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- Professionals
- Michael Nonaka
Michael Nonaka is co-chair of the Financial Services Group and advises banks, financial services providers, and non-bank companies on a broad range of compliance, enforcement, transactional, and legislative matters. He has worked extensively with federal and state banking agencies and with other federal agencies authorized to regulate financial services. Mr. Nonaka also plays an active role in the firm’s Fintech Initiative and works with a number of banks, lending companies, money transmitters, payments firms, technology companies, and service providers on innovative technologies such as blockchain, bitcoin and other cryptocurrencies, big data, cloud computing, same day payments, and online lending.
Mr. Nonaka has significant experience advising clients on issues arising under financial services legislation such as the Economic Growth, Regulatory Relief, and Consumer Protection Act and Dodd-Frank Wall Street Reform and Consumer Protection Act. He has advised clients on, among other areas, regulation as a systemically important financial institution, resolution planning, the Federal Deposit Insurance Corporation’s orderly liquidation authority under Title II, and the scope of the Consumer Financial Protection Bureau’s authority.
Mr. Nonaka also has advised a number of clients on compliance with TILA, ECOA, TISA, HMDA, FCRA, EFTA, GLBA, FDCPA, CRA, BSA, USA PATRIOT Act, FTC Act, Reg. K, Reg. O, Reg. W, Reg. Y, state money transmitter laws, state licensed lender laws, state unclaimed property laws, state prepaid access laws, and other federal and state laws and regulations.
- Representation of Monzo, a UK challenger bank, with respect to the launch of a prepaid card in the United States in partnership with Sutton Bank.
- Representation of Citizens Financial Group in the reorganization and merger of its bank subsidiaries, Citizens Bank N.A. and Citizens Bank of Pennsylvania.
- Representation of the Bank Policy Institute on various comment letters and other advocacy efforts.
- Representation of General Electric and Synchrony Financial in connection with exchange offer to complete the separation of Synchrony from GE and in connection with Federal Reserve Board application process and approval required for the separation of Synchrony from GE.
- Representation of several Fortune 500 companies on big data, blockchain, and other fintech solutions.
- Representation of Synchrony Financial (GE Capital’s North American retail finance business) in connection with its approximately $2.95 billion initial public offering and related $3.6 billion debt offering.
- Representation of WSFS Financial Corporation in acquisitions of First Wyoming Financial Corporation, Alliance Bancorp, Inc. of Pennsylvania, and Penn Liberty Financial Corp.
- Representation of Wells Fargo in connection with a Federal Reserve Board investigation and consent order with respect to alleged falsification of customer income and customer steering by Wells Fargo Financial sales personnel in the origination of consumer mortgage loans.
- Representation of Citigroup, Inc. and Citibank, NA, in connection with negotiation and implementation of OCC and Federal Reserve Board consent orders relating to consumer mortgage servicing and foreclosure activities.
- Representation of General Motors in congressional hearings and requests for government funding.
- Representation of Freddie Mac in connection with establishment of Federal government conservatorship.
Pro Bono
- Represent City First Enterprises and City First Bank of D.C., N.A. on bank regulation and corporate governance matters.
- Represented indigent Florida inmate in post-conviction proceedings in state and federal courts.
- Assisted the Washington Lawyers Committee in drafting and introducing legislation in the District of Columbia to reform certain aspects of the District’s parole and sentencing laws.
Memberships and Affiliations
- American Bar Association, Banking Law Committee
March 2021
As the legal, regulatory, and commercial implications of coronavirus COVID-19 continue to evolve, our lawyers and advisors are helping clients navigate the complex considerations that companies around the world are facing and develop plans and strategies in response. Reach out to our COVID-19 task force at COVID19@cov.com. Below is a compendium of resources ...
February 17, 2021
PALO ALTO—Covington advised Standard Cognition, which provides an autonomous checkout solution that can be quickly and easily installed in retailers’ existing stores, on its $150 million Series C funding led by SoftBank Vision Fund 2 with participation from existing investors CRV, EQT Ventures, and TI Platform Management, as well as new investors SK Networks, ...
January 13, 2021, Covington Alert
On January 1, 2021, the United States Congress enacted the Anti-Money Laundering Act of 2020 (the “AMLA”), as part of the National Defense Authorization Act (the “Act”). The AMLA includes extensive and fundamental reforms to anti-money laundering (“AML”) laws in the United States, including the Bank Secrecy Act (“BSA”). We described the principal reforms — ...
December 18, 2020, Covington Alert
On December 18, 2020, the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, and Federal Deposit Insurance Corporation issued a notice of proposed rulemaking requiring a banking organization to notify its primary federal regulator within 36 hours of a significant cybersecurity incident and requiring a bank service ...
December 16, 2020, Covington Alert
On December 15, 2020, the Board of Directors of the Federal Deposit Insurance Corporation (“FDIC”) voted 3–1 to approve a final rule that significantly revises and clarifies the regulatory framework applicable to brokered deposits, under which less-than-well-capitalized insured depository institutions (“IDIs”) are generally prohibited from accepting funds ...
December 11, 2020, Covington Alert
On December 8, 2020, the House passed the National Defense Authorization Act (the “NDAA” or “Act”), which includes over 200 pages of significant reforms to the Bank Secrecy Act (“BSA”) and other anti-money laundering (“AML”) laws that have been working their way through Congress for several years. Despite some remaining objections from President Trump and ...
December 3, 2020, Covington Alert
On November 23, 2020, the Office of the Comptroller of the Currency (“OCC”) issued a final rule amending its regulations under 12 C.F.R. Part 7 relating to the activities and operations of national banks and federal savings associations. The final rule, which becomes effective on April 1, 2021, governs a range of topics, including permissible derivatives ...
