Showing 46 posts by William T. Repasky.
On Wednesday, April 26, the Conference of State Bank Supervisors (the “CSBS”) filed suit against the Office of the Comptroller and Currency and its Comptroller Thomas J. Curry (collectively, the OCC”) over Curry’s December 2016 announcement that the OCC has created a new national bank charter for non-bank companies (the “Non-Bank Charter Rule”). This Non-Bank Charter Rule, the complaint alleges, will pull chartered non-bank companies into the national banking regulatory system, and will preempt and replace state-based banking regulation, licensing, and supervisory responsibility of state authorities. Read More ›
A Cautionary Tale for Money Service Businesses: How Violating the Bank Secrecy Act Could Cost Millions
On February 27, 2017, The Financial Crimes Enforcement Network (“FinCEN”) fined Merchants Bank of California (“Merchants”) $7 million for what it called “egregious” violations of the Bank Secrecy Act (“BSA”). The Office of the Comptroller of the Currency simultaneously assessed a $1 million civil monetary penalty against Merchants because it violated two previous consent orders. Merchants is a community bank located in Carson City, California. The Bank had a large portfolio of Money Service Businesses (“MSBs”) customers. MSBs are generally recognized by federal regulators to include: (1) currency dealers or exchangers; (2) check cashers; (3) issuers of traveler’s checks, money orders, or stored value; (4) sellers or redeemers of traveler’s checks, money orders, or stored value; and (5) money transmitters. In Merchants’ case, it had 165 check-cashing and 44 money-transmitter customers, who often operated at great distances from the Bank. Compounding the situation was the fact that Bank insiders owned or managed a number of the MSB customers. Read More ›
Should state Attorney General’s (AG’s) intrude in the private market place to influence the choice consumers and merchants’ make as to the type of payments they will prefer for credit card transactions? By any account, those are complicated business decisions involving complex cost, risk, marketing, technology and personal preference issues, which are often unique to each business’s situation. But nonetheless, this is exactly what nine Attorneys General recently did. Read More ›
Many banks are now evaluating the pros and cons of using the new “.bank” domain. For those not already in the know, rather than continuing to use the generic “.com” domain, qualifying banks can soon switch to a more descriptive .bank top-level domain name. For example, a bank’s website address might read www.XYZinstitution.bank, rather than www.XYZinstitution.com; and its emails name.employee@XYZinstitution.bank. In 2012, fTLD Registry Services, LLC (formed by the Financial Services Roundtable and the American Bankers Association) applied to ICANN for the right to issue and manage the .bank generic top-level domain names. On September 25, 2014, fTLD was granted these rights, and it promptly established a roll-out schedule for the issuance of the .bank domain name. For those few financial institutions who hold registered trademarks in their names, open enrollment began last Sunday, May 17, 2015. For all the other banks, those without registered trademarks, general availability enrollment will begin at 8:00 pm, EDT, on June the 23rd. Read More ›
Those practicing in the payments space know that recorded judicial decisions are few and far between concerning disputes over credit card processing contracts. Terms and conditions in these contracts are often created with heavy reliance on general contract principles, even though the operative acts of the parties are highly unique and subject to extensive third-party rules. The January 15, 2015 decision in Schnuck Markets v. First Data Merchant Data Services Corp. and Citicorp Payment Services, U.S.D.C. E.D. Missouri, No. 4:13-CV-2226-JAR, is one of those rare cases, and is a decision highlighting the importance of careful contract drafting in the context of the merchant processing relationship. Read More ›
Towards the end of 2014, two new national savings laws were signed by President Barack Obama. The first is American Savings Act, H.R. 3374. To encourage consumer savings, this Act permits financial institutions to offer prize-linked savings products. Citing the need to improve the country’s saving rate by American households, and following the success the State of Michigan saw with its own similar program, the Act permits a saving promotion raffle to be offered by insured financial institutions, including federal savings and loan institutions. A permitted savings promotion raffle is a contest in which the consideration for entry is obtained by the deposit of a specified amount of money into a savings account or other savings program offered by a financial institution. Read More ›
The Supreme Court of Kentucky, on June 19, 2014, finalized its “to be published” decision in the case of Patricia W. Ballard v. 1400 Willow Council of Co-Owners, Inc. Although this case arises from facts involving a condominium owner’s dispute with her building’s council of owners, the case is of interest to all financial institutions engaged in mortgage lending and real estate collections. Read More ›
During the early stages of the Heartbleed computer bug panic, financial institutions and their customers were justly concerned about the vulnerability of their e-banking systems. It now appears that the nation’s largest banks, including most regional banks, face little direct risk, and that many community banks continue to work with their technology vendors to determine whether their core platforms used the vulnerable version of Open SSL cryptography. On the same day Heartbleed was “publically” announced, April 7th, the FDIC re-issued its guidance “Technology Outsourcing: Informational Tools for Community Banks.” Read More ›
An unheralded transformation is occurring in the business of banking. Banking is increasingly a business of outsourcing banking operations, as stretched financial institutions work to meet their customers and their regulators’ demands. Skill in the procurement of third-party vendor services is now a core competency, and the regulatory agencies increasingly recognize it as such. In December of 2013, the Federal Reserve Board issued its updated “Guidance on Managing Outsourcing Risk.” Read More ›
In a recent lawsuit rising from cyber account-takeover fraud, the defending financial institution won summary judgment on two issues of apparent subjective analysis under the Uniform Commercial Code’s Chapter 4A. “The tension in modern society between security and convenience is on full display in this litigation.” Choice Escrow and Land Title, LLC v. BancorpSouth Bank, (U.S.D.C., WD of Missouri; Case No. 10-03531-CV-S-JTM. Read More ›
Ask the Blogger
Do you have a topic that you would like discussed in a future blog article? Please let us know. If you have a confidential question regarding a blog article, please feel free to contact the article's author directly, or let us know if you would like for someone to contact you directly.
Christopher C. Tieke is an associate in Frost Brown Todd's Louisville office, focusing his practice on business litigation. He graduated from the University of Cincinnati College of Law, with magna cum laude honors; served as an Associate Member of the University of Cincinnati Law Review; and participated in the Entrepreneurship and Community Development Clinic.