Financial Service Law
Financial services are those services provided by businesses in the finance industry, including organizations that manage money like credit unions, banks, credit card companies, insurance companies, accountants, consumer finance companies, stock brokerages, investment funds, and some government sponsored enterprises.
A "commercial bank" is what is commonly referred to when one uses the term “bank.” A commercial bank differs from an investment bank in that a commercial bank lends money directly to businesses while an investment bank helps businesses raise money from other firms, usually through the exchange of bonds or stock. Typical commercial bank services include holding money and allowing withdrawals, issuing payments based on checks, providing personal and business loans, issuing credit and debit cards, and so forth. These entities are heavily regulated by state and federal law and a number of regulatory agencies.
Foreign Exchange Service
Foreign exchange services allow the transfer of money from the currency of one nation to another. These are heavily regulated by both domestic and international laws, as well as many banking and other regulations.
Asset Management Services
Asset management usually refers to the servicing of collective investment funds. Entities offering these services are usually registered with the Securities and Exchange Commission (SEC) as Registered Investment Advisors. The focus of these services are usually the growth of capital through client investments.
Another, commonly overlooked financial service, is insurance. Insurance is regulated at both the state and federal level. Many insurance policies are backed by investments which are, themselves, further regulated by the SEC and other agencies.
Other Financial Services
Examples of other industries that fall under the heading of financial services may include bank-issued credit and debit cards, credit card processing services, hedge fund investing, financial intermediation services, private equity funds, angel investment services, and many others.
For more information about the laws affecting the financial services industry, please review the materials below. Additionally, if you have particular questions and need legal assistance, you may visit our Law Firms page for a listing of attorneys in your area who can assist you.
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Articles on HG.org Related to Financial Services Law
- Whistleblowers Helping the Public By Exposing FraudThe 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted to assist the government with discovering financial fraud. A recent SEC whistleblower received a $14 million dollar reward for reporting a real estate scam.
- Transfer Agents in the Going Public ProcessTransfer agents play a key role in the going public process. Transfer agents are the record keeper for a company’s securities when it goes public. Share ownership is reflected on the issuer’s shareholder list. In addition, transfer agents issue and cancel certificates to reflect changes in the ownership of securities and act as an intermediary for the company and its stockholders during the going public process.
- Accredited Investors l Rule 506 RequirementsRegulation D under the Securities Act of 1933,as amended (the “Securities Act”), sets forth a safe harbor from the registration statement requirements of the Securities Act for certain private placements of securities. In connection with these exemptions, offerings made in reliance upon Regulation D, Rule 504, 505 and 506 can be made to up to 35 non-accredited investors and an unlimited number of “accredited” investors.
- Section 4(1) ExemptionRule 144 (“SEC Rule 144”) under the Securities Act of 1933 (“Securities Act”) provides a safe harbor from the registration provisions of the Securities Act for resales of restricted and control securities by persons other than the issuer if all conditions of the rule are complied with.
- Form 8K Reporting of Reverse MergersThe Securities and Exchange Commission (“SEC”), Division of Corporate Finance frequently notes disclosure deficiencies in the disclosure of reverse merger transactions in on 8-K Filed. This post summarizes SEC staff comments in response to reports on Form 8-K reporting of reverse mergers with public shell companies or similar transactions that result in a public company no longer being designated as a shell company.
- US Listings For Foreign IssuersTypically, foreign companies seeking to raise capital attempt to obtain public company status. Foreign companies that go public in the U.S. may complete a public offering by registering securities with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Securities Act”) or by registering a class of securities under the Securities Exchange Act of 1934 (the “Exchange Act”).
- OTCMarkets OTCQX l Dual List USAThe OTCMarkets OTCQX offers foreign issuers seeking to go public in the U.S. an appealing alternative to listing on a stock exchange. Foreign issuers whose securities are listed on a foreign stock exchange that qualify for the exemption from the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
- Private Placement Memorandums 101A private placement memorandum (“PPM”) is also referred to as a confidential offering circular or memorandum. PPM’s are typcially prepared by securities lawyers who assist private companies with their going public transactions. PPM’s are used to raise capital by selling either debt or equity in an exempt offering that has not been registered with the SEC. These exempt offerings are often called private placements.
- SEC Registration Statements l Question & AnswerAddressing the most common questions we receive about going public using Form S-1 and the SEC registration statement process.
- Section 16 ReportingShareholders and management of private companies are often unaware of their reporting obligations upon completion of a going public transaction. Section 16(a) of the Exchange Act of 1934 (the “Exchange Act”) requires the reporting of beneficial ownership by the officers, directors and stockholders who hold stock directly or indirectly, beneficially owning more than 10% of the company’s common stock or other class of equity securities registered under Section 12(b) or 12(g) of the Exchange Act.
- All Banking and Finance Law Articles
Articles written by attorneys and experts worldwide discussing legal aspects related to Banking and Finance including: asset protection, capital markets, corporate finance, financial planning, financial services law, investment law, offshore accounts, private equity, project finance, public finance, securities, trade investment and venture capital.
Financial Services Law - US
- ABA - Banking And Financial Services Subcommittee
The Committee considers matters involving the federal and state regulation of financial institutions and monitors relevant legislative developments, with particular emphasis on the manner in which regulations are administered and enforced. Such matters fall within the jurisdiction of the Department of Treasury, the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve Board, the Federal Housing Finance Board, and various state agencies.
