BankBryanCave.com

Bank Bryan Cave

Federal Reserve

Main Content

FRB Lifts Threshold for Financial Stability Review

April 11, 2017

Authors

Lyn Schroeder

FRB Lifts Threshold for Financial Stability Review

April 11, 2017

by: Lyn Schroeder

In its March 2017 approval of People United Financial, Inc.’s merger with Suffolk Bancorp (the “Peoples United Order”), the Federal Reserve Board eased the approval criteria for certain smaller bank merger transactions by expanding its presumption regarding proposals that do not raise material financial stability concerns and providing for approval under delegated authority for such proposals.  The Dodd-Frank Act amended Section 3 of the Bank Holding Company Act to require the Federal Reserve to consider the “extent to which a proposed acquisition, merger, or consolidation would result in greater or more concentrated risks to the stability of the United States banking or financial system.”

In a 2012 approval order, the Federal Reserve established a presumption that a proposal that involves an acquisition of less than $2 billion in assets, that results in a

Read More

Congress Makes Capital Requirements Easier for Small Banks

April 6, 2015

Authors

Jonathan Hightower

Congress Makes Capital Requirements Easier for Small Banks

April 6, 2015

by: Jonathan Hightower

Author’s Note: On April 9, 2015, the Federal Reserve adopted a final rule to implement the changes discussed below.  The final rule will be effective 30 days after publication in the Federal Register.

For many years, bankers have asked the question, “What size is the right size at which to sell a small community bank?”  Some offer concrete asset size thresholds, while others offer more qualitative standards. We have always believed the best answer is “whatever size allows an acquirer’s profits and capital costs to deliver a better return than yours can.” While that answer is typically greeted with a scratch of the head, a recent change in law impacts the answer to that question for smaller companies. Given a proposed regulatory change by the Federal Reserve, a growing number of small bank holding companies will soon have lower cost of capital funding options that are not available

Read More

A Significant Change in the Regulatory Oversight of Third-Party Relationships

April 7, 2014

Authors

Bryan Cave

A Significant Change in the Regulatory Oversight of Third-Party Relationships

April 7, 2014

by: Bryan Cave

Both Banks and Their Vendors Must Pay Attention

Introduction

First there was the bulletin about third-party vendors issued by the Consumer Financial Protection Bureau (CFPB) in April 2012. Then it was the FFIEC’s guidance on IT service providers in October 2012.  Next came the FDIC’s September 2013 Financial Institution Letter about payment-processing relationships with high-risk merchants.  Then there was the news on October 30, 2013 about the OCC’s guidance on third-party relationships, followed shortly by the Federal Reserve Board’s guidance on managing outsourcing risks in December 2013.

Let’s face it. There has always been guidance and concern about banks and their relationships with third-party service providers. But in recent years it has become quite obvious that the bar has been raised on how banks relate to their third-party processors, program managers, and other service providers. These

Read More

The Way Forward for Banking: An Interview with Walt Moeling

March 27, 2014

Authors

Bryan Cave

The Way Forward for Banking: An Interview with Walt Moeling

March 27, 2014

by: Bryan Cave

Walt Moeling recently sat down with Donna Fay, the Director of Examinations for the Federal Reserve Bank of Atlanta, to discuss the future of community banking in connection with the Federal Reserve’s 2014 Banking Outlook Conference.

As noted by the disclaimer at the beginning of the video, Walt’s views unfortunately don’t necessarily represent the views of the Federal Reserve Bank of Atlanta. However, we can be hopeful that the Federal Reserve Bank of Atlanta continues to be open to our point of view.

Read More

District Court Judge Strikes Down Federal Reserve Board’s Interchange Rule

August 5, 2013

Authors

Bryan Cave

District Court Judge Strikes Down Federal Reserve Board’s Interchange Rule

August 5, 2013

by: Bryan Cave

Decision Favoring Merchants Could Potentially Cost Banks Billions

A U.S. District Court judge recently granted summary judgment against the Board of Governors of the Federal Reserve System (the “Federal Reserve” or “Board”), ruling that the Federal Reserve disregarded Congress’s statutory intent by “inappropriately inflating all debit card transaction fees” and considering data it was not permitted to use in setting a 21-cent cap on debit-card transaction fees under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). In NACS v. Board of Governors of the Federal Reserve System, 11-cv-02075, U.S. District Court, District of Columbia (Washington), Judge Richard J. Leon also ruled in favor of the retailers’ challenge to the network non-exclusivity and routing provisions, stating that the Board’s rule is inconsistent with the “clear, defined language in the network non-exclusivity and routing provisions” and does not support competition or choice in the marketplace.

Read More

Fall 2012 Update on Regulatory and Legal Changes Affecting Community Banks

October 30, 2012

Authors

Dan Wheeler

Fall 2012 Update on Regulatory and Legal Changes Affecting Community Banks

October 30, 2012

by: Dan Wheeler

Bank regulators have been as busy as usual in 2012, but some of the more interesting regulatory and legal changes have come from non-bank regulators and the courts. And, the JOBS Act changes described below actually lifts the regulatory burden on banks a bit, a rare respite in an otherwise challenging regulatory environment.

