Lenders in Ohio frequently incorporate cognovits, or confession of judgment provisions, into promissory notes, guaranties and other loan instruments. T
One of the “issues du jure” for the bank and thrift industry involves the benefit, or possibly lack thereof, of having a holding company.
Branch purchase and sale transactions, involving sales and acquisitions of defined assets and assumption of defined liabilities (P&A transactions) can be more complex and document-intensive than whole-bank mergers.
The financial services industry in this country is fortunate to have choices when it comes to the nature and oversight of bank and thrift charters.
Last month, the United States District Court for the Northern District of Illinois confronted a bank’s potential liability for false information obtained (and even allegedly encouraged) by bank employees in the processing of consumer loans.
Due to the evolving sophistication of criminals, security breaches continue to occur on a regular basis. When such breaches occur, the victims of breaches often look to the law to make them whole.
Bankers, and lenders in particular, have enjoyed relatively broad opportunities for mobility between institutions for decades.
Doctors, nurses, social workers, and first responders are the types of professionals thought of when it comes to reporting elder abuse.
Being an Ohio-chartered bank or trust company, or institution-affiliated party of same (IAP), becomes a bit more comfortable with the addition of the new “bona fide error” protections of Ohio Sub. H.B. 489, effective March 20, 2019.
Recent changes in stock prices, capital levels and loan demand for some institutions have created an increased interest in stock buybacks.
In a proposal reminiscent of the recent comprehensive changes to Ohio banking law that effectively eliminated legal differences between Ohio-chartered banks, savings banks, and savings and loans, the Office of the Comptroller of the Currency (OCC) on September 10, 2018, issued a proposal to enable federal savings associations (FSAs) with consolidated assets of $20B or less to, in effect, opt in to becoming full national banks with the same rights and privileges as national banks and subject to the same “…duties, restrictions, penalties, liabilities, conditions and limitations that apply to national banks.”
For those who follow such things, the press release, consent cease and desist order and official letters of reprimand published by the Federal Reserve Board on February 2, 2018, with respect to Wells Fargo & Company (Wells) and named directors (combined, the Wells Order) were highly unusual, and raise issues that should cause all bank directors significant pause.
Sexual harassment is illegal. It has been illegal for a long time — over 40 years, in fact. It is, in other words, not new.
While once virtually “unthinkable,” banks are now targeted for acquisition by credit unions with more and more frequency.
Over the past year, various plaintiff-side law firms sent aggressive demand letters on behalf of activist organizations and individuals to financial institutions – typically community banks – asserting that the Americans with Disabilities Act (ADA) applies to websites.
Under revisions to the Ohio Depository Act, the Ohio Treasurer of State has developed proposed rules and a new program for the pledging of pooled collateral for public deposits, referred to as the Ohio Pooled Collateral Program.
This week a federal judge in Florida passed down one of the most historic ADA website accessibility decisions to date, finding that Winn-Dixie was liable under Title III of the ADA because its website was inaccessible.
Creditors of Ohio estates have little room for error under a decision handed down by the Supreme Court of Ohio on April 19, 2017.
More and more, bankers are becoming familiar with the term “High Volatility Commercial Real Estate,” or HVCRE for short.
The financial services industry has seemingly passed out of the dark shadows of the post-2008 “crisis” period. Now, the “Trump Effect,” as well as other factors, are influencing industry stock prices positively and generating a renewed interest in M&A and related matters in the financial services industry.
In a continuing effort to alert our lender clients and other friends to developments in the bankruptcy, restructuring, workout and creditors’ rights space, provided below is a summary of recent noteworthy court decisions.
On March 1, the New York State Department of Financial Services’ (DFS) Cybersecurity Requirements for Financial Services Companies (the regulations) went into effect.
Several law firms nationally are in the process of issuing demand letters to banks, thrifts and various other businesses alleging website access barriers. The most recent wave of demand letters specifically target the banking industry. The letters demand changes to banks’ web pages and payment of substantial legal fees based on alleged violations of the Americans with Disabilities Act (the ADA).
The past few weeks have seen a flurry of activity in the cybersecurity arena – and not just from the intruders, such as those who orchestrated the massive distributed denial of service (DDoS) attack that temporarily took down PayPal, Twitter and others.
The banking industry has received long sought-after clarification as to whether Community Reinvestment Act (CRA) credit is available for Historic Tax Credit (HTC) financed projects.
In another new and welcome gesture, the Federal Deposit Insurance Corporation (FDIC) has provided further encouragement for formation of de novo charters as described in the FDIC’s Summer 2016 “Supervisory Insights Journal.”
The landscape of collateral requirements for public fund deposits by state and local public entities is changing.
Bank and BHC subordinated debt can be a good idea for a variety of reasons. In an industry where capital is still (and really always has been) “king,” and TruPS have become a thing of the past, sub debt provides a number of the benefits of equity but without the shareholder dilution and other issues that accompany sales of equity.
On June 17, 2016, the four federal financial institution regulatory agencies issued a joint statement on the long-awaited and controversial new accounting standards issued by FASB implementing the “current expected credit loss” model for financial reporting, commonly referred to as “CECL.”
The Bankruptcy Judges and Chapter 13 Trustees for the United States Bankruptcy Court for the Southern District of Ohio have reviewed and approved a proposed District Wide Mandatory Form Chapter 13 Plan and proposed form Order Confirming Chapter 13 Plan and Awarding Attorney Fees.
The first wave of attacks on the Consumer Financial Protection Bureau’s (CFPB) recently proposed rules prohibiting class action waivers in pre-dispute arbitration agreements occurred during the House Financial Institutions and Consumer Credit Subcommittee hearing entitled “Examining the CFPB’s Proposed Rulemaking on Arbitration.
On May 24, 2016 the Consumer Financial Protection Bureau’s (CFPB) proposed arbitration rule was published in the Federal Register.
Sales tax on goods and services purchased by your business is always an element of cost that must be considered. This has become especially important to the Ohio banking industry.
In working out of a troubled commercial credit, often the optimal exit strategy for the senior lender is a sale of the borrower’s business as a going concern. However, frequently it is not feasible for a distressed borrower simply to execute a sale of its assets directly to a buyer and pay the senior secured debt at closing.
It was not that long ago that the concern over preparing for, and dealing with, activist investors was rare in the banking industry, and especially rare for community banks. That comfort is quickly fading, however, as more funds and individuals contemplate opportunities for becoming “activist” investors in community banks through a variety of mechanisms, some for the better and some perhaps not so much.
Earlier this year, two federal appeals courts decided cases that are significant to lenders whose borrowers are experiencing financial distress. In one case, the court stripped the lender of its secured status because the lender had failed to investigate the borrower’s wrongdoing, despite having notice of suspicious facts.
As the longest awaited sequel in years, financial regulators have finally revealed their revised interagency proposal to restrict incentive-based compensation arrangements for executives at financial institutions. In 2010, the Dodd-Frank Act obligated six agencies, including the Federal Deposit Insurance Corporation, the Federal Reserve Board, the Officer of the Comptroller of the Currency, the Securities and Exchange Commission, the National Credit Union Administration and the Federal Housing Finance Agency, to establish rules prohibiting incentive-based compensation arrangements that would encourage inappropriate risk-taking.
After nearly a decade practically devoid of state or federal de novo charter activity nationwide, the FDIC has announced plans to return to its three-year post-approval oversight period for de novos that was in effect prior to the financial crisis.
In a highly-anticipated opinion, this morning the U.S. Supreme Court overturned the Ninth Circuit Court of Appeals’ decision in Spokeo, Inc. v. Robins.
The Consumer Financial Protection Bureau (CFPB) yesterday released a widely anticipated proposed rule that would: (1) prohibit class action waivers in pre-dispute arbitration agreements, and (2) require a provider to submit records from individual arbitrations to the CFPB.
On March 2nd, the Consumer Financial Protection Bureau (CFPB) announced a $100,000 penalty and settlement with online payment processor Dwolla, Inc. (Dwolla) for weak data security practices.
It’s all over the news and it’s top of mind with bank regulators: “Cybersecurity.” What happened with Target, Home Depot and Wyndham hasn’t helped. The last several years have been fraught with news story after news story about those crafty hackers who find vulnerabilities in a company’s system and steal private information or even redirect funds. And despite all of our technological advancements, the escalation in successful hacking attempts has no end in sight. Call them hackers, fraudsters or good old-fashioned crooks, from computer-savvy teenagers to state-sponsored groups, they are not going away. And, unfortunately, they seem at times to be two steps ahead of the latest security software and security vendors that are offering you and your financial institution protection.
With an industry-wide focus on enterprise risk management, and with the particular vulnerability of banks to the adverse impact of “reputation risk,” it is important that banks understand and take appropriate steps to mitigate risks associated with internet defamation. Online reputation attacks, including internet defamation, are affecting all industries and professionals. Banks, –including community banks,– are not immune from being attacked and disparaged online.
Bank and thrift shareholders are “different.” Direct or indirect ownership or control of large blocks of stock in a bank or a thrift institution brings with it the need to be cognizant of complex state and federal laws and regulations that may well trigger applications with state and federal regulators to approve the ownership, and/or a proposed transfer of ownership, in advance.
Recently five federal agencies, The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Farm Credit Administration and the Federal Housing Finance Agency (collectively, the Agencies), issued much-anticipated joint final rules (the Final Rules) that establish minimum margin and capital requirements for registered swap dealers, major swap participants, security-based swap dealers and major security-based swap participants (Swap Entities) for which one of the Agencies is the prudential regulator (Swap Entities regulated by one or more of the Agencies are referred to as Covered Swap Entities).
Recently five federal agencies, The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Farm Credit Administration and the Federal Housing Finance Agency, issued much-anticipated joint final rules that establish minimum margin and capital requirements for registered swap dealers, major swap participants, security-based swap dealers and major security-based swap participants for which one of the Agencies is the prudential regulator.
During Monday’s oral argument in Spokeo, Inc. v. Robins, No. 13-1339, the Supreme Court appeared sharply divided on the issue of whether a plaintiff has standing to sue for a technical violation of a federal consumer law even when there is no indication that the plaintiff has actually been harmed by the violation.
With cybersecurity as THE hot button issue in bank and thrift risk management right now, and of course to help the industry celebrate “National Cybersecurity Awareness Month” (who knew?), bankers and their boards should take advantage of the FDIC informational teleconference on cybersecurity issues being held on October 28, 2015.
Unless you’ve been under a rock for the past year, you’re aware that perhaps top on the list of “risk management” items is the need to ascertain the viability and efficacy of your data security programs. Banking industry and agency literature has been replete with warnings and highlights. On June 30, 2015 the federal agencies, through the FFIEC, published their promised Cybersecurity Assessment Tool (CAT) to assist institutions, including those too small to have specific cybersecurity assessment resources, to evaluate cybersecurity risks and preparedness.
Jeff Smith, a partner in the Vorys Columbus office, and Jeffrey Quayle, senior vice president and general counsel for the Ohio Bankers League (OBL), co-authored an article for the Spring 2015 edition of the Ohio Record (the magazine of the OBL) titled “Joining Forces to Enhance Competitiveness.”
As 2015 gets under way, bank compensation committees are tasked with setting the bank’s executive compensation strategy for the year and effectively communicating that compensation structure to shareholders. Compensation committees need to strike a balance between a compensation program that attracts and retains employees and encourages those employees to take appropriate business risks while advancing the bank’s growth strategies and discouraging inappropriate risks.
Maybe at one time your company was reporting to the Securities and Exchange Commission (SEC) and your company’s stock was listed on The NASDAQ Stock Market (NASDAQ). You were relieved when the Jumpstart Our Business Startups Act allowed you to terminate your SEC registration, even though it meant that your stock could no longer be listed on NASDAQ.
During the past three years, a significant number of community banks and their holding companies (collectively, banks) throughout the United States elected to “go dark” by taking advantage of a provision in The Jumpstart Our Business Startups Act (JOBS Act). These banks were able to suspend their reporting obligations under Section 12(g) of the Securities Exchange Act of 1934 (Exchange Act) and deregister with the Securities and Exchange Commission (SEC) because they had fewer than 1,200 shareholders of record.
In December 2014, Congress modified portions of Dodd-Frank to provide additional opportunities to reduce the regulatory burden on community banks. In response to this legislation, on January 29, 2015 the Federal Reserve Board (FRB) requested comment on several related proposals (and an interim rule) focused primarily on increasing the number of holding companies eligible for the reduced reporting and other requirements under the “small” holding company exclusion.
The Consumer Financial Protection Bureau (CFPB) released a study on March 10, 2015 that concludes that pre-dispute arbitration agreements restrict a consumers’ relief. This study is the latest step in the CFPB’s analysis of lenders’ arbitration practices and is widely regarded as a precursor to new regulations.
On January 13, 2015, the United States Supreme Court ruled in favor of homeowners seeking to rescind their loans and mortgages with written notice to lenders within three years of completion of a real estate transaction, where lenders allegedly failed to comply with the federal Truth in Lending Act (TILA). Based on this decision in Jesinoski v. Countrywide Home Loans, Inc., it is not necessary that a homeowner actually file a court action within those three years.
Following an extended dry spell for de novo bank applications, in what could be interpreted as a gesture to “kick-start” de novo conversations, the FDIC issued in November a somewhat “out of the blue” financial institutions letter (FIL-56-2014) containing a series of Q&As relating to procedural issues surrounding applications for deposit insurance.
On August 22, 2014, the Sixth District Court of Appeals affirmed on all counts a Williams County probate court’s September 2012 decision in favor of PNC Bank, National Association against successor trustee and beneficiaries’ various breach-of-fiduciary-duty claims. The decision in Newcomer v. National City Bank, (2014-Ohio-3619; 2007 Ohio App. LEXIS 6365 (Ohio App. 6th Dist.)) provides critical guidance for Ohio trustees on four key points of law.
Jeffery E. Smith, a partner in the Columbus office, published this article regarding the Consumer Financial Protection Bureau's new mortgage-related rules in the Spring 2013 issue of The Bankers' Statement.
Vorys attorneys Daniel Buckley, Lisa Babish Forbes, Elizabeth Weinewuth and Elizabeth Davis Conway authored an article for the Probate Law Journal of Ohio titled "Important Guidance for Ohio Trustees: Newcomber V. National City Bank."
On January 10, 2013, the Consumer Financial Protection Bureau (CFPB) issued a number of mortgage-related rules, including its long-awaited qualified mortgage (QM) rules in an 804-page set of complex guidelines for residential real estate lending mandated by the Dodd-Frank Act. The rules take effect in January 2014.
