Our practice spans business and product lines and the lifecycle of investments and financing transactions. We not only work with all types of financial institutions on complex transactions and product rollouts but also represent their investors, partners and counterparties in similar transactions and joint ventures. Further, we collaborate with colleagues in our Corporate & Securities; Banking & Finance; Fund Formation & Investment Management; and Public Policy, Regulatory & Political Law practices on the regulatory aspects of significant investments and acquisitions, divestitures, joint ventures and other transactional matters.

Counsel at the Matter Level

Most transactional matters involving financial institutions have regulatory elements from day one. We assist in structuring and documenting regulated transactions and in preparing, submitting and negotiating all necessary regulatory applications and notice filings. We routinely review term sheets and analyze structure charts to identify and resolve issues related to compliance with restrictions on activities under banking laws, the prohibitions of the Volcker Rule, margin lending requirements and anti-tying rules. We also synthesize disparate regulatory requirements to produce innovative solutions—for example, structures that satisfy regulatory capital and liquidity rules and true sale accounting standards while providing appropriate insolvency protections.

We also advise on anti-money laundering and sanctions compliance matters globally, including under the USA PATRIOT Act and US Bank Secrecy Act. In addition to providing business-as-usual regulatory compliance counseling, such as by drafting policies and reviewing workflows, we implement practical compliance solutions for complex commercial transactions by drawing on our substantial experience with how anti-money laundering requirements affect these transactions and working with our peers in the banking industry.

And at the Operational Level

On an ongoing basis, we counsel clients, solve complex management issues associated with corporate activities and operations and advise senior management and boards on corporate governance and oversight, transactions with affiliates, risk management and management succession. We provide guidance on disclosures that are required under the securities laws and expected by banking regulators as well as filings for changes in control and golden parachutes. Our advice ranges from addressing discrete control issues under the US Bank Holding Company Act to drafting comprehensive policies for equity investments for cross-border financial institutions. We tailor our advice to the specific issue facing the client, which may be as small as providing an opinion for onboarding as a financial market utility or as large as preparing an organization-wide resolution plan.

We guide clients through the most recent changes in supervisory expectations for corporate governance, risk management, compliance and cybersecurity. We also conduct regulatory inventories to support risk management functions and gap analyses. Our deep involvement throughout the lifecycle allows us to efficiently provide customized solutions in the mitigation stage, such as by adjusting reporting lines under the three lines of defense model or drafting policy addenda for new legal requirements.

Chartering Experience

We advise nonbank financial institutions and other institutions on the organization or acquisition of banks, including banks with novel charters. Our advice typically includes assessing the suitability of different charter options based on our clients’ existing and planned business activities. For example, we have addressed the pro and cons associated with chartering insured full-service banks, fintech banks, savings associations, trust banks and companies, and industrial loan companies, as well as the alternatives of obtaining lender or money transmitter licenses. For non-US banks, we have addressed the licensing of US branches, agencies and representative offices and the formation of commercial lending companies and other nonbank entities.

Our deep market knowledge ensures our advice is both cutting-edge and practical. We understand the supervisory expectations of the US regulators and have a good sense of which options will be achievable for our clients. Further, our experience with non-traditional ownership structures, including investment funds and non-US entities, helps us to identify potential difficulties early in the engagement and design tailored solutions at both bank and holding company levels.

Volcker Rule Experience

Our team counsels banking organizations and fund managers on compliance with the requirements of the prohibitions against proprietary trading and covered fund activities, commonly known as the “Volcker Rule.” This work includes reviewing fund structures and financing arrangements to help banking organizations and fund managers determine if their participation is subject to the Volcker Rule’s covered fund prohibitions and whether exclusions or exemptions may be available to them. We also revise transaction documents and securities disclosures to ensure that certain types of fund investments will be excluded from the Volcker Rule, including by having the fund qualify for alternative exceptions under the US Investment Company Act.

We provide similar advice concerning the prohibition against proprietary trading, often in the context of evaluating the status of esoteric cross-border trading and hedging activities. Our depth with both components of the Volcker Rule allows us to provide comprehensive counseling, such as through the drafting of organization-wide compliance procedures.

Permissible Activities Experience

Our lawyers advise banking organizations and their investors on the prohibitions against engaging in nonbanking activities. We review investment targets to help a banking organization determine if the target engages in impermissible nonbanking activities and whether exemptions may be available for certain types of investments. We also revise transaction documents to ensure that banking organizations may rely on specific exemptions for certain types of nonbanking activities and that the target will not subsequently engage in impermissible activities.

Additionally, we represent investors in banking organizations in connection with reviewing and conforming activities and investments that are not permissible. This has included obtaining financial holding company status to allow the investor to continue to engage in certain activities and winding down impermissible activities or debanking. This work also includes submitting requests to the regulators for general exemptive relief under Section 4(c)(9) of the US Bank Holding Company Act.

Control Rules Experience

We counsel banking organizations and their investors on the control rules of the Federal Reserve and other banking regulators. This work includes reviewing relationships and investments to help a banking organization or investor determine if the relationship or investment constitutes control under the Bank Holding Company Act. We also revise transaction documents to ensure that an investment or relationship will not constitute control or create a controlling influence.

Additionally, we represent investors in banking organizations in connection with divesting control or restructuring controlling relationships, such as through changes to passivity commitments.

Our work in this area also has included representing parts of the securitization industry in their successful effort to decouple the definition of ownership interest in Regulation YY from the definition of control in Regulation Y.

Heightened Standards and Board Effectiveness Experience

Our team advises banking organizations’ senior management and boards of directors on supervisory expectations for risk management and corporate governance. This work includes designing and implementing risk governance frameworks under the OCC’s heightened standards, as well as making incremental revisions to policies and procedures. And we conduct regulatory inventories to support risk management functions and gap analyses to ensure compliance with new cybersecurity requirements and third-party risk management expectations.

We also train directors on federal supervisory expectations for board effectiveness and state law fiduciary duties. These tailored trainings reflect the complex interaction between the federal regulatory requirements and state corporate law. And we review management and board reporting structures and help banking organizations clarify and align roles and responsibilities relative to supervisory expectations, such as through the three lines of defense model.

Capital and Liquidity Experience

We advise financial institutions and investors on the regulatory capital and liquidity rules. This work has included the design of groundbreaking securitization structures to provide capital relief as well as traditional counseling to ensure that specific instruments qualify as regulatory capital. We also advise on the capital implications of specific transactions, including with respect to the advanced approaches for larger, more complex institutions and quasi-capital requirements for US branches and agencies of foreign banking organizations.

Additionally, we counsel financial institutions on complying with the standardized liquidity requirements and related reporting obligations. This work includes reviewing specific transactions and instruments to help financial institutions identify outflow or inflow rates. We also help institutions align their liquidity management activities under the Liquidity Coverage Ratio requirements with their liquidity reporting obligations under the FR 2052a.

Resolution Planning Experience

Our lawyers counsel financial institutions on resolution planning requirements, commonly known as “living wills.” This work includes reviewing activities and operations to help financial institutions identify material entities and interconnections and drafting resolution plans or parts of plans. While we have worked on resolution plans for institutions of all sizes, our advice is tailored for each institution’s unique footprint and designed to avoid over-engineering the final plan.