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Federal Rules Target Student Bank Accounts

October 20, 2016

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As previously discussed on BankBryanCave.com, new Department of Education regulations will impact the terms and conditions of bank accounts that institutions of higher education and postsecondary vocational institutions may offer to students to receive disbursements of Title IV Higher Education Act funds. While the regulations apply directly to colleges, many banks and third-party servicers will need to change their products, services and practices if they want to contract with colleges to offer accounts to students.

The DOE rules require covered colleges to ensure that student account terms are in the best financial interest of students, present Title IV fund disbursement and account options to the student in a fact-based and neutral manner, and ensure that students have access to an appropriate number of surcharge-free ATMs. The rules also prohibit many account fees and impose ongoing monitoring obligations on colleges to ensure that student accounts meet all requirements of the rules.

The CFPB’s new prepaid account rules will further regulate accounts offered to students by imposing Regulation E protections on those prepaid accounts, limiting overdrafts, and highly regulating other credit features on student prepaid accounts. CFPB enforcement actions against colleges relating to consumer financial products and services remind us that even colleges can be subject to their jurisdiction and enforcement efforts.

On November 18, 2016 at 1:00pm EST, Bryan Cave LLP partner, John ReVeal, will be conducting a webinar with Lorman Education Services to summarize the new DOE rules and the key CFPB prepaid account rules as they relate to student accounts.  With John as a faculty member, we are able to offer a 50% discount on the registration fee.  Click here for more information, here for the brochure of the webinar, and here to register.

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California Court Rejects “Sham Guarantee” Defense

October 13, 2016

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Bryan Cave LLP recently served as counsel for amicus curiae California Bankers Association (“CBA”) and helped score a victory in an important California appellate case of great interest to the banking industry,  LSREF2 Clover Property 4 LLC v. Festival Retail Fund 1 357 N. Beverly Drive LP (Second District, California Court of Appeal case number B259937).

The trial court had ruled that the guarantor of a commercial loan was excused from performance on the grounds that the guaranty was a “sham,” structured by the lender to circumvent California’s anti-deficiency laws.  The guarantor essentially argued that there was no legal separation between it and the borrower because it was the borrower’s “alter ego,” and as support they identified evidence that the two entities failed to observe basic corporate formalities.  According to the guarantor, it should be excused from its obligations because it was essentially the same as the borrower, and thus protected by California’s anti-deficiency laws.

In its amicus brief, the CBA raised two principal arguments, both of which were adopted by the court of appeal in its published opinion reversing the trial court’s judgment in favor of the guarantor Festival Fund.

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Brexit: Stay Calm, but Be Prepared for Changes

June 24, 2016

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We have all woken up on June 24th to the surprising news that the UK has voted to leave the European Union following a contentious referendum.  The vote was very close, with 52% voting to leave and 48% voting to remain.  Markets are reacting with volatility, as might be expected, and British Pound Sterling values have sunk overnight to a historic 30 year low against the dollar.  To add to the turmoil, David Cameron, the British Prime Minister, has announced that he will be stepping down with his successor to be in place by the October Conservative Party conference.

That said, nothing is going to happen immediately.  There is a very specific legal process for Brexit and the timeline is hardly swift.  As the first step, the UK has to give notice to leave under Article 50 of the Lisbon Treaty.  Based on the Prime Minister’s announcement this morning and questions surrounding who might lead the negotiations on the terms of the UK’s exit from the EU, that notice may not be given for many weeks, if not months. That notice is also just the commencement of the process. Once notice has been given, there is then a two year period in which to negotiate the terms of an exit Treaty.

Our colleagues have posted more details on the Brexit process on Bryan Cave’s EU & Competition blog.

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Hightower Explores Intersection of Fintech and Bank Mergers

May 10, 2016

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Atlanta Partner Jonathan Hightower authored a BankThink piece in the American Banker on May 9, 2016 titled “Don’t Ignore This FDIC ‘Request for Comment.’”  The discusses FDIC Financial Institution Letter FIL-32-2016,  which asks for comment on the agency’s plan to explore the economic inclusion potential of mobile financial services.

Jonathan notes “banks’ focus on mobile products not only provides innovative benefits to underserved consumers who may lack branch access, but in light of regulators’ interest in the potential for mobile technology to expand economic inclusion, this focus may also help institutions overcome regulatory and community-based challenges to mergers.”

Click here to read the whole article.

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Survey of 2015 Georgia Corporate Case Law Developments

March 31, 2016

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The annual survey of decisions by state and federal courts during 2015 addressing Georgia corporate and business organization issues is now available.

This survey covers the legal principles governing Georgia businesses, their management and ownership. It catalogs decisions ruling on issues of corporate, limited liability company and partnership law, as well as transactions and litigation issues involving those entities, their governance and investments in them.

In 2015, there were a number of noteworthy decisions spanning a wide variety of corporate and business law issues. There were two significant decisions involving directors of corporations who simultaneously serve as trustees for trusts who hold a minority interest in the corporation – one dealing with liability issues, the other an insurance coverage dispute. Elsewhere, the Georgia Supreme Court issued an important opinion reaffirming the duty to read transactional documents and clarifying the circumstances under which that duty can be excused. The Supreme Court also addressed the availability of prejudgment interest in an action for specific performance of a stock purchase agreement, and the remedy of equitable partition in the context of a joint venture agreement. The Georgia Court of Appeals addressed two issues of first impression: the first dealing with a judgment creditor’s right to a charging order against an LLC member, the other dealing with an LLC’s right to recover for discomfort and annoyance in a nuisance action. The courts also dealt with interesting questions of jurisdiction and venue over corporate entities, including whether a foreign corporation or LLC with its corporate headquarters outside of Georgia can remove a tort action from the county in which it is filed to the county where its largest Georgia office is located.

