Transition From LIBOR
In July of 2017, the United Kingdom Financial Conduct Authority, the regulator of the London Interbank Offered Rate (LIBOR), announced that LIBOR will phase out at the end of year 2021. The reason for discontinuing LIBOR was due to the high level of manipulation of the rate that had been exposed in 2012, which dates back to as early as 2003.
Filling The Truist Void
With the expected closing of the BB&T and SunTrust merger in the fall of this year, we anxiously await to see how the banking industry reacts. The merger of equals, as it is being called, will result in the sixth largest bank, operating under its new name – Truist Bank. While Truist Bank will still conduct business out of BB&T and SunTrust’s current headquarters in WinstonSalem, North Carolina and Atlanta, Georgia, Truist Bank will have its new headquarters in Charlotte, North Carolina.
Bank Client Advisory Alert
As 2018 comes to an end, management should look closely at what the potential challenges of 2019 will bring to their holding companies and subsidiary banks, and must be ready to address those challenges with their Board of Directors. This is a great time to reflect on what has worked and what has not in 2018, and to deal with the situations and issues that need to be addressed to make 2019 a better year for your Company, board of directors, management and shareholders.
Due Process For Banks
Igler | Pearlman, P.A. recently had the opportunity to participate in a Federal Deposit Insurance Corporation (“FDIC”) Appeal of Material Supervisory Determina-tions (“Appeal”). We represented a Florida state-chartered bank before the Supervision Appeals Review Committee (“SARC”). The SARC Appeal procedures provided the bank with the opportunity to dispute cited violations of law and a CAMELS component rating assigned to the bank in its recent Safety and Soundness Examination (“Examination”), and allowed the bank the opportunity to present its position on the findings of the Examination in an open forum.
Report Of Examination Recommendations Being Treated As Mandatory
All financial institutions, whether state or federally-chartered, are subject to regulatory
examinations by one or more of the banking regulatory agencies (collectively, the “Supervisory
Authorities”). Each examination is followed by a Report of Examination that summarizes the
Supervisory Authorities’ findings and specifies whether the financial institution is operating in a safe and sound manner.
The Drawback In Vendor Contracts
Although there is certainly a resurrection in de novo banks making a comeback across the country, it does not seem to have an effect on the ever-increasing number of mergers and acquisitions.
Is Your Bank Prepared To Comply By July?
When Reg CC was first implemented, all checks were in paper form. Now, with mobile banking and remote deposit capture being utilized by even the smallest financial institutions, the Board has been playing catch-up by implementing a round of amendments to Reg CC in order to provide guidance on electronic checks and electronically-created items.
Cybersecurity: Growing Concern For The Going Concern
Cybersecurity is not a new topic, but its importance has grown exponentially with the number of sophisticated data security breaches reported in the last five years. These breaches have become a multi-million dollar problem for many organizations such as Target, Chase, Ashley Madison and Equifax. With more exposure on the topic coming from the seemingly unending investigation into Russia’s meddling with the 2016 election, we now know more than we ever have about cyber attacks and the risks they pose. Even with that knowledge, however, it seems as though there is no way to prevent these attacks from happening.
The Amazon Effect
The Amazon Effect is the overwhelming deterioration of any market that Amazon decides to enter. Amazon first started by selling books online. Their rapid success caused Barnes & Noble’s sales, stock price, and capital to dwindle almost immediately. What was once the largest bookstore has seen a continuous decrease in year to year sales since 2013. This was the beginning of the Amazon Effect.