Pub. 3 2013-2014 Issue 5

14 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S • Issued before May 19, 2010, by a depository institution holding company with total consolidated assets of less than $15 billion • Issued beforeMay 19, 2010, by amutual holding company TruPS CDOs with amajority of collateral issued by real estate investment trusts or insurance companies would not benefit from the exemption and may still be subject to divestiture by July 21, 2015. To expedite the review process, the agencies have provided a nonexclusive list of issuers that meet the requirements of the interim final rule, which includes 85 of the 108 TruPS CDOs is- sued. If a TruPS CDO is not on this list, youwill need to determine if another exemption is available. The relief allows banks to continue activities related to exist- ing role(s) as sponsor or trustee for these securitizations and to continue acting as a market maker in TruPS CDOs. Accounting Implications & Next Steps Without this interim rule, banks would have been required under generally accepted accounting principles to take an im- mediate write-down of TruPS CDOs with a fair value less than their carrying value by recognizing an other-than-temporary impairment. “The agencies’ accounting staffs believe that, ‘consistent with GAAP, any actions in January 2014 that occur before the issuance of December 31, 2013, financial reports, including the FR Y-9C and the Call Report, should be considered when preparing those financial reports.’ The agencies’ decision in this interimfinal rule to permit a banking entity to retain certain TruPS CDOs should be factored into the accounting analysis,” the agencies stated in a combined news release. Banks should quickly review and document that their hold- ings comply with the interim rule’s requirements to support the nonwrite-down of TruPS CDOs. BKD also has issued amore in-depth paper—available at bkd. com—reviewing the definition of covered funds and highlight- ing other common investments that may be prohibited by the final rule. n This information was written by qualified, experienced BKD professionals, but ap - plying specific information to your situation requires careful consideration of facts and circumstances. Consult your BKD advisor before acting on any matter covered here. Article reprinted with permission from BKD, LLP, bkd.com. All rights reserved.  Relief Approved  continued from page 12 A legal partner you can trust. Our advantage is simple—we understand the business. Stinson Leonard Street’s banking attorneys have broad experience in matters related to financial services, including commercial lending, mergers and acquisitions, regulations and compliance, litigation and payment systems. Bank on our reputation and knowledge. stinsonleonard.com Ernie Panasci Kristin Godfrey The choice of a lawyer is important and should not be based solely on advertisements. 5613 DTC Parkway, Ste. 970 | Greenwood Village, CO 80111 | 303.376.8400 Offices in Denver as well as Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix; Washington, D.C.; Wichita and Overland Park, Kan.; Omaha, Neb.; Bismarck, N.D.; and Decatur, Ill. Perry Glantz Deborah Bayles 20638 CO Banker Ad_Half pg 1/6/14 11:20 AM Page 1