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Walt Moeling Selected as Lifetime Achiever

March 30, 2016

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Atlanta Senior Counsel Walter Moeling has been selected as a Lifetime Achievement Award recipient by The Fulton County Daily Report. Moeling received the honor for his considerable contributions to the legal profession in Georgia.

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.

He has been recognized by Who’s Who in America. He has been ranked since 1998 in Best Lawyers, including as Best Lawyers’ 2015 Atlanta Financial Services Regulation Law “Lawyer of the Year” and as one of the top 10 lawyers in the state. He also has been featured annually in Chambers USA since 2003.

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Crossroads: Banking and Fintech Conference in Atlanta 4/20-4/21

March 8, 2016

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We are pleased to announce that we are co-hosting a conference with Banks Street Partners and TTV Capital that will take a new look at the opportunities that exist for the banking community within the evolving Fintech landscape.

The agenda features prominent industry speakers regularly quoted in the media as foremost experts in the banking and fintech arenas. The morning keynote will be given by Chris Nichols, Chief Strategy Officer for CenterState Bank. Chris Nichols is an active bank investor, entrepreneur and lover of quantified banking. He currently serves on the Editorial Advisory Board of Banking Exchange and is co-founder of Wall&Main, Inc. a leading platform for crowdfunding. Prior to joining CenterState, Chris was CEO of the capital markets arm of Pacific Coast Bankers’ Bank and is the former author of the Banc Investment Daily.

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Rinearson Identifies How US is Behind in FinTech Innovation

January 6, 2016

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London and New York Partner Judith Rinearson authored a “Bankthink” opinion piece posted on the front page of American Banker  on Dec. 28 regarding differences in how the payments industry is perceived and supported in the U.S. and Europe.

“My biggest surprise after moving to London in September is how far the U.S. has to catch up to the United Kingdom and other European Union countries in the fintech and payments innovation race. Compared with their U.S. counterparts, U.K. and EU regulators are really trying to encourage payment innovation through licensing regimes. One thoughtful and pragmatic step taken by the U.K.’s payments regulator, the Financial Conduct Authority, was to ask industry for its input on appropriate policy. But the U.K. and EU’s bigger advantage is how their ‘e-money’ and payment service licensing processes work compared with U.S. state money transmitter laws.”

Click here to read her full article.

Rinearson is leader of Bryan Cave’s global Prepaid & Emerging Payments Team and has recently been named co-chair of the firm’s new Fintech Team.

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Bryan Cave Files Amicus Brief On Behalf of GBA in Overdraft Case

January 3, 2016

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Byran Cave filed an amicus brief on behalf of the Georgia Bankers Association and the Georgia Chamber of Commerce in the Bickerstaff v. SunTrust Bank litigation currently pending before the Georgia Supreme Court in which a bank customer seeks to certify a class action against SunTrust to challenge the propriety of certain overdraft charges.

The trial court below ruled that while the plaintiff could opt out of an arbitration clause in the deposit agreement with SunTrust to pursue such challenges in his own right, the plaintiff could not do so on behalf of a class. The Georgia Court of Appeals affirmed the trial court ruling that “the deposit agreement contract and its arbitration clause prohibit [plaintiff] from altering others’ contracts where he is neither a party nor in privity with a party.” The plaintiff in the case then petitioned the Georgia Supreme Court to grant certiorari in the case. Certiorari was granted in September to resolve the issue.

Bryan Cave was thereafter retained by both the Georgia Banker’s Association and the Georgia Chamber of Commerce to weigh in and support the fundamental proposition that the deposit agreements should be honored by the courts and that strangers, such as the plaintiff, should not be permitted to interfere with such contracts under the guise of the class action rules. Bill Custer and Jen Dempsey of Bryan Cave, along with former Supreme Court Justices George Carley and Hardy Gregory appeared as counsel on behalf of the GBA and Chamber as amici. The case has now been fully briefed and oral arguments are set for January 4, 2016.

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Preventing Your Own Peach Breach

November 24, 2015

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Preventing Your Own Peach Breach

November 24, 2015

Authored by: Bryan Cave

A Crash Course on Data Breach and Cyber Security

The recent disclosure by the Georgia Secretary of State of voter’s Social Security Numbers has caused a number of our clients – particularly those based in Georgia – to request additional information concerning how to prevent and respond to data security incidents.

To that end we have gathered together our recorded materials on effective breach prevention and response into a suggested week long training program with one suggested hour of programming every day the week following Thanksgiving. Celesq, the company that maintains the recordings of our programs, has agreed to waive the fee for any of our clients that wish to access them during the week.

  • Monday, November 30th: Data Security Boot Camp: A Crash Course in the Law
  • Tuesday, December 1st: Investigating Data Breaches: A Guide for In-House Counsel
  • Wednesday, December 2nd: Cyber-Insurance
  • Thursday, December 3rd: Data Breach Litigation
  • Friday, December 4th: Ethics and Data Breach Investigation

To receive a registration waiver, email Audrey Brekel at audrey.brekel@bryancave.com. To sign up for any, or all, of the days, please follow the directions here.

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