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Banking Law Committee

The Banking Law Committee hosts the annual Banking Law Institute in conjunction with Minnesota CLE and holds CLE lunch meetings throughout the year.

The Banking Law Institute and luncheon CLEs feature national and local attorneys on current issues in banking law, valuable handouts, and lively discussions. The committee also reviews and/or drafts new Minnesota legislation affecting financial institutions.

Co-Chairs: Karen Grandstrand and Joe Green.

Helpful Resources:

4-5-13 Banking Law Institute
by Jason Seashore, Securities Writer, Thomson Reuters Westlaw

The 2013 Banking Law Institute took place on April 5 at the Minnesota CLE Conference Center.  Banking Law Committee co-Chairs Karen Grandstrand and Joe Green hosted a day-long series of talks and breakout sessions covering a wide range of banking law topics.

Powerpoint presentations for most of the day’s talks are available at

Karen and Joe began the day discussing themes of the last year in banking law.  First Joe discussed the continuing exertion of regulatory power through guidance (e.g. examinations and enforcement actions) rather than formal rule-making (e.g. overdraft guidance; auto-lending guidance) and the continuing uncertainty over the banking business (e.g. Dodd-Frank was supposed to resolve Too Big To Fail, but didn’t; the unclear legal authority of Consumer Financial Protection Bureau and its director).  Then Karen detailed ways that things are getting better (earnings are strong; declining loan losses mean less problem institutions), the fact that less than half of Dodd-Frank’s rules have been finalized, and increasing consolidation.

KeyNote Address: Congressional Update (Congresswoman Shelley Moore Capito - West Virginia)
As a member of the House Financial Services Committee and chairwoman of the Financial Institutions and Consumer Credit Subcommittee, Rep. Capito delivered an insightful address on recent and upcoming developments in banking law and on Capitol Hill.

Rep. Capito discussed the uncertainty due to Dodd-Frank’s missed deadlines and yet-to-be worked out rules and the unintended consequences of some rules, such as the credit card “ability to repay” rule which would have prevented stay-at-home spouses from obtaining credit (the rule has since been reformulated to correct that).

She also detailed the upcoming focus of her Subcommittee, which will zero in on the regulatory impact of Dodd-Frank on regional and community banks, and discussed the significant impact of the qualified mortgage rule in mortgage banking.

And she discussed the oft-referenced partisan gridlock in Washington and provided a ray of hope due to bipartisan coalescing on immigration and tax reform, and the possibility of some entitlement reform being wrapped into tax reform.

Industry Consolidation (Ron Feldman & Steve Kent)
Ron Feldman of the Federal Reserve Bank of Minneapolis walked us through a data-intensive survey of community bank consolidation in the ninth district.  The takeaway of the overview was a steady decline in the overall number of community banks and continued consolidation being likely.  His Powerpoint presentation can be viewed at

Steve Kent of River Branch Capital discussed the overall market environment for mergers and acquisitions and the considerations that come into play for M&A activity. His Powerpoint is at

Unfair, Deceptive and Abusive Practices (Christopher Sablich)
Christopher Sablich of Treliant Risk Advisors gave a comprehensive overview of Unfair, Deceptive and Abusive Practices, covering its history including changes due to Dodd-Frank, elements of a UDAAP violation, recent case examples, suggested UDAAP preventative measures, and ten steps to assess your UDAAP risk.  Christopher’s Powerpoint can be found at

The UDAAP presentation was part of a breakout session.  Other available topics were ‘Bank Secrecy Act/Anti-Money Laundering’ ( and ‘Fair and Responsible Lending in the Regulatory Crosshairs’ (

Luncheon Speaker: Banks in the Public Eye – Why People Don’t Love Banks Like They Used To (Tony Carideo)
Over an excellent lunch at the Radisson Plaza Hotel, Tony Carideo of The Carideo Group brought to bear his diverse background in journalism, securities analysis, and investor relations on the problem of the public’s low opinion of banks.  He reviewed current and historical polling, discussed why public perception of bankers has declined, and offered solutions for the industry.  His talk was at times humorous and philosophical, ending with reasons for optimism for banking’s future.  His Powerpoint is at

