Wednesday, December 28, 2016
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the-bank-accountJonathan and I were joined by the godfather of banking law, our Senior Partner, Walt Moeling for Episode 7 of The Bank Account.

Enjoy Walt’s thoughts on where the banking industry is headed in 2017, what he sees as the biggest concerns today, what one regulatory change he would make if given carte blanche power to improve the system, and a prediction on the number of community banks in the future.

For nearly 50 years, Moeling has been with Bryan Cave and its predecessor firm in Atlanta, Powell Goldstein. Moeling has counseled financial institutions on corporate governance matters, operational and regulatory issues, capital and acquisition strategies, board disputes and dissident shareholders, as well as other strategic decisions.

Moeling has served on the board of the Georgia Bankers Association (GBA) for many years and occupied the role of GBA’s general counsel. He has also been appointed as a state deputy attorney general in Georgia and neighboring Alabama over the course of his career to deal with particularly complex banking matters.

Please click to subscribe to the feed on iTunes, Android, Email or MyCast. It is also now available in the iTunes and Google Play searchable podcast directories.

You can also follow-us on Twitter for updates between podcast episodes @RobertKlingler and @hightowerbanks.

Tuesday, December 20, 2016
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In January 2016, the G20’s Financial Stability Board organized a task force, chaired by Michael Bloomberg, to come up with recommendations for a uniform framework for the disclosure of financial risks and opportunities related to climate change. On December 14, the Task Force released its recommendations, which are intended to assist “all financial and non-financial organizations with public debt or equity” in figuring out what climate-related issues merit disclosure.  The report characterizes the “catastrophic economic and social consequences” of unchecked climate change as “[o]ne of the most significant, and perhaps most misunderstood, risks that organizations face today.” It notes that numerous climate-related disclosure frameworks already exist, but so far the information produced under those frameworks has been inconsistent, non-comparable and lacking the context needed for a full understanding of its importance. Because there is no standardized protocol for disclosure, the report indicates that companies face uncertainty as to what information should be disclosed, and how it should be presented to potential investors.  The recommendations, along with the extensive “implementation guidance” the Task Force released along with the report, aim to address this problem by providing a framework for disclosure that will assist companies in providing information that is “consistent, comparable, reliable and clear.”

The Task Force begins by noting that climate-related risks fall into two categories: (i) physical risks, such as those posed to coastal storms or droughts that can cause damage or disruption to the company’s facilities, infrastructure or supply chain; and (ii) transition risks, which can result from governmental efforts to reduce greenhouse gas emissions or the shift to a low carbon economy. Transition risks are further defined to include “policy and legal risks” (e.g., those posed by carbon pricing or new regulations mandating a reduction in emissions); “technology risks” (for example, where new energy-efficient technologies disrupt existing technologies –like what LED technology has done to fluorescents); “market risk” (i.e., a shift in supply or demand for products and services); and “reputational risk.”


Monday, December 19, 2016
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the-bank-accountJonathan and I were joined by Ken Achenbach for Episode 6 of The Bank Account in which we discuss the OCC’s newly announced special purpose charter for FinTech companies.

Among the topics covered in this discussion are how we view the OCC’s announcement, how existing banks may want to look at the announcement, and the largest challenge that we think may emerge for FinTech companies entering the banking space.

Unfortunately, the highlight of this episode… me completely cracking up during Jonathan’s introduction… will have to wait until a later blooper reel.  It was early enough in the recording that we decided to start over.

Please click to subscribe to the feed on iTunes, Android, Email or MyCast. It is also now available in the iTunes and Google Play searchable podcast directories.

You can also follow-us on Twitter for updates between podcast episodes @RobertKlingler and @hightowerbanks.

Wednesday, December 14, 2016
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Normally, a scheme to defraud another individual would be a state crime, prosecuted and sentenced at the state level (leaving aside use of U.S. mail or wires). To be convicted of the state crime of fraud usually requires proof of some combination of a false statement or representation and an actual intent to defraud.