November 16, 2020
WASHINGTON—Global Banking Regulation Review has named Covington partner Michael Nonaka to its “45 Under 45,” a list of the leading, next-generation banking regulation specialists. Mr. Nonaka is co-chair of the Financial Services Group and advises banks, financial services providers, and non-bank companies on a broad range of compliance, enforcement, ...
October 22, 2020, Covington Alert
On October 20, 2020, the federal banking agencies adopted a final rule to implement the net stable funding ratio (“NSFR”), a standardized liquidity requirement that the agencies proposed in May 2016. Once effective on July 1, 2021, the final rule will require certain larger banking institutions to maintain a minimum level of stable funding as measured over a ...
October 21, 2020, Covington Alert
On Tuesday, October 20, 2020, the Federal Deposit Insurance Corporation issued a proposed rule that would supersede and codify, with certain changes described below, a 2018 Interagency Statement Clarifying the Role of Supervisory Guidance (the “2018 Statement”). Like the 2018 Statement, the proposed rule would be adopted on an interagency basis with the Board of ...
October 16, 2020, Covington Alert
On September 17 and October 6, 2020, the Commodity Futures Trading Commission (“CFTC” or “Commission”) held open meetings (the “September Meeting” and the “October Meeting,” respectively) to consider a number of final rules, each of which the Commission approved unanimously. The September Meeting considered rules impacting market participants, such as swap ...
October 6, 2020, Covington Alert
On September 21, the Federal Reserve released an advance notice of proposed rulemaking ("ANPR") to solicit views on potential changes to the agency's Community Reinvestment Act regulations. The Board’s issuance of the ANPR follows the May 2020 release of a final rule by the OCC that substantially reforms the OCC’s CRA regulations. The ANPR's unusual level of ...
September 21, 2020, Covington Alert
On September 16, 2020, the Financial Crimes Enforcement Network (“FinCEN”) issued an Advance Notice of Proposed Rulemaking (the “ANPR”) seeking public comment on significant potential amendments to anti-money laundering (“AML”) regulations under the Bank Secrecy Act (“BSA”). The ANPR proposes three principal changes to the current BSA/AML regime — in ...
September 21, 2020, Covington Alert
On September 15, 2020, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) released an Outline of Proposals under Consideration and Alternatives Considered for the small business data collection rulemaking mandated by Section 1071 of the Dodd-Frank Act and a High-Level Summary of Outline of Proposals under Consideration for SBREFA: Small Business ...
August 14, 2020, Covington Alert
On August 13, 2020 the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency (the Agencies) issued joint guidance to clarify and update their policies with respect to the enforcement of the Bank Secrecy Act’s (BSA’s) anti-money laundering (AML) program requirement.[1] ...
July 21, 2020, Covington Alert
On July 20, 2020, the Office of the Comptroller of the Currency (OCC) released a proposed rule intended to establish a bright-line test to identify the “true lender” in lending partnerships between national banks and federal savings associations, and third parties. Uncertainty in this area has caused confusion because the identity of the lender determines which ...
June 29, 2020, Covington Alert
On June 25, 2020, five federal financial regulators jointly issued a final rule that modifies existing regulations implementing the Volcker Rule’s general prohibition on banking entities investing in, sponsoring, or having certain relationships with hedge funds or private equity funds (collectively, “covered funds”). The substance of the final rule is largely ...
June 22, 2020, Covington Alert
In response to the COVID-19 pandemic, state and local lawmakers have implemented measures requiring financial institutions to provide relief to consumers, such as forbearance on loan payments or waiving fees. The OCC has released a bulletin reminding stakeholders that federally-chartered institutions generally are governed primarily by uniform federal standards ...
May 26, 2020, Covington Alert
On May 20, 2020, the Office of the Comptroller of the Currency (the “OCC”) issued a final rule overhauling its regulations implementing the Community Reinvestment Act (the “CRA”). The CRA, enacted in 1977, incentivizes banks to meet the credit needs of their entire communities, including low- and moderate-income (“LMI”) neighborhoods. The final rule makes the ...
May 22, 2020, Covington Alert
Today, May 22, the Consumer Financial Protection Bureau (“CFPB”) issued an important no-action letter template in response to an application by the Bank Policy Institute (“BPI”), which could serve as the basis for no-action letter applications by BPI members and other deposit-taking institutions that wish to offer a standardized, small-dollar credit product as ...
May 21, 2020, Covington Alert
On May 20, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (collectively, the “agencies”) issued interagency principles (the “Lending Principles”) to encourage supervised banks, savings associations, and credit unions ...
May 4, 2020, Covington Alert
On May 4, 2020, the Federal Reserve Bank of New York (the “FRBNY”) released an updated series of Frequently Asked Questions (“FAQs”) regarding two of the Federal Reserve’s liquidity facilities established to provide financial assistance to businesses impacted by the COVID-19 pandemic: the Primary Market Corporate Credit Facility (“PMCCF”) and the Secondary ...
May 1, 2020, Covington Alert
Yesterday, April 30, 2020, the Board of Governors of the Federal Reserve System announced important changes to the Main Street Lending Program (the “Program”) that it had introduced on April 9, 2020. The changes reflect further information and clarification with respect to the terms and conditions of the Program and address, at least in part, feedback that the ...
April 23, 2020, Covington Alert
As the Paycheck Protection Program (“PPP”) is about to re-open following passage of a bill that will provide additional $310 billion in funds to the program (including funds reserved for loans by certain small and mid-sized lenders), the rules of the Small Business Administration (“SBA”) that prohibit or restrict loans to the small business ventures of bank ...
April 14, 2020, Covington Alert
The CARES Act established a $349 billion Paycheck Protection Program (“PPP”) that authorizes participating lenders to make federally-guaranteed loans to small businesses as part of Congress’s COVID-19 relief effort. Just days after lenders began accepting PPP applications, lawsuits were already being filed challenging how lenders administer the PPP. In Profiles, ...
