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Bank Regulation

On October 26, 2022, the Securities and Exchange Commission (the “SEC”) adopted a long-awaited rule[1] that will require listed companies to adopt and publicly file so-called “clawback” policies to recover erroneously awarded incentive-based compensation following accounting restatements. Companies with securities listed on national securities exchanges, including NYSE and Nasdaq, will be required to implement such policies within 60 days of the effective date of new listing standards, which the exchanges must adopt within 12 months of the new rule’s publication in the Federal Register. Companies who fail to comply will be subject to delisting.

The most significant deviation from the SEC’s initial proposal of the clawback rule in 2015 is that Rule 10D-1 will require companies to conduct a clawback analysis not only for “Big R” accounting restatements, which must be disclosed under Item 4.02(a) of Form 8-K, but also for “little r” accounting restatements, which involve the correction of errors in prior period financial statements when those financial statements are included in a current period filing.

Clawback Policy Requirements

Under the new rule, a listed company’s clawback policy must require the company to recover, reasonably promptly, erroneously awarded incentive-based compensation from persons who served as an executive officer at any time during the performance period for such incentive-based compensation and who received such compensation during the three fiscal years preceding the date on which the company is required to prepare an accounting restatement. The compensation to be recovered is the amount in excess of what would have been paid based on the restated results.Continue Reading SEC Requires Clawback Policy

In the wake of rulings upholding federal regulators’ “valid when made” rules, a new lawsuit serves as a reminder that state regulators and class-action plaintiffs’ lawyers may continue to challenge the bank partnership lending model under the “true lender” doctrine.

In early March, the fintech OppFi filed suit to stop…
Continue Reading Fintech Lawsuit Highlights True Lender Risk for Bank Partnership Lending Model

On January 1, 2021, the Senate voted to override President Trump’s veto of the National Defense Authorization Act (the “NDAA” or “Act”), which includes over 200 pages of significant reforms to the Bank Secrecy Act (“BSA”) and other anti-money laundering (“AML”) laws that have been working their way through Congress

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Continue Reading BSA/AML Reform in the 2021 NDAA Becomes Law

On November 20, 2020, the Office of the Comptroller of the Currency (“OCC”) issued a proposed rule that would impose on large national banks and federal savings associations (collectively, “banks”) a requirement to provide “fair access” to the financial products and services those institutions offer. The proposal is intended to

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Continue Reading OCC Proposes “Fair Access” Requirements for Large Banks

On November 19, 2020, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Financial Crimes Enforcement Network, National Credit Union Administration, and Office of the Comptroller of the Currency (collectively, the “Agencies”) issued a joint fact sheet clarifying how banks subject to the Bank Secrecy Act

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Continue Reading Federal Banking Agencies and FinCEN Issue Joint Statement on Risk-Based Approach to Customer Due Diligence for Charities and Non-Profit Organizations

Under the Biden administration, it is unlikely that major financial services legislation like a Dodd-Frank Act will pass in the next few years, especially if Republicans hold the Senate. The Biden Administration will nevertheless have significant opportunities to shape policy through the federal financial agencies. The adage that “personnel is…
Continue Reading Anticipated Changes in Financial Regulation

On Wednesday, May 20, 2020, the Board of Governors of the Federal Reserve System (the “Board”) announced further details on the Term Asset-Backed Securities Loan Facility (“TALF”).  The Board’s announcement contains key documents and forms, including the Master Loan and Security Agreement; updated FAQs and a blackline reflecting changes

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Continue Reading Federal Reserve Publishes Additional Detail on TALF

Yesterday, on Sunday, March 15, 2020, in response to the COVID-19 pandemic’s impact on U.S. and global economic activity, the Federal Reserve’s Federal Open Market Committee (“FOMC”) cut the target range of the federal funds rate to 0 to 1/4 percent until such time as the FOMC is “confident that

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Continue Reading Federal Reserve Takes Extraordinary Actions Supporting Financial Markets to Mitigate COVID-19 Impact

On January 8, 2020, Federal Reserve Board (“FRB”) Governor Lael Brainard delivered remarks on the state of Community Reinvestment Act (“CRA”) reform before an audience at the Urban Institute.  As we summarized in a client alert, last month, the Office of the Comptroller of the Currency (“OCC”) and the

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Continue Reading FRB Governor Brainard Discusses Path Forward on Community Reinvestment Act Reform

On October 18, the Supreme Court granted certiorari in Seila Law v. Consumer Financial Protection Bureau (CFPB). The question presented before the Court is “whether the substantial executive authority yielded by the CFPB, an independent agency led by a single director, violates the separation of powers.”  In addition, the

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Continue Reading Supreme Court Grants Certiorari in Seila Law v. Consumer Financial Protection Bureau