They’ve Got Next: Banking and Finance Fresh Face Randy Benjenk

After serving as regulatory counsel on several major bank mergers, Covington & Burling’s Randy Benjenk was ready to take the lead role in taking his clients through the approval process.

Benjenk guided a merger of City First Bank of Washington, D.C. and Los Angeles’s Broadway Bank creating the largest Black bank in the U.S. He advised the banks as the country went through a racial reckoning sparked by the murder of George Floyd, which made the work even more special.

“It’s somewhat a case of work reflecting life,” Benjenk said.

City First Bank is a community development financial institution, meaning that it focuses on lower income communities and looks to make profits, but not maximize them. CDFIs are certified by the Treasury Department, which has dedicated funding to help support those institutions.

Combining with Broadway Bank in a deal announced in April 2020 created a $1 billion bank that Benjenk says will help small businesses and other borrowers that wouldn’t necessarily get the same level of assistance from a larger bank.

“All of our clients are finding ways to get dollars to people who need it. City First has really made it its mission to get it to the most vulnerable,” Benjenk said.

The City First-Broadway Bank deal required regulatory approvals from the Office of the Comptroller of the Currency, which regulates national banks, as well as the Federal Reserve. The state of California also had to review portions of the deal.

Approval from the OCC came on Christmas Eve 2020, while the Fed signed off on the deal on Dec. 28, 2020.

It was a “nice present for the client,” Benjenk said.

Along with the City First merger, in 2020 Benjenk focused on guiding clients through the coronavirus pandemic and the federal government’s response to it and banks’ response to a major rewrite of the Community Reinvestment Act, a 1977 anti-redlining law, by regulators.

Benjenk’s already extensive experience in banking law put him in a strong position to help clients navigate those delicate areas.

“All these skills that we as regulatory lawyers developed over the years were suddenly in demand,” said Benjenk, who graduated from Harvard Law School in 2012.

The federal government created a series of programs, including the Paycheck Protection Program, that shoveled billions of dollars of assistance to small businesses through banks. But the rules and guidance about how banks should process the loans, seek repayment and even forgive the loans were constantly in flux, putting Benjenk in demand to help banks figure out what they could and couldn’t do.

“There’s a lot of triage” in such an uncertain environment, Benjenk said.

Even as banks were trying to figure out the Covid-19 landscape, regulators were working their way through a complicated rewrite of the CRA, which had last been updated in 1993.

The CRA allows regulators to