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Fall 2016

Banking Regulators Clarify Application of the CRA to Historic Tax Credit Projects

By Jeffery E. Smith, Kelly B. Bissinger and Nicholas R. House

The banking industry has received long sought-after clarification as to whether Community Reinvestment Act (CRA) credit is available for Historic Tax Credit (HTC) financed projects. Recent regulatory guidance has clarified that HTC financed projects otherwise meeting CRA requirements are eligible for CRA credit, potentially making investments and loans to HTC financed projects more attractive to banks and other financial institutions.

On July 15, 2016, the Office of the Comptroller of the Currency, the Federal Reserve and the Federal Deposit Insurance Corporation (collectively, the Agencies) released a notice (the Notice) in connection with the Interagency Questions and Answers Regarding Community Investment (Q&As). In the view of the Agencies, appropriate HTC projects have always qualified for CRA credit provided such projects otherwise met CRA requirements. The Notice clarifies this approach in its introductory sections without modifying the existing text of the relevant Q&As in this respect.  Read more.

Ohio's Statutory Form Durable Power of Attorney

By Mark E. Vannatta and Jeffery E. Smith

Financial institutions are particularly susceptible to issues relating to powers and authorizations granted to agents by customers in documents referred to generally as "powers of attorney" (POAs), including the nature of those powers, the extent of those powers, and the duration of those powers. Risk exposure for financial institutions can be high when accepting the agency appointments reflected by POAs, and liability for mistakes and being drawn into disputes between parties where the institution is only tangentially involved as an account holder can be very costly events. In light of those issues, institutions need to know and understand just what type of exposure they are incurring when accepting POAs and transacting on accounts with persons other than the actual account owners and signatories.  Read more.

Birthing Baby Banks; the Dearth of De Novos

By Jeffery E. Smith

In another new and welcome gesture, the Federal Deposit Insurance Corporation (FDIC) has provided further encouragement for formation of de novo charters as described in the FDIC’s Summer 2016 "Supervisory Insights Journal." This additional de novo encouragement by the FDIC follows on its April 2016, reduction of the "special" supervisory oversight timeframes for de novos from seven years to three years in most instances.

Clearly the FDIC is attempting to address the dearth of de novo applications it has received since the beginning of the great recession, and is to be commended for continuing that effort.  Read more.

Highlights of the New Ohio Pooled Collateral Program for Public Funds

By Jeffery E. Smith, Lauren A. Brown and Brian P. Baxter

The landscape of collateral requirements for public fund deposits by state and local public entities is changing. Under recent revisions to the Ohio Depository Act (the Act), the Ohio Treasurer is required to develop a new program for the pledging of pooled collateral for public deposits by July 1, 2017, referred to as the Ohio Pooled Collateral Program (the Program). Under current law (in effect until July 1, 2017), depository institutions accepting deposits of public funds (referred to as public depositories) may collateralize such deposits through a pledge of securities for the specific deposit OR a pledge of pooled securities to secure all public deposits. Although the pooled collateral system has served to streamline the procedures for collateralization of public deposits, the lack of a centralized collateral monitoring or oversight process requires public entities to manage separate relationships with each public depository. This branched program has also required public depositories pledging pooled collateral to monitor the adequacy of such collateral and has led in some instances to inconsistencies in collateralization of public deposits. The new Program is thus an attempt by the Ohio legislature to "streamline and modernize" the public deposit collateral system in Ohio by allowing public depositories to collateralize all public deposits of state and local public entities, by pledging a pool of collateral to the state treasurer, rather than the individual public entities. The state treasurer then, in turn, would contract with the public depositor and public depositories to monitor and hold the collateral on their behalf.  Read more.

Three Experienced In-House Banking Attorneys Join Vorys Pittsburgh Office. 

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About the Vorys Banking Group

With nearly 20 lawyers dedicated to our banking practice, we have hundreds of years of combined practical, hands-on experience in the banking 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.

Our group has extensive experience with all aspects of bank corporate and regulatory legal matters, and our attorneys are in constant contact with senior representatives of state and federal banking agencies concerning a diverse variety of significant client matters. We have been intimately involved in the comprehensive rewrite of Ohio banking laws, currently underway with the Ohio Division of Financial Institutions. In fact, since the inception of this project, one of our lawyers, along with representatives from the Ohio Division of Financial Institutions and the Ohio Bankers League, has been a member of the four-person team tasked with handling the rewrite.

We represent public and non-public institutions, from community banks and thrifts to large, multinational financial institutions throughout the United States including clients in Ohio, Washington, D.C., Maryland, Virginia, Arizona, Florida, Indiana, Michigan, Kentucky, Missouri, New York, North Carolina, South Carolina and West Virginia.

We assist our clients with bank, thrift, holding company and non-bank affiliate formations; securities law matters; board governance and education; regulatory enforcement actions involving state and federal agencies; mergers, acquisitions and divestitures; branch acquisitions and divestitures; regulatory compliance; capitalization, recapitalization and private equity as well as debt transactions; litigation; employment law matters; executive compensation and benefit plans; tax matters; and the negotiation of all types of contracts. We also represent financial institutions and other institutional lenders, as well as borrowers, in all types of complex commercial and real estate financings, bankruptcies and restructurings.

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.

To learn more, visit vorysfinancialservices.com



Aaron S. Berke

Kelly B. Bissinger

Anthony L. Ehler

Elizabeth Turrell Farrar

Jason L. Hodges

Nicholas R. House

Michael D. Martz

Kimberly J. Schaefer

Jeffery E. Smith

J. Bret Treier

Mark E. Vannatta

Anthony D. Weis

Frank C. Zonars



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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.