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Financial Services Law Insights and Observations


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  • Agencies extend favorable CRA consideration for certain areas affected by Hurricane Maria

    On September 20, the Federal Reserve, FDIC, and OCC announced they are providing a 36-month extension to give favorable consideration under the CRA for bank activities that help revitalize or stabilize areas in Puerto Rico and the U.S. Virgin Islands impacted by Hurricane Maria. This extension is the second extension following the original period provided in January 2018 and the first extension granted in May 2021.

    The agencies determined that the FEMA’s designation of parts of Puerto Rico and the U.S. Virgin Islands as “active disaster areas” demonstrates ongoing community need to the area. The extension allows the agencies to give favorable consideration to a financial institution’s activities in the qualifying areas that satisfy the definition of “community development” under the CRA, including loans and investments, through September 20, 2026. The activities will be treated consistently with the agencies’ original Interagency Statement in January 2018.

    Bank Regulatory Federal Issues OCC FDIC Federal Reserve CRA Disaster Relief

  • Biden announces nomination for FDIC Inspector General

    Federal Issues

    On September 15, President Joe Biden announced his intention to nominate Jennifer L. Fain as Inspector General of the FDIC. Fain brings over 22 years of experience in the inspector general community, most recently serving as Deputy Inspector General for the Export-Import Bank of the United States (EXIM). She has extensive oversight experience in financial services and consumer protection and has held leadership positions in various audit, inspection, and evaluation offices within federal agencies. Fain holds an M.S. in Finance from Johns Hopkins University and a B.S.B.A. in Accounting from the University of Colorado.

    Federal Issues Bank Regulatory FDIC Biden

  • Fed announces enforcement action against Kansas bank for operational deficiencies

    On September 5, the Fed announced a cease and desist order (the “order”) against a Kansas bank holding company and its subsidiary bank (collectively, the “bank”) for having significant operational deficiencies, including deficiencies related to staffing, internal controls, credit risk management, lending and credit administration, capital, information technology and information security, books and records, regulatory reporting, liquidity and funds management, earnings, interest rate risk management, third-party risk management, and other deficiencies such as compliance with federal laws related to AML/BSA requirements.

    The order directs the bank to, among other things, (i) strengthen board oversight; (ii) engage a third party to conduct an assessment of the bank’s corporate governance and staffing; (iii) improve lending and credit administration policies and procedures; (iv) correct the identified information technology and information security deficiencies; (v) revise its allowance for credit losses methodology to comply with supervisory guidance; (vi) enhance interest rate risk management practices; (vii) improve internal controls; (viii) submit a written plan to maintain sufficient capital; (ix) enhance liquidity risk management; and (x) improve the bank’s earnings and overall condition. The order also directs the Bank to improve its BSA/AML compliance program and internal audit program, and to take all necessary steps to correct all violations of law or regulation and to ensure future compliance.

    Bank Regulatory Federal Issues Enforcement Cease and Desist Bank Secrecy Act Anti-Money Laundering Kansas

  • FDIC announces launch of new examination portal

    On September 5, the FDIC announced the launch of a new Banker Engagement Site (“BES”) through FDICconnect. The BES will provide a secure and efficient electronic portal through which financial institutions may exchange documents, information and communications for consumer compliance and Community Reinvestment Act examinations. BES will not be used for other FDIC examinations, including safety and soundness examinations. The announcement notes that the FDIC’s existing tool to exchange examination information, the Enterprise File Exchange, will continue to be used when the pre-planning for consumer compliance and CRA activity initiated prior to the availability of BES and also may be utilized in some additional circumstances. 

    Bank Regulatory Federal Issues Examination FDIC CRA

  • Federal and state financial regulatory agencies issue joint statement on the effects of Hurricane Idalia on supervisory practices

    On September 1, the FDIC, Fed, NCUA, OCC and CSBS issued a joint statement recognizing the serious impact of Hurricane Idalia on the customers and operations of many financial institutions in the effected area.

    The guidance discusses the following aspects of financial institution operations:

    • Lending: The agencies encourage financial institutions to work constructively with borrowers in affected communities, including prudent efforts to adjust existing loan terms, and declares that the agencies will not subject such efforts to examiner criticism. “The agencies recognize that efforts to work with borrowers in communities under stress can be consistent with safe-and-sound practices as well as in the public interest.”
    • Temporary Facilities: The agencies understand that many financial institutions face staffing, power, telecommunications, and other challenges in re-opening facilities and will expedite, as appropriate, any request to operate in temporary facilities.
    • Publishing Requirements: The agencies understand that the damage that the hurricane caused may affect compliance with publishing and other requirements for branch closings, relocations, and temporary facilities.  Impacted institutions should contact their primary federal and/or state regulator.
    • Regulatory Reporting Requirements: Impacted institutions that expect to encounter difficulty meeting the agencies' reporting requirements should contact their primary federal and/or state regulator to discuss their situation. 
    • Community Reinvestment Act: Financial institutions may receive CRA consideration for community development loans, investments or services that revitalize or stabilize federally designated disaster areas.
    • Investments: The agencies encourage financial institutions to monitor municipal securities and loans affected by the hurricane, including those related to local government projects.


