Banking Law Committee Journal - Winter 2020


In This Issue


Dodd-Frank 2.0: The Contours of the Policymakers’ Debate

We are now two years into the “reform” of Dodd-Frank, and although there has unanimity on a number of issues, certain changes have drawn dissent. The pruning of certain aspects of the original regulations has been a goal of Federal Reserve Vice Chair Randal Quarles, who has been supported by the other Board governors, except for Governor Lael Brainard on six matters. Similarly, for changes on which the Federal Deposit Insurance Corporation (FDIC) Board has also issued its approval, support has been unanimous other than for Director Martin Gruenberg on five matters. This article analyzes these competing schools of thought.


Tee Up Your OFAC Compliance Commitments: Pillars, Critical Factors, and Essential Components

OFAC’s guidelines on the essential components of OFAC compliance programs and the DOJ’s guidelines for the evaluation of corporate compliance programs share a number of common themes with what have become known as the “five pillars” of Bank Secrecy Act/anti-money laundering (collectively, BSA/AML) compliance under the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) regulations. This article will briefly explore the conceptual overlap of the three compliance regimes, with particular regard to management commitment, risk assessment, internal controls, independent testing, and training in order to distill core components of compliance across the board and help financial institutions get their compliance commitments teed up in the new year.


Accounts That Go Up in Smoke: To Bank or Not to Bank, the Marijuana Industry

A curious phenomenon has occurred over the last couple of years. A number of institutions have re-examined their corporate structure and concluded that the tried and true bank holding company structure is no longer necessary or advisable. Notably, Bank of the Ozarks, Bancorp South and Zions Bancorp, all elected to merge their holding companies into their subsidiary banks, eliminating the Federal Reserve as a regulator. While the specific reasons vary from institution to institution, some of the common themes include reduced regulatory oversight, simplified financial reporting and reduced administrative burdens and costs. Financial and legal advisors have picked up on the bandwagon and some are now pushing the concept as a way to simplify operations.


Banks’ Enhancements in Risk Management Provide a Prudential Backstop in this Deregulatory Cycle

Recent bipartisan amendments to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) in 2018, the loosening of Volcker rule provisions in August 2019, discussed in the Journal’s November issue, and the final rules issued in October 2019 that reduce regulatory obligations by tiering bank holding companies (BHCs) and designated nonbank financial institutions by size and risk have led to no small amount of controversy.