April 9, 2020, Covington Alert
Today, the Board of Governors of the Federal Reserve announced the creation of four new liquidity facilities and the expansion of three previously announced liquidity facilities to provide credit to borrowers impacted by the COVID-19 pandemic. Whereas the previously announced programs primarily targeted certain financial markets and their participants (such as ...
March 30, 2020, Covington Alert
Since the last financial crisis, the commercial real estate industry has accumulated vast amounts of debt. By one account, there is currently more than $3.6 trillion in mortgage debt secured by commercial and multi-family residential properties. Much of this debt is held by real estate investment trusts (“REITs”), in the form of commercial mortgage-backed ...
March 26, 2020, Covington Alert
When consumers use their credit cards to purchase goods or services that they never receive, the Fair Credit Billing Act gives consumers the right to dispute the charge directly with their credit card issuer. As merchants cancel orders and reservations in the wake of the Covid-19 crisis, creditors should prepare themselves for a dramatic increase in consumers ...
March 25, 2020, Covington Alert
The U.S. Congress appears close to finalizing the scale and scope of stimulus legislation to address the economic crisis caused by the COVID-19 pandemic. Although its final shape remains uncertain, it is highly likely to provide for one or more lending programs, loan guaranty programs, and other financing programs administered by the federal government to direct ...
March 24, 2020, Covington Alert
The past several days have seen a flurry of activity among the federal banking agencies to take both proactive and responsive steps to address the impacts of COVID-19 on the banking industry and support continued lending to the real economy as the crisis unfolds. In case you missed it, here’s a quick recap of recent federal banking agency actions, along with ...
March 24, 2020, Covington Alert
On March 23, the Board of Governors of the Federal Reserve System (the “FRB”) announced the latest in a series of extraordinary actions intended to help mitigate the impacts of the COVID-19 pandemic on the U.S. economy. Unlike the measures announced last week – which mostly involved re-establishing emergency programs that were used during the 2008–09 financial ...
March 23, 2020
NEW YORK—The American Lawyer has named Covington lawyers Sergio Urías and Laura Torre as “Dealmakers of the Year.” The annual feature highlights “the most impressive and significant matters that deal lawyers worked on in 2019.” Shareholders of Covington’s client Prisma Medios de Pago, Argentina’s largest payment processing company, were mandated by the antitrust ...
March 19, 2020, Covington Alert
Yesterday, on March 18, 2020, the Board of Governors of the Federal Reserve System (“Board”) announced the creation of a Money Market Mutual Fund Liquidity Facility (“MMLF”) to provide liquidity support to money market mutual funds (“MMMFs”) by facilitating their sale of certain assets in order to meet redemption requests. Under the MMLF, the Federal Reserve ...
The FDIC's Proposed Rule for Industrial Banks and Industrial Loan Companies: Five Things to Know
March 19, 2020, Covington Alert
On March 17, 2020, the Federal Deposit Insurance Corporation issued a notice of proposed rulemaking that would codify the FDIC’s existing supervisory processes and policies that apply to industrial banks and industrial loan companies (collectively, “ILCs”) and their parent companies. The FDIC issued the Proposal to formalize its ILC supervisory framework and to ...
Square Gets FDIC's Approval To Launch A Bank In 2021
March 18, 2020, Law360
Michael Nonaka is quoted in Law360 regarding Square Inc.’s approval from the FDIC to form a bank. The article also mentions that, Nelnet, a federal student loans company, received an approval to create a digital-only ILC. Mr. Nonaka says, “The FDIC Board’s approval of the Square and Nelnet applications shows that the ILC charter is compatible with different ...
March 18, 2020, Covington Alert
Yesterday, on March 17, 2020, the Board of Governors of the Federal Reserve System (“FRB”) announced the creation of a Primary Dealer Credit Facility (“PDCF”) to provide a liquidity backstop to primary dealers of the Federal Reserve Bank of New York (“FRBNY”), which include the nation’s largest broker-dealers. The PDCF will provide short-term loans to primary ...
March 17, 2020, Covington Alert
Today, on March 17, 2020, the Federal Reserve provided a backstop of commercial paper ("CP") in the form of a Commercial Paper Funding Facility (“CPFF”) that establishes a special purpose vehicle (“SPV”) to acquire eligible CP directly from eligible issuers. The CPFF will provide liquidity to CP issuers that may otherwise face issues rolling over their CP in ...
Federal Reserve Takes Extraordinary Actions Supporting Financial Markets to Mitigate COVID-19 Impact
March 16, 2020, Covington Alert
Yesterday, on Sunday, March 15, 2020, in response to the COVID-19 pandemic’s impact on U.S. and global economic activity, the Federal Reserve’s Federal Open Market Committee (“FOMC”) cut the target range of the federal funds rate to 0 to 1/4 percent until such time as the FOMC is “confident that the economy has weathered recent events and is on track to achieve ...
March 12, 2020, Covington Alert
The Tax Cuts and Jobs Act (“TCJA”) made significant changes to the tax code, a number of which can have unexpected effects when a company loses money in the United States or abroad. While the immediate concerns around the spread of COVID-19 are rightfully focused on public health and welfare, given the current economic fallout arising from COVID-19, companies ...
February 4, 2020, Covington Alert
On January 30, 2020, five federal financial regulators jointly issued a proposed rule that would modify existing regulations implementing the Volcker Rule’s general prohibition on banking entities investing in, sponsoring, or having certain relationships with hedge funds or private equity funds (collectively, “covered funds”). The proposal, which follows a 2019 ...
January 31, 2020, Covington Alert
On January 30, 2020, the Board of Governors of the Federal Reserve System (“Board”) unanimously approved a final rule that establishes a comprehensive framework for determining whether a company (“investor”) controls another company (“investee”) for purposes of the Bank Holding Company Act (“BHCA”) and Home Owners’ Loan Act (“HOLA”), and clarifies certain ...