    Bank Regulatory Federal Issues OCC FDIC NCUA CSBS Disaster Relief Consumer Finance

  • FDIC’s CRA evaluation rates fintech bank “needs to improve” for alleged FTC Act violations

    On September 5, the FDIC released the list of nonmember banks examined for compliance with the Community Reinvestment Act (CRA), which is intended to “encourage insured banks and thrifts to meet local credit needs.” Included in the list was a fintech bank that the FDIC rated as “Needs to Improve” for reasons involving its overall record of helping meet the credit needs of underserved communities. According to the FDIC’s CRA performance evaluation of the Utah-based bank, the FDIC adjusted the CRA rating from “Satisfactory” to “Needs to Improve” due to illegal credit practices that resulted in violations of Section 5 of the FTC Act, Unfair or Deceptive Acts or Practices that were present during the time of the evaluation period. The FDIC found that the bank’s actions impacted a significant number of customers across the bank’s fuel card programs, and that the practices were sustained for multiple years. The FDIC also noted that, after the bank was notified of the violations, it implemented corrective measures, including customer restitution.


    Bank Regulatory CRA FDIC Fintech Compliance FTC Act Unfair Deceptive

  • FDIC, Fed issue new rules and guidance aimed to strengthen resolution planning at large banks

    On August 29, the FDIC and the Federal Reserve Board issued a joint press release inviting public comment on proposed guidance that serves to toughen requirements for non-G-SIB large bank holding companies’ resolution plans, or “living wills” that set forth strategies for rapid and orderly resolution under bankruptcy in the event of financial distress or failure. The proposed guidance, which includes guidance for both domestic triennial full filers and guidance for foreign triennial full filers, will generally apply to certain bank holding companies and foreign banking associations with between $250 billion and $700 billion in total assets. This guidance is separate from the guidance previously issued to the largest and most complex companies, which is already in place. The guidance (i) is organized around key areas of potential vulnerability, such as capital, liquidity, and operational capabilities; (ii) provides agency expectations for both single point of entry and multiple point of entry strategy needs; and (iii) proposes that foreign banking organizations develop U.S. resolution strategies that complement their global resolution plans. The proposed guidance will be published in the Federal Register, with comments due by November 30, 2023.

    Separately on August 29, the FDIC approved a notice of proposed rulemaking to enhance resolution planning for insured depository institutions (IDIs) with at least $100 billion in total assets. The proposed rule would strengthen existing IDI resolution planning requirements under 12 CFR § 360.10 and would require a resolution submission from covered IDIs every two years, with limited filings in between. Covered IDIs would be required to submit comprehensive resolution plans that would “enhance current IDI resolution planning requirements by incorporating useful elements of existing guidance and important lessons learned from past plan reviews and from past large bank resolutions, including those earlier this year.” Additionally, IDIs with total assets of at least $50 billion but less than $100 billion would submit more limited informational filings and would not be required to develop a resolution strategy. Comments on the proposed rule are due by November 30, 2023.

    Bank Regulatory Federal Issues Agency Rule-Making & Guidance FDIC Federal Reserve Compliance

  • OCC allows institutions in Florida affected by Hurricane Idalia to temporarily close

    On August 29, the OCC issued a proclamation permitting OCC-regulated institutions, at their discretion, to close offices in areas of Florida affected by Hurricane Idalia “for as long as deemed necessary for bank operation or public safety.” In issuing the proclamation, the OCC noted that only bank offices directly affected by potentially unsafe conditions should close, and that banks should make every effort to reopen as quickly as possible to address customers’ banking needs. The proclamation directs institutions to OCC Bulletin 2012-28 for further guidance on natural disasters and other emergency conditions.

    Find continuing InfoBytes coverage on disaster relief here.

    Bank Regulatory Federal Issues Disaster Relief Florida Consumer Finance

  • Fed issues enforcement action against state bank and its holding company

    On August 17, the Fed announced an enforcement action against a state bank and its holding company for failing to comply with conditions imposed during the approval process for the bank to become a member of the Federal Reserve System and subsequent application for acquisition. Namely, the order provides that, among other conditions and limitations, the bank was required to provide advance notice of any change in its business plan, and was found to have changed the business plan without the requisite prior written approval. As part of the order, the bank will wind down its operations as part of a purchase agreement where it will sell its assets to a third-party bank and it will ensure the conservation of capital, preservation of cash assets, and will limit its business activities to only those necessary to consummate the purchase agreement.

    Bank Regulatory Federal Issues Federal Reserve Enforcement

  • OCC announces Tropical Storm Hilary disaster relief

    On August 21, the OCC issued a proclamation providing discretion to OCC-regulated institutions to close offices affected by Tropical Storm Hilary in California, Nevada, and Arizona “for as long as deemed necessary for bank operation or public safety.” The proclamation directs institutions to OCC Bulletin 2012-28 for further guidance on actions they should take in response to natural disasters and other emergency conditions. According to the OCC, only bank offices directly affected by potentially unsafe conditions should close, and institutions should make every effort to reopen as quickly as possible to address customers’ banking needs.

    Find continuing InfoBytes coverage on disaster relief here.

    Bank Regulatory Federal Issues OCC Disaster Relief California Nevada Arizona


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