On December 12, 2016, in a remarkably unpretentious opinion by Justice Breyer, the U.S. Supreme Court, in Shaw v. United States, U.S., No. 15-5991, resolved a circuit split by ruling that such a scheme can also constitute federal bank fraud, even if there was intent only to defraud the individual, not the bank itself.

The case stemmed from Shaw’s successful efforts to defraud a bank customer of more than $300,000. Shaw was convicted of violating 18 U.S.C. § 1344(1) which makes it a federal crime to “knowingly execut[e] a scheme . . . (1) to defraud a financial institution.” Shaw argued that to prove fraud it is necessary to show intent to defraud and he had no intent to defraud the bank – and, in fact, the bank did not lose any money. The Supreme Court affirmed a 9th Circuit opinion that no such proof was necessary to establish the federal crime of bank fraud, on the ground that a bank had a property interest in the use of the money deposited by its customers, even if the bank ultimately suffers no financial loss.

Read more about the broader impact on criminal law enforcement on

Monday, December 12, 2016
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Bryan Cave recently organized a half-day symposium on the opportunities and legal considerations related to responsible and impact investing. The “Responsible and Impact Investing Symposium,” held on November 10, was co-hosted by Fordham University’s Gabelli School of Business and featured leaders in this growing field who discussed opportunities and challenges for investors, private foundations, financial advisors and for-profit entities. More than 135 guests attended, including investment managers and private wealth advisors, foundation representatives, asset managers, financial analysts, corporate counsel and others.

VIDEOS: To access videos of the symposium sessions described in this post, click here. To review the program agenda and speaker bios, click here.

The program was kicked off by Convener Roberta Gordon of Bryan Cave’s New York office, who launched the afternoon’s discussion of using philanthropic and investment dollars to maximize social change. She introduced the program’s many illustrious speakers, including Thomas P. DiNapoli, the Comptroller of the State of New York. Mr. DiNapoli, who is the sole trustee of the $181 billion New York State Common Retirement Fund, addressed how he manages the Fund to advance environmental, social and governance (“ESG”) policies while discharging his fiduciary duties to attain performance benchmarks and minimize risk. Among other things, the Comptroller described how the Fund’s engagement with companies has resulted in key improvements to corporate behavior, particularly with respect to climate change. Watch this video.


Wednesday, December 7, 2016

The fintech industry has justifiably greeted the OCC’s announcement of a national fintech charter with optimism. But one area where we have seen significant confusion is the possibility of the fintech charter being granted without deposit insurance, and the implications thereof.

Background.  On December 2, 2016, OCC Comptroller Thomas Curry announced that the OCC is planning to take applications from fintech companies wishing to obtain a special purpose national bank charter.  These banks would be national banks with the same privileges and obligations as traditional full-service national banks, but with specialized business plans and that may or may not choose to have deposit taking authority.

In his remarks, Comptroller Curry expressed his excitement about the great potential to expand financial inclusion and reach unbanked and underserved populations.  At the same time, clearly recognizing that there are some industry players that are worried about new sources of competition from fintech banks, or that these new banks might otherwise have unfair advantages, Curry took great pains to seek to alleviate those concerns in his remarks and in the OCC’s white paper on the proposal.

Curry acknowledged that it will be difficult for the agency to determine the requirements to charter a fintech bank because of the “diversity of approach” among fintech companies. He noted that, for example, a payments model would be different than a marketplace lending one. However, he said that the OCC is a “firm believer in tailored innovation” and has the existing framework to evaluate these issues in the chartering process.  Consistent with existing OCC regulation, the white paper states that a special purpose bank that conducts activities other than fiduciary activities must conduct at least one of the following three core banking functions: receiving deposits, paying checks, or lending money.


