James Stevens, co-leader of Troutman Pepper’s Financial Services Industry Group, was quoted in the May 7, 2024 S&P Global Market Intelligence article, “Smooth Approval Outlook for Wintrust-Macatawa Deal Could Invite More US Bank M&A.”
Republicans Seek ‘Shot Clock’ on Regulators’ Bank Merger Reviews
James Stevens, co-leader of Troutman Pepper’s Financial Services Industry Group, was quoted in the May 2, 2024 Banking Dive article, “Republicans Seek ‘Shot Clock’ on Regulators’ Bank Merger Reviews.”
Bank Board Insights Series Part VII: From Good to Great, Elevate Your Bank’s Performance with Boardroom Mastery!
James Stevens, co-leader of Troutman Pepper’s Financial Services Industry Group, was interviewed in the Travillian Next podcast episode “Bank Board Insights Series Part VII: From Good to Great, Elevate Your Bank’s Performance with Boardroom Mastery!“
Implications of the FTC’s Noncompete Ban on Financial Institutions
There has been a great deal of press about the Federal Trade Commission’s (FTC) vote to ban employee non-competition provisions and policies; see our firm’s fuller discussion here. While the FTC describes the rule as a comprehensive ban, it acknowledges that the rule does not apply to regulated financial institutions, and nonsolicitation clauses are still permitted.
FINRA’s First Disciplinary Action Targeting Firm’s Use of Social Media Influencers
The Financial Industry Regulatory Authority’s (FINRA) Enforcement Division recently announced its first settlement involving a firm’s supervision of social media influencers. The respondent, M1 Finance LLC (M1), is a financial technology company that provides self-directed trading to retail investors through its mobile application and website. In connection with FINRA’s targeted exam of M1’s use of social media influencers to acquire new customers, FINRA found that social media posts made by influencers on the firm’s behalf were not fair or balanced, or contained exaggerated, unwarranted, promissory, or misleading claims. According to FINRA, M1 also failed to establish, maintain, and enforce a reasonably designed supervisory system for its influencers’ social media posts, and failed to preapprove and preserve records of these retail communications.
The SEC Voluntarily Stays Climate-Related Disclosure Rules Pending Eighth Circuit Judicial Review
On April 4, the Securities and Exchange Commission (SEC) issued a stay on the implementation of its newly enacted climate impact disclosure rules. This decision is connected to a challenge to the rules currently pending in the U.S. Court of Appeals for the Eighth Circuit, which is a consolidation of numerous lawsuits that hit the SEC following the rule announcement on March 6. The SEC adopted a scaled-back version of its initial 2022 proposal, requiring large public companies to report their greenhouse gas emissions, climate-related risks to their businesses, and the financial harm caused by extreme weather events, in their registration statements and annual reports. The reporting requirements were to be rolled out in stages, with the largest filers beginning disclosures in 2025.
FDIC Announces Two More Consent Orders Containing Third-Party Risk Management and Fintech Partnership Orders
On March 29, the Federal Deposit Insurance Corporation (FDIC) announced two more consent orders containing provisions relating to banks’ third-party risk management programs with respect to banking as a service (BaaS) partnerships.
Texas Federal Court Grants Preliminary Injunction in Community Reinvestment Act Lawsuit
On March 29, a Texas federal court granted a preliminary injunction enjoining the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (collectively, the agencies) from implementing their Final Rule modernizing how they assess lenders’ compliance under the Community Reinvestment Act (CRA). Notably, the court found the plaintiffs demonstrated a substantial likelihood of success on the claim that the Final Rule violates the CRA, indicating how the district court will likely find on the merits.
FinCEN Proposes Loosening Customer Identification Program Requirements
On March 29, the Federal Crimes Enforcement Network (FinCEN), in collaboration with other federal agencies, issued a Notice and Request for Information and Comment (Notice and Request) seeking public comment on its proposal to amend the Customer Identification Program (CIP) Rule requirement for banks to collect a taxpayer identification number, among other information, from a U.S. customer prior to opening an account. Usually, for a U.S. customer this requires banks to collect a full Social Security number (SSN). The amendment comes in response to pressure from fintechs, specifically providers of buy-now, pay-later products that rely on bank partners, for an accommodation from the CIP Rule.
FDIC’s Bank Merger Review Overhaul to Have ‘Chilling’ Effect on Deal Activity
James Stevens, co-leader of Troutman Pepper’s Financial Services Industry Group, was quoted in the March 28, 2024 S&P Global Market Intelligence article, “FDIC’s Bank Merger Review Overhaul to Have ‘Chilling’ Effect on Deal Activity.”