January 17, 2020
WASHINGTON—Covington represented Piramal Enterprises Limited in itsdefinitive agreement to sell Decision Resources Group to Clarivate Analytics plc, in a deal valued at $950 million. The $950 million purchase price includes $900 million in cash and approximately $50 million in Clarivate ordinary shares to be issued following the one-year anniversary of ...
January 9, 2020, WatersTechnology
Michael Nonaka spoke with WatersTechnology about the impact of the California Consumer Privacy Act on financial institutions. Mr. Nonaka says, “There are exemptions [in the CCPA] for information that is covered by the GLBA. This is consumer information used by FIs, including broker-dealers. But there is not a broad exemption that just takes out the entirety of ...
Fintech Litigation To Watch In 2020
January 1, 2020, Law360
Mike Nonaka is quoted in Law360 regarding the New York Department of Financial Services and the Conference of State Bank Supervisors’ fintech charter, which is being challenged for its validity in the Southern District of New York. Mr. Nonaka says, “The [fintech charter case] is important litigation, because many of the companies that could be interested in the ...
Are states gaining upper hand in fintech charter battle?
December 30, 2019, American Banker
Mike Nonaka spoke with American Banker about fintech companies’ struggle to gain banking charters in 2019 and the prospect for better results in 2020. Mr. Nonaka says, “States are looking at how difficult the federal landscape can be, and based on their current laws, they're looking for ways to attract companies — either through their current regulations or even ...
December 16, 2019, Covington Alert
On December 12, 2019, the Office of the Comptroller of the Currency (“OCC”) and Federal Deposit Insurance Corporation (“FDIC”) released a notice of proposed rulemaking to overhaul the agencies’ regulatory framework for evaluating banks’ Community Reinvestment Act (“CRA”) performance. The proposal follows a 2018 advance notice of proposed rulemaking by the OCC, ...
Reactions to CRA plan signal long fight ahead
December 15, 2019, American Banker
Karen Solomon is quoted in American Banker regarding bank regulators’ push to reform the Community Reinvestment Act and its reception from the OCC, FDIC, and Federal Reserve. Ms. Solomon says, “[I]t looks to me on first read like there are multiple elements of the determination of the CRA rating. Some of it appears to be at the assessment level, some of it at ...
December 13, 2019
On December 12, 2019, the Federal Deposit Insurance Corporation ("FDIC") proposed significant changes to its regulatory framework for brokered deposits for insured depository institutions ("IDIs"). The Notice of Proposed Rulemaking (the "NPR"), which follows the FDIC's December 2018 Advanced Notice of Proposed Rulemaking, would modernize key aspects of the ...
November 20, 2019, Covington Alert
On November 18 and 19, 2019, the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) provided long-awaited regulatory affirmation that a bank loan’s rate of interest retains its non-usurious character when acquired by a third-party. The agencies each issued proposed rules that seek, as the OCC put it, to “codify what ...
November 20, 2019, Law360
Mike Nonaka is quoted in Law360 regarding the legality of the Office of the Comptroller of the Currency's fintech charter and the Conference of State Bank Supervisors' model payments. Both the OCC and CSBS have taken the concerns of industry to heart, and each initiative, while potentially overlapping in their goals of reducing regulatory burdens, may very well ...
November 19, 2019, Covington Alert
In a recent Interpretive Letter, the Office of the Comptroller of the Currency (OCC) addressed a proposal from an OCC-regulated bank to automate its process for filing suspicious activity reports (SARs) under the Bank Secrecy Act (BSA).
November 3, 2019, Journal of Investment Compliance
October 18, 2019, Covington Alert
On October 10, 2019, the Board of Governors of the Federal Reserve System (“Board”) released two final rules to tailor and modify the applicability of enhanced prudential standards for bank holding companies (“BHCs”), savings and loan holding companies that are not substantially engaged in insurance underwriting or commercial activities (“Covered SLHCs”), ...
October 17, 2019, Covington Alert
On September 10, 2019, the Consumer Financial Protection Bureau issued a No-Action Letter Policy, along with a Compliance Assistance Sandbox Policy and Trial Disclosure Program Policy, to promote innovation and facilitate compliance in consumer financial services. Covington & Burling LLP is pleased to provide this Model No-Action Letter Application as a ...
October 14, 2019, Journal of Investment Compliance
August 27, 2019, Covington Alert
On August 20, 2019, the Board of Directors of the Federal Deposit Insurance Corporation (the “FDIC”) approved a final rule (the “final rule”)1 that will significantly revise existing regulations implementing the Volcker Rule – a statutory provision that generally prohibits banking entities from engaging in proprietary trading or taking an ownership interest in, ...
Fintech Adoption Poised For Growth In US Despite Lag
August 20, 2019, Law360
Michael Nonaka is quoted in Law360 regarding Madden v. Midland Funding, a case that called into question the validity of interest rates on bank-originated debt that is later transferred to nonbank partners, such as fintech firms. The decision largely rejected the "valid-when-made" doctrine stating that a loan's interest rate remains legal as long as it was legal ...
Fintech Solutions: Artificial Intelligence and Blockchain
August 18, 2019, BAFT West Coast Trade Finance Workshop
Hot (Legal and Regulatory) Topics in Marketplace Lending
August 5, 2019, Practicing Law Institute, Alternative Finance Summit 2019: Marketplace Lending, Cryptocurrency and Crowdfunding
August 4, 2019, CoinTelegraph
Michael Nonaka spoke with CoinTelegraph to discuss cryptocurrency regulation in the U.S. Mr. Nonaka says, "The U.S. Financial Crimes Enforcement Network issued its first guidance addressing cryptocurrency companies in 2013, and since then regulatory action for digital assets has been slow to develop but has picked up in the past few years as an increasing ...
