At a Peterson Institute for International Economics event on June 22, Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg announced that the FDIC — along with the Board of Governors of the Federal Reserve System (Federal Reserve) and the Office of the Comptroller of the Currency (OCC) — will issue an interagency notice of proposed
Troutman Pepper advises portfolio companies to review legal and financial obligations
This article originally appeared in the Summer 2023 issue of Middle Market Executive.
For many private equity firms, the recent bank failures served as a wake-up call to review their portfolio companies’ corporate documents, the legal status of their entities, and credit and
In recent years, the U.S. Securities and Exchange Commission (SEC) has had its eye on the special purpose acquisition company (SPAC) market — warning investors against putting money into SPACs, expressing skepticism about their performance, and taking affirmative steps to corral SPACs, including direct prosecution of investment firms. Now its gaze has turned upon a
On June 16, The Board of Governors of the Federal Reserve System (Federal Reserve) launched its Master Account and Services Database, providing a searchable database on which financial institutions have access to the Federal Reserve master accounts and financial services. A master account is an account in which a Federal Reserve bank receives deposits
On June 22, the Office of the Comptroller of the Currency (OCC) released Version 1.0 of its Asset Management booklet, which provides an overview of sound risk management processes for bank asset management. The OCC will apply this updated booklet to the supervision of community banks engaged in asset management activities.
Version 1.0 is a
Mindful of the impending retirement of many millions of investors in the “baby boomer” generation, which hold a substantial amount of the world’s wealth, the Financial Industry Regulatory Authority (FINRA) continues to heavily monitor its member firms supervision of their registered financial advisors who service vulnerable and elderly investor customers. For example, last month FINRA suspended a former David Lerner Associates (DLA) branch manager for failing to properly supervise sales of interests in two illiquid oil and gas limited partnerships. The suspended manager at issue approved these transactions, which carried a high degree of risk, to some senior investors with insufficient tolerance for risk. Ultimately, FINRA concluded that the supervising branch manager failed to “conduct a reasonable analysis” of the suitability of those investments for the elderly customers or within 30 days of their risk tolerance increasing.
At a Brookings Institution event on June 20, Assistant Attorney General Jonathan Kanter, a top antitrust official for the U.S. Justice Department (DOJ or Department), announced that the Department will reassess its approach to bank merger enforcement given current market realities. Specifically, the Department will assess whether the factual and economic assumptions underlying its 1995 Bank Merger Guidelines are adequate to measure today’s competition.
Editor’s Note: Montana became the latest state to pass a comprehensive privacy bill, joining California, Virginia, Colorado, Connecticut, Utah, and Tennessee. Florida, too, passed a privacy bill, but with a much narrower scope. Meanwhile, at the federal level, the House Energy and Commerce Committee continued to work on the federal analog: the American Data Privacy and Protection Act. In U.S. litigation, courts continued to see litigation under the Video Privacy Protection Act, including a new suit against Hearst Television. At the international level, European Parliament members adopted a nonbinding opinion to vote against the EU-U.S. Transfer Agreement, and the French CNIL leveraged a fine against Clearview AI for noncompliance.
On June 14, the Treasury Department (Treasury) and the Internal Revenue Service (IRS) issued proposed regulations and temporary regulations on tax credit transfers pursuant to Section 6418 of the Internal Revenue Code of 1986, as amended (Code), which was enacted by the Inflation Reduction Act. Section 6418 allows eligible taxpayers to elect to transfer certain tax credits, including the ITC and PTC, to unrelated taxpayers rather than using the credits against their federal income tax liabilities. The IRS also issued regulations on direct payments pursuant to Section 6417, which we will address in a subsequent update.
On June 14, the Office of the Comptroller of the Currency (OCC) published the spring edition of its Semiannual Risk Perspective, which discusses key issues facing banks. The good news is that the federal banking system saw historic growth in net interest income in 2022. However, rising interest rates weigh on other aspects of bank performance, such as noninterest income, as mortgage activity continues to slow.