(Editors’ suggestion—to maximize your reading pleasure, try reading the following post in your best Ben Stein impersonation, circa “Ferris Bueller’s Day Off.”)
The Federal Reserve has issued a letter providing guidance to regulated banking and financial institutions on their duties to provide notice of proposed settlements to their state and local regulators. The notice states that, within 10 days after the filing of a proposed class action settlement agreement with the court, any defendant financial institution covered by the law and supervised by the Federal Reserve should send notice of the proposed settlement to the General Counsel at the responsible Federal Reserve Bank. The notice required to be filed with the Federal Reserve Bank must also be filed with the financial institution’s state bank supervisor, if any.
The letter also reminds that a proposed class settlement requiring notice to the regulators, cannot be given final approval by the courts until 90 days after serving the applicable federal or state regulator.
The letter goes on to clarify that the notice of proposed settlement to regulators is only required for class actions involving at least regulated activity, such as lending practices. However, class actions involving claims unrelated to regulated lending activities, would not require notifying regulators.
Bueller, Bueller, Bueller…
For a copy of the letter, go to :
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