 |
|
|
|
|
Message from the Chair
|
| |
I am pleased to present the Spring 2010 issue of the Banking Law
Committee Journal. You've done it again! Thanks to the contributions
of Committee Members Pete Bergan, Satish Kini, Paul Lee, Tom Vartanian,
Gordon Miller and Travis Nelson, this issue of the Journal is filled
with up-to-date information and insightful commentary about recent
developments of interest to banking lawyers.
Pete has prepared a great summary and pointed critique of the FDIC's
ANPR on bank-sponsored securitizations. Satish's and Paul's article
on the February report of the Senate Permanent Subcommittee on
Investigations, detailing instances of access by politically exposed
persons to the U.S. financial system, serves as an important reminder
of regulatory concerns about PEPs that banks neglect at their peril.
Tom and Gordon have provided a thorough and thoughtful comparison of
bank receivership and bankruptcy regimes, questioning whether it makes
sense to apply the receivership template to non-bank financial
companies, as proposed in the House-approved Wall Street Reform and
Consumer Protection Act. And Travis has explained the implications
for federal chartered banks and thrifts of the closely-divided
Supreme Court's corporate political spending decision in
Citizens United v. Federal Election Commission.
Finally, last and, yes, least, we have the answer to last issue's Test
Your Banking Knowledge! question and the names of the four Committee
Members who got it right, as well as a new question for your entertainment.
All Committee members are encouraged to contribute articles to the Journal.
Analyses of recent developments are always welcome, but book reviews,
opinion pieces or other submissions relevant to the banking business are
also appropriate. You will be reaching a nationwide audience of more than
2000. Feel free to contact Peter Heyward at
peheyward@ venable.com or
202-344-4616 if you would like to propose an item for the next issue.
back to top ↑
|
|
|
|
|
Featured Articles
|
| |
FDIC Issues ANPR on Its Role As Receiver or Conservator of Assets Transferred in Connection with a Bank-Sponsored Securitization
Peter C. Bergan
In mid-December, the Federal Deposit Insurance Commission
(the "FDIC") released an Advance Notice of Proposed
Rulemaking regarding Treatment by the FDIC as Conservator or Receiver
of Financial Assets Transferred by an Insured Depository Institution
in Connection with a Securitization or Participation After March 31,
2010 (the "ANPR"). 75 Fed. Reg. 934 (January 7, 2010) (to
be codified at 12 C.F.R. pt. 360). The FDIC solicited public comment
regarding possible amendments to the "safe harbor" rule for
off-balance sheet securitizations currently codified in 12 C.F.R.
§ 360.6. The ANPR seeks comment on a draft revised rule (the
"Proposed Rule") that would permanent make the interim
grandfathering of securitizations closed before March 31, 2010.
The Proposed Rule, however, goes beyond extending this safe harbor
and ventures into other securitization issues, such as disclosure
and risk retention requirements creating a potentially sweeping
rule change in the area of bank-sponsored securitizations.
More...
A Renewed Focus on Foreign Corruption and Access by Politically Exposed Persons to the U.S. Financial System
Satish M. Kini and Paul L. Lee
On February 4, 2010, the Senate Permanent Subcommittee on Investigations
released a 325-page report detailing instances of access gained by
politically exposed persons ("PEPs") to the U.S. financial system.
The Subcommittee Report provides a cautionary tale for U.S. financial
institutions and professionals, including lawyers, in dealing with PEPs.
Through four case histories, the Report chronicles how PEPs were able to
use U.S. lawyers, real estate agents and escrow agents to circumvent
anti-money laundering ("AML") controls at U.S. financial
institutions. It also highlights deficiencies in the AML procedures
of these financial institutions. The Report concludes that U.S. financial
institutions need to strengthen, and other intermediaries, including lawyers,
realtors and escrow agents, need to adopt, PEP programs to prevent U.S.
institutions from being used to conceal, protect and use gains from foreign
corruption. The Subcommittee Report itself comes on the heels of a World
Bank survey report issued in November 2009 that found a low level of
compliance with internationally recommended measures directed at PEPs
and political corruption.
More...
Changing the Rules to Create Systemic Safety: Federal Receiverships for Nonbanks
Thomas P. Vartanian and Gordon L. Miller
Special rules to deal with bank insolvency pre-date the
Great Depression and the Federal Deposit Insurance Act,
enacted in 1933 (FDIA). In 1864, The National Bank Act
authorized the Comptroller of the Currency, rather than a
court, to appoint a receiver for national banks, and in 1873
shareholders of an impaired national bank were made liable
for an assessment up to the par value of their stock.
Bank insolvency measures were introduced in Congress as
early as 1837 in response to banking panics. Thus, while
FDIA and the Federal Deposit Insurance Corporation (FDIC),
with the assistance of deposit insurance, have unquestionably
succeeded in preventing bank runs, resolving failed banks
and reducing the destabilizing effects of bank failures,
the issue today is whether the bank receivership model is
the best way to deal with nonbank financial companies
that pose systemic risk.
More...
Political Spending By Banks After Citizens United v. Federal Election Commission
Travis P. Nelson
"If the First Amendment has any force, it prohibits Congress
from fining or jailing citizens, or associations of citizens, for
simply engaging in political speech."
-- Justice Anthony Kennedy, Citizens United
I. Introduction
The U.S. Supreme Court's January 21, 2010, 5-4 decision in
Citizens United v. Federal Election Commission has sparked
immediate debate at the highest levels of our Government as to the
propriety of political spending by corporations. In his January 27,
2010 State of the Union Address, President Barack Obama said of the
decision:
With all due deference to separation of powers, last week the Supreme Court
reversed a century of law that I believe will open the floodgates for special
interests – including foreign corporations – to spend without limit
in our elections. I don't think American elections should be bankrolled by
America's most powerful interests, or worse, by foreign entities. They
should be decided by the American people. And I'd urge Democrats and Republicans
to pass a bill that helps to correct some of these problems.
More...
back to top ↑
|
|
|
|
|
Test Your Banking Knowledge
|
| |
First, the answer to last issue's question: What do Alan Greenspan and the late
Ernesto "Che" Guevara have in common? The answer is that each served
as the head of his country's central bank. Of course, one can't push the
comparison too far: Che's tenure was marred by his rigid adherence to an
outdated ideology, and he served for less than two years (from November 1959 to
February 1961). The Maestro's tenure lasted more than 18 years, from 1987 to 2006.
Congratulations to Committee members Pete Bergan, Scott Smith, Peggy Mevs and
John Knoeckel for getting the right answer!
Here is the new question: Which real-world financial institution did director
Francis Ford Coppola use for the exterior shot of the fictitious bank where New
York's Five Families negotiated a truce to their long-running war in Godfather I?
The first five respondents with the correct answer will have their names published in the next issue. Good Luck!
back to top ↑
|
|
|
|
|
