Attorney Robert Smith's article on the federal Change in Bank Control Act and its compliance challenges was featured this week in Arkansas Business.
Excerpt from "CIBC Act Compliance Challenges"
The federal Change in Bank Control Act may be the most often overlooked — and one of the most often violated — of all banking regulations. Inadvertent violations have grown more common given the increase in estate planning-related stock transfers by shareholders planning the next generation of ownership.
Complex ownership structures often make it difficult to determine whether a filing is required. A review of the act's basic requirements suggests some steps to avoid problems.
CIBC Act Requirements
The act requires an application to be submitted to an institution's primary federal bank regulator at least 60 days before any person acquiring "control" of a state or national bank or bank holding company. Control refers to the acquisition of 25 percent or more of the outstanding shares of any class of voting securities of the bank or holding company. Applications for a bank holding company or state member bank are submitted to the Federal Reserve, while the Comptroller of the Currency approves applications for national banks and the Federal Deposit Insurance Corp. handles applications for insured state nonmember banks.
Robert is a partner in the firm’s Mergers and Acquisitions Practice Group. In the banking area, he advises clients on merger and acquisition transactions, lending, regulatory compliance and capital raising activities (including government investment programs). He assists companies in corporate finance matters, the offering of debt and equity securities, and counseling directors and executive officers regarding fiduciary duties and corporate governance issues. Robert also regularly represents professionals and professional firms in the formation, expansion, merger, and division of professional practices.