- Community Reinvestment Act (CRA)
The Community Reinvestment Act (CRA), enacted by Congress in 1977 (12 U.S.C. 2901) and implemented by Regulations 12 CFR parts 25, 228, 345, and 563e, is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate. In this section of the web site, you can find out more about the regulation and its interpretation and information on CRA examinations.
- Equal Credit Opportunity Act (ECOA) - FTC
The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Equal Credit Opportunity Act (ECOA), which prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because you get public assistance. Creditors may ask you for most of this information in certain situations, but they may not use it when deciding whether to give you credit or when setting the terms of your credit. Not everyone who applies for credit gets it or gets the same terms: Factors like income, expenses, debts, and credit history are among the considerations lenders use to determine your creditworthiness.
- Fair Housing Act
Title VIII of the Civil Rights Act of 1968 (Fair Housing Act), as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability).
- Federal Reserve System
The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded.
- Gramm-Leach Bliley Act
The Financial Modernization Act of 1999, also known as the "Gramm-Leach-Bliley Act" or GLB Act, includes provisions to protect consumers’ personal financial information held by financial institutions. There are three principal parts to the privacy requirements: the Financial Privacy Rule, Safeguards Rule and pretexting provisions.
- Home Mortgage Disclosure Act (HMDA)
The Home Mortgage Disclosure Act (HMDA) was enacted by Congress in 1975 and is implemented by the Federal Reserve Board's Regulation C. This regulation provides the public loan data that can be used to assist: in determining whether financial institutions are serving the housing needs of their communities; public officials in distributing public-sector investments so as to attract private investment to areas where it is needed; and in identifying possible discriminatory lending patterns.
- House Committee on Financial Services
The Committee oversees all components of the nation's housing and financial services sectors including banking, insurance, real estate, public and assisted housing, and securities. The Committee continually reviews the laws and programs relating to the U.S. Department of Housing and Urban Development, the Federal Reserve Bank, the Federal Deposit Insurance Corporation, Fannie Mae and Freddie Mac, and international development and finance agencies such as the World Bank and the International Monetary Fund. The Committee also ensures enforcement of housing and consumer protection laws such as the U.S. Housing Act, the Truth In Lending Act, the Housing and Community Development Act, the Fair Credit Reporting Act, the Real Estate Settlement Procedures Act, the Community Reinvestment Act, and financial privacy laws
- Industrial Loan Companies - FDIC
Industrial loan companies and industrial banks (collectively, ILCs) are FDIC-supervised financial institutions whose distinct features include the fact that they can be owned by commercial firms that are not regulated by a federal banking agency.
- Sarbanes-Oxley Act of 2002
The legislation came into force in 2002 and introduced major changes to the regulation of financial practice and corporate governance. Named after Senator Paul Sarbanes and Representative Michael Oxley, who were its main architects, it also set a number of deadlines for compliance. The Sarbanes-Oxley Act is arranged into eleven titles. As far as compliance is concerned, the most important sections within these are often considered to be 302, 401, 404, 409, 802 and 906. An over-arching public company accounting board was also established by the act, which was introduced amidst a host of publicity.
Organizations Related to Financial Services Law
- American Bankers Association
Founded in 1875 and based in Washington, DC, the American Bankers Association brings together banks of all sizes and charters into one association. ABA works to enhance the competitiveness of the nation's banking industry and strengthen America's economy and communities. Its members – the majority of which are banks with less than $125 million in assets – represent over 95 percent of the industry's $13.3 trillion in assets and employ over 2 million men and women.
- American Institute of Certified Public Accountants - AICPA
The American Institute of Certified Public Accountants is the national, professional organization for all Certified Public Accountants. Its mission is to provide members with the resources, information, and leadership that enable them to provide valuable services in the highest professional manner to benefit the public as well as employers and clients. In fulfilling its mission, the AICPA works with state CPA organizations and gives priority to those areas where public reliance on CPA skills is most significant.
- Bank Information Security
BankInfoSecurity.com was created as a reference tool. BankInfoSecurity.com strongly believes that education on security issues reinforces the need for maintaining customer data confidentiality and integrity, thus improving the long term security posture of an organization. Because we understand the community banking community, BankInfoSecurity.com was able to establish a medium whose content was personalized and appropriate for the industry.
- National Credit Union Administration (NCUA)
The National Credit Union Administration (NCUA) is the independent federal agency that charters and supervises federal credit unions throughout the United States and its territories. NCUA administers the National Credit Union Share Insurance Fund (NCUSIF). Backed by the full faith and credit of the United States government, the NCUSIF insures the member accounts in all federal credit unions and the substantial majority of state-chartered credit unions
- Office of Comptroller of the Currency (OCC)
The OCC's primary mission is to charter, regulate, and supervise all national banks and federal savings associations. We also supervise the federal branches and agencies of foreign banks. Our goal in supervising banks and federal savings associations is to ensure that they operate in a safe and sound manner and in compliance with laws requiring fair treatment of their customers and fair access to credit and financial products.
Publications Related to Financial Services Law
- Financial Services Articles
Maximize customer lifetime value, improve financial performance and calculate enterprise wide risk measures for banking, insurance, investments and financial planning.
- Financial Services Forum
The Financial Services Forum is a non-partisan financial and economic policy organization comprising the CEOs of 18 of the largest and most diversified financial services institutions doing business in the United States.