FINANCIAL INSTITUTIONS ADVISORY & FINANCIAL REGULATORY GROUP NEWSLETTER JANUARY 10, 2018 ISSUE 1/2018 Financial Regulatory Developments Focus In this week’s newsletter, we provide a snapshot of the principal U.S., European and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructure providers, asset managers and corporates. Click here if you wish to access our Financial Regulatory Developments website.

Date

6/22/2017

Action

Testimony of Keith Noreika, Acting Comptroller of the Currency, before the Senate Committee on Banking, Housing, and Urban Affairs.

Key Provisions

The Comptroller made a series of recommendations for regulatory reforms directed at promoting economic growth and reducing regulatory burden. He stated that the OCC’s recommendations are consistent with the Treasury Report.

Key recommendations include:

On April 21, President Trump issued a Presidential Memorandum directing the Secretary of the Treasury to conduct a review of the Financial Stability Oversight Council (FSOC) processes for determining whether nonbank financial companies are financially distressed and designating nonbank financial companies as “systemically important.” The memorandum explains that a review of these processes is needed because the designations “have serious im

Companies that the Financial Stability Oversight Council (FSOC) believes may be subject to FDIC receivership under the Orderly Liquidation Authority contained in Title II of the Dodd-Frank Act, and certain of their affiliates, are now subject to recordkeeping requirements related to their “qualified financial contracts”1 (QFCs).

Title II of the Act, designated "Orderly Liquidation Authority" – effective July 21, 2010 – establishes what is intended to be an orderly liquidation process for "financial companies" whose collapse or potential collapse are determined to constitute a risk to the financial system as a whole. Such systemically significant institutions would be liquidated under these new procedures, rather than being treated under existing bankruptcy laws. (The intent of Act is that most-failing financial companies will continue to be administered under existing bankruptcy laws.)

I. Introduction

Title II of the Dodd-Frank Act establishes a new non-judicial receivership al-ternative for resolving troubled financial companies that could threaten the stability of the U.S. financial system (“Covered Financial Companies”), as described further below. The Federal Deposit Insurance Corporation (“FDIC”), on October 12, 2010, issued a notice of proposed rulemaking (the “Proposal”) to begin to implement the provisions of Title II.

Recently, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board (FRB) each issued rules related to different aspects of the Dodd-Frank Act. The FDIC published in the Federal Register an interim final rule clarifying how it will treat certain creditor claims under the new orderly liquidation authority (OLA) granted under Title II of the Dodd-Frank Act.

A recently proposed rule by the Federal Reserve Board and the Federal Deposit Insurance Corporation would systemically impose significant bank holding companies and nonbank financial companies to submit annual resolution plans and quarterly credit exposure reports.

The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board announced the process for receiving and evaluating the initial resolution plans--also known as living wills--from the largest banking organizations operating in the United States. The agencies also gave a timetable for release of the public portion of such plans, which are due on July 2.