Stevens & Lee represents banks, thrifts and their holding companies; insurance companies; mortgage banks and other specialty lenders; investment banks; private equity groups; asset managers and other non-bank financial services companies. We regularly represent financial institutions throughout the country ranging in size from approximately $500 million to $5 billion in assets and have served as general counsel to a number of publicly traded banks, thrifts and insurance companies.
Stevens & Lee understands first-hand the environment in which financial institutions operate. The firm is part of a professional services platform which includes affiliates Griffin Financial Group LLC, a FINRA-licensed investment bank serving financial institutions; Pinnacle Risk Services, which provides professional risk management and insurance advisory services to financial institutions; and federal and state lobbying units. Among the professionals on our integrated team are a former bank CEO, CFO and other senior executive officers; former Big Four financial accountants; tax professionals; risk managers; regulatory compliance officers; economists and research analysts.
The principal service areas in which Stevens & Lee assists financial institutions include the following:
Mergers & Acquisitions
Stevens & Lee has extensive experience in mergers and acquisitions. Over the past five years we have been counsel to buyer and seller in more than 75 transactions involving financial institutions having an aggregate transaction value in excess of $7 billion. These transactions range in size and scale from the more than $3.2 billion acquisition by Sovereign Bancorp, Inc. of Independence Community Bancorp involving the simultaneous stake-out investment of $2.4 billion by Banco Santander, S.A., to acquisitions of banking-related businesses for community and regional bank and thrift holding companies. These transactions include acquisitions or dispositions of insurance brokerage businesses, securities broker-dealer operations, registered investment advisors, employee benefit plan administrators, asset-based lenders, monoline finance companies and similar businesses. We have also represented banking clients in a number of branch sale transactions, including the sale of the FleetBoston branches in New England to Sovereign Bancorp in the largest federally mandated bank divestiture in U.S. history and in multi-state branch transactions designed to permit entry of an out-of-state bank into a new jurisdiction.
Similar to investment banking and national public accounting firms, we have developed – in the law firm and its affiliated businesses – sophisticated tax, accounting and regulatory, value-added acquisition and asset securitization structures, which have contributed significantly to the growth of this practice area. Stevens & Lee professionals are highly proficient in the OTTI issues that many banks are currently dealing with (and are capable of assisting banks to interface with outside auditors), and are equally well-versed in the SFAS 141R requirements in the merger and acquisition arena.
Stevens & Lee represents financial institutions clients in negotiating, structuring and documenting investment transactions of all types, including senior debt, mezzanine and equity and exits from those investments. We assist our clients in accessing both the public and private capital markets in both complex underwritten securities offerings of $350 million or more and in smaller private placement transactions. During the past 10 years, we have assisted clients in raising more than $7 billion in both public and private debt and equity offerings.
Stevens & Lee is highly experienced in representing financial institutions in corporate governance and anti-takeover matters. We have been involved in several takeovers and attempted takeovers and have represented both acquirers and targets in bear-hug transactions, hostile tender offers, proxy contests and destabilization attempts which often precede a hostile takeover. Moreover, we have advised several clients on the very delicate and highly complex corporate governance issues that are presented when differences in strategic vision surface in the board room and threaten unity. Our experience in this area has given us great insight into the dynamic and sometimes competing interests of management, the Board of Directors, stockholders, the investment community at large and the financial and securities law regulatory authorities.
Advising clients – offerors and targets – in connection with unsolicited acquisition proposals, board destabilization attempts, proxy contests and other struggles for control of public companies demands lawyers with the experience and skill to meet the challenges created by today’s volatile corporate environment. Stevens & Lee lawyers advise clients on the implications of Pennsylvania, New Jersey and Delaware anti-takeover statutes, shareholder rights plans, takeover defense tactics and election contests for corporate control. We also skillfully handle many other delicate corporate governance matters. Our public company issuers are traded in the over-the-counter market and on NASDAQ and the New York Stock Exchange and we are well-versed in the requirements of each of those trading markets.
We advise clients on the implications of anti-takeover legislation and have implemented for a number of clients shareholder rights plans and other structural devices designed to retain decision-making processes in the board room. Particularly at annual meeting time, we also advise clients on the requirements of the institutional shareholder advisory services and on matters to be presented to shareholders, such as employee benefit plan design.
Stevens & Lee has extensive experience in dealing with and representing clients before the four federal bank and thrift regulatory agencies, as well as the state banking departments of Pennsylvania, Delaware, Maryland and New Jersey and the United States Department of Justice. We counsel clients regularly on all aspects of financial regulation, including federal and state requirements as they relate to consumer and commercial lending, deposits, payment systems, cash management, non-insured products, the safety and soundness of the institution and corporate responsibility. In securities and other regulatory matters, we represent a multi-billion dollar money market mutual fund and numerous additional short-term investment funds with aggregate assets under management in excess of $35 billion. We have assisted a number of financial institution clients before, during and after examinations and assist them in all facets of compliance, enforcement, penalties, and administrative practices, including civil and criminal penalties, administrative remedies, recordkeeping requirements, litigation, liability defenses and risk management. We also advise our clients on attorney/client privileged communications and internal investigations.
