Gibson Dunn Discusses U.S. Banking Regulation of Confidential Supervisory Information

One of the thornier areas of law for U.S.-regulated banks and their holding companies is that regarding confidential supervisory information (CSI). U.S. regulators treat bank examination reports and related correspondence and materials, which are often the most useful sources of information about a financial institution, as the regulators’ own property, with parties subject to severe penalties for disclosing such information without prior regulatory approval.[1] Receiving approval is often a time-consuming process that may frustrate corporate transaction and litigation deadlines. In addition, each of the federal regulators – the Board of Governors of the Federal Reserve System (Federal Reserve), the … Read more

Gibson Dunn Discusses Volcker Rule Revisions

Since it was enacted in July 2010, the Dodd-Frank Act’s Volcker Rule has challenged banks and their regulators alike.  This is particularly the case with respect to its restrictions on proprietary trading.  It has been one thing for former Federal Reserve Chairman Volcker to state that “you know it when you see it,” quite another to formulate a regulation that accurately defines proprietary trading and implements a broad statutory directive across complex business operations.

On August 20, 2019, the Office of the Comptroller of the Currency and the Board of Directors of the Federal Deposit Insurance Corporation, Director Gruenberg dissenting, … Read more

Gibson Dunn Discusses OCC Office’s Guidance on Third-Party Business Relationships

In June, the Office of the Comptroller of the Currency (OCC), the regulator of national banks, federal savings associations, and federal savings banks, issued additional guidance on the oversight and risk management of third-party relationships (Bulletin 2017-21).  The guidance takes the form of responses to fourteen “frequently asked questions” about the OCC’s prior guidance in its Bulletin 2013-29.  In that Bulletin, the OCC required banks to adopt risk management and oversight procedures for third-party relationships based on the level of risk and complexity of the applicable relationship.  OCC Bulletin 2013-29 also outlined a recommended risk management process consisting of:  (i) … Read more

Gibson Dunn explains Resolution Triumphs: Proposed U.S. TLAC and Long-Term Debt Requirements for G-SIBs

At an October 30th open meeting, the Board of Governors of the Federal Reserve System (Federal Reserve) approved a proposed rule (Proposed Rule) that would impose Total Loss Absorbing Capacity (TLAC) and long-term debt (LTD) requirements for globally significant banks (G-SIBs). In so doing, it anticipated by ten days the Financial Stability Board (FSB), which finalized its template for TLAC on November 9th. Although the Proposed Rule is consistent with important aspects of the FSB’s TLAC requirements, its LTD requirement is more onerous. In addition, the Proposed Rule would impose new “clean holding company” requirements on institutions subject … Read more

Gibson Dunn discusses Developments in Virtual Currency

The pace of regulation and enforcement actions relating to virtual currencies has continued to pick up during the fall of 2014. We discuss below the following recent developments: (1) updated guidance from the Financial Crimes Enforcement Network on the applicability of rules regarding licensed money transmitters; (2) proposed rules from the Consumer Financial Protection Bureau that could implicate bitcoin debit cards and other prepaid accounts; (3) the role of the Commodity Futures Trading Commission in regulating virtual currencies; (4) the potential consequences of Internal Revenue Service reporting requirements for foreign accounts; (5) the State of New York’s proposed “BitLicense” regulatory … Read more

Gibson Dunn discusses Cybersecurity Regulation in the Financial Sector

In response to a string of publicly disclosed cyberattacks against financial institutions in recent months, New York and federal regulators are pushing the financial sector to better protect itself and, notably, are seeking additional information about banks’ cybersecurity efforts.  Benjamin Lawsky, the Superintendent of the New York State Department of Financial Services (“DFS”) has been at the forefront of this increased regulatory focus.

New York State

On October 21, 2014, Superintendent Lawsky reportedly sent a letter to dozens of banks that not only urges them to address the cybersecurity of their third-party service providers but also requests detailed information about … Read more

Gibson Dunn discusses The Federal Reserve’s Section 165 Rule for Foreign Banks

On February 18th, the Board of Governors of the Federal Reserve System (Federal Reserve) voted unanimously to approve a final rule (Final Rule) implementing the enhanced prudential standards contained in Section 165 of the Dodd-Frank Act.  This Client Alert discusses the Final Rule as it applies to non-U.S. banks that are “foreign banking organizations” under the Federal Reserve’s regulations (FBOs).

As expected, the Final Rule breaks sharply from the Federal Reserve’s historical treatment of FBOs by requiring those FBOs with $50 billion or more in total global consolidated assets and $50 billion or more in total U.S. non-branch/agency assets (non-branch … Read more

Gibson Dunn discusses OCC Proposed Guidelines for Heightened Governance Standards for Large US Banks and Their Boards

The Office of the Comptroller of the Currency (OCC) has issued for public comment proposed guidelines (Guidelines) to establish minimum standards for risk management governance at large insured national banks, insured federal savings associations, and insured branches of non-U.S. banks (Banks).[1] The proposed Guidelines would generally apply to any such institution that has average total consolidated assets of $50 billion or more, measured over the four most recent consecutive quarters.

The Guidelines are yet another step in what is becoming a codified corporate governance framework for banking organizations that are deemed systemically significant, like the enhanced prudential standards proposed by

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Gibson Dunn discusses the Fed’s Foreign Banking Organization Proposal: Will Comments on the Intermediate Holding Company Requirement Be Heeded?

The comment period has now closed on the controversial proposed rule (FBO Proposal) of the Board of Governors of the Federal Reserve System (Board) implementing Sections 165 and 166 of the Dodd-Frank Act (Dodd-Frank) for foreign banking organizations (FBOs) and foreign nonbank financial companies supervised by the Board. 

If the FBO Proposal becomes final in the manner proposed, it will mark a sea change in the regulation of the U.S. operations of FBOs, by requiring FBOs with $50 billion or more in total global consolidated assets and $10 billion or more in total U.S. nonbranch assets to form an intermediate Read more

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