The JOBS Act eases bank capital activities and M&A.  The Jumpstart Our Business Startups Act affects community banks in 4 key ways:

  • “Going public” is easier. Banks that have less than $1 billion in gross revenue can qualify as an “emerging growth” company and take advantage of relaxed rules that allow them to “test the waters” and obtain a confidential prior review of an IPO filing by the SEC, provide reduced executive compensation disclosures and file without a SOX 404 attestation by the bank’s auditors.
  • The “crowdfunding” rule (expected in early 2013)
    Read More

Opposition to Imposing Basel III Regime on Community Banks Growing; Comment Period Ends on October 22, 2012

October 8, 2012

Authors

Michael Shumaker

Opposition to Imposing Basel III Regime on Community Banks Growing; Comment Period Ends on October 22, 2012

October 8, 2012

by: Michael Shumaker

In recent weeks, we have been closely monitoring a flurry of activity among many banking organizations to respond formally to the proposed Basel III rules. With few exceptions, the response of the banking industry, particularly with respect to the impact of the proposed Basel III rules on community-focused financial institutions, has been roundly negative.

In mid-September, U.S. Senator Mark Warner (D-VA) and U.S. Senator Pat Toomey (R-PA) circulated a letter  to the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation that has garnered the signature of 51 of their colleagues in the U.S. Senate. The senators’ letter raises their concerns with the “significant, unintended consequences for community banks” that may stem from the proposed capital rules that would make it tougher for smaller banks to raise capital or result in reduced lending in the communities they serve.

Another prominent critic of

Read More

Federal Reserve Board Issues Final Rule on Interchange Fraud Adjustment

October 1, 2012

Authors

Bryan Cave

Federal Reserve Board Issues Final Rule on Interchange Fraud Adjustment

October 1, 2012

by: Bryan Cave

The Federal Reserve Board (FRB) announced an amendment to the fraud-prevention adjustment provisions of Regulation II’s debit card interchange fee standards. When Reg. II was initially released in July 2011, the section addressing this adjustment was issued as an interim final rule.

To be eligible for the adjustment of no more than one cent per transaction, an issuer must develop and implement policies and procedures reasonably designed to take effective steps to reduce the occurrence of, and costs to all parties from, fraudulent electronic debit transactions, including developing and implementing cost-effective fraud prevention technology.

According to the Board’s press release, the final rule simplifies the elements required to be included in the issuer’s fraud prevention policies and procedures, which now must address:

  • Methods to identify and prevent fraudulent electronic debit transactions;
  • Monitoring volume and value of its fraudulent electronic debit transactions;
  • Appropriate responses to
    Read More

Financial Services Update – August 26, 2011

August 29, 2011

Authors

Matt Jessee

Financial Services Update – August 26, 2011

August 29, 2011

by: Matt Jessee

Bernanke Signals No New Fed Stimulus

On Friday, Federal Reserve Chairman Ben Bernanke offered an upbeat assessment of the domestic economy that offered little indication of any immediate monetary stimulus by the Fed. However, Bernanke did acknowledge that the nation faces significant challenges, including high unemployment and an unsustainable federal debt. Bernanke also offered an unusual critique of the government’s fiscal policy, criticizing the political battle over raising the debt-ceiling. While Bernanke failed to signal any future Fed action, he did say the issue of potential action would be discussed at the next meeting in late September.

Treasury Department Announces OFAC Settlement with JPMorgan Chase

On Thursday, the Treasury Department announced that JPMorgan Chase has agreed to pay $88.3 million as part of a settlement over a series of transactions involving Cuba, Iran and Sudan. The Treasury Department’s Office of Foreign Assets Control (OFAC) said in a news release that

Read More

Financial Services Update – July 22, 2011

July 22, 2011

Authors

Matt Jessee

Financial Services Update – July 22, 2011

July 22, 2011

by: Matt Jessee

Debt Limit Negotiations Continue

On Tuesday, the House passed its “Cut, Cap and Balance” legislation which would cut government spending now, cap it in the future and approve a constitutional amendment to balance the federal budget. On Friday, the Senate voted to table a motion to consider the measure. However, after another tense week of negotiations between the Senate Republicans, Senate Democrats, House Republicans, House Democrats, and the President Obama, the outline of a purported deal seemed to emerge late Thursday. Congressional Democrats reported that President Obama discussed with them a deal he had reached with Speaker John Boehner to raise the debt ceiling by $2.4 trillion, enough to get through the 2012 elections, with at least as much in immediate spending cuts and a promise of  “tax reform”  in 2012. On Friday, in response to the news of a “deal,” Speaker Boehner told the House Republican Conference there was

Read More
The attorneys of Bryan Cave LLP make this site available to you only for the educational purposes of imparting general information and a general understanding of the law. This site does not offer specific legal advice. Your use of this site does not create an attorney-client relationship between you and Bryan Cave LLP or any of its attorneys. Do not use this site as a substitute for specific legal advice from a licensed attorney. Much of the information on this site is based upon preliminary discussions in the absence of definitive advice or policy statements and therefore may change as soon as more definitive advice is available. Please review our full disclaimer.