Lawrence D. Fruchtman

My focus

I help bank leaders navigate both the everyday and bet-the-company operational and transactional issues they contend with in the complex, risk-focused regulatory environments of insured depository institutions. After many years of legal practice, I have a depth of experience in domestic and foreign financial services regulatory and transactional matters from the vantage of the Federal Reserve, as well as inside and outside counsel positions. I have addressed matters under the Bank Holding Company Act of 1956, as amended, and navigated affiliate and insider transactions, lending limits and permissible bank investments, regulatory capital, anti-tie-in rules and many other financial services regulatory matters.

I have spent the last decade as an executive vice president and general counsel of a unique, union-owned $3.7 billion asset commercial bank and its institutional Taft-Hartley trust department—with over $30 billion in assets under management or in custody—while also handling a variety of matters, including assisting with a $100 million private equity capital raise. Prior to that, I was special counsel at a large New York City law firm where I provided advice to foreign and domestic clients on bank regulatory matters and also prepared the firm’s extensive memorandum on the Gramm-Leach-Bliley Act. For the first ten years of my practice, I practiced as an attorney and officer of the Federal Reserve Bank of New York.

Looking ahead

The challenges facing insured depository institutions and other financial services businesses have never been greater. The low interest rate environment has placed a significant strain on margins while, at the same time, these institutions are subject to significantly greater regulatory burdens and capital constraints on their ability to take risks and make money. Although the most onerous of those requirements fall on the largest financial institutions, I have seen and anticipate that elements of these requirements will be applied to smaller institutions. In addition, I expect to see continued growth in the less regulated part of the financial services industry, while the types of regulation normally applied to insured depository institutions expand to the broader financial services market.

Areas of ongoing and future concern include:

• Onerous anti money laundering requirements coupled with regulatory pressure to serve high risk money services businesses
• Requirements to record and address customer complaints
• Developing the systems to comply with revised consumer and wholesale banking regulations
• Limits on leveraged finance and bars to proprietary trading and certain fund investments by insured depository institutions
• More restrictive and complex capital requirements
• Newly mandated liquidity requirements and stress testing
• Requirements that systemically important financial institutions provide roadmaps to their resolution in the event of insolvency