Banking & Finance Law Report

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UPDATE: Foreseeable pitfalls of the SAFE Banking Act

The SAFE Banking Act has hit a snag in Congress thanks to opposition from the chair of the Senate Banking Committee.  The October 2019 post, “Temper Your Expectations on Cannabis Banking Reform: foreseeable pitfalls of the SAFE Banking Act,” explained how the SAFE Act intended to alleviate the bank industry’s cannabis problem, and where it may … Continue Reading

Temper Your Expectations on Cannabis Banking Reform: foreseeable pitfalls of the SAFE Banking Act

On September 25, 2019, the Secure and Fair Enforcement (SAFE) Banking Act of 2019 passed the U.S. House of Representatives by an impressive margin of 321 to 103. The U.S. Senate—once seen as a gauntlet of insurmountable obstacles to cannabis banking reform—has also seen some meaningful progress. Senator Mike Crapo (R., Idaho), the influential chair … Continue Reading

The Bank Industry’s Cannabis Problem

The banking industry has a cannabis problem—it cannot bank cannabis related businesses. Despite the fact that over 35 states have legalized medical cannabis in some form and more than 10 others have recreational cannabis laws, the mainstream banking industry has been largely unable to provide services to lawful cannabis companies. That is because federal law … Continue Reading

Changes to Ohio Banking Law

Last year, the Ohio Legislature made a number of important changes to Ohio’s statutory banking code. These are the first comprehensive changes in more than twenty years.  Most of the changes were effective January 1, 2018. The heavy lifting of the new Ohio banking bill is language that consolidates a number of existing financial institution … Continue Reading

Judicial Review of CAMELS Ratings – Banking Organizations Weigh In

Several trade associations for the banking industry have weighed in on a pending potential landmark case in the Northern District of Illinois regarding the possible judicial review of CAMELS (Capital, Asset Quality, Management, Earnings, Liquidity and Sensitivity) ratings of financial institutions. As noted by this blog earlier this year, the United States Court of Appeals … Continue Reading

Potential Changes for HVCRE Loans

In this blog, we have described some of the original concerns with the “high volatility commercial real estate” loan regulation as well as some suggestions for change. These rules apply to certain real estate loans for acquisition, development and construction. Recently, there have been suggestions that changes are possible regarding “high volatility commercial real estate” loans … Continue Reading

JUDICIAL REVIEW OF CAMELS RATINGS?

Bankers will be interested in a recent appellate court order in a bank regulatory case. Their lawyers will be astonished by it because the ruling lights a flicker of hope in an area where there has been none for many years:  the judicial review of CAMELS ratings. The ruling came early in a litigation seeking … Continue Reading

High Risks of Banking with “Legal” Marijuana Businesses

Twenty-three states and the District of Columbia now permit the use and possession of marijuana to some degree under state law, and public support for legalization is at an all-time high. Despite the growing number of states legalizing marijuana, however, it remains a Schedule 1 controlled substance under the federal Controlled Substances Act (CSA). President … Continue Reading

Website Accessibility Regulations Delayed Until 2018 but Banks Should Not Table the Issue

Long awaited Guidelines from the federal Department of Justice (DOJ) for website accessibility under the Americans with Disabilities Act (ADA) are now expected sometime in 2018. But, as discussed below, that does not mean that financial institutions transacting business with the public through websites and mobile applications should ignore web-based accessibility entirely until 2018. Law … Continue Reading

Federal Reserve Expresses Openness to Relaxation of HVCRE Regulations on Community Banks

Last year, as noted by this blog, the FDIC, OCC, and Federal Reserve imposed harsher capital requirements on certain “high volatility commercial real estate,” or HVCRE, exposures, in accordance with the Basel III international banking standards. These new requirements were opposed not only by the real estate industry but also by banking associations, particularly the … Continue Reading

Newly Effective HVCRE Loan Rules

Lenders who finance commercial real estate exposures should be aware of new regulations that impose harsher capital requirements on certain “high volatility commercial real estate,” or HVCRE, exposures. In June 2013, the FDIC, OCC, and Federal Reserve jointly approved proposed rules intended to implement new international banking standards, known as the Basel III Capital Accords, … Continue Reading

The Eleventh Circuit Holds That the National Bank Act Preempts State-Law Whistleblower Claims by Terminated National Bank Officers

The United States Court of Appeals for the Eleventh Circuit just recently held that an officer of a nationally-chartered bank regulated by the National Bank Act (NBA) had no claim for wrongful termination under a Florida whistleblower statute.  According to the federal court, the state-law whistleblower claims were preempted by 12 U.S.C. § 24 (Fifth) … Continue Reading

FDIC Guidance on Brokered Deposits

Late last year, the FDIC released guidance on brokered deposits in the form of a series of frequently asked questions and answers (FAQs).  The guidance is available here: https://www.fdic.gov/news/news/financial/2015/fil15002a.pdf The ostensible purpose of the guidance is to collect previously scattered views on various questions related to two primary subjects: what are brokered deposits and how they should be reflected … Continue Reading

UPDATE: FDIC joins in on IOLTAs for CRA consideration

Editor’s Note: This post was prepared by Susan A. Choe, Deputy Director & General Counsel, The Ohio Legal Assistance Foundation. As an update to our guest blog post of April 10, 2014, the Ohio Legal Assistance Foundation is pleased to report that the Federal Deposit Insurance Corporation (FDIC) will join the Ohio Office of the … Continue Reading

CIP To Cover Small Business Ownership And Control

It has been an active couple of weeks for FinCEN from a regulatory pronouncement perspective. For example, FinCEN has proposed a regulation to amend existing “know your customer” rules for certain financial institutions to require the verification of beneficial owners of legal entities. Legal entities in this context would mean corporations, partnerships or similar business … Continue Reading

FDIC Guidance on Agricultural Credits

At a time of relative affluence in the farming industry, the FDIC has issued a warning on a need for monitoring agricultural credits. FIL-39-2014 (July 16, 2014) suggests that banking institutions of all sizes should carefully consider a recent, negative projection by the U.S. Department of Agriculture. While current market conditions are good, the projection … Continue Reading

Risk Management and In-house Bank Lawyers

In-house bank lawyers got a vote of confidence last week. The context was a comment submitted to the Office of the Comptroller of the Currency regarding proposed enforceable guidelines on the risk management practices for the nation’s largest banks. Last January, the OCC proposed the guidelines and asked for comments. Previously, risk management practices suggested … Continue Reading

Some Big Picture Links

At year-end, when there may be more time and inclination for busy bank executives (and their counsel) to consider the big picture, a look at financial research from your federal bank regulators may provide insight and food for thought. As a place to start, here are two recent examples. The first is a research project … Continue Reading
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