Stevens & Lee has assisted bank clients in the regulatory aspects of merger and acquisitions or bank-related businesses and in issues surrounding permissible holding companies and other bank and thrift activities, including inter and intra-state banking, branching and fiduciary matters through traditional and alternative delivery systems.
In addition, Stevens & Lee provides ongoing regulatory compliance consulting services to bank management, including analyzing and determining potential risks, developing and implementing action plans and monitoring compliance.
In the area of consumer finance, we advise financial institutions on state and federal regulatory compliance for their mortgage, home equity, auto, credit sale and other consumer lending programs. Specific matters in which we assist our clients are:
- Regulation Z and the Truth-in-Lending Act
- Regulation B and the Equal Credit Opportunity Act
- Regulation X and the Real Estate Settlement Procedures Act
- Regulation C and the Home Mortgage Disclosure Act
- Regulation M and the Consumer Leasing Act
- Regulation BB and the Community Reinvestment Act
- Regulation DD and the Truth-in-Savings Act
- Regulation CC and the Expedited Funds Availability Act
- Regulation E and the Electronic Fund Transfer Act
- ACH transactions
- FDIC deposit insurance regulations
- The Fair Credit Reporting Act
- The Fair Debt Collection Practices Act and state debt collection laws
- State and federal SAFE Act licensing and registration requirements
- Federal and state interest rate and usury law
- Government and private student loan requirements
- Escheat and abandoned property laws
- FTC Act and state unfair trade practice laws
- Bank and operating subsidiary preemption
- FHA, Ginnie Mae, Fannie Mae and Freddie Mac programs
- Fannie/Freddie Home Valuation Code of Conduct and state appraisal regulations
- Holding company and multi-state banking and lending problems
- State and federal subprime, “predatory,” and related lending laws
- USA PATRIOT Act, Bank Secrecy Act and related anti-money laundering laws
On behalf of our clients, we evaluate, structure and document consumer credit products and services. These include first and second mortgage loans, home equity credit arrangements, credit care and revolving loans, consumer leases, personal installment loans, student loans, retail lending, motor vehicle and other retail installment sale programs.
Government Sponsored Programs
We have advised the boards of directors and management of more than 15 Pennsylvania and New Jersey-based financial institutions in connection with their decisions to apply for TARP CPP funds. We have also advised clients in connection with or helped them apply for participation in Treasury’s Capital Assistance Program and are advising other institutions with less than $500 million in assets on the expanded CPP for smaller institutions.
In connection with TARP CPP, Stevens & Lee employee benefits lawyers have also worked closely with the firm’s banking lawyers on the executive compensation provisions of the American Recovery and Reinvestment Act of 2009 (ARRA) and the Treasury regulations intended to implement that statute.
Stevens & Lee lawyers, along with other professionals in the Stevens & Lee platform, are well-versed in the Treasury and Federal Reserve’s PPIP and TALF programs and the FDIC’s Temporary Liquidity Guaranty Program.
Stevens & Lee is highly experienced in all facets of financial services and public company litigation. We have particular technical experience in such matters as:
- Large-scale financial fraud
- Class action defense
- FINRA arbitration and other broker-dealer disputes
- Auditor liability claims
- Lender liability
- Tender offers or proxy contests
- Regulatory investigations and enforcement actions involving the SEC, FINRA and other regulatory organizations
- Consumer Financial Services (TILA, RESPA, ECOA, FCRA, FDCPA, etc.)
- UCC – Negotiable Instrument and Article 9
- Mortgage Fraud and Mortgage Related Litigation
- Mortgage Servicing Litigation
- Intellectual Property
- Corporate Governance
- Securities, Trust and Fiduciary
- Employee Benefits/ERISA
Structured Finance and Securitization
We offer a wide range of legal services to issuers, investors, mortgage companies, specialty finance companies, underwriters, servicers, trustees and others involved in securitization and other structured finance transactions. Our work in this area is highly diverse and covers a vast array of transaction types and asset classes, including:
- Auto loans
- Auto dealer floorplan receivables
- Credit card receivables
- Distressed consumer debt
- Equipment finance receivables
- Commercial loans
- Residential mortgage loans
- Home equity loans
- Student loans
- Trade receivables
We have substantial experience in tax and accounting advantaged cross-border structured finance transactions and other innovative structures. We dedicate a significant portion of time to actively monitoring and assessing regulatory economic accounting (such as FAS 166 and 167) and other factors impacting the securitization and banking industries and follow and advise clients regarding the various new and evolving government programs such as TALF and the Straight A Funding Conduit. We also work with our clients on the use of securitization techniques, such as resecuritization to mitigate capital problems.
Loan Trading and Servicing
Stevens & Lee has counseled clients in the purchase and sale of hundreds of pools of single and multi-family mortgage loans, student loans, commercial loans and various types of consumer loans with trades ranging in size from $1 million to billions of dollars. These trades involve a wide variety of buyers and sellers including:
- Savings institutions
- Mortgage companies
- Specialty finance companies
- The FDIC and FHA, housing authorities and other governmental units
- Insurance companies
- Credit unions
- Investment funds
- Fannie Mae and Freddie Mac
We have also been involved in the purchase and sale of loan portfolios of varying quality from portfolios of Fannie Mae and Freddie Mac eligible loans to those including loans in foreclosure and REO properties.