Tuesday, December 6, 2016
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bankthinkIn a recent American Banker BankThink article, Partner Dan Wheeler explores the possibility that the OCC could rise in stature, while the other banking regulatory agencies fall out of favor.  By largely staying out of Congress’ scrutiny and taking a lead on fintech regulation, Dan argues that the OCC is well positioned to obtain greater chartering and regulatory responsibility under a Trump administration.

Some regulatory agencies, such as the Consumer Financial Protection Bureau and Federal Reserve Board, appear ripe for more congressional criticism and even curbs to their authority under the incoming Trump administration. But one may be in relatively good position to have its authority expanded: the Office of the Comptroller of the Currency.

The OCC has stayed under the radar and avoided the political backlash aimed at other regulators while also emerging as a new leader in the fast-growing area of fintech regulation. The OCC’s focus on innovation and its largely pristine image among lawmakers could lead to greater chartering authority and — if the CFPB continues to lose favor — more responsibility to oversee consumer rules.

Continue Reading Dan’s position, OCC Could Gain Power as Other Agencies Fall Out of Favor, on

Monday, December 5, 2016
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piggybankOn November 29, 2016, the FDIC, as part of its Community Banking Initiative, held an outreach meeting in Atlanta.  While the FDIC has indicated that it will publish a handbook regarding applications for deposit insurance in the coming weeks (which we’ll also summarize), we thought it made sense to provide a few highlights from that meeting:

Mechanics.  The mechanics of the chartering process are the same as before.

Business Plans.  As expected, there will be greater scrutiny on business plans, making sure that banks stick to their business plans post-opening, and (not expressly stated but as translated by me) ensuring that the results of the bank’s business plan do not deviate greatly from the original projections (i.e., providing for limited ability to take advantage of natural growth in the new bank’s markets or lines of business during the first three years of operations if not reflected in projections).  Approvals to deviate from one’s business plan will not be granted under most circumstances.


Friday, December 2, 2016
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the-bank-accountJonathan and I convened after lunch (a delicious assortment of tacos) to record Episode 4 of The Bank Account.  We focused on The Financial CHOICE Act as a potential roadmap for the potential bank regulatory reforms under the Trump administration.

The Financial CHOICE Act represents the the Republican’s 2016 proposal to reform the financial regulatory system.  While Republican’s regulatory reforms may vary next year based on the change in administration (and the process of going from a proposal to enacted legislation is likely to create further changes), the Financial CHOICE Act represents a good starting place in looking at potential upcoming reforms.  In this episode, Jonathan and I discuss the following aspects of the Financial CHOICE Act:

  • A Dodd-Frank Regulatory “Off Ramp” for Well-Capitalized Institutions;
  • CFPB Reforms;
  • Durbin Amendment and Volcker Rule Repeal;
  • Proposed Civil Procedure Changes; and
  • Community Bank Relief.

Please click to subscribe to the feed on iTunes, Android, Email or MyCast. It is also now available in the iTunes and Google Play searchable podcast directories.

You can also follow-us on Twitter for updates between podcast episodes @RobertKlingler and @hightowerbanks.

Monday, November 28, 2016
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the-bank-accountIf you missed it as you returned for seconds (or thirds) during Thanksgiving week, Episode 4 of The Bank Account, Data Dilemma, is now online.

In this episode, Jonathan and Ken Achenbach discuss the Consumer Financial Protection Bureau, with a focus on the CFPB’s recent announcement that it would be investigating data sharing of financial records and the CFPB’s decision to appeal the ruling that the CFPB director may be removed without cause by the President.

As mentioned by Jonathan, I’m absent from last week’s podcast I was cruising the Caribbean on the Disney Dream.  Unlike Jonathan, I’m certain that I would rather be cruising than recording a podcast… and my kids are even more certain!  I’m sure if we were to ask Jonathan’s kids, they would have preferred a Disney cruise to Episode 4.

Please click on the link to subscribe to the feed on iTunes, Android, Email or MyCast. It is also now available in the iTunes and Google Play searchable podcast directories.

You can also follow-us on Twitter for updates between podcast episodes @RobertKlingler and @hightowerbanks.