It was hardly surprising to hear Federal Reserve Board Governor Michelle Bowman suggest earlier this week that it’s time to update the bank merger framework. This is one we’ve heard before and makes a lot of sense.  

Speaking of no surprises, there's the decision by the Second Circuit to vacate a February 2021 Southern District of New York ruling in favor of the defendant loan managers who had been told that they did not have to return an accidental payment by Citibank N.A. of approximately $500 million in what has been come to be known simply as “Revlon.” All the legal wrangling aside, this seems like one of those cases where common sense prevailed in the end. We take a closer look this week in a detailed Clients & Friends Memo.

And surprise, surprise, there’s no way to get through an issue of Cabinet News and Views without an important crypto-assets story, so thanks to Peter Malyshev for this week’s write-up on the CFTC's assertion of jurisdiction over decentralized autonomous organizations (“DAOs”). 

I would also encourage you to read Keith Gerver’s analysis of a new directive from the White House to CFIUS on “evolving national security risks.”

Any thoughts on this week’s articles? Anything on your mind? Just drop me a note here.

Daniel Meade 
Editor, Cabinet News and Views

By Daniel Meade

Partner | Financial Regulation

Federal Reserve Board Governor Michelle Bowman spoke to the Community Banking Research Conference yesterday regarding the landscape for banking competition. Governor Bowman noted, as many have, that it is past time to update the bank merger framework, which was last updated in 1995.

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By Peter Y. Malyshev

Partner | Financial Regulation

On September 22, the Commodity Futures Trading Commission asserted its jurisdiction over a decentralized autonomous organization and its founders, signaling for the industry that even an unincorporated association cannot violate U.S. commodity derivatives regulations. This enforcement action exemplifies a novel approach to liability for violations under the Commodity Exchange Act and the CFTC’s jurisdictional reach over decentralized markets in digital assets.

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By Keith M. Gerver

Associate | White Collar Defense and Investigations

On September 15, President Biden issued an Executive Order on “Ensuring Robust Consideration of Evolving National Security Risks by the Committee on Foreign Investment in the United States” in response to “an evolving national security landscape and the nature of investments that pose related risks to national security.” The Executive Order directs CFIUS to consider five specific “sets of factors” as part of its review of covered transactions.

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By Steven M. Herman

Partner | Real Estate

By Calla Abrunzo

Associate | Real Estate

In a decision rendered on September 8, a three-judge panel for the United States Court of Appeals for the Second Circuit vacated a February 2021 decision by the United States District Court for the Southern District of New York in favor of the defendant loan managers of certain institutional lenders, which held that the loan managers were not obligated to return an accidental payment by Citibank N.A. of approximately $500 million. Citi served as administrative agent to the lenders for a $1.8 billion syndicated seven-year loan to Revlon, Inc. pursuant to a credit agreement entered into in 2016. Read our Clients & Friends Memo here.