Federal Reserve Proposes Extraordinary Curtailment of Statutory Banking Powers and Grandfather Provisions: The Federal Reserve’s Recommendations Included in a Report Released Today by the Federal Banking Agencies Call for Congressional Repeal of Long-Standing Statutory Merchant Banking and Commodities Powers and the Elimination of Grandfather Provisions for Certain Thrift and Savings and Loan Holding Companies

Sullivan & Cromwell LLP - September 8, 2016

In what can be termed a truly astonishing set of legislative proposals, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) has recommended congressional reversal of a number of long-standing statutory powers and exemptions for financial institutions.
The recommendations were contained in a 107-page report issued today (September 8, 2016) by the Federal Reserve, the Federal Deposit Insurance Corporation (the “FDIC”) and the Office of the Comptroller of the Currency (the “OCC”, together with the Federal Reserve and the FDIC, the “Federal banking agencies”). The report was issued pursuant to Section 620 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which required the Federal banking agencies to review and make recommendations regarding the activities and investments of banking entities. The report includes a review and a set of recommendations by each Federal banking agency with respect to the institutions that it supervises.