Prominent Financial Services Lawyer Joining Covington
July 1, 2019
WASHINGTON—Jeremy Newell has joined Covington's Financial Services Group as a partner in Washington. Mr. Newell's arrival follows the recent addition of Karen Solomon, who joined Covington after serving as the acting Chief Counsel of the Office of the Comptroller of the Currency. Mr. Newell was formerly Executive Vice President, General Counsel & Chief ...
June 21, 2019, The Wall Street Journal
Michael Nonaka is quoted in The Wall Street Journal regarding the Financial Act Task Force’s request to virtual currency firms to develop procedures for sharing customer information with other financial institutions. Mr. Nonaka says that some crypto companies have invested heavily in compliance, others have a long way to go to build the systems necessary for ...
Inside The Legal Battle For The Future Of Fintech
June 3, 2019, Law360
Michael Nonaka is quoted in Law360 regarding the OCC and New York Department of Financial Services’ legal battle over how the fintech industry will be regulated. Mr. Nonaka says, “The litigation challenging the OCC's authority to issue a special purpose fintech charter certainly has delayed the process for nondepository fintech firms to apply and receive ...
June 2019, The Banking Law Journal
Covington Represents Bayer in $550M Sale of Coppertone™
May 13, 2019
NEW YORK—Covington advised Bayer in a definitive agreement to sell its Coppertone™ business to Beiersdorf AG, a provider of skin care products, for $550 million. Bayer is a global enterprise with core competencies in the life science fields of health care and nutrition. Its products and services are designed to benefit people by supporting efforts to overcome ...
AML/BSA/OFAC/CDD/KYC: It's Not Just Alphabet Soup
May 9, 2019, Futures Industry Association, Annual Law & Compliance Conference
May 8, 2019, Covington Alert
May 3, 2019, Covington Alert
On April 29, 2019, the Office of the Comptroller of the Currency (OCC) issued an Advance Notice of Proposed Rulemaking (ANPR) seeking comment on expansion of the term “fiduciary capacity” in part 9 and part 150 of the OCC’s regulations to include certain trust-related roles authorized under state law, potentially including roles that do not involve investment ...
May 2019, The Banking Law Journal
April 18, 2019, Covington Alert
On April 8, 2019, the Board of Governors of the Federal Reserve System (the “Board”) approved a notice of proposed rulemaking (the “Resolution Plan Proposal” or the “Proposal”), issued jointly with the Federal Deposit Insurance Corporation (the “FDIC,” and together with the Board, the “Agencies”), that would revise the Agencies’ jointly issued resolution ...
April 17, 2019, Covington Alert
On April 8, 2019, the Board of Governors of the Federal Reserve System (“Board”) released two proposals to tailor and modify the applicability of enhanced prudential standards for foreign banking organizations (“FBOs”) and their U.S. intermediate holding companies (“IHCs”).
2019, American Bar Association
Our cross-disciplinary Internet of Things initiative contributed to the ABA's first book on IoT, The Internet of Things: Legal Issues, Policy, & Practical Strategies. Laura Kim and Jennifer Johnson authored the chapter “U.S. Regulatory Framework for IoT,” with contributions from Sarah Wilson (product safety); Wade Ackerman, Elizabeth Guo, Christopher Hanson, ...
March 13, 2019, Covington Alert
On March 6, 2019, the Financial Stability Oversight Council (“FSOC”) voted unanimously to issue proposed interpretive guidance (“Proposed Guidance”) that would significantly change its approach to designating nonbank financial companies that pose a risk to the financial stability of the United States (“nonbank SIFIs”) for supervision and prudential regulation by ...
Will Regulators Stifle AI
January 31, 2019, American Banker, On-Demand Web Seminar
Covington Advises Argentinian Payments Company on Sale with Enterprise Value of $1.42B
January 22, 2019
NEW YORK—Covington advised Prisma Medios de Pago, Argentina’s leading payments company, in the sale of a controlling stake to Advent International. Prisma’s existing shareholders will retain a 49% stake in the company. The transaction values 100 percent of Prisma at $1.42 billion. Prisma is an Argentinian company established in 2014 through the merger of Visa ...
January 9, 2019
WASHINGTON—Karen Solomon has joined Covington's Financial Services Group in Washington. Before joining Covington, Ms. Solomon served as the Acting Senior Deputy Comptroller and Chief Counsel at the Office of the Comptroller of the Currency (OCC). In that role and in her prior role as Deputy Chief Counsel, Ms. Solomon’s work included developing and drafting ...
December 26, 2018, Bloomberg Law
Michael Nonaka is quoted Bloomberg Law regarding the Office of the Comptroller of the Currency’s 2019 revamped rules for banks’ community investments. Mr. Nonaka says, “It’ll be interesting to see what the next step is in the rulemaking process, and that will reveal whether there are these differences.” He said the agencies are likely to come together on some ...
December 20, 2018, Covington Alert
On December 18, 2018, the Federal Deposit Insurance Corporation (FDIC) issued an Advance Notice of Proposed Rulemaking (ANPR) seeking comment on the regulatory approach to brokered deposits and the interest rate caps applicable to banks that are less than well capitalized. The FDIC for some time has been exploring the extent to which the current regulatory ...
December 2018, Covington Alert
FinTech refers to the use of new and emerging technologies in the financial services industry to improve the delivery of financial services to customers, and includes innovations such as cryptocurrencies and open banking. Recent years have ushered in the use of several key technologies in the FinTech landscape, including artificial intelligence, data analytics, ...
December 1, 2018, Practical Law
This chapter provides a comprehensive overview on fintech regulation in the United States as part of a global fintech guide published by Thomson Reuters. Reproduced from Practical Law with the permission of the publishers. For further information, visit www.practicallaw.com.
November 29, 2018, American Banker
Michael Nonaka is quoted in the American Banker regarding how banks focused on improving their technology have shown a propensity to quickly enter into fintech partnerships. Mr. Nonaka says, “One of the most interesting developments is now small and large banks have gotten to the point where these partnerships are just business as usual. There is a lot more ...