Key Trends and Developments in Banking: a Regulator’s Perspective (Coreen Arnold)
Coreen Arnold from the Office of the Comptroller of the Currency in Chicago came to give us her perspective as a regulator.  She discussed her office’s focus (strategic risk and credit risk), why compliance risk is such a big problem, and gave an overview of 2012 rule-making, including stress testing, relationship lending, high cost home loans, investor-owned real estate lending, and the new capital rules.

The 2012 Legislative and Regulatory Update (Thomas Boswell-Healey, Teresa Rice, and Joseph Witt)
Three members of the Minnesota Bankers Association covered what passed the Minnesota Legislature in 2012 and what’s likely to do so in 2013.

They also gave an overview of federal regulatory activity of the last year, noting that the overall theme is that regulatory rules are adding more and more specificity and shifting away from being vague guidelines.

One point of relief came in the form of changes to the Electronic Fund Transfer Act, which was amended to remove the requirement for ATM surcharge signage.  This addresses the problem of class action lawsuits over missing signage, even though on-screen warnings are present.

They also discussed how banks are concerned about coming capital rules.  While uniformity is needed, are the added costs of these internationally-focused rules worth the benefits for small banks with simple products or no international exposure?

Are You Ready For The Mortgage Regapocalyspe? (Amy Thoreson Long & Heather Thayer)
Amy Thoreson Long of Wells Fargo and Heather Thayer of Thayer Legal Services discussed the wealth of CFPB rules issued in January and the impact of the substantive provisions as well as the timing of when they become effective (many of them all at once in January 2014).  One of the interesting new aspects is “rule-making through preamble”: a large amount of the substance of the new rules is in the preamble, and we don’t know if it is binding law.

Amy and Heather got into a very detailed discussion of the new rules for Ability To Repay/Qualified Mortgage, home equity line of credit, TILA servicing, RESPA servicing, and the Home Ownership and Equity Protection Act.
This presentation was part of a breakout session.  Other available topics were ‘Banking Law Case Update’ ( and ‘Tales of FDIC Lawsuits Against Officers and Directors, et al.’

The Latest Bank Fraud Schemes and How to Deal With Them (David Kantor)
Though it was the end of a long day and a Friday, David Kantor from Leonard Street & Deinard kept us engaged with fascinating tales of banks and lawyers falling for scams.

He explained the ‘counterfeit official check’ scam and discussed at length both the implications for banks and the Minnesota attorneys who have fallen victim to it.

In addition to alerting us to many other kinds of scams, David gave us an overview of recent cases in this field of law, including:

Patco Construction Company Inc. v. People’s United Bank, No. 11–2031, 684 F.3d 197 (1st Cir. July 3, 2012): highly recommended to read re whether or not the bank’s anti-fraud procedures were commercially reasonable.

Experi-Metal Inc. v. Comerica Bank, No. 09–14890, 2011 WL 2433383 (E.D. Mich. June 13, 2011): discussion of who’s liable when a bank account holder falls for a phishing scam, leading to $1.9 million being wired from its account to the scammers’ account; it comes down to whether the bank’s actions displayed an “observance of reasonable commercial standards of fair dealing.”

Choice Escrow and Land Title LLC v. Bancorpsouth Bank, No. 10–03531, 2013 WL 1121339 (W.D. Mo. Mar. 18, 2013): the judge’s quote sums up case: “The tension in modern society between security and convenience is on full display in this litigation.”

David’s Powerpoint is at

This presentation was part of a breakout session.  The other available topic was ‘Recent Developments in Credit Card and TCPA Litigation’ (

Plans are underway for next year’s Banking Law Institute.  Watch for more details in the fourth quarter of this year.  If you are interested in participating in next year’s institute, contact Karen or Joe!

- Last Updated 05/30/2013 -

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