United States

Topic: Banking

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US banking regulators propose a rule for 36-hour notice of breach

On December 18, 2020, the US Department of the Treasury (Office of the Comptroller of the Currency), Federal Reserve Board and Federal Deposit Insurance Corporation (FDIC) jointly announced a 53-page proposed rule that would require banks to notify their regulators within 36 hours of a “computer-security incident” that rises to the level of a “notification … Continue Reading

New beneficial ownership requirements should help with AML KYC obligations

When banks and certain other financial institutions open accounts for entities, among other anti-money laundering (AML) customer identification requirements, they must obtain beneficial ownership information on individuals owning 25% or more of the entity and a person with significant control over the entity such as a president or chief executive officer. We have published several … Continue Reading

UK Risk Retention Requirements Post Brexit

Having only days previously made statements that such a deal was unlikely and warning their citizens to prepare for a no deal Brexit, the United Kingdom (UK) and the European Union (EU) announced on 24 December 2020 that they had reached an agreement in principle on trade and co-operation. More than 1200 pages long, the … Continue Reading

New York City PACE administrator provides program update

As we discussed in our October blogpost “Advances in New York City PACE programs,” the New York City Department of Finance (“NYCDOF”) has published for comment proposed rules that would establish criteria and program guidelines for the New York City Commercial Property Assessment Clean Energy (“C-PACE”) Program. The proposed rules establish eligibility criteria for obtaining … Continue Reading

FSB highlights need for resolution preparedness

On 18 November 2020, the Financial Stability Board (FSB) published its 2020 Resolution Report. In relation to banks the report notes that global systemically important banks (G-SIBs) are estimated to already meet the final 2022 minimum external total loss absorbing capacity (TLAC) requirement. While disclosure of external TLAC levels by G-SIBs has improved over the … Continue Reading

The LIBOR Transition – US Banking Agencies issue statement on replacement rates

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (collectively, the “Banking Agencies”) issued a statement (“Statement”) on November 6, 2020, regarding the upcoming discontinuation of LIBOR as a reference rate. Referencing a recent statement on the LIBOR transition issued by … Continue Reading

2020 list of global systemically important banks

On 11 November 2020, the Financial Stability Board (FSB) issued a press release confirming the 2020 list of global systemically important banks (G-SIBs). The list of G-SIBs is based on end-2019 data and the updated assessment methodology published by the Basel Committee on Banking Supervision in July 2013. The overall number of G-SIBs remains 30. … Continue Reading

The LIBOR Transition – New York State introduces LIBOR replacement legislation

When the use of LIBOR as a reference rate in financial contracts is phased out at the end of 2021, those contracts currently utilizing LIBOR may face costly litigation, renegotiation and market disruption. On October 28, 2020, New York State Senate Bill S9070 (“S9070”) was introduced and is intended to possibly pre-empt much of that … Continue Reading

The LIBOR Transition – ISDA 2020 IBOR Fallbacks Protocol and Supplement

Introduction On October 23, 2020, the International Swaps and Derivatives Association (“ISDA”) released the ISDA IBOR Fallbacks Protocol (“Protocol”) and a Supplement to the 2006 ISDA Definitions (“Supplement”). While the Supplement amends definitions to the 2006 ISDA Definitions, it only amends definitions for new contracts. The Protocol gives participants an opportunity to amend existing contracts. … Continue Reading

Advances in New York City PACE programs

The New York City Department of Finance (“NYCDOF”) has published for comment proposed rules which would establish criteria and program guidelines for the New York City Commercial Property Assessment Clean Energy (“C-PACE”) Program. The proposed rules establish eligibility criteria for obtaining C-PACE loans for the purpose of retrofitting or renovating properties for energy efficiency or … Continue Reading

Is it still legal? Lingering uncertainty in securitization of loans and the interest rate that can be charged to borrowers

In 2015, the US Court of Appeals for the Second Circuit in New York stunned markets when it issued an opinion in Madden v. Midland Funding, LLC that ignored the “valid-when-made” principle of usury law that had been in place for decades. That decision impugned much of the secondary consumer debt market, including credit card … Continue Reading

Basel Committee approves annual G-SIBs assessment, updates workplan to evaluate post-crisis reforms

On 25 September 2020, the Basel Committee on Banking Supervision (Basel Committee) issued a press statement following its meeting on 14, 18 and 25 September 2020 to take stock of COVID-19 risks to the global banking system and related vulnerabilities. Key points in the press statement include: The Basel Committee reiterates its previous guidance that … Continue Reading

FinCEN finalizes AML requirements for certain banks; asks for comments on possible rulemaking on AML compliance programs

