On July 28, 2023, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the National Credit Union Administration (the “NCUA”) and the Office of the Comptroller of the Currency (together, the “Agencies”) issued an addendum to the Interagency Policy Statement on Funding and Liquidity Risks, originally published in the Federal Register on March 22, 2010 (available here), in response to the recent instances of banks failing in part due to severe liquidity issues earlier this year (the “Addendum”).  The Agencies’ release of the Addendum follows recent statements made by the Chair of the Federal Reserve, Jerome Powell, on July 26, 2023, urging “banks broadly” to be proactive and test more regularly in order to be in a position to expeditiously access the discount window should ever the need to do so arise.

Continue Reading Federal Regulators Issue Updated Guidance on Liquidity Risks and Contingency Planning

On July 27, 2023, in an effort to bolster the resilience of the U.S. banking system in the aftermath of recent bank failures and to promote consistency with international banking capital standards, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency (together, the “Agencies”) issued a notice of proposed rulemaking which would standardize the way large banks calculate risk-weighted assets and minimum capital requirements (the “NPRM”).  While the NPRM primarily applies to those banks with $100 billion or more in total consolidated assets (“Large Banks”), banks with total assets below the $100 billion threshold may still be affected if they have either (a) trading assets and trading liabilities at or above $5 billion or (b) trading assets and trading liabilities greater than or equal to ten percent (10%) of their total assets.

Continue Reading Federal Regulators Issue Notice of Proposed Rulemaking Revising Capital Requirements for Large Banks and Banks with Significant Trading Activity

On November 18, 2021, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Board of Governors of the Federal Reserve System (FRB) (each, an “Agency” and, collectively, the “Agencies”) finalized a uniform regulation, codified at 12 C.F.R. Part 53, 12 C.F.R. Part 225.300 and 12 C.F.R. Part 304, with the stated purpose of improving the sharing of information about cybersecurity incidents harmful to the U.S. banking system (the “Regulation”). Pursuant to the Regulation, banks will be required to notify their primary federal regulatory Agency within thirty-six (36) hours of “any significant computer-security incident.”

Continue Reading Federal Bank Regulators Expand Duty to Notify after a Cybersecurity Event

Effective January 1, 2021, the National Defense Authorization Act for Fiscal Year 2021 (the “Act”) became law. Among other provisions, the Act contains the most significant changes to the Bank Secrecy Act (the “BSA”) since 2001. Most significantly, the Act requires the Department of the Treasury, through the Financial Crimes Enforcement Network (“FinCEN”), to adopt regulations within one year that will establish a framework by which smaller, closely held businesses, regardless of the type of enterprise (e.g., corporation, limited liability company or partnership) will be required to disclose their beneficial ownership to FinCEN.

Continue Reading BSA/AML Update: Significant New Requirements Ahead

US National Capitol

On December 27, 2020, as part of a larger government funding bill, President Donald J. Trump signed into law the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Act”). The Act, among other things, restarts the Paycheck Protection Program (“PPP”), as administered by the Small Business Administration (“SBA”), provides borrowers with greater flexibility in using PPP loan proceeds and expands the types of expenses eligible for loan forgiveness. The following is a summary of these provisions; however, please note that the SBA is required to issue implementing regulations by January 6, 2020 and we expect further guidance on the Act’s provisions at that time.

Continue Reading It’s Back: Paycheck Protection Program 2.0