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Banking Regulators Issue Dodd-Frank Report on Bank Activities and Investments

On September 8, the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) issued a report (Report) that they were required to prepare pursuant to section 620 of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd–Frank). The primary purpose of the Report is to inform Congress concerning the investment and other activities that a banking entity may engage in under federal and state law, so it provides a useful summary of current regulatory framework for banks. The Report is also required to include recommendations as to (1) whether each activity or investment has or could have a negative effect on the safety and soundness of the banking entity or the US financial system; (2) the appropriateness of the conduct of each activity or type of investment by banking entities; and (3) additional restrictions as may be necessary to address risks to safety and soundness arising from the activities or types of investments.

Among the more noteworthy recommendations in the Report are a recommendation by the Board that Congress should repeal the authority of financial holding companies to engage in merchant banking activities, and a statement by the OCC that it will be soliciting comment on whether the OCC should treat copper as a base metal rather than a precious metal, define “coin and bullion” in a manner that excludes copper cathodes, and conclude that buying and selling copper is generally not part of or incidental to the business of banking.

The text of the Report is available here.

©2019 Katten Muchin Rosenman LLP


About this Author

Guy Dempsey Jr., Bank Regulations Legal Specialist, Katten Muchin

Guy C. Dempsey Jr. concentrates his practice on derivatives and structured products and on bank regulation. He advises clients on derivatives transactions of all types across all asset classes, as well as on the corporate governance, regulatory, collateral, compliance, insolvency and litigation issues associated with such products.

Much of Guy’s work involves helping bank and non-bank clients analyze the details and impact of the Dodd-Frank Act. He maintains deep knowledge of the banking laws and regulations relating to capital markets activities....