Banks, Fintechs, Neo-Banks: The Drive for Constant Innovation
November 27, 2018, The Clearing House + Bank Policy Institute, 2018 Annual Conference
Community Reinvestment Act: rework or revamp?
October 17, 2018, International Financial Law Review
Michael Nonaka is quoted in International Financial Law Review regarding the potential modernization of the Community Reinvestment Act of 1977. Mr. Nonaka says, “It’s important to make sure that with new innovative technologies and people using smartphones and the internet to connect with banks, that all those services are tracked for purposes of CRA premise. ...
Blockchain Technology and the Compliance Function: Risks and Opportunities
October 16, 2018, Institute of International Bankers, Risk Management and Regulatory Examination/Compliance Seminar
A Next Tidal Wave of U.S. Privacy Law? The California Consumer Privacy Act and What’s to Come
October 5, 2018, Privacy + Security Forum
September 28, 2018
WASHINGTON—The National Law Journal has named Covington's Michael Nonaka to its inaugural list of "Cryptocurrency, Blockchain, & Fintech Trailblazers." This list profiles 50 lawyers who have "moved the needle" and are making great strides as finance and technology grow more entwined. Mr. Nonaka is co-chair of the firm’s Financial Services Group and advises ...
September 5, 2018, Covington Alert
This client alert summarizes recent regulatory developments relating to fintech and discusses the implications of these developments.
August 17, 2018
WASHINGTON— Law360 named Covington lawyers Alexander Berengaut, Michael Nonaka, and Ursula Owczarkowski to its list of “2018 Rising Stars.” This annual recognition honors top attorneys under 40 “whose legal accomplishments transcend their age.” Alex Berengaut represents clients in civil litigation, international arbitrations, and government enforcement ...
August 8, 2018
WASHINGTON—Covington advised Wilmington, Delaware-based WSFS Financial Corporation in its acquisition of Philadelphia-based Beneficial Bancorp, Inc., in a transaction valued at approximately $1.5 billion. This is the second bank M&A deal in two weeks where Covington is representing the acquiring institution. Covington is also representing Dallas-based Veritex ...
August 1, 2018, Bloomberg Law
Michael Nonaka is quoted in Bloomberg Law on the fintech industry’s enthusiasm regarding the Treasury Department’s recommendation that Congress support the “valid when made” doctrine. Mr. Nonaka adds, “The [recommendation] shows that these issues are not going away and that the uncertainty created from a growing body of inconsistent court opinions isn't a stable ...
OCC Will Accept Fintech Charter Applications
July 31, 2018, Law360
Michael Nonaka is quoted in Law360 regarding the Office of the Comptroller of the Currency accepting applications for special-purpose national bank charters from financial technology companies. Mr. Nonaka says it will be a while before any fintech firms operate as national banks, and they may ultimately decide the special purpose charter does not suit their ...
Cayman Islands AML Requirements
July 23, 2018, Goldman Sachs Prime Services Hedge Fund Consulting
July 3, 2018, Covington Alert
On June 28, 2018, the Governor of California signed the California Consumer Privacy Act of 2018 (“CCPA”). The new law is the most comprehensive data privacy statute in the United States and introduces significant privacy requirements for covered businesses. The CCPA takes effect on January 1, 2020, but based on comments from both the public-interest and business ...
June 14, 2018, Covington Alert
This week has brought three significant developments in Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) regulation and legislation.
May 29, 2018, Bloomberg Law
Michael Nonaka is quoted in a Bloomberg Law article regarding guidance from the Office of the Comptroller of the Currency on small-dollar installment loans. The OCC was likely making an observation and statements of fact “rather than trying to write into the policy any discouragement of any bank-fintech partnership," says Nonaka. But the provision “does stick ...
Blockchain and Cybersecurity, Overview of Current Blockchain Applications
April 25, 2018, HB Litigation Conference
April 25, 2018, Bloomberg Law
Michael Nonaka is quoted in a Bloomberg Law article regarding Rep. Patrick McHenry's statements at a recent conference stressing that a proposal to modify how banks comply with investment requirements in local communities must take account of new technologies such as mobile banking. According to Nonaka, the Treasury's report, which included recommendations for ...
Federal Reserve and OCC Propose Revisions to Capital Framework for Large Banking Organizations
April 20, 2018, Covington Alert
On April 10, 2018, the Federal Reserve issued a notice of proposed rulemaking to implement a stress capital buffer ("SCB") into its capital requirements; revise its capital planning rule for bank holding companies with $50 billion or more in total consolidated assets and U.S. intermediate holding companies of foreign banking organizations established pursuant to ...
Bank Supervision and Regulation Update
April 19, 2018, Covington's Financial Regulatory Forum
Finance of Tomorrow
April 18, 2018, Corporate Council on Africa, Africa Finance Forum
April 10, 2018, Risk Magazine
Michael Nonaka is quoted in a Risk Magazine article regarding U.S. Treasury's proposed reform to the bankruptcy code known as Chapter 14, intended to be the first resort ahead of orderly liquidation authority (OLA). According to Nonaka, “You want there to be different tools in the toolkit in the event of a crisis. That doesn’t mean you have to use Title II, but ...
Law Firms Hitch a Ride on the Blockchain Wagon
April 3, 2018, Washington Lawyer
Michael Nonaka is quoted in a Washington Lawyer article regarding legal opportunities surrounding blockchain. While some lawyers might eventually become blockchain-specialty attorneys, blockchain is looking “more like a technology you have to know about if you’re in certain industries,” says Nonaka. For instance, highly regulated industries such as energy and ...
