Financial Institution Regulation

Chapman provides regulatory and compliance support for virtually everything a financial institution requires, including the charting of financial institutions, mergers and acquisitions, bank regulation and compliance, payment systems and products, consumer financial services, commercial lending and corporate finance, credit enhancement and derivatives, private bank and trust counsel services, and litigation including workout, bankruptcy, and class action defense.

Bank Chartering and M&A

Chapman advises clients in the formation and chartering of de novo institutions, merger and acquisition transactions, the purchase and sale of assets/portfolios, and restructurings for federal and state-chartered financial institutions including holding companies and banks, savings associations, finance companies, commercial lenders, mortgage companies, trust companies, and credit card banks.

Our work includes identifying permissible financial and non-banking activities for business expansion, interstate acquisitions, participation in due diligence, negotiation of definitive transaction documents, and preparation of closing documentation. We also file necessary applications for regulatory approvals and licensing with federal and state agencies in connection with merger and acquisition activity.

Bank Regulatory, Compliance and Examination Activities

Chapman is well-versed on the laws and regulations affecting all products provided by banks, be they deposit, lending (commercial and consumer), insurance, securities, trust, or investment. We are equally well-versed on bank compliance issues, including bank secrecy/anti-money laundering, customer identification programs, electronic funds transfers, privacy, safekeeping of customer information, credit reporting, equal credit opportunity, truth in savings, truth in lending, fair debt collection, advertising, fair trade practices, and community reinvestment. As circumstances dictate, we represent clients before regulatory bodies including the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and state banking agencies.

With respect to holding companies, we advise on applicable regulatory issues, including affiliate transactions, capital adequacy, deposit insurance, merchant banking, permissible banking, and non-banking activities and tying arrangements. Compliance advice also includes drafting and review of financial institution policies and procedures, compliance training, and legislative and lobbying activities.

Unique to California and Utah, we advise on regulatory and compliance aspects of utilizing an industrial bank or industrial loan company as a vehicle to deliver consumer financial services.

Bank Secrecy/USA Patriot Act and OFAC

With respect to bank secrecy and anti-money laundering compliance, Chapman closely monitors regulators’ examination findings to help our clients navigate this complex regulatory landscape. We advise on compliance with regulatory requirements, including account opening notices, customer identification policies, suspicious activity reporting, and anti-money laundering programs. When practices are questioned, we provide counsel in connection with regulatory examinations or applications to expand operations.

Community Reinvestment Act Compliance (CRA)

In addition to assisting financial institutions with fair lending and equal credit opportunity issues, Chapman advises depository institutions on CRA matters including defining the CRA assessment area, preparation of CRA statements, CRA policies and procedures, CRA training, and lending, investment, and service requirements. Additionally, we provide assistance with CRA examinations; prepare individualized, strategic plans for CRA programs; address CRA considerations in matters of bank acquisition, merger, and expansion applications; and also respond to regulatory requests concerning community reinvestment issues. As part of Chapman’s pro bono commitment, we assist financial institution clients with CRA activities supporting the needs of low- and moderate-income communities in their service areas by providing pro bono legal assistance to housing agencies, sharing our resources and insights to advance programs and expand access to more people.

Disclosure Requirements

Chapman helps financial institutions comply with myriad disclosure requirements in offering credit deposit products, particularly to consumers. Our clients seek advice with all types of consumer lending and leasing transactions such as credit cards, mortgages, home equity loans/lines of credit, retail installment credit, small loans, student loans and auto loans, and deposit products. Our advice encompasses all program components from account acquisition through collection. We prepare and review privacy policies and statements to ensure compliance with privacy and safekeeping of customer information disclosure requirements. We also ensure that these requirements are satisfied in contracts with vendors.

Fair Lending and Equal Credit Opportunity

Chapman provides advice on complying with the federal Equal Credit Opportunity Act and implementing Regulation B, including adverse action notifications. We have successfully defended creditors in various suits, particularly class action litigation involving fair lending issues, including risk-based pricing and rate spread issues related to consumer lending.

Privacy and Fair Credit Reporting

Chapman routinely advises clients on Gramm-Leach-Bliley privacy and safeguarding rules as well as state laws governing privacy and safeguarding of customer information, including Illinois law (which applies to both consumer and business customers), and Vermont and California law (which contains exceptions to federal requirements). We draft, review, and revise privacy policies and statements for financial institutions across the country, as well as draft notifications and policies required to comply with the Fair and Accurate Credit Transactions Act of 2003. We have extensive experience with myriad facets of the federal Fair Credit Reporting Act. In addition to the law itself, we have in-depth understanding of prescreening rules, obligations to investigate disputes, and the other responsibilities of furnishers of credit bureau information. We also routinely negotiate contracts with credit reporting agencies and service providers, including for risk analysis tools and scoring models.

Non-Banking Activity Approvals

We help financial holding companies and bank holding companies follow process and procedural requirements for engaging in permissible "non-banking" financial activities and advise on the regulatory and notification requirements in connection with these activities. We advise on the regulatory aspects of financial activities permissible under the Gramm-Leach-Bliley Act, most notably, merchant banking investment opportunities, and affiliate transactions and anti-tying issues under the Bank Holding Company Act.

Portfolio Acquisitions and Sales

Chapman has deep experience representing financial entities in the purchase or sale of financial assets and receivables and we provide regulatory and compliance support for these types of transactions, including due diligence and review of portfolio operations, legal compliance, negotiation of purchase documentation and attendant closing documents, and assistance with ongoing operational needs.

State Licensing, Regulation and Examination

In addition to banks and other financial institutions, Chapman assists commercial lenders, consumer lenders, trust companies, retailers, and other non-bank entities in obtaining required state licenses in order to conduct their businesses, and we develop policies, procedures, programs, documents, and forms to assist them in complying with federal and state law requirements and regulations, as well as advise on examination matters. We help commercial finance companies obtain licenses where required for commercial lending and leasing. We also assist entities in obtaining retail installment, small loan, mortgage banker, and mortgage broker licenses.

General Compliance Matters

We write policies and procedures, training materials, and other documents to support our clients’ compliance with federal and state laws and regulations.