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Summer 2013

Environmental Lender Liability: Tips to Stay Safe this Summer and Beyond

By Mark A. Norman

Do you remember 1988?  It was the year that the Soviet Union withdrew from Afghanistan.  The Dow Jones Average ended over 2100 points.  Residential mortgages averaged around 10.5%.  Popular children’s toys included Playskool Kitchens and Transformers.  And about that year, the term “Environmental Lender Liability” entered banking vocabulary, along with “Phase 1 ESA reports” and “environmental indemnities.”  For those who have not tracked this subject regularly in the past 25 years, there are plenty of tips that can help lenders “stay safe,” especially when they workout or take-back potentially contaminated properties. Read more.

A Primer: The Federal Reserve's E-Apps Filing System

By J. Bret Treier

The Federal Reserve System recently streamlined the registration process for the Electronic Applications (E-Apps) system it initially launched in early 2010.  E-Apps is a free, web-based application that allows financial institutions supervised by the Federal Reserve, as well as their authorized agents such as law firms, to submit certain applications and other filings electronically.  Using E-Apps may reduce an institution’s copying and other costs incidental to providing multiple hard copies of filings and help streamline some of the Federal Reserve’s internal procedures.  However, filing through E-Apps will not shorten the relevant review period for any application or other filing. Read more.

Final Omnibus HIPAA Rule: What it Means for Financial Institutions

By Lisa Pierce Reisz

In January, the U.S. Department of Health and Human Services (HHS) issued the long-awaited Final Omnibus HIPAA Rules.  The Rules, effective on March 26, 2013, require compliance by September 23, 2013.  While health care providers, health care plans and health care clearinghouses – covered entities as defined by HIPAA –  have all been closely following the evolution of HIPAA after HITECH, certain financial institutions, though seemingly far-removed from the health care industry, may not be immune from HIPAA liability.

Although many financial institutions have historically relied upon HIPAA’s Section 1179 exception to avoid any HIPAA compliance obligations, this exception may no longer provide a safe harbor given the evolving nature of the services that many financial institutions are providing to their health care clients today. Read more.

Financial Institutions Face Increased Risk of FCA Liability

By Michael J. Bronson and Laurie A. Wireman

The Department of Justice (DOJ) recently announced a record breaking $4.9 billion in recoveries under the False Claims Act (FCA) for fiscal year 2012.  Unfortunately for financial institutions, this record-breaking year included an “unprecedented” $1.4 billion in recoveries from the financial industry. And it appears that this trend is here to stay.  As a result, financial institutions have begun to pay close attention to the FCA and how they can minimize future risks.

Banks and other financial institutions have only recently become a target for civil FCA actions.  In the past, the federal government typically has worked cooperatively with financial institutions to remedy regulatory non-compliances associated with the receipt of federal funding.  The collapse of the world’s financial markets, however, marked a change in the government’s approach.  Now, the DOJ is utilizing the FCA — with its treble damages and civil penalties provisions — to target financial institutions that have allegedly failed to comply with the regulatory requirements associated with federal programs such as the Troubled Asset Relief Program (TARP), the Capital Purchase Program (CPP), the American Recovery and Reinvestment Plan, and federal mortgage insurance programs. Read more.

If you have an idea for an article you would like us to pursue, please contact your Vorys attorney. We hope you enjoy the read.

About the Vorys Banking Group

Our nearly 20 lawyers dedicated to our banking practice have hundreds of years of combined practical, hands-on experience in the industry. We have been named a "Top Lead Legal Advisor" by American Banker magazine, and a Go-To Law Firm® in banking and finance, securities and corporate transactions by Fortune 500 general counsel. We represent public and non-public institutions, from community banks and thrifts to large, multinational financial institutions throughout the United States. Our clients have been in Ohio, Washington, D.C., Maryland, Virginia, Arizona, Florida, Indiana, Michigan, Kentucky, Missouri, New York, North Carolina, South Carolina and West Virginia. Our team includes two former general counsels for major bank holding companies; their insight has been invaluable to our clients. We assist our clients with bank, thrift and holding company formations; securities law compliance; board governance; enforcement actions with state and federal agencies; M&A and divestitures; capitalization, recapitalization and private equity transactions; employment law matters; executive compensation and benefit plans; tax matters; and the negotiation of all types of contracts. We also represent financial institutions, other institutional lenders and borrowers in all types of complex commercial financings.



Aaron S. Berke

Elizabeth Turrell Farrar

Jason L. Hodges

Michael D. Martz

Mark A. Norman

Lisa Pierce Reisz

Kimberly J. Schaefer

Jeffery E. Smith

J. Bret Treier

Anthony D. Weis


This alert is for general information purposes and should not be regarded as legal advice. As always, please let us know if you want more information or have questions about how these developments apply to your situation.

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