March 2018, Microsoft
February/March 2018, Bankruptcy Law Journal
Digital Currencies in a Connected World: Key Considerations for Cross-Border Practitioners
February 16, 2018, Florida Bar Association, ILS Global Forum on International Law
Everything You've Always Wanted to Know About Industrial Loan Companies But Were Afraid to Ask
January 9, 2018, American Bar Association Consumer Financial Services Committee Meeting
2018 Should See Trump’s Bank Rule Rollback Gain Steam
January 1, 2018, Law360
Michael Nonaka is quoted in a Law360 article providing a look ahead at bank regulations in 2018. According to Nonaka, leadership changes should mean that banks will see a shift in their operating environment that they had been expecting for some time to come over the course of 2018. “The people will be in place, the will will be there, so I think there will be ...
November 9, 2017, Covington Alert
On October 31, 2017, the Office of the Comptroller Currency (“OCC”) released OCC Bulletin 2017-48, Updated Guidance: Bank Enforcement Actions and Related Matters, updating its internal policies and procedures regarding bank enforcement actions and related matters.
November 2, 2017, Law360
Michael Nonaka is quoted in a Law360 article regarding President Trump's selection of Jerome Powell to chair the Federal Reserve. According to Nonaka, Powell will bring a level of stability that should temper any radical moves, particularly on regulation and supervision of big banks. “He has experience being on the board, so he understands how large bank ...
Developments in RegTech and FinTech Charters
October 16, 2017, Institute of International Bankers Risk Management and Regulatory Compliance Seminar
Fintech Bank Charters and Other Hot Topics
October 12, 2017, Berkeley Center for Law, Business and the Economy, Fundamentals of Banking Law & FinTech 2017
Marketplace Lending Matures
September 7, 2017, PLI Marketplace Lending and Crowdfunding
If OCC Charter Case Is Dismissed, State Regulators Will Likely Sue Again, Say Fintech Attorneys
August 3, 2017, Corporate Counsel Magazine
Michael Nonaka is quoted in a Corporate Counsel Magazine article regarding the Office of the Comptroller's argument that it cannot be sued over its plans for a special purpose national bank charter. According to Nonaka, "it's a fair assumption" the Conference of State Bank Supervisors would continue to pursue litigation against the OCC if the case is thrown out, ...
American Regulators Playing FinTech Catch-Up
June 15, 2017, Law360
Michael Nonaka is quoted in a Law360 article examining how U.S. regulators are fostering fintech innovation. According to Nonaka, the CFTC and FINRA initiatives are important steps to get the agencies up to speed on fintech issues. “It’s certainly a step forward, it’s a step in the right direction for the regulators to be able to do new initiatives that will ...
May 31, 2017, The National Law Journal
Michael Nonaka is quoted by The National Law Journal in an article regarding the likelihood that the U.S. will introduce a regulatory sandbox for fintech companies to test new products and business models without regulatory consequences. According to Nonaka, there is "great value" in a sandbox for entrepreneurs, but "in order for a sandbox to work, you have to ...
Proposed Restrictions on Mexican Remittances Could Hinder Fintechs, Probably Not Banks
May 11, 2017, Forbes
Michael Nonaka is quoted in a Forbes article regarding the prospect of President Trump's taxing remittances for a Mexico border wall, and the possibility of an increase in the use of digital currencies as a result. In discussing banks and payment companies' experience in this field, Nonaka indicates that these institutions have taken the proposed rules in ...
April 24, 2017, Covington Alert
On April 19, 2017, the House Financial Services Committee (the “Committee”) released a new “discussion draft” of the Financial CHOICE Act, its comprehensive regulatory reform bill (“CHOICE Act 2.0”). The Committee released the first version of the bill (“CHOICE Act 1.0”) in June 2016.
March 6, 2017, Covington Alert
Following up on the Consumer Financial Protection Bureau’s (the “Bureau,” or “CFPB”) monthly complaint report highlighting credit reporting issues (and particularly issues with accuracy and disputes), on March 2, 2017, the CFPB issued a special edition of its Supervisory Highlights bulletin focusing on consumer reporting issues, highlighting those same concerns. ...
Trump Unlikely To Ease AML Burden, Say Experts
February 22, 2017, Payments Compliance
Michael Nonaka is quoted in a Payments Compliance article regarding financial crime regulation under President Trump amid Dodd-Frank reforms. According to Nonaka, “The conversation around deregulation hasn’t touched on anti-money laundering and terrorist financing compliance and enforcement.” The “strong nexus with law enforcement and border protection,” is why ...
February 21, 2017
In September 2016, the Office of the Comptroller of the Currency issued final guidance for recovery planning, requiring OCC-regulated banking organizations with average total consolidated assets of $50 billion or more to develop recovery plans. Covered banks with at least $750 billion in assets are required to comply by July 1, 2017; covered banks with at least ...
February 6, 2017, Harvard Law School Forum on Corporate Governance and Financial Regulation
February 3, 2017, Covington Alert
Throughout his campaign, President Donald Trump promised to curtail financial regulations, particularly those promulgated under the Dodd-Frank Act. President Trump argued frequently that the regulations issued under the act have proven overly burdensome and, among other things, limited job growth. This afternoon, the President took his first formal step in ...
The New CRA Interagency Q&As from July 2016
December 15, 2016, Mortgage Bankers Association CRA Lending Workshop
December 11, 2016, Harvard Law School Forum on Corporate Governance and Financial Regulation
December 5, 2016, Covington Alert
On December 2, 2016, Comptroller of the Currency Thomas J. Curry announced that the Office of the Comptroller of the Currency (“OCC”) would move forward with issuing special purpose national bank charters to financial technology (“fintech”) companies. The OCC released a whitepaper1 outlining its authority to issue charters to fintech companies, its approach to ...
October 20, 2016, Covington Alert
On October 19, 2016, the Board of Governors of the Federal Reserve System (Federal Reserve), Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corporation (FDIC) (collectively the “Agencies”) released a joint Advance Notice of Proposed Rulemaking (ANPR) requesting public comment on enhanced cybersecurity standards that would apply to ...
