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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 in office, President Trump has taken steps to undo or alter major components of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). These include delaying implementation of the “Fiduciary Rule,” which regulates the relationship between investors and their financial advisors, directing the Treasury Secretary to review the Dodd-Frank Act in its entirety, and signing a resolution passed by Congress that repeals a Dodd-Frank regulation on disclosures of overseas

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Trump May Not be the Only Catalyst for Administrative Reform

March 21, 2017

Authors

Crystal Homa

Trump May Not be the Only Catalyst for Administrative Reform

March 21, 2017

by: Crystal Homa

In the past few months, there has been a lot of speculation regarding the future of many administrative agencies under Trump’s administration. However, two current cases pending in the D.C. Circuit have the potential to have a dramatic impact on administrative agencies and past and present regulatory enforcement actions by such agencies.

In Lucia v. SEC, the SEC brought claims against Lucia for misleading advertising in violation of the Investment Advisers Act of 1940. The enforcement action was initially resolved by an administrative law judge (ALJ); however Luica was later granted a petition for review based on an argument that the administrative hearing was unconstitutional because the ALJ was unconstitutionally appointed. The issue made it up to the U.S. Court of Appeals for the D.C. Circuit who recently held that the ALJ

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Walt Moeling Always Has a Story

March 3, 2017

Authors

Robert Klingler

Walt Moeling Always Has a Story

March 3, 2017

by: Robert Klingler

The February/March 2017 edition of Banking Exchange contains a lengthy interview between Bank Exchange’s Executive Editor, Steve Cocheo, and our own Walt Moeling.  Framed in the context of seven questions asked of Walt, the interview does a great job illustrating Walt’s use of stories to prove a point.

Talking to banking attorney Walter Moeling about an organization that forbade talk about mergers and acquisitions—because it may make folks unhappy—leads to his gentle scoff: “There’s nobody involved in banking who is not interested in mergers.”

And then, in typical Moeling fashion, a short point brings him to a story. Walt Moeling always has a story—nearly always with a point or moral for the listener to let sink in.

“I was called upon to do a board session, a strategic planning meeting.

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Parents, not Banks, Should Aim For Empty Nests

March 2, 2017

Authors

Crystal Homa

Parents, not Banks, Should Aim For Empty Nests

March 2, 2017

by: Crystal Homa

I recently happened to find myself among a group of young professionals who had grown up in the same rural area of Georgia, but had dispersed to not only different parts of the state, but also different parts of the country and even at times, the world. At some point in the evening, it became the topic of conversation that one of the members of this group still banked at his hometown community bank despite no longer living there and spending almost a decade traveling the world. His childhood friends were shocked, uttering things like “Wait, you still bank there?” and “Isn’t it time you leave the nest?”

As someone who did not grow up in Georgia and thus was an outsider to the conversation, I really began to think about this.

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Core Principles for Financial Regulation

February 7, 2017

Authors

Robert Klingler

Core Principles for Financial Regulation

February 7, 2017

by: Robert Klingler

On February 3, 2017, President Trump issued an executive order setting forth his administration’s core principles for the regulation of the U.S. financial system.  While generally touted as the administration’s first affirmative steps to dismantle the Dodd-Frank Act, the executive order actually does little to implement any immediate change but says a lot about the overall framework by which the Trump Administration intends to approach financial regulation.

In addition to standard executive order boilerplate, the executive order sets forth two specific actions.  First, it establishes the “principles of regulation” that the administration will look at in evaluating regulations.

Section 1. Policy. It shall be the policy of my Administration to regulate the United States financial system in a manner consistent with the following principles of regulation, which shall be known as the Core

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Is the OCC on a Path to Greater Power?

December 6, 2016

Authors

Robert Klingler

Is the OCC on a Path to Greater Power?

December 6, 2016

by: Robert Klingler

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

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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 the agency’s existence and actions violated the Constitution, the agency’s grant of power under Dodd-Frank and the Administrative Procedures Act.  Increasingly, the courts have dealt the agency significant setbacks.  This author believes that Director Cordray only persisted in his aggressive pursuit of policy goals because he believed that pursuit was

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Engaging Your Board with a New Bank Logo

November 11, 2016

Authors

Robert Klingler

Engaging Your Board with a New Bank Logo

November 11, 2016

by: Robert Klingler

From time to time we hear from bank senior management that their board doesn’t seem engaged, or that they can’t get a sustained conversation out of their board.  Instead, board meetings consist of routine review of management reports, with motions, seconds, and unanimous adoptions of management recommendations without any meaningful discussion.  Years of bank board meetings can go by without a single dissenting vote recorded in the bank’s board minutes.  Regulators may being to question, perhaps correctly, that the board has merely become a rubber stamp for management, and that the board is merely “going through the motions” at each board meeting.

Over time, we have found one topic for which no board member can remain silent, and everyone (and I mean everyone) has an opinion.

What color should the bank’s new logo be?

Branch lobby carpet colors can also be quite effective, as can capitalization (grammar, not

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Bitcoin after Brexit: Safe Haven or Harbinger of Future Distress?

July 21, 2016

Authors

Bryce Suzuki and Justin Sabin

Bitcoin after Brexit: Safe Haven or Harbinger of Future Distress?

July 21, 2016

by: Bryce Suzuki and Justin Sabin

What a difference a week can make! On June 17, 2016, bitcoin was trading at more than $750. Five days later, as polls showed the Brexit vote leaning heavily to “remain,” bitcoin dropped as low as $585. After the vote to leave the European Union became final, the British Pound, the Euro, the Chinese Yuan, and global stocks dropped precipitously. Bitcoin, on the other hand, spiked to more than $676. Could this mean bitcoin is being perceived as a new safe-haven asset?

A Brief Background on Bitcoin Generally

Bitcoin often is described as a “digital currency.” On a more technical level, bitcoin is a digital asset within a peer-to-peer computer network payment system created in 2008 by an anonymous cryptographer going by the pseudonym Satoshi Nakamoto. Because the computer network uses open-source, peer-to-peer software, no truly central authority administers and oversees transactions, and no government controls or backs the digital

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Economies of Scale Encourage Continued Consolidation

July 20, 2016

Authors

Robert Klingler

Economies of Scale Encourage Continued Consolidation

July 20, 2016

by: Robert Klingler

The Federal Reserve Bank of St. Louis just published a short summary of research by economists with the Federal Reserve Bank of Kansas City concluding that compliance costs weigh “quite a bit” more heavily on smaller banks than their larger counterparts in the community banking segment.  Looking specifically at banks under $10 billion in total assets (where additional Dodd-Frank-related burdens are triggered), the study found that the ratio of compliance costs as a percentage of total noninterest expenses were inversely correlated with the size of the bank.  While banks with total assets between $1 and $10 billion in total assets reported total compliance costs averaging 2.9% of their total noninterest expenses, banks between $100 million and $250 million reported total compliance costs averaging 5.9% and banks below $100 million reported average compliance costs of 8.7% of non-interest expenses.

While nominal compliance costs continued to increase as banks increased in

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