On March 22, the FFIEC provided an update on the status of its Examination Modernization Project. The purpose of the Examination Modernization Project is to improve the effectiveness, efficiency and quality of community financial institutions’ safety and soundness examination processes. As a result of feedback from FFIEC members, the FFIEC has identified the following areas as having the potential for the most significant supervisory burden reductions:
- improve regulator communication objectives before, during and after examinations;
- leverage technology and shift, as appropriate, examination work from onsite to offsite;
- tailor examinations based on risk; and
- improve electronic file transfer systems to provide for the secure exchange of information.
FFIEC members will focus on developing strategies to address these four areas. As the Examination Modernization Project is expected to be a long-term process, the FFIEC expects to identify additional areas of improvement in the future.
On March 22, the CFPB issued a request for information (RFI) seeking public comments to assist the CFPB in determining whether it should amend regulations or exercise rulemaking authorities that were transferred to it from other federal agencies pursuant to Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The RFI is intended to encompass the inherited regulations restated in 12 C.F.R. Chapter 10 and all rulemaking authority inherited by the CFPB, whether or not a predecessor exercised it. The CFPB invites comments on whether any inherited regulations should be updated or revised, consistent with the CFPB’s authority and purpose, as well as what aspects should not be changed. The RFI includes a list of considerations commenters might address, and invites commenters to offer their highest priorities. Comments must be received by June 25, 2018.
Basel Committee Proposes Technical Amendments to Pillar 3 Disclosures
On March 22, the Basel Committee issued a proposed technical amendment to bank disclosure requirements in light of new expected credit loss accounting models being implemented worldwide, including the CECL model being implemented in the United States. The proposal requires global systemically important banks to make additional quantitative and qualitative disclosures regarding the effects of expected credit loss accounting when used in total loss absorbing capacity ratios, and requires all banks to make additional quantitative and qualitative disclosures relating to the credit quality of loans, debt securities and off-balance sheet exposures. Comments on the proposal are due May 4, 2018.
This writer received three cold emails in two weeks asking for legal help around operating a bitcoin ATM (BTM). Each groundbreaker asked: “What are the legal requirements for an operator putting a BTM in, say, a coffee shop?” Lawyers and businessmen and businesswomen work on the assumption that for every one person who asks you a question, 100 others also want to ask you the same question or are asking someone else. For more information, read the Fintech Flash issued by Goodwin’s Fintech practice.
Enforcement & Litigation
In the closely watched case Cyan, Inc. v. Beaver County Employee Retirement Fund, the U.S. Supreme Court has decided that the Securities Litigation Uniform Standards Act of 1998 did not eliminate concurrent state court jurisdiction over class action lawsuits asserting claims under the Securities Act of 1933. The Court also ruled that SLUSA did not alter the 1933 Act’s prohibition against removal to federal court of suits filed under that statute in state court. As a result of the Cyan decision, securities issuers and underwriters will continue to face – or perhaps see an uptick in – 1933 Act class actions filed in state courts. Not all of the procedural protections provided to defendants in the Securities Litigation Reform Act of 1995 have been held to apply in state court, making state court a potentially more attractive forum for plaintiffs’ lawyers. In addition, the Cyan decision does not prevent putative class action cases alleging identical claims under the 1933 Act from being filed by different named plaintiffs simultaneously in both state and federal court, possibly complicating the efforts of issuers and underwriters to resolve securities claims and potentially leading to inefficiency and inconsistent rulings. For more information, read the client alert issued by Goodwin’s Securities & Shareholder Litigation practice.
LendIt USA is the world’s largest marketplace lending event, bringing together over 4,000 members of the global online lending ecosystem. Goodwin is a sponsor. For more information, please visit the event website.
American Conference Institute’s National Legal, Regulatory & Compliance Forum on Cyber Risk & Data Security presents insights and the latest developments from representatives from leading government agencies, in-house counsel, insurance professionals, and top litigators who work in the area of data breach and cyber risk. Counsel Brian Mukherjee will be a speaker on the topic of “Exploring the Link Between Cyber Risk, Data Breach and D&O Liability.” For more information, please visit the event website.
Directors, C-Suites, and General Counsel are increasingly focusing on compliance – a critical aspect to every business operation. Mistakes can seriously heighten corporate and personal liability. Not only do the DOJ and SEC have an impact on compliance, but state and local regulators – particularly in New York – are also intensely overseeing compliance initiatives and ethics of financial services institutions and other industries. Goodwin partner Richard Strassberg joins Alexander Vasilescu, New York Head of Litigation at the United States Securities and Exchange Commission, and Yan Cao, Principal at Cornerstone Research, as the panel for this program. They will provide an overview of key federal and state regulatory and compliance issues in financial services and other industries. For more information, please visit the event website.
Join NRS at its Spring 2018 Conference - Compliance Agility: Risk, Resources & Technology, where industry experts will address how investment adviser and broker-dealer firms can successfully navigate the disruptive currents of regulatory change and adapt agile procedures to compliance programs.
Hosted by the American Bar Association, this special program is dedicated to an in-depth analysis of the emerging legal issues and the latest legal events concerning digital currencies, like bitcoin, and blockchain technology. Grant Fondo, partner and chair of Goodwin’s Digital Currency & Blockchain Technology practice, will be a featured speaker.
Consero’s 2018 Financial Services & Insurance Litigation Forum will address current and looming legal and business challenges faced by today’s chief litigation officers, providing a one-of-a-kind opportunity to share best practices and strategies that will help lead their departments and companies in the right direction. Goodwin is a sponsor. For more information, please visit the event website.
MBA’s Legal Issues and Regulatory Compliance Conference gathers industry leaders to consider best practices, organizational changes needed to assimilate to final rules and knowledge to educate staff. Goodwin is a sponsor.