Current Issues in Fintech Regulation
September 16, 2016, Columbia Law School Center for Israeli Legal Studies Fintech Conference
Legal Developments in Marketplace Lending
September 9, 2016, PLI Marketplace Lending and Crowdfunding
September 2016, The Review of Banking & Financial Services
U.S. Watchdog Seeks Revival Of Prepaid AML Rules
August 25, 2016, PaymentsCompliance
Michael Nonaka is quoted in a PaymentsCompliance article regarding FinCEN’s renewed efforts to reissue anti-laundering (AML) controls on prepaid cards after abandoning original proposals two years earlier. According to Nonaka, “There are all these controls and existing tracking mechanisms that apply to cross-border movements of cash, but these aren't in place ...
July 28, 2016, Covington Alert
Today, the Consumer Financial Protection Bureau (“CFPB”) issued its outline of proposals under consideration for a debt collection rulemaking that would govern third-party debt collection activities of debt collection agencies, debt buyers, collection law firms, and loan servicers. Release of this outline of proposals signals the start of the Small Business ...
June 13, 2016, Covington Alert
The Federal Reserve has recently sent non-compliance notices to U.S. issuers of foreign-currency denominated bonds that are sold abroad (“foreign bonds”), including Euro bonds, for failure to submit Treasury International Capital (TIC) Form SLT. Although the final instructions for Form SLT were promulgated in February 2011, this filing requirement has come as a ...
May 10, 2016, Covington Alert
On May 5, 2016, the Financial Crimes Enforcement Network (“FinCEN”) issued its long-awaited final rule on beneficial ownership with respect to customer due diligence requirements. The final rule requires covered financial institutions to adopt due diligence procedures to identify and verify a legal entity customer’s beneficial owner(s) at the time a new account ...
May 9, 2016, The Wall Street Journal
Mr. Nonaka was quoted in the article that discussed the rollout of the Treasury Department’s customer due diligence rule and related anti-corruption plan.
May 5, 2016, Data Guidance
Michael Nonaka is quoted in this Data Guidance article regarding the Payment Card Industry Security Standards Council’s latest version of its data security standard. According to Nonaka, "PCI DSS version 3.2 does not reflect sweeping changes to the requirements in prior versions, but it is indicative of the data security priorities being expressed by card ...
Anti-Laundering: The ABCs of Federal GTOs
April 12, 2016, Law.com
Michael Nonaka is quoted in this law.com article describing the federal government’s use of geographic targeting orders to combat money laundering and terrorist financing in the real estate sector. According to Nonaka, “real estate transactions have been a focus of FinCEN for a long time…We’re likely to see this continue for quite some time.”
Compliance Lessons from Geographic Targeting Orders
April 11, 2016, ACAMS AML & Financial Crimes Conference (21st Annual)
What Business Lawyers Need to Know about Privacy Law
April 9, 2016, American Bar Association: Cyberspace Law Committee 2016 Spring Meeting
Money Services Businesses: Licensing Requirements in Canada and the U.S.
April 8, 2016, American Bar Association: Consumer Financial Services Committee 2016 Spring Meeting
April 1, 2016, Covington Alert
Yesterday, the Office of the Comptroller of the Currency issued a whitepaper, Supporting Responsible Innovation in the Federal Banking System: An OCC Perspective, that introduces the agency’s principles for facilitating and regulating “responsible innovation” in the federal banking system, particularly in financial technology or “fintech.” The whitepaper ...
February 8, 2016, BNA's Banking Daily
October 15, 2015, Covington Alert
Covington Promotes Nine New Partners
October 1, 2015
WASHINGTON, DC, October 1, 2015 - Covington has elected nine of its lawyers to partnership. “We are delighted to welcome our new partners, who exemplify the spirit and substance of Covington,” said Timothy Hester, chair of the firm’s management committee. “This partnership class reflects our focus on the firm’s core practice strengths. We are confident that ...
Big Data and Compliance
June 2015, 2015 American Bankers Association Regulatory Compliance Conference
Covington Advises Public Pension Capital on Partnership with Kramer Van Kirk Credit Strategies
May 15, 2015
WASHINGTON, DC, May 15, 2015 — Covington represented Public Pension Capital, LLC in the formation of a strategic partnership with and investment in Kramer Van Kirk Credit Strategies LP, a Chicago-based manager of collateralized loan obligations with more than $4 billion in assets under management. Public Pension Capital also acquired a stake in KVK Technology ...
April 30, 2014, BankDirector.com
February 24, 2014, Covington E-Alert
2014, Regulation of Foreign Banks and Affiliates in the United States
2014, Regulation of Foreign Banks and Affiliates in the United States
December 11, 2013, Covington E-Alert
February 14, 2013, Covington Advisory
October 11, 2011, Covington Advisory
October 11, 2011, Covington Advisory
December 14, 2010, Covington E-Alert
Covington Advises Financial Federal Corporation on $738M Merger with People’s United Financial
2/22/2010
NEW YORK, February 22, 2010 — Financial Federal Corporation and People’s United Financial, Inc. have completed the merger of Financial Federal with People’s United in a transaction valued at approximately $738 million. Covington & Burling LLP advised Financial Federal on the transaction. Financial Federal is a financial services company providing collateralized ...
Anti-Money Laundering Compliance
June 2009, New Jersey Bankers Association Compliance Seminar
September 23, 2008, Covington E-Alert
- Global Banking Regulation Review, "45 Under 45" (2020)
- Chambers FinTech (2019)
- The National Law Journal, "Cryptocurrency, Blockchain, & Fintech Trailblazers" (2018)
- Law360, Banking "Rising Star" (2018)
- Legal 500 US, Finance - Financial Services Regulation (2017) and Technology: Data Protection and Privacy (2016)

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