On September 15, 2020, the Financial Crimes Enforcement Network (FinCEN), the US anti-money laundering (AML) agency, published a final rule that completes the circle of all banking organizations being treated the same for purposes of AML compliance requirements for banks. The final rule covers banks that do not have a Federal functional regulator, such as … Continue Reading

The LIBOR Transition – CFTC issues more LIBOR transition relief

On August 31, 2020, in response to requests by the Alternative Reference Rates Committee (ARRC), the US Commodities Futures Trading Commission (CFTC) issued revised no-action letters to swap dealers and other market participants relating to the transition from use of the London Interbank Offered Rate (LIBOR) as a reference rates in transactions. These letters supersede … Continue Reading

US banking agencies and FinCEN issue statements regarding AML enforcement

Last month the US federal banking agencies (the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, and the National Credit Union Administration, collectively, the “US banking regulators”) and the Financial Crimes Enforcement Network (“FinCEN”) the US anti-money laundering (“AML”) agency, issued statements providing guidance on their … Continue Reading

The LIBOR Transition – ARRC Releases Helpful Resource Guides for Market Participants

With the potential end of LIBOR quickly approaching in only 16 months, the ARRC has been publishing many helpful resources to aid in the market’s transitions from LIBOR to SOFR, including multiple quick reference resource guides listed below. As part of the ARRC’s Summer Series (a webinar series aimed at educating the public about SOFR … Continue Reading

US Banking Regulators Finalize Volcker Rule Covered Funds Revision

On July 31, 2020, the Federal Register published the final Volcker Rule covered funds amendments promulgated in June by the federal financial services regulators (the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, the Office of the Comptroller of the Currency, and the Commodity Futures Trading Commission). In her latest … Continue Reading

OCC issues groundbreaking interpretive letter on cryptocurrency custody services

On July 22, 2020, the US Office of the Comptroller of the Currency (OCC) issued an interpretive letter concluding that national banks and federal savings associations have the authority to provide cryptocurrency custody services for customers. The letter, which uses the term “cryptocurrency” to encompass digital currencies, virtual currencies, and “digital assets that are not … Continue Reading

The LIBOR Transition — US banking regulators caution banks on LIBOR transition risks

As noted in previous LIBOR Transition posts, the availability of LIBOR as a reference rate is not guaranteed beyond the end of 2021. On July 1, 2020, the Federal Financial Institutions Examination Council (FFIEC), which consists of US federal and state banking regulators and the Consumer Financial Protection Bureau, issued a Joint Statement highlighting the … Continue Reading

FSB and Basel Committee set out supervisory recommendations for benchmark transition

On 9 July 2020, the Financial Stability Board (FSB) and the Basel Committee on Banking Supervision (Basel Committee) issued a report on supervisory issues associated with benchmark transition. The report includes insights on remaining challenges to LIBOR transition based on surveys undertaken by the FSB, the Basel Committee and the International Association of Insurance Supervisors. … Continue Reading

Basel Committee publication: Targeted revisions to the CVA risk framework

On 8 July 2020, the Basel Committee on Banking Supervision (Basel Committee) published a paper setting out the final targeted revisions to the credit valuation adjustment (CVA) risk framework. In January 2019 the Basel Committee published the revised market risk framework. In November 2019 the Basel Committee consulted on a set of targeted final revisions … Continue Reading

The LIBOR Transition — CFPB addresses elimination of LIBOR in consumer credit transactions

LIBOR is used as a component of an interest or finance charge in consumer transactions as well as the commercial transactions we have discussed in prior LIBOR Transition posts. On June 4, 2020, the US Consumer Financial Protection Bureau (CFPB), issued a proposed rule that would amend US consumer credit regulations to address the pending … Continue Reading

OCC formalizes “valid-when-made” interest rate doctrine on loan transfers

On June 2, 2020, the Office of the Comptroller of the Currency (“OCC”) published a final rule clarifying the permissible interest rates on transferred loans in relation to the “valid-when-made” doctrine. According to the “valid-when-made” doctrine, a loan is valid at its inception and cannot become invalid or unenforceable based on its original terms due … Continue Reading

The LIBOR Transition – ARRC 2020 Best Practices for Completing the Transition from LIBOR

Following on our post discussing the ARRC’s publication of their 2020 Key Objectives, we mentioned that ARRC panned to release a set of recommended best practices. As promised, the ARRC has published guidance for Best Practices for Completing the Transition from LIBOR (“Best Practices Guidance”), along with an accompanying ARRC fact sheet, which sets forth … Continue Reading
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