financial services

Banking and Financial Institutions

Resolving complex transactional, regulatory, litigation and enforcement challenges

Dechert is a trusted advisor to financial institutions worldwide, with extensive sector experience built upon a century-long heritage of bank representations.

Chambers USA has consistently ranked Dechert nationally for Financial Services: Enforcement, Compliance and M&A. Both The Legal 500 and IFLR1000 ranked us nationally for Financial Services: Regulatory (2017).

Our lawyers advise large, regional, foreign and community financial services companies, their holding companies and investors, private and registered funds, and asset managers with regard to the most complex transactional, regulatory, litigation and enforcement challenges that confront them.

Clients value the level of sophistication and professionalism of our legal team. Many of our lawyers once served as government officials and regulators, shaping the most momentous industry developments of recent decades. These lawyers have earned the respect of federal and state regulators, and the accolades of numerous leading industry organizations.

Keeping banking clients on the leading edge

Dechert’s lawyers keep clients up-to-date on critical financial services regulatory changes through hot-topic web sites. We are well known for our instructive materials on Dodd-Frank and most recently for our Financial Regulation Reform Tracker, which closely monitors the reform of regulation that the Trump Administration has initiated.

Experience

M&A

  • Wells Fargo’s acquisition of the banking assets of GECC
  • Bank of Ireland’s €1.1 billion recapitalization by five U.S. private investors
  • Capital One’s US$9 billion acquisition of ING FSB
  • CIT Group’s acquisition of IMB Holdco (parent of OneWest Bank)

Contested Acquisitions

  • Independence Federal Bank’s response to a proxy contest and ensuing litigation in federal district court
  • Abigail Adams Bank’s response to a proxy contest and ensuing litigation in federal district court
  • DFCU Financial’s successful defense against a proxy contest and related litigation in federal and state courts

Open Bank Recaps & Acquisitions

  • Sterling Financial Corp.’s US $730 million recapitalization by Thomas H. Lee Partners, L.P., Warburg Pincus Private Equity X, L.P. and other private investors
  • Doral Financial Corp.’s recapitalization by a consortium of private equity investors led by Bear Stearns Merchant Bank
  • Citadel LLC’s 19 percent equity investment, US$3.1 billion asset-backed security purchase, rebuttal of control, debt funding and subsequent exchange transactions involving E*TRADE Financial Corp
  • Northeast Bancorp’s recapitalization by East Rock Capital, Arlon Capital Partners and other investors

Failed Bank & Credit Union Acquisitions

  • Montauk Credit Union’s sale by the NCUA as conservator on behalf of an unsuccessful bidder
  • IndyMac Federal Bank’s sale by the FDIC to Paulson & Co., Inc., J.C. Flowers & Co. and other private investors
  • Investments in acquisition companies to acquire failed banks from the FDIC, including NBH Holding Corp., Community & Southern Bank, Bond Street Holdings, Inc., First Michigan Bank, and Blue Ridge Holdings

Litigation

  • ICBA v. NCUA (Challenge to NCUA member business loan rule)
  • MetLife v. Financial Stability Oversight Council (Challenge to designation of MetLife as a SIFI)
  • Perry Capital v. Jacob J. Lew (Challenge to legality of conservatorship of Fannie Mae and Freddie Mac)

Regulatory Enforcement

  • Negotiation of a Consent Order between Melrose Credit Union and the New York State Department of Financial Institutions
  • Negotiation of a Consent Agreement between a state bank and the FDIC
  • Advice regarding the Consent Orders with the OCC and OTS related to the National Mortgage Settlement impacting the 14 largest U.S. mortgage servicers

Fair Lending Cases

  • First National Bank of Dona Dan Bank with regard to a fair lending challenge and settlement with the DOJ
  • First National Bank of Vicksburg with regard to a fair lending enforcement matter
  • A national bank with regard to a fair lending investigation by the DOJ

D&O Litigation

  • Settlement of FDIC-threatened D&O suit arising out of the failure of First Chicago Bank & Trust
  • Freddie Mac COO’s defense against multiple litigations initiated by shareholders with regard to alleged accounting and governance irregularities
  • The FDIC and the DOJ’s parallel criminal actions against the former chairman of a South Carolina failed bank

FSOC & FSB Representations

  • An insurance company and large financial services companies with regard to the FSOC designation process and filings
  • The U.S. Chamber of Commerce and the ICI as amicus in MetLife’s challenge in federal district court and the U.S. Court of Appeals to its designation of MetLife as a SIFI by FSOC
  • A large financial services company in the administrative challenge of FSOC SIFI designation rules

Receivership Challenges and Creditor Representations

  • Washington Mutual Bank’s FDIC receivership and related litigation
  • Downey Savings Bank’s FDIC receivership and the bankruptcy of its parent, Downey Financial Corp

GSE Exclusionary Actions

  • Defense of homebuilder and real estate brokers with regard to inclusion on Freddie Mac’s “exclusionary list"
  • A property and casualty insurance company seeking to continue writing business despite failing to maintain adequate ratings under Fannie Mae and Freddie Mac’s requirements
Federal and state bank regulation

Financial services companies value our practical experience in guiding their compliance with regulatory challenges and the development of alternative structures, transactions and operations impacted by rules stemming from the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and the balance of federal and state regulation which impact nearly every aspect of their business. We appear for our clients before the:

  • Federal Reserve Board (FRB)
  • Office of the Comptroller of the Currency (OCC)
  • Federal Deposit Insurance Corporation (FDIC)
  • Consumer Financial Protection Bureau (CFPB)
  • Financial Stability Oversight Council (FSOC)
  • Securities and Exchange Commission (SEC)
  • Federal Housing Finance Agency (FHFA)
  • Department of Justice (DOJ)
  • New York Department of Financial Services
  • Other states that maintain a high profile in financial institutions regulation and enforcement

We counsel banking organizations and investors on a wide range of regulatory matters, including bank acquisitions, the establishment of de novo banks and the scope of permissible activities and investments under federal and state banking law. We regularly advise clients on the application of the Volcker Rule and in structuring non-controlling investments in banks and other entities. We also closely monitor developments in the marketplace lending and Fintech space and advise clients on a range of related matters, including state licensing requirements, the applicability of federal preemption and the process for obtaining an OCC Fintech or other special purpose charter.

