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Volume X, Number 185

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Amid "Stay Home. Work Safe" Orders, Community Banks Remain Open for Business Under Designation as "Critical Infrastructure Sector"

On March 24, 2020, Harris County Judge Lina Hidalgo, in coordination with Houston Mayor Sylvester Turner, issued a mandatory “Stay Home. Work Safe.” order, effective at 11:59 pm March 24, to preserve public health and safety in Harris County in the face of the coronavirus (COVID-19). This follows similar orders issued in Texas’s largest counties encompassing Austin, Dallas, Fort Worth and San Antonio.

Each of the orders contain their own list of various specific exceptions to the mandatory shutdown; however, all of the orders contain an exception for the sixteen “critical infrastructure sectors” designated by the National Cybersecurity and Infrastructure Agency (CISA) that may remain open and operational. The Financial Services Sector, which includes community banks, is one of the sixteen exempt “critical infrastructure sectors” designated by CISA. Services covered by the Financial Services Sector include thousands of depository institutions, providers of investment products, insurance companies, other credit and financing organizations, and the providers of the critical financial utilities and services that support these functions. Accordingly, community banks are to remain open and must decide themselves how best to serve their customers while maintaining the safety and health of their employees.

There are not always easy answers in determining how and what operations a financial institution should continue in the wake of government orders that are issued to slow the spread of COVID-19.   Each financial institution should consider developing and maintaining a written record of its analysis, including backup information and sources, in the event its actions are challenged by regulatory authorities or others.  Financial institutions should recognize that at least some of their operations, employees and customers will be affected by such orders, and be proactive in monitoring the various state and federal regulators that have jurisdiction over the financial institution and the updates from such regulatory bodies.  With the understanding that the COVID-19 environment and situation is fluid and unique, financial institutions should attempt to make legally supportable decisions that maintain the safety and health of their employees and customers.

Learn more about CISA on their website.

Find out more about federally-designated critical infrastructure sectors here.

© 2020 Bracewell LLPNational Law Review, Volume X, Number 86

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About this Author

William S. Anderson, Securities Attorney, Bracewell Law Firm
Partner

Will Anderson focuses on capital markets transactions, liability management, SEC compliance and disclosure matters and mergers and acquisitions.  He also regularly advises Boards of Directors and Special Committees on fiduciary duties, corporate governance and other matters.

Will has represented issuers and underwriters in well over 100 securities offerings that have collectively raised more than $30 billion.  His experience includes initial public offerings, follow-on equity offerings and high yield and investment grade debt offerings.  He...

713-221-1122
Jason Jean Finance & Energy Attorney Bracewell
Partner

Jason Jean is experienced in advising public and private businesses, including private equity investors, in the financial services sector, upstream and midstream energy sector, and other sectors with respect to mergers and other business combinations, asset and stock purchases and sales, restructurings and joint ventures. Jason also advises businesses in private capital markets transactions, including Rule 144A private placements and PIPEs, and public capital market transactions listed on the New York Stock Exchange (NYSE), NASDAQ, Amex and London Stock Exchange. His capital markets experience extends to representation of issuers, underwriters and placement agents on a variety of debt and equity offerings, including initial public offerings. Jason’s practice also includes advising businesses on corporate governance and compliance issues.                          

713.221.1328
Joshua McNulty Corporate Attorney Bracewell
Partner

Josh McNulty is a corporate and regulatory banking attorney. Josh’s practice primarily focuses on regulatory compliance, mergers and acquisitions, and securities law matters for financial institutions. He counsels state and national banks, holding companies and other financial institutions on state and federal regulatory compliance issues, including all aspects of regulatory matters involving the FDIC, the Federal Reserve, the OCC, the TDB, and the CFPB.

Josh also advises financial institutions, corporate clients and boards of directors on corporate governance, stockholder matters,...

214.758.1046
Shannon Baldwin Securities Lawyer Bracewell
Associate

Shannon Baldwin represents privately owned and publicly traded companies in securities matters, capital markets, corporate governance, joint ventures, mergers and acquisitions, and master limited partnership (MLP) dropdown transactions. In addition, she represents companies in equity and debt offerings, including public and private issuances and private investment in public equity (PIPE) transactions.

1.713.221.1308