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May 3, 2024

Breaking Up is Hard to Do

By Elizabeth Donaldson, Dowse Bradwell "Brad" Rustin, IV, Lashania White, Marianna McDevitt

Bank Director

The partnerships banks have established with third parties have been under regulatory scrutiny recently. In turn, it has banks reassessing relationships and, in many instances, severing ties all together. In an article published by Bank Director, Nelson Mullins partners Elizabeth Donaldson and Brad Rustin and associates Lashania White and Marianna McDevitt, provide insightful tips to consider when scaling back or terminating these strategic partnerships.

In an excerpt from the article, they said, in part:

“Successfully winding down or terminating relationships with partners involves careful planning, and banks should consider the implications of exiting a particular relationship from the outset. A key feature of effective partnerships is clarifying the obligations of both parties and understanding the consequences of non-compliance. Contracts should clearly define the obligations of both the partner and the bank to mitigate any confusion or uncertainty about the assignment of risk controls. If a partner fails to meet their obligations, the contract should spell out mechanisms for temporary suspension, timelines for remediation and, ultimately, the process for termination.”

Read the entire article here.