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On October 21, 2024, the Office of the Comptroller of the Currency (OCC) finalized revisions to its Guidelines Establishing Standards for Recovery Planning by Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches at 12 CFR Part 30, Appendix E (Revised Guidelines). The Revised Guidelines continue the regulatory trend following the 2023 bank failures of lowering the threshold at which financial institutions become subject to requirements aimed at promoting their resiliency—in this case, from $250 billion to $100 billion in average consolidated assets (Covered Banks). This will result in Covered Banks in the $100 billion to under $250 billion range having to develop and annually review recovery plans for the first time since 2018. Moreover, all Covered Banks will be subject to new requirements to test their plans and incorporate non-financial risk, with standards that differ from those applicable to resolution plans under the Federal Deposit Insurance Corporation’s (FDIC) recently finalized rule for insured depository institutions (IDI Rule) and Section 165(d) of the Dodd-Frank Act (165(d) Plans). As a result, Covered Banks of all sizes will need to reexamine and update their recovery planning processes. These changes are effective as of January 1, 2025, and are subject to staggered compliance dates.

With the amount of commercial real estate loans scheduled for maturity over the next several years expected to increase significantly, there is accompanying heightened risk that some borrowers may be unable to replace their maturing debt with new debt under reasonable terms and prevailing market conditions (refinance risk).  On October 3, 2024, the Office of the Comptroller of the Currency (“OCC”) issued OCC Bulletin 2024-29, which provides guidance to banks in the management of credit risk associated with refinancing commercial loans.  The bulletin, which applies to all banks with commercial loan portfolios, outlines that refinance risk affects both individual loan transactions and loan portfolios and can be driven by both external and borrower-specific factors. The bulletin highlights the need for banks to have related risk management processes that are appropriate for their size, complexity, risk profile and loan types. 

On October 22, 2024, the Consumer Financial Protection Bureau (the “CFPB”) finalized its personal financial data rights rule (“The Final 1033 Rule” or the “Final Rule”) that would require data providers to make available to consumers and their authorized third parties certain covered data in the data provider’s control or possession concerning a covered consumer financial product or service. This Final Rule comes a year after the CFPB initially proposed the rule (the “Proposed Rule”) in October of 2023.

On October 2, 2024, the Securities and Exchange Commission (“SEC”) announced it had settled enforcement proceedings against Thrivent Investment Management, Inc. (“Thrivent”), a SEC dually-registered broker-dealer and investment adviser, stemming from Thrivent’s alleged failure to update a calculator tool utilized by its representatives to determine which shares in certain 529 College Savings Plans are recommended to its retail customers.

Welcome to “The Desk”, Moore & Van Allen's (MVA) updated Swaps and Derivatives newsletter. Our goal is simple, to provide you key updates and insights that you can quickly digest and easily share with your peers, boss, or anyone else that shares a passion for swaps and derivatives news. 

On Sunday, September 29, California Governor Gavin Newsom vetoed California Senate Bill 1047, which would have established novel safety regulations on large artificial intelligence (AI) models.  Known as the Safe and Secure Innovation for Frontier Artificial Intelligence Models Act, SB 1047 would have required developers of covered models, which are defined to include only large, high-cost and power-intensive AI models, to, among other things.

Moore & Van Allen (MVA), Financial Regulatory Advice and Response Member, Kathryn Wellman authored the article, “FDIC final resolution planning rule increases requirements on large insured depository institutions”, which was published by Reuters and Westlaw Today on August 12.

Securities regulators have long been concerned with the potential regulatory risks associated with geographically dispersed broker-dealer offices, citing the observation that the distance of these offices from compliance and supervisory personnel could make it easier for them to be involved in and conceal securities laws violations.  On-site internal inspections of those offices have been viewed as a vital component of the supervisory process in mitigating those potential risks.  SEC Staff Legal Bulletin No. 17 (March 19, 2004).  However, given recent advances in technology and changing work environments resulting from the COVID-19 pandemic, broker-dealer supervisory practices have evolved.  This evolution has not gone unnoticed by regulators such as FINRA, who has adopted a new voluntary inspections pilot program rule which will allow member firms to perform required office inspections by remote means.  FINRA member firms will have the ability to opt into this voluntary program beginning on June 1, 2024.  The discussion below covers some aspects of what FINRA member firms may expect, including potential benefits, regarding this new rule.  

On October 4, 2023, Deputy Attorney General Lisa Monaco announced the next (but not final) chapter of the U.S. Department of Justice’s concerted attempt to promote voluntary corporate self-disclosure of misconduct with a new Mergers & Acquisitions Safe Harbor Policy.

Background

The DOJ in recent years has expressed a commitment to creating clear, predicable, and standardized policies that incentivize companies to voluntarily self-disclose misconduct to the government, which the Department describes as the “clearest path for a company to avoid a guilty plea or an ...

From July 20-23, 2023, the South Asian Bar Association of North America hosted its annual conference, “The Next Revolution,” in Boston. SABA’s conference brought together 800 South Asian attorneys from all over the continent, including in-house counsel, government attorneys, and private practitioners.

Palvia was selected for the Class of 2023 of SABA’s Leadership Institute and met many members of the class at the conference, along with SLI graduates from prior years. Learn more about SABA here.

_{[Palvia is second from the left at the SABA Leadership Institute Reception]}