Regulatory

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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 October 19, the Securities and Exchange Commission (SEC) dismissed its claims against Ripple Labs, Inc. (Ripple) executives Bradley Garlinghouse and Christian Larsen for allegedly aiding and abetting Ripple’s violations of the Securities Act with respect to its “institutional sales” of XRP. The Southern District of New York had deemed “institutional sales” to be unregistered securities in its July summary judgment decision, however, at that time the court reserved judgment as to the aiding and abetting claims against the executives. The matter was set for trial in 2024.

On October 17, following Washington Attorney General (AG) Bob Ferguson’s unsuccessful consumer protection action against thrift store chain, Savers Value Village Inc. (Savers), the Washington Superior Court of King County granted Savers’ motion for attorney’s fees and costs in the amount of $4.3 million. This substantial award — which is allowable under the Washington Consumer Protection Act (WA CPA) — represents a substantial recoupment of Savers’ attorneys’ fees spent to defend the almost decade-long litigation.

On October 17, 52 state and territorial attorneys general, in addition to state money transmission regulators, entered into settlements amounting to more than $20 million with ACI Worldwide (ACI), to resolve claims involving a money transmission error that led to the unauthorized withdrawal of $2.3 billion from Nationstar Mortgage (also known as Mr. Cooper) customers.

On August 1, the two major national credit union trade associations — the National Association of Federal Credit Unions (NAFCU) and the Credit Union National Association (CUNA) — announced plans to merge and create a new organization called America’s Credit Unions. The goal of the merger would be to form a single credit union trade group “to serve credit unions more efficiently and effectively” through “one strong and united voice.”

A board of directors of a Delaware company may delegate its authority to grant equity awards if certain requirements enumerated in the Delaware General Corporation Law (DGCL) are met. Effective August 1, 2023, updates were made to these DGCL requirements.

Under §§ 157(c) and 152(b) of the DGCL, a board must establish the delegation through…

On September 8, the Financial Crimes Enforcement Network of the U.S. Department of Treasury (FinCEN) issued an alert warning financial institutions to be vigilant against a prominent virtual currency investment scam called “pig butchering.” U.S. law enforcement currently estimates victims in the United States have lost billions of dollars to these types of scams.

On August 29, at a Board Meeting for the Federal Deposit Insurance Corporation (FDIC), Comptroller of the Currency Michael J. Hsu issued a statement supporting the insured depository institution (IDI) Resolution Plan Rule, which would require covered banks to develop and submit detailed plans demonstrating how they could be resolved in an orderly fashion in the event of receivership. Describing the impetus for this rule, Comptroller Hsu stated, “as the large bank failures of this spring have shown, banks and regulators cannot afford to be complacent when it comes to resolution.”