We represent loan servicers and investors in servicing and subservicing contract matters, the purchase and sale of servicing rights and the terminination of servicing agreements, and represent Pennsylvania Higher Education Assistance Agency (PHEAA) which maintains a service portfolio of approximately $98 billion in loan servicing and other matters.
Bankruptcy and Workout
Stevens & Lee represents financial institutions in all types of bankruptcy and financial restructuring proceedings. We have experience in all aspects of financial transactions and commercial collections and are able to approach bankruptcy and workout proceedings and corporate restructurings with a broad perspective. We have represented banks and other lending institutions; financially distressed companies; stockholders, bondholders and parties with other debt or quasi-equity positions; creditors’ committees; trade creditors, including manufacturers, insurers and others in bankruptcy courts throughout the country.
Contract Review and Technology
Stevens & Lee has extensive experience in the evaluation, structuring and negotiation of highly specialized information technology, vendor and outsourcing arrangements for financial services clients. We have developed core processing agreements of every kind for financial services clients, and their affiliates, and have engaged in acquisition, licensing and implementation of technical solutions. We also have assisted dozens of financial services providers in software systems integration issues, licensing and application service provider agreements for core and other processing systems, and have assisted them in matters as diverse as the establishment of both domestic and offshore e-mail response centers and call centers, the design and implementation of records retention programs, and IT and contract matters related to internet banking.
Stevens & Lee has significant expertise in IP due diligence and transition services, licensing and technology transfer issues in the context of mergers and acquisitions. We assisted a $40 billion financial institution in negotiating complex interrelated agreements representing a changeover of its core data processing functions from a single vendor to a team of independent vendors. This changeover affected application services provider agreements, account and item processing, electronic funds transfer, and related third party software licensing, development and implementation agreements.
Employee Benefits and Executive Compensation
Stevens & Lee advises clients on the contractual, tax, regulatory, change-in-control and fiduciary issues presented in employee benefits packages and executive compensation plans. We assist clients in the design and implementation of employment contracts, stock-based compensation plans, both qualified and non-qualified pension and welfare benefit programs and other executive compensation arrangements. We monitor all new industry developments, particularly as they pertain to financial institutions and counsel board compensation committees on best practices and peer group comparisons. We advise TARP and non-TARP entities on compliance with evolving Treasury and SEC guidelines as well as on the administration of deferred compensation programs to comply with IRC Section 409A. We also represent financial institutions in benefit integration issues following acquisitions and reductions in force.
Stevens & Lee has particular skill in working with financial services clients in developing compensation programs that provide varying degrees of benefits and compensation opportunities to all levels of employees through the combination of retirement and welfare benefits, executive compensation agreements, non-qualified deferred compensation and cash and equity-based incentive plans. Our full-service approach also provides financial analysis to executives with respect to stock option valuation and golden parachute excise tax calculations.
Equity incentive programs created for financial institutions include basic incentive and non-qualified stock option plans, as well as restricted stock, performance unit and phantom stock programs. We have implemented in excess of 30 employee stock purchase plans as a compliment to an overall compensation program to provide employees with additional equity acquisition opportunities.
Labor and Employment
Stevens & Lee combines an understanding of the needs of employers with its broad experience in labor and employment matters to provide financial institution clients with practical solutions to complex problems. Financial institutions have special challenges in labor and employment matters and human resource management. These challenges arise from such diverse areas as regulatory restriction to high employee turnover in lower wage positions.
Workforce restructuring presents unique challenges to financial institution employers both in the context of mergers and acquisitions and in re-aligning the workforce to meet internal and external economic challenges. Our experience representing financial institution employers has given us an understanding of how services are delivered to customers and allows us to provide creative solutions to staffing model problems. We assist in analyzing staff reduction decisions to ensure that potential claims of employment discrimination are minimized.
Having counselors and advisors who understand the business of financial institutions and can assist in educating and persuading outside decision makers is imperative when faced with employment litigation at the administrative agency level or in the courts. For example, our understanding of why and how it is important for banks to address teller discrepancies has helped us to convince investigators from state employment discrimination agencies of the fairness of disciplinary action taken against tellers who do not meet cash management standards.
The current political climate is likely to bring about significant reform to the nation’s laws governing union organizing. With the impending passage of the Employee Free Choice Act (EFCA) unions have made no secret of their goal to extend their penetration into the organization of employees working in financial services. Stevens & Lee has extensive experience representing employers in union organizing as well as collective bargaining. We represent one of the few banks in this country whose employees are represented by a union.
We work with clients to protect their interests before state and federal legislature and regulatory agencies. As the financial services industry continues to change, the broad experience, extensive relationships and recognized credibility we have established over our long history are invaluable assets which we employ on behalf of clients as they seek to respond to a constantly shifting regulatory environment.
For more information regarding the services we provide to financial institutions contact David W. Swartz at 610.478.2184.