Tag Archives: Eric McLaughlin

Federal Reserve and FDIC Reports—Next Steps

Editor’s Note: The NYU School of Law Program on Corporate Compliance and Enforcement (PCCE) is watching the recent banking crisis and failures of Silicon Valley Bank, Signature Bank, and, most recently, First Republic Bank.  PCCE is looking to publish additional posts in this area and those interested should contact joseph.facciponti@nyu.edu.

by Dana Seesel Bayersdorfer, Jung Eun Choi, Luigi L. De Ghenghi, Ledina Gocaj, Randall D. Guynn, Eric McLaughlin, Daniel E. Newman, David L. Portilla, Gabriel D. Rosenberg, and Margaret E. Tahyar

Photos of the authors

From top left to right: Dana Seesel Bayersdorfer, Jung Eun Choi, Luigi L. De Ghenghi, Ledina Gocaj, and Randall D. Guynn.
From bottom left to right: Eric McLaughlin, Daniel E. Newman, David L. Portilla, Gabriel D. Rosenberg, and Margaret E. Tahyar. (photos courtesy of Davis Polk & Wardwell LLP)

The Federal Reserve and the FDIC reports on their supervision of Silicon Valley Bank and Signature Bank provide insight into potential upcoming shifts in regulatory and supervisory focus.

The Board of Governors of the Federal Reserve System (Federal Reserve or Board) released the results of its review of the supervision and regulation of Silicon Valley Bank (SVB), which was led by Vice Chair for Supervision Michael S. Barr (the Board Report),[1] and the FDIC released the results of its review of the supervision of Signature Bank,[2] which was led by FDIC Chief Risk Officer E. Marshall Gentry (the FDIC Report).[3]

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NY DFS’ Virtual Currency Guidance for Banking Organizations

by Luigi L. De Ghenghi, Boaz B. Goldwater, Randall D. Guynn, Joseph A. Hall, Justin Levine, Eric McLaughlin, Daniel E. Newman, Gabriel D. Rosenberg, Margaret E. Tahyar, and Zachary J. Zweihorn

The New York Department of Financial Services (DFS) has released guidance that expands the scope of virtual currency activity for which New York banking organizations need prior approval.

The DFS has released guidance clarifying both the scope of and application process for virtual currency-related activities by NY banking organizations (the Guidance). The Guidance expresses the DFS’ expectation that all Covered Institutions[1]—New York-chartered banks and trust companies and foreign bank branches and agencies in New York—seek the DFS’ approval before engaging in any new or additional virtual currency-related activity.[2] The BitLicense regulations have always been clear that Covered Institutions that obtain approval from the DFS before engaging in virtual currency business activity[3] do not need to obtain a BitLicense from the DFS.[5] But the Guidance requires a Covered Institution to obtain approval before engaging in virtual currency-related activity, which includes but is not limited to virtual currency business activity. The Guidance, therefore, expands the scope of activities for which Covered Institutions must seek prior approval.

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Bank Relationships with Fintechs

by Jai R. Massari, Eric McLaughlin, Gabriel D. Rosenberg, Margaret E. Tahyar, Zachary J. Zweihorn, Adam Greene, and Dana E. Seesel

Federal banking regulators continue to signal their attention to banks’ relationships with third parties, and particularly with fintechs. We think that these developments should be of interest to larger banking organizations as well.

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10 Key Takeaways from the Federal Reserve’s Final Rule on CSI and FOIA

by Luigi L. De Ghenghi, Randall D. Guynn, Jai R. Massari, Margaret E. Tahyar, Eric McLaughlin, Daniel E. Newman, and Eric B. Lewin 

The Federal Reserve’s recent updates to its regulations on confidential supervisory information (CSI) and availability of information under the Freedom of Information Act (FOIA)[1] include several meaningful modifications to adapt these rules for the digital age of emails, data rooms and slide decks and the modern organizational structure and operations of banking organizations.  

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Regulators and Plaintiffs Aren’t Waiting for Privacy Legislation: Companies Face Potential Liability Now and Can Take Steps to Reduce Risks

by Avi Gesser, Eric McLaughlin, Greg Swanson, and Clara Y. Kim

Momentum is building in Congress for federal privacy legislation and several states have their own privacy laws in the works.  But, as concerns grow that companies are collecting and sharing personal information about U.S. residents without their knowledge and not adequately protecting that data, regulators and plaintiffs aren’t waiting for new laws.  Instead, they are refitting existing laws to meet their data privacy and security objectives. Continue reading →

The FTC Moves Toward a Rules-Based Approach to Cybersecurity Regulation for Financial Institutions

by Avi Gesser, Kelsey Clark, Jennifer E. Kerslake, and Eric McLaughlin

In our first Cyber Blog post, we predicted that the rules-based approach adopted by the NYDFS would become the model for cybersecurity regulation.  Two years later, we’re feeling pretty good about that prediction, as the FTC recently proposed incorporating a number of aspects of the NYDFS cybersecurity rules into its Standards for Safeguarding Customer Information rule (the “Safeguards Rule”).  The proposal would also expand the Safeguards Rule’s definition of “financial institution” to include “finders,” or companies that connect potential parties to a transaction.  As a reminder, the Safeguards Rule applies to financial institutions that are not regulated by the federal banking agencies, the SEC, or state insurance authorities, including non-bank mortgage lenders, payday lenders, finance companies, check cashers, money transmitters, collection firms, and tax preparers. Continue reading →

Alternative Data Goes Mainstream, and Gets Increased Attention from Regulators

by Avi Gesser, Eric McLaughlin, Clara Y. Kim, and Sumeet Sanjeev Shroff

In the last few years, we have seen a dramatic increase in the purchase and sale of alternative data—a shorthand for big data sets, such as satellite images of parking lots, drug approvals, credit card purchases, cellphone data on retail foot traffic, and construction permits. According to alternativedata.org, the alternative data industry is projected to be worth $350 million in 2020. The recent announcement by Bloomberg LP that it is offering a product that will give clients access to large volumes of alternative data shows the widespread use of this information in making investment decisions, which is causing hedge fund managers and institutional investors to seek even more untapped alpha-generating data sets.  Not surprisingly, all this activity is attracting increased regulatory scrutiny. Continue reading →