M&A Transactions and contests for control

Top-ranked for M&A by the most prominent league tables and legal directories, Dechert advises clients engaged in mergers, tender and exchange offers, leveraged buyouts, cross-border transactions, going-private transactions, strategic alliances, collaborations and joint ventures, acquisitions, divestitures, proxy contests, and special committee assignments.

During the planning phase, we analyze tax and regulatory implications and conduct risk assessments. Our interdisciplinary team handles every aspect of complex regulated transactions, including mergers between healthy banks, controlling and non-controlling investments in banks by private equity or hedge funds and FDIC-assisted acquisitions of failed institutions. We understand the importance of developing complementary regulatory, transactional and litigation strategies that serve achieving our clients’ objectives.

Dechert’s bank regulatory lawyers have extensive experience in working on corporate transactions which require regulatory approvals. In fact, they drafted many of the federal banking agencies’ control rules which apply to the issues that inevitably arise in these matters. 

Bank enforcement

We regularly handle many of the most complex bank and financial institution enforcement cases, whether working to prevent charges from being filed, mounting a proactive defense, negotiating a settlement, or handling pretrial and trial advocacy. For the past 10 years, we have published a comprehensive annual bank enforcement review for the Bloomberg BNA Banking Reporter.

Our lawyers conduct internal investigations on behalf of companies and their boards of directors relating to regulatory violations, disclosure issues, accounting irregularities, whistleblower matters, money laundering, insider transactions, financial statement irregularities, regulatory filings, market timing and insider trading issues, among others.

We have extensive experience in fair lending matters and have represented banks and companies in investigations and proceedings pursued by regulatory agencies and the DOJ.

Systemic stability regulation

Our lawyers have appeared before the FSOC and its various subcommittees, commented on or challenged its pronouncements and designations regarding systemically important financial institutions (SIFIs) on behalf of large insurance companies, non-depository financial institutions and private as well as registered investment funds and managers.

We have also submitted a variety of comments to the FSOC and the Financial Stability Board (FSB) on a wide range of systemic issues and policies impacting our clients and their potential designation. We have also participated in the first litigation against FSOC, filing an amicus brief in support of MetLife’s challenge to its designation as a SIFI.

Financial institution litigation

Our lawyers have handled dozens of ground-breaking lawsuits in a variety of federal and state courts involving a wide range of regulatory policies, actions, transactions and regulations.

We are also regularly called upon to represent officers, directors and other professionals at failed financial institutions against actions by oversight bodies and in related civil, criminal or administrative litigation. Our hands-on experience with federal agencies gives us a valuable understanding of the decision-making processes that surround possible director and officer (D&O) actions by the FDIC or investigations by the Inspector General.

FDIC receiverships

Dechert lawyers have deep experience advising on federal receivership issues related to the FDIC. Additionally, we possess a thorough understanding of the impact of FDIC receivership rules on the claims and counter-claims that arise when a bank’s parent holding company files for bankruptcy. We regularly represent creditors, investors and borrowers in the claims and receivership resolution process, as well as related lawsuits against FDIC Receivers.

GSE regulation

Dechert lawyers have extensive experience in matters related to government-sponsored enterprises (GSEs) like Freddie Mac, Fannie Mae and the Federal Home Loan Banks (FHLBanks). We regularly guide these clients through a variety of transactional, regulatory and enforcement issues before the FHFA.

We are also deeply involved in regulatory events that impact current housing finance reform efforts, FHL Bank membership by insurance companies and captives, and the potential combination of FHLBanks. We handled the only three formal enforcement actions involving FHLBanks and represented several FHLBanks in proposed mergers. We also advise Fannie Mae and Freddie Mac on regulatory, transactional and new product development issues.

Deep expertise

Our lawyers are also well known for authoring hundreds of articles, treatises, manuals and books such as:

  • The Bank Investor’s Survival Guide (2016)
  • The Volcker Rule: Commentary and Analysis, published by Thomson Reuters (2014)
  • A Strategic Guide to the ATR/QM Rules, published by the ABA (2013)
  • The ATR/QM Legal Stress Test (2013)
  • Bank D&O Defense Manual (2012)
  • Dechert LLP’s Analysis of Financial Regulatory Reform for the American Bankers Association (2010)
  • The Bank Holding Company Guide: New Rules of the Road for Banks and their Investors (2009)
  • Equity Investments and Controlling Acquisitions Involving U.S. Financial Institutions (2007)
  • Banker’s Pocket Guide to Information Security (2005)
  • 21st Century Money, Banking & Commerce (1998)
  • The Fair Lending Guide (1995)
  • The Management of Risks Created by Internet-Initiated Value Transfers (1995)
  • Contracting with the RTC and FDIC (1991)
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