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James Stevens

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James is the co-leader of the firm’s Financial Services Industry Group. He has significant experience working with clients across the entire financial services sector, regularly working with public and private companies such as banks, neobanks, marketplace lenders, and other fintech and financial services providers and partners.

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On June 6, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency (collectively, the agencies) issued guidance to banking organizations on managing the risks associated with third party relationships. This final guidance reflects the 82 comment letters the agencies received from banking organizations, financial technology (fintech) companies and other third party providers on the proposed guidance released in July 2021 and replaces each agency’s existing guidance to ensure consistency in supervisory enforcement. While the agencies acknowledge that “[t]he use of third parties can offer banking organizations significant benefits, such as quicker and more efficient access to technologies, human capital, delivery channels, products, services, and markets,” they caution that the use of third parties “does not remove the need for sound risk management.” The agencies emphasize, however, that supervisory guidance does not have the force and effect of law and does not impose any new requirements on banking organizations.

On June 1, The Board of Governors of the Federal Reserve System (Board of Governors) and the California Department of Financial Protection and Innovation (CA DFPI) announced a mutual consent order with Silvergate Capital Corporation, a former leader in crypto lending, providing for the winding down of its operations.

Under the terms of the consent…

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The idea for Troutman Pepper’s Financial Services Industry Group – and this new blog – came when we looked around the firm and realized that we had so many areas of legal specialty in which we were serving financial services clients. But by thinking of ourselves as legal specialists in particular areas – like consumer finance, commercial lending, M&A or bank regulatory – we were missing the opportunity to provide greater value to clients by integrating our teams across those legal practice areas.

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On May 23, Chairman Martin J. Gruenberg of the Federal Deposit Insurance Corporation (FDIC) delivered remarks at the Cities for Financial Empowerment Fund 2023 Bank On National Conference. One of the focuses of the Chairman’s remarks was on entities that misrepresent the availability of deposit insurance. ”[S]ince 2022, the FDIC has taken action against more than 85 entities that were misrepresenting the nature, extent, or availability of deposit insurance. In some instances, these firms had made misleading claims in connection with crypto assets while others had apparently developed fraudulent websites to trick consumers into believing they were doing business with a bank.”

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Today, the Federal Deposit Insurance Corporation (FDIC) published a notice of proposed rulemaking that would impose special assessments to recover losses to the Deposit Insurance Fund (DIF) arising from the FDIC’s protection of uninsured depositors in the wake of the two significant bank closings in March 2023. The Federal Deposit Insurance Act requires the FDIC to recover any losses to the DIF as a result of protecting uninsured depositors through a special assessment. The law also provides the FDIC authority to consider the types of entities that benefited the most from the assistance provided.

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On April 12, the U.S. Small Business Administration (SBA) announced that it is ending the moratorium that capped the number of small-business lending companies permitted to participate in its § 7(a) loan program at 14, and opening up participation in the program to fintech firms and other alternative lenders. The SBA’s loan program offers small businesses loans of up to $5 million, with the agency guaranteeing up to 85% on loans up to $150,000, and 75% for loans more than $150,000. The new rule will take effect on May 12.