Financial Services Spotlight

October 2016 Developments

Posted by Roy Andersen on Nov 6, 2016 12:00:00 PM

Overview

The SEC adopted proposed and final rules regarding the activities of and definitions of clearing agencies.  Relations with Burma and Cuba continue to be eased.  The CFTC has promulgated proposed rules on implementing its cross border rules on corporate practices.  The banking agencies published proposed rules on cyber security.

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Topics: SEC, Cuba, Qualifying Master Netting Agreements, RESPA, Burma, Covered Clearing Agencies

September 2016 Developments

Posted by Roy Andersen on Oct 4, 2016 12:00:00 PM

Overview

Two developments signal for the first time in my memory a cut back in bank powers.  The Fed is restricting physical commodities activities and merchant banking activities in its proposed rule just below.  In the same vein, the OCC is restricting national bank activities in industrial metals—i.e., copper.  These proposals are reversing decisions made many years ago and have seemingly operated without any appreciable losses to the banking industry.  The Fed is exempting certain banks from the full range of capital requirements and stress test is a proposed rule.

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Topics: OCC, Derivatives Clearing Organizations, Bank Holding Company Act, Japan, Regulation Q

August 2016 Second Half Developments

Posted by Roy Andersen on Sep 8, 2016 12:00:00 PM

Overview

The OCC published a proposed rule dealing with qualified financial contracts and their effect on the U.S. financial system.   The proposal is similar to a rule proposed by the Federal Reserve earlier this year.  In essence, QFCs will be required to contain provisions that restrict acceleration and contain contractual stay provisions.  FinCEN is proposing to expand its requirements for AML programs to banks that are not currently subject to federal supervision.

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Topics: Whistleblowers, OCC, CFTC, Federal Housing Finance Agency, AML Program

July 2016 Second Half Developments

Posted by Roy Andersen on Jul 27, 2016 12:00:00 PM

Overview

The CFPB has issued its proposed regulations to regulate payday loans and other similar high cost extensions of credit. An extensive study of these types of loans revealed that there were some unfair and deceptive practices and a lack of focus on whether the consumers had the wherewithal to repay these loans on schedule without continuing to renew such credits.

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Topics: CFPB, Daylight Overdrafts, Payday Loans, Home Mortgage Data, Transnational Criminal Organizations

July 2016 First Half Developments

Posted by Roy Andersen on Jul 18, 2016 12:00:00 PM

Overview

The CFPB has issued its regulations to implement one of the few legislative changes to ease the compliance burden on banks.  The privacy rules have produced one of the least helpful disclosure requirements on how banks treat your confidential information.  Most consumers received rafts of these confusing disclosures to no useful end, except to trip up banks at examination time.  These were so burdensome that Congress actually provided some relief.  The CFPB rule demonstrates how confusing and overlapping rules are since the bulk of the rule is to ease interactions with other disclosure rules that intersect with the privacy notices.  The CFPB also published a special report on the mortgage servicing business highlighting the compliance problems in that business and suggesting that a crackdown was coming.

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Topics: OFAC, CFPB, Penalty Calculations, Mortage Servicing, Regulation P

June 2016 Second Half Developments

Posted by Roy Andersen on Jul 6, 2016 12:00:00 PM

Overview

The CFTC published a proposed rule on clearing interest rate swaps and identified a number of new swaps that would be required to be cleared.   In addition, the CFTC tightened the recordkeeping and reporting of certain swap transactions and the SEC finalized a rule requiring trade acknowledgements.  The FDIC published two rules on the treatment of failed banks with assets related to securitizations and its own requirements to maintain records of how it manages receiverships.

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Topics: North Korea, CFTC, Security-Based Swaps, Regulation Z, Interest Rate Swaps, Western Balkans

June 2016 First Half Developments

Posted by Roy Andersen on Jun 16, 2016 12:00:00 PM

Overview

The Fed has published the proposed enhanced prudential standards for certain large insurance companies in the United States.  These standards are similar to the requirements that have been imposed on large United States based and foreign financial organizations.  It is probable that these proposals will be vigorously opposed by the insurance industry.  FinCEN has taken the rare step of determining that a country is of primary money laundering concern. In this case, North Korea has been so designated.  The banking agencies have re-proposed the rules regarding incentive-based compensation.

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Topics: Belarus, North Korea, CFTC, FSOC, Liquidity Risk Measurement, NSFR, Automated Trading, Hizballah, ANPR

May 2016 Second Half Developments

Posted by Roy Andersen on May 31, 2016 12:00:00 PM

Overview

The CFPB has issued a proposed rule that would restrict the use of mandatory arbitration in consumer finance contracts.   Arbitration is generally more expensive for consumers and eliminates the chance for class actions.  The proposed rule would cover a broad range of financial products.  The CFTC has issued its final rule on cross-border application of its margin rules on uncleared swaps. One Commissioner described the new rule as “muddled methodology” as well as impractical and unnecessary and harmful to US businesses. 

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Topics: Margin Requirements, CFPB, Iraq, Burma, Arbitration Agreements

May 2016 First Half Developments

Posted by Roy Andersen on May 18, 2016 12:00:00 PM

Overview

In a major change for compliance at financial institutions, FinCEN is requiring banks to understand who are the beneficial owners of bank institutional customers.  This will require banks to gather even more information from legal entities on who the individual owners are.   This rule becomes effective in two years because it may take that long to develop compliance mechanisms.  Swap dealers now have final standards regarding business operations including the requirements to appoint a chief compliance officer and how to deal with cross-border application of CFTC rules.

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Topics: Securities Exchange Act, Syria, Qualified Financial Contracts, Yemen, FFIEC, GSIB

April 2016 Second Half Developments

Posted by Roy Andersen on May 5, 2016 12:00:00 PM

Overview

The President issued an order subjecting certain Libyan persons to asset blocking and travel restrictions due to the deteriorating conditions in Libya.  OFAC will most likely update its sanctions to reflect the President’s actions. 

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Topics: Libya, OFAC, CFPB, RESPA, NCUA, Mortgage Servicing, Regulation Z

About the Spotlight


The Financial Services Spotlight examines the regulatory and technology developments impacting banks, asset managers and other financial services providers—where challenges meet opportunities.

 

Meet the Authors


Roy C. Andersen, of counsel in Sullivan & Worcester's New York office, is a member of the Corporate Department. Mr. Andersen focuses on bank regulatory and compliance matters, including international banks and their branches and agencies in New York.

Joel Telpner, partner in the firm's New York office, is a seasoned advisor, strategist and problem solver. Mr. Telpner brings more than 30 years of legal experience in a career that includes time as an AmLaw 100 partner, the former U.S. general counsel of a global financial institution, and a venture capitalist. He is recognized for his ability to deftly manage complex financial transactions, especially those involving sophisticated structured finance and derivatives matters and has an extensive and unique combination of transactional and regulatory experience.

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