basel III, Minimum Regulatory Capital Ratios, Capital Adequacy, and Transition Provisions

FIL-27-2012:  Regulatory Capital Rules:  Standardized Approach for Risk-Weighted Assets; Market Discipline and Disclosure Requirements

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