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Financial Services Law Insights and Observations


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  • FDIC updates FAQs for financial institutions affected by Covid-19

    Federal Issues

    On May 20, the Federal Deposit Insurance Corporation (FDIC) updated its frequently asked questions  issued to financial institutions affected by Covid-19 (previously covered here, here, and here). The updated FAQs provide guidance on Community Reinvestment Act requirements, including, among other things, (i) whether Covid-19-affected states and jurisdictions are considered CRA designated disaster areas, (ii) how activities undertaken in response to Covid-19 that are responsive to community needs will be considered in CRA examinations, and (iii) whether bank loans made under the Paycheck Protection Program or Main Street Lending Program are eligible for CRA consideration. 

    Federal Issues Covid-19 FDIC Financial Institutions CRA SBA

  • Colorado Banking and Financial Services commissioners provide guidance on Safer at Home orders

    State Issues

    On May 15, the Colorado Banking and Financial Services commissioners provided additional guidance on the Safer at Home orders. The commissioners continue to encourage Colorado state-chartered financial institutions to work with affected borrowers and customers, and provide payment relief to consumers impacted by Covid-19. For example, financial institutions are encouraged to waive fees for services (e.g., overdraft fees, ATM fees) and provide accommodations such as eliminating minimum balance requirements on accounts and increasing daily withdrawal limits on ATMs.

    State Issues Covid-19 Colorado Financial Institutions Consumer Finance Overdraft ATM

  • OFAC designates Iranian front company and owner; DOJ files concurrent criminal charges and related civil forfeiture action

    Financial Crimes

    On May 1, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) designated a dual Iranian and Iraqi national and a company owned, controlled, or directed by the designated individual for their alleged involvement with Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). According to OFAC, the designated individual allegedly provided support for several years to IRGC-QF’s smuggling operations by securing entry to vessels carrying IRGC-QF shipments, using business connections to facilitate logistics, and developing revenue generating illicit business opportunities. As a result of the sanctions, “all property and interests in property of these persons that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC further noted that its regulations “generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons,” and warned foreign financial institutions that knowingly facilitating significant transactions or providing significant financial services to the designated individuals may subject them to U.S. correspondent account or payable-through sanctions.

    On the same day, the DOJ announced a two-count criminal complaint against the designated individual and another Iranian national for allegedly conspiring to provide U.S. financial services to help several Iranian entities and their front companies purchase a petroleum tanker. The defendants allegedly concealed that the sale of the vessel was destined for Iran, and attempted to evade the regulations, prohibitions, and licensing requirements of the International Emergency Economic Powers Act and the Iranian Transactions and Sanctions Regulations. The DOJ also filed a related civil forfeiture complaint claiming that more than $12 million is subject to forfeiture.

    Financial Crimes OFAC Department of Treasury Iran Of Interest to Non-US Persons Financial Institutions

  • North Carolina passes Covid-19 Recovery Act

    State Issues

    On May 5, the North Carolina governor signed the Covid-19 Recovery Act, which provides certain relief to North Carolinians in response to the Covid-19 crisis. Among other things, the legislation authorizes emergency video notarization and video witnessing during the state of emergency. The legislation also provides limited immunity to essential businesses from civil liability for claims alleged to have been caused by the Covid-19 pandemic. Essential businesses include financial and insurance institutions, as determined by Executive Order 121, and any business that the Department of Revenue determines is essential.

    State Issues Covid-19 North Carolina Notary Financial Institutions Insurance

  • Wisconsin Department of Financial Institutions issues guidance for conducting annual meetings

    State Issues

    On April 3, the Wisconsin Department of Financial Institutions issued emergency guidance for annual meetings of members and shareholders as a result of Covid-19 emergency measures. The guidance provides that all annual meetings may be conducted virtually, provided the meeting adheres to standard record-keeping obligations. 

    State Issues Wisconsin Covid-19 Financial Institutions

  • Special Alert: CARES Act places significant burdens on servicers of consumer debt but provides some relief to depositories

    Federal Issues

    President Trump late last week signed the Coronavirus Aid, Relief, and Economic Security Act that attempts to soften the negative economic effects of the Covid-19 pandemic on consumers, including by suspending payments for certain student loan borrowers and enabling mortgage loan borrowers to easily obtain temporary forbearances. The act also provides certain limited regulated relief for banks and credit unions.  

    This Special Alert summarizes the provisions providing relief to borrowers with federal student loans and the provisions of Title IV that dictate the manner in which servicers and collectors report borrowers to consumer reporting bureaus; provide forbearance, foreclosure, and eviction relief throughout the housing market; and provide limited regulatory relief to depository institutions. 

    Buckley issued a separate Special Alert  on the Small Business Administration-related provisions contained in Title I of the act and will be covering separately the new Special Inspector General’s office created by the act, False Claims Act considerations, and other liability risks that we expect to arise.  

    Federal Issues Special Alerts Covid-19 CARES Act Federal Legislation Consumer Finance Student Lending Mortgages Financial Institutions

  • FDIC requests 2019 diversity self-assessments through new automated portal

    Agency Rule-Making & Guidance

    On March 23, the FDIC issued FIL-23-2020 to announce a request from the agency’s Office of Minority and Women Inclusion for 2019 diversity self-assessments from FDIC-regulated financial institutions in accordance with Section 342 of the Dodd-Frank Act. Financial institutions with 100 or more employees should refer to the FIL for instructions on completing the voluntary self-assessment. The FDIC strongly encourages financial institutions to use the new automated portal: Diversity Self-Assessment of FDIC Regulated Financial Institutions when completing self-assessments, as it allows for multiple authorized users and the ability to view previous submissions, as well as provides additional resources for participants. Self-assessments are due May 31.

    Agency Rule-Making & Guidance FDIC Federal Issues Diversity Dodd-Frank Financial Institutions

  • Fed extends small financial institutions' filing deadline

    Federal Issues

    On March 26, the Federal Reserve (Fed) announced that it will not take action against small financial institutions that miss the deadline for filing their March 31 “Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) or Financial Statements of U.S. Nonbank Subsidiaries of U.S. Bank Holding Companies (FR Y-11).” Pursuant to the Fed’s guidance, small financial institutions with $5 billion or less in assets must file their financial statements within 30 days of the official deadline. The Fed also encouraged institutions to communicate with their Reserve Bank if they anticipate the need for additional time to file their statements. As previously covered by InfoBytes, the federal regulatory agencies issued a similar 30-day grace period for institutions that must submit call reports.

    Federal Issues Financial Institutions Federal Reserve Bank Holding Companies Covid-19

  • Idaho issues stay at home order

    State Issues

    On March 25, the Idaho Department of Health and Welfare issued an Order to Self-Isolate for all individuals living in Idaho except for those providing or receiving certain services or activities or engaged in essential businesses. Banks, credit unions, and financial institutions, including processing and maintaining systems for processing financial transactions and services are deemed essential business. Idaho also has published a List of Essential Services.

    State Issues Credit Union Financial Institutions Idaho Covid-19

  • Massachusetts DOB issues expectations for relief to mortgage borrowers

    State Issues

    On March 25, the Massachusetts Division of Banks (DOB) issued a memorandum to financial institutions, mortgage lenders, and mortgage loan servicers outlining the actions the DOB “fully expects” institutions will take to alleviate the impact of Covid-19 on mortgage borrowers. The actions include (i) postponing foreclosures for 60 days; (ii) forbearing payments for 60 or more days; (iii) waiving fees for late payments and online payments for at least 60 days; (iv) refraining from reporting late payments to credit rating agencies for 60 days; (v) offering an additional 60-day grace period for borrowers to complete trial loan modifications; (vi) ensuring borrowers do not experience a disruption of service if a mortgage servicer closes its office; and (vii) proactively reaching out to borrowers to explain the assistance being offered. The memorandum also emphasizes that reasonable and prudent efforts to assist borrowers are consistent with safe and sound banking practices and will not be subject to examiner criticism.

    State Issues State Regulation Massachusetts Financial Institutions Mortgage Lenders Mortgage Servicing Mortgages Consumer Lending | Consumer Finance Examination Covid-19


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