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Financial Services Law Insights and Observations


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  • UK’s Prudential Regulation Authority imposes its second highest fine against a bank

    On January 30, UK’s Prudential Regulation Authority (PRA) fined a large bank £57,417,500, the second highest fine ever imposed by the PRA, for allegedly failing to properly implement Depositor Protection Rule requirements. The bank allegedly exhibited shortcomings in depositor protection like maintaining information integrity, which is relied upon by the Financial Services Compensation Scheme (FSCS) to make payments to depositors in the event of a firm failure. In addition, the PRA alleged that the bank did not identify eligible deposits for FSCS protection from 2015 to 2022. The bank also allegedly failed to notify the PRA of inaccuracies in its account of eligible FSCS-protected accounts in a timely manner or to appoint a senior manager responsible for ensuring compliance with Depositor Protection Rules. The bank agreed to settle this matter at an early stage of the PRA’s investigation.  

    Bank Regulatory Of Interest to Non-US Persons UK PRA Enforcement Deposits

  • FDIC Finalizes Depositor Preference Rule

    Consumer Finance

    On September 10, the FDIC approved a final rule to clarify that deposits in foreign branches of U.S. banks are not insured. The impetus for the rule was the U.K. Prudential Regulation Authority’s (PRA) (formerly the Financial Services Authority) proposal to prohibit banks from non-European Economic Area countries from operating deposit-taking branches in the U.K. unless U.K. depositors in such branches would be on an equal footing in the national depositor preference regime with home-country (uninsured) depositors if a bank were to fail and require a resolution. The FDIC believes that U.S. banks seeking to comply with the PRA proposal likely will change their U.K. deposit agreements so that the deposits are payable both in the U.K. and in the U.S. The FDIC rule is intended to protect the Deposit Insurance Fund against the potential resulting liability that the FDIC could face as a deposit insurer for customers of foreign branches of U.S.-based insured depository institutions. While deposits at foreign branches of U.S. banks will not be insured, they can be treated as deposits for purposes of national depositor preference laws. The rule will not affect deposits in overseas military banking facilities governed by regulations of the Department of Defense. The rule takes effect 30 days from publication in the Federal Register.


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