Over one year ago, on October 3, 2023, the Federal Deposit Insurance Corporation (FDIC) proposed supervisory guidelines that would establish standards for corporate governance and risk management for all state non-member banks with assets greater than $10 billion (Proposed Guidelines). Unlike guidance, which does not have the force and effect of law, any final guidelines based on the Proposed Guidelines (Final Guidelines) would be issued as Appendix C to the FDIC’s standards for safety and soundness in part 364, pursuant to Section 39 of the FDI Act.

Bankruptcy provisions in contracts are often included as a safeguard against potential financial instability of a contract counterparty. However, the enforceability of these provisions in bankruptcy is not guaranteed. Key issues include bankruptcy default provisions, anti-assignment provisions, and automatic stay waivers. Bankruptcy default provisions, which trigger contract termination upon insolvency or bankruptcy filing, are generally unenforceable under Section 365(e)(1) of the Bankruptcy Code. Anti-assignment provisions, which prevent the assignment of contracts without consent, are also typically unenforceable in bankruptcy, with exceptions for personal service contracts and certain intellectual property licenses.

On September 23, Principal Deputy Assistant Attorney General Nicole M. Argentieri announced that the U.S. Department of Justice (DOJ) updated its guidance on the Evaluation of Corporate Compliance Programs (ECCP). The DOJ’s ECCP serves as a roadmap for federal prosecutors to use when evaluating the effectiveness of corporate compliance programs. Therefore, companies should also pay close attention to this guidance when reviewing their compliance programs. Ultimately, a company’s efforts to design, regularly evaluate, and update its compliance program in line with this guidance could inform criminal investigations, charging decisions, and case resolutions.

Today, the Federal Deposit Insurance Corporation (FDIC) announced an extension of the comment period for its notice of proposed rulemaking (NPR) aimed at revising the 2020 Brokered Deposit Rule. To ensure that all interested parties have sufficient time to review the proposed changes and prepare their comments, the FDIC has extended the comment period from October 22, 2024, to November 21, 2024.

We previously posted on the Federal Deposit Insurance Corporation’s (FDIC) notice of proposed rulemaking aimed at enhancing recordkeeping for bank deposits received from fintech and other third-party, non-bank companies. Today, the proposed rule was published in the Federal Register and the FDIC is accepting public comments until December 2, 2024.

In a significant development since our last post, Fiserv’s application for a merchant acquirer limited purpose bank (MALPB) charter has been approved by the Georgia Department of Banking and Finance. This approval marks a pivotal moment for fintech and nonbank entities seeking direct access to card networks.

Trade creditors often find themselves categorized as “general unsecured creditors” when a customer files for bankruptcy. However, some creditors benefit from liens that have been contractually negotiated or statutorily granted, potentially elevating the priority of their claims. To secure this priority, the lien must be properly granted and perfected under applicable law before the customer files for bankruptcy, and in a manner that does not expose the lien to avoidance as a “preferential transfer.”