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Weekly RoundUp
July 29, 2015

Financial Services Weekly News


The Public Comment Process. Many of us, even those a long time out of school, still think of summer as the end of one year and September as the beginning of another. As we said last week, the regulatory process becomes quieter during the summer, while agency staff take their vacations, but it continues above and below ground. Momentous things can happen in the summer – the Dodd-Frank Act was signed into law on July 21, 2010 – but for the most part summer gives us time to consider how we are handling our present regulatory responsibilities and to plan for regulatory changes to come. Regulators are also taking stock. They pay attention to legislative changes, look for problems revealed by enforcement actions and examinations and follow news reports about regulated businesses and their consumers. They also read comment letters. Right now the Department of Labor has thousands of letters to read on its proposed fiduciary standard and related exemptions. One of those comment letters is from SEC Commissioner Daniel Gallagher, who has been critical of the DOL proposal. The public comment process is vital to good regulation; regulators cannot possibly know everything about the businesses they regulate, and they need comments from all sides to make their rules clearer, more effective and less burdensome. At Goodwin Procter, we participate in the comment process in three ways: we prepare letters for bar association committees or other organizations to which we belong; we sometimes prepare our own letters, and we assist clients in drafting comment letters on matters important to their businesses. Comment letters may be balanced or advocate strong positions in support or opposition, but the best letters demonstrate an understanding of the objectives of the regulator and offer statistical or other information supporting the commenters’ positions. Commenting gives us a chance to participate in one corner of the democratic process and to help shape rules that will apply to us for a long time to come. We don’t always have the time, of course. Perhaps when things slow down a bit…?
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Regulatory Developments

New Hampshire Governor Signs Into Law a Bill Recodifying Banking, Credit Union and Trust Company Laws

On July 28, New Hampshire Gov. Maggie Hassan signed into law SB 188, an act revising banking, credit union, and trust laws. The new law reorganizes and streamlines provisions of New Hampshire law applicable to banks, credit unions and trust companies.

FTC Announces Workshop to Examine Online Lead Generation

The Federal Trade Commission (FTC) announced that it is hosting a workshop on Oct. 30, 2015 to examine the growing use of online lead generation in various industries, including consumer lending. Lead generators identify or cultivate consumer interest in a product or service and sell the consumer “lead” information to third parties. The workshop, “Follow the Lead: An FTC Workshop About Online Lead Generation,” will gather a variety of stakeholders, including industry representatives, consumer advocates and government regulators, to discuss consumer protection issues raised by the practices of the lead generation industry.

Agencies Provide Additional Guidance for Certain Resolution Plans

The Federal Reserve Board and the FDIC (the agencies) on Tuesday issued a joint press release regarding guidance to 119 firms that in December will be filing updated resolution plans. Following review of the resolution plans, the agencies are providing each firm with guidance, clarification, and direction for their upcoming resolution plans based on the relative size and scope of each firm's U.S. operations. Also on Tuesday, the agencies released an updated tailored resolution plan template. A tailored resolution plan focuses on the nonbanking operations of the firm and on the interconnections and interdependencies between the nonbanking and banking operations. The optional template is intended to facilitate the preparation of tailored resolution plans.

Agencies Provide Feedback to Nonbank Firms on Resolution Plans

Also on Tuesday, the agencies issued a joint press release stating that they provided three nonbank financial companies regarding their initial resolution plans and guidance to the firms for their upcoming filings. In addition to the specific guidance given to each company, the letters include some common areas that the firms should address. Those areas include the need for more detailed information on, and analysis of, obstacles to resolvability, including global cooperation, interconnectedness, and adequate funding and liquidity. Further, the agencies instructed the firms to describe in their resolution plans the progress they are making, and the steps remaining, to be more resolvable. Finally, the agencies directed the firms to strengthen the public portions of the firms' upcoming resolution plans. The three nonbank financial companies will submit the second version of their annual resolution plans on or before Dec. 31, 2015.

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