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Kevin Petrasic

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The world’s leading banks trust Kevin to manage their regulatory challenges. An in-depth understanding of regulators and their objectives, coupled with his comprehensive knowledge of the banking business, have positioned him as a trusted advisor to clients across the financial sector.

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As discussed here, on June 28, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed significant amendments to the anti-money laundering and countering the financing of terrorism (AML/CFT) program requirements for financial institutions subject to the Bank Secrecy Act (BSA). Last week, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (collectively, the agencies) issued a joint statement announcing their own notice of proposed rulemaking for their supervised institutions. The purpose of the proposed rulemaking is to align the agencies’ respective AML/CFT program rules with FinCEN’s proposed revisions, ensuring a unified standard for compliance.

On June 24, the Office of the Comptroller of the Currency (OCC) announced it is requesting comments on proposed amendments to its recovery planning guidelines. A recovery plan’s purpose is to provide a covered bank with a framework to effectively and efficiently address the financial effects of severe stress events and avoid failure or resolution. Among other things, the proposed amendments aim to expand the guidelines to apply to banks with average total consolidated assets between $100 billion and $250 billion. The proposal also seeks to incorporate a testing standard and clarify the role of non-financial risks in recovery planning.

On May 30, the U.S. Supreme Court unanimously decided Cantero, reaffirming and elaborating on the Barnett Bank preemption standard, and remanding the case to the Second Circuit for further proceedings. Cantero addressed whether a New York law requiring the payment of at least 2% per annum interest on mortgage escrow deposits was preempted by federal law as to national banks. The Supreme Court held that the Second Circuit erred when it failed to apply the preemption standard articulated in Barnett Bank of Marion County, N.A. v. Nelson, which was incorporated by Congress into the Dodd-Frank Act. The Court rejected the lower court’s holding “that federal law preempts any state law that ‘purports to exercise control over a federally granted banking power,’ regardless of ‘the magnitude of its effects.’” The Court also rejected the approach argued by the petitioners, explaining it would “yank the preemption standard to the opposite extreme, and would preempt virtually no non-discriminatory state laws that apply to both state and national banks.”

On March 29, a Texas federal court granted a preliminary injunction enjoining the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (collectively, the agencies) from implementing their Final Rule modernizing how they assess lenders’ compliance under the Community Reinvestment Act (CRA). Notably, the court found the plaintiffs demonstrated a substantial likelihood of success on the claim that the Final Rule violates the CRA, indicating how the district court will likely find on the merits.

Today, a divided Federal Deposit Insurance Corporation’s (FDIC) Board of Directors issued a proposed Statement of Policy (SOP) on bank merger transactions that would create a combined bank with more than $100 billion in assets. The proposed SOP would replace the FDIC’s current SOP on bank merger transactions and proposes a principles-based overview that describes…

On March 12, at the Institute of International Bankers Annual Washington Conference, Acting Comptroller of the Currency Michael J. Hsu discussed the importance of operational resilience in the banking sector and hinted that potential regulations aimed to promote the same may be forthcoming.