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Winter 2018

Be Proactive: Managing UDAP and UDAAP Risks

While the prohibition on unfair or deceptive acts or practices in or affecting commerce (UDAPs) by financial institutions is not new, we have observed a noticeable uptick over the past few years in the number of alleged UDAPs cited by federal banking regulators in the course of examinations. Acts or practices that, historically, may have been identified within an examination as a violation of a specific consumer protection statute or regulation (e.g., TILA, TISA, RESPA, etc.) and typically addressed in the examination report as a matter requiring attention (MRA), appear to be more frequently considered and scrutinized as potential UDAPs. In addition, acts or practices that are in technical compliance with consumer protection statutes and regulations may nonetheless be scrutinized as potential UDAPs. Read more.

The Challenges of CSI in M&A

With the current uptick in M&A activity, it is timely to revisit the concept of "confidential supervisory information" (CSI) and its impact on M&A as well as other matters.

What exactly is CSI?

Defining CSI begins with the premise that virtually all regulatory communications with a regulated financial institution or holding company, regulated person, or institution-affiliated party, from the "one way" communications contained in reports of examination (ROEs) to "matters requiring board attention" (MRBAs) in those ROEs, CAMELS ratings, agency correspondence, and "informal" regulatory enforcement actions such as memoranda of understanding (MOUs), constitutes CSI unless it is specifically required by law to be disclosed publicly. Read more.

Deposit Account Control Agreements

Deposit Account Control Agreements (DACAs) are too often given little thought by a depository institution that signs them. It is all too common that a depository institution does not have the proper controls in place, including engagement of counsel for advice when appropriate, to protect the depository institution’s interest when signing and implementing a DACA. This is in stark contrast to lenders, who typically engage counsel to meticulously review and edit the DACA to ensure that the lender’s security interest in any deposit accounts are perfected and to shift the exposure under the DACA to the depository institution. The result is that a depository institution can expose itself to significantly more risk than necessary when entering into DACAs. Read more.

Vorys Ranks Nationally in Number of 2017 Bank Mergers and Acquisitions

According to data compiled by S&P Market Intelligence, Vorys ranked 20th nationally in the number of bank and thrift merger and acquisition transactions completed in 2017.

Vorys provides a full array of legal services to both national- and state-chartered banks and thrifts, and their holding companies and subsidiaries. Vorys advises financial institution clients and their management and boards on issues related to their strategic options including expanding their businesses through mergers, acquisitions and formation of holding companies, raising capital, charter conversions branch sales and purchases and interstate branching. The firm also assists financial institution clients in complying with increasingly complex federal and state laws and regulations impacting the industry.

About S&P Global Market Intelligence: S&P Global Market Intelligence collects, interprets and analyzes vast volumes of content, turning it into actionable intelligence on the global financial markets and the companies and industries that comprise those markets.

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., Pennsylvania, 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



David M. Aldous

Aaron S. Berke

Elizabeth Turrell Farrar

Jason L. Hodges

Rodney A. Holaday

Michael D. Martz

Kimberly J. Schaefer

Shane D. Sclichter

Jeffery E. Smith

J. Bret Treier

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.