Courts consistently hold that, despite a special relationship, banks have no duty to disclose customers' check-kiting activities to other banks or to third parties

Article Abstract:

Case law states that competing banks have no duty to inform each other or third parties of suspicions of a check-kiting scheme. This rule of thumb has certain exceptions, mainly the duty to disclose when a contractual or fiduciary relationship exists. Since banks are obliged to maintain confidentiality regarding their customers' affairs, they might expose themselves to various kinds of liability if they disclosed information or suspicions about a customer's affairs to third parties. Common law theories of recovery and Uniform Commercial Code provisions on check collection form the statutory basis for banks' duty to inform.

Checks, Check fraud

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Regulation of foreign banks tightens

Article Abstract:

The Federal Deposit Insurance Corp. Improvement Act of 1991 gives the Federal Reserve Board (FRB) increased oversight authority regarding the subsidiaries of foreign banks. The FRB has indicated it considers this increased mandate important and will implement procedures in 1993. The new law shows congressional intent to enforce foreign branch compliance with many banking laws formerly considered to apply only to domestic banks. Remedies the banking regulators may seek and procedures foreign bank subsidiaries should follow to minimize liability are listed.

United States. Federal Reserve Board, Powers and duties

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Setting up in America is not easy: in the aftermath of the recent BCCI scandal, foreign banks wishing to expand operations to this country face procedural hardships

Article Abstract:

The Foreign Bank Supervision Enhancement Act of 1991 requires that the Federal Reserve scrutinize foreign banks seeking to start or expand operations in the US. The procedures the Fed has followed are subjective and often cumbersome and time-consuming, revolving around three standards: whether the bank is comprehensively supervised in its home country, whether operations information is available, and who its US managers will be. The first bank from a given country often bears the brunt in time and money.

international

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