The proposal would establish stricter oversight of certain transactions and responds to concerns that large asset managers may be exerting influence on FDIC-supervised institutions.
By Arthur S. Long, Pia Naib, and Deric Behar
On July 30, 2024, the Board of Directors of the Federal Deposit Insurance Corporation (FDIC) approved a Notice of Proposed Rulemaking to amend the agency’s regulations under the Change in Bank Control Act1 (the Proposal)2. The Proposal would require advance notice to
The proposal seeks to enhance Bank Secrecy Act compliance by aligning the agencies’ AML/CFT program requirements for banks with FinCEN’s requirements.
By Arthur S. Long, Pia Naib, and Deric Behar
On July 19, 2024, the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the National Credit Union Administration (NCUA) (collectively, the Agencies) issued a joint Notice of Proposed Rulemaking (the Proposed
OCC-supervised institutions with $100 billion or more in average total consolidated assets must be adequately prepared to mitigate severe financial and non-financial risks.
By Arthur S. Long, Pia Naib, and Deric Behar
On July 3, 2024, the Office of the Comptroller of the Currency (OCC) issued a proposal (the Proposal) to revise its enforceable recovery planning guidelines1 (the Guidelines) for certain large insured national banks, insured federal savings associations, and insured federal branches of non-US banks (together
Insured depository institutions with $50 billion to less than $100 billion in average total assets are subject to new resolution reporting standards, with enhanced reporting for those with average total assets of $100 billion or more.
By Arthur S. Long, Pia Naib, and Deric Behar
On June 20, 2024, the Federal Deposit Insurance Corporation (FDIC) issued a final rule (the Rule) updating the FDIC’s resolution plan regulations1 for covered insured depository institutions (CIDIs).2 The revisions are
The proposal seeks to make executive compensation arrangements more sensitive to risk and would require complex risk management programs to ensure compliance.
By Arthur S. Long, Pia Naib, and Deric Behar
On May 6, 2024, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Federal Housing Finance Agency (FHFA), and the National Credit Union Administration (NCUA) (collectively, the agencies) issued a joint Notice of Proposed Rulemaking (the Proposed Rule) to curb “excessive risk-taking” resulting from incentive-based compensation arrangements. The Board of Governors of the Federal Reserve System (FRB) and the Securities and Exchange Commission (SEC) did not join in the Proposed Rule.[1],[2] Critically, without the FRB’s participation, the Proposed Rule may not be finalized.
The Proposed Rule seeks to curtail incentives for certain financial services sector officers, employees, and directors to take inappropriate risks as a result of seeking excessive compensation, fees, or benefits. It uses a tiered approach based on asset size categories, where covered institutions (defined below) within the two largest asset size categories would be subject to prescriptive requirements related to the structure of their incentive-based compensation arrangements, including incentive award limits, deferral requirements, downward adjustments, forfeitures, and clawbacks.
The Proposed Rule re-proposes the regulatory text previously proposed in June 2016 (with a new preamble that acknowledges developments and supervisory learnings) and seeks additional feedback from commenters on potential alternatives to various provisions.
With regulators keeping close watch, the results underscore the need for ongoing climate risk management investment and adaptation within the financial sector.
By Betty M. Huber, Arthur S. Long, Pia Naib, and Deric Behar
On May 9, 2024, the Board of Governors of the Federal Reserve System (FRB) published summary results of a pilot climate scenario analysis (CSA) that explored how resilient six of the largest US bank holding companies (by total assets) are to climate-related financial risks. The analysis is intended to help the FRB “learn about large banking organizations’ climate risk-management practices and challenges and to enhance the ability of large banking organizations and supervisors to identify, estimate, monitor, and manage climate-related financial risks.”
The CSA was first announced in September 2022, and was intended as an exploratory exercise. It does not therefore result in any capital or supervisory consequences for the participating financial institutions.
The Proposal clarifies the FDIC’s bank merger approval process but may prove challenging for new large bank consolidations with the FDIC as the primary regulator.
By Arthur S. Long, Pia Naib, and Deric Behar
On March 21, 2024, the Board of Directors of the Federal Deposit Insurance Corporation (FDIC) approved Proposed Revisions to its Statement of Policy on Bank Merger Transactions (the Proposal). The Proposal adopts a principles-based approach and aims to update, strengthen, and clarify the FDIC’s
Banking agencies are alleged to have exceeded their congressional authorization, with potentially adverse consequences on banks and consumers.
By Arthur S. Long, Pia Naib, and Deric Behar
On February 5, 2024, several banking trade groups[1] (the Plaintiffs) sued the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Federal Reserve), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the Agencies) in the US District Court for the Northern District
As person-to-person payments become mainstream, the proposal would proactively outlaw fees that financial institutions could assess on instantaneously declined transactions.
By Arthur Long, Parag Patel, Barrie VanBrackle, and Deric Behar
On January 24, 2024, the Consumer Financial Protection Bureau (CFPB) proposed a rule, Fees for Instantaneously Declined Transactions (the Proposal), that would prevent banks and other financial institutions from charging non-sufficient funds (NSF) fees on transactions declined in real time.
When a consumer initiates a withdrawal, debit
Opposition and significant concerns dominate the record.
By Arthur S. Long, Roman Martinez, Pia Naib, and Jordan R. Goldberg
Key points: