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Greg leverages his broad experience and pragmatic approach, bringing a wealth of knowledge, business insight and practical problem-solving skills to efficiently manage transactions and advise clients in an evolving legal landscape. He combines his corporate and transactional experience with a robust knowledge of bank regulatory issues to provide valued legal solutions for financial institutions, financial technology companies and other businesses. Greg often works closely with clients to design and implement internal policies and procedures and contractual safeguards in commercial arrangements in connection with corporate and regulatory requirements and risk management best practices.

On January 29, the Office of the Comptroller of the Currency (OCC) issued a notice of proposed rulemaking regarding its review of business combinations under the Bank Merger Act (BMA). Specifically, the OCC proposed: (i) amendments to 12 C.F.R. § 5.33 to remove provisions related to expedited review and the use of streamlined business combination applications subject to BMA review; and (ii) the adoption of an official policy statement setting forth general principles the OCC will use in its review of applications subject to the BMA. If adopted as proposed, the rulemaking will likely lead to longer approval timelines for certain national bank transactions, particularly for mergers involving well-managed, well-capitalized community banks, internal corporate reorganizations, and branch acquisitions that would have otherwise been able to take advantage of expedited review. Currently, assuming certain criteria are met, a BMA filing that qualifies as a business reorganization eligible for a streamlined application is deemed approved on the 15th day after the close of the comment period, unless the OCC notifies the applicant that the filing is not eligible for expedited review or the expedited review process is extended. However, if the rulemaking is adopted as proposed, § 5.33 would be amended to remove the procedures for expedited review and the use of streamlined applications.

On January 18, at an event hosted by Columbia University Law School, Acting Comptroller of the Currency Michael J. Hsu discussed liquidity risk at banks and described potential “targeted regulatory enhancements” that would require midsize and large banks to have sufficient liquidity to cover “ultra-short-term” stress outflows over a five-day period. The rationale for the enhancements stem from last year’s large bank failures and are intended to ensure that updated liquidity and risk management practices are implemented and sustained across midsize and large banks.

On January 17, the Office of the Comptroller of the Currency (OCC) issued a bulletin advising banks on how to prepare for the upcoming shortening in the standard securities settlement cycle for most U.S. securities transactions. This is in response to the Securities and Exchange Commission (SEC) adoption of final rules that shorten the standard settlement cycle for most broker-dealer transactions from the second business day after the trade date (T+2) to the first business day after the trade date (T+1). The SEC has approved a similar rule change by the Municipal Securities Rulemaking Board (MSRB) to the settlement cycle for municipal securities, which has shortened the regular-way settlement for municipal securities transactions to T+1. The OCC expects banks to be prepared to meet T+1 standards as of May 28, 2024.

On January 8, the Office of the Comptroller of the Currency (OCC) announced adjustments to the maximum amount of each civil money penalty (CMP) within its jurisdiction. The 2015 Adjustment Act requires federal agencies with CMP authority to annually adjust each CMP to account for inflation in accordance with the guidance published by the Office of Management and Budget. The adjusted maximum penalties are effective immediately for violations occurring on or after November 2, 2015. The OCC adjustment does not affect the OCC’s discretion to assess a CMP lower than the maximum allowed. Further, with respect to community banks, the OCC retains discretion to impose inflation-adjusted maximum CMPs, as appropriate

On December 21, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Financial Crimes Enforcement Network (FinCen), the National Credit Union Administration, along with state bank and credit union regulators (collectively, the agencies) announced issuance of the final Access Rule regarding access by authorized recipients to beneficial ownership information (BOI) that will be reported to FinCen, pursuant to the Corporate Transparency Act (CTA). In their announcement, the agencies emphasized that the Access Rule does not create new regulatory requirements or supervisory expectations for banks and that banks’ responsibilities under the Customer Due Diligence (CDD) Rule and Bank Secrecy Act (BSA) remain unchanged. However, the agencies did note that if banks access and use BOI, they must comply with the requirements of the CTA and the Access Rule.

On December 7, the Office of the Comptroller of the Currency (OCC) published the fall edition of its Semiannual Risk Perspective, which discusses key issues facing banks. From the OCC’s perspective, the overall strength of the banking system remains sound and recessionary pressures appear to be easing. The OCC notes that, while many economists had predicted a decline, gross domestic product increased at an annual rate of 2.1% in the second quarter of 2023, slowing just slightly from the first quarter’s 2.2% pace. However, the OCC also emphasized that inflation remains elevated and a slowing labor market, declining savings, and higher interest rates could cause financial stress to borrowers.

On October 24, the Federal Reserve Board (Fed), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (collectively, the agencies) finally issued their long-awaited final rule modernizing how they assess lenders’ compliance under the Community Reinvestment Act (CRA). The CRA was enacted in 1977 to address systemic inequities in access to credit and encourages banks to meet the credit needs of the entire community, including low- and moderate-income (LMI) communities, consistent with safety and soundness principles. The last meaningful, comprehensive revision to the CRA regulations occurred in 1995.

On August 2, the Federal Financial Institutions Examination Council (FFIEC) announced updates to certain sections and examination procedures in the FFIEC Bank Secrecy Act/Anti-Money Laundering Examination Manual (Manual). The Manual instructs examiners on how to assess a bank’s anti-money laundering/countering the financing of terrorism (AML/CFT) program and its compliance with other AML/CFT regulatory requirements. The FFIEC cautions that the updates should not be seen as new instructions or an increased focus on certain areas, but instead as offering further transparency into the examination process and supporting risk-focused examination work.

On July 28, the Board of Governors of the Federal Reserve System (Federal Reserve), Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and the National Credit Union Administration (NCUA) (collectively, the agencies) issued an addendum to the agencies’ joint policy statement on funding and liquidity risk management, which advises depository institutions to assess and maintain a broad range of funding sources that can be accessed in adverse circumstances. Specifically, the agencies advised depository institutions to regularly test any contingency borrowing lines to ensure the institution’s staff are well versed in how to access them and that they function as envisioned.

Today, the Federal Deposit Insurance Corporation (FDIC) issued a letter to financial institutions (FIL-37-2023) regarding the proper way to report estimated uninsured deposits in accordance with the instructions to the Consolidated Reports of Condition and Income (Call Report). FIL-37-2023 does not impact institutions with less than $1 billion in total assets that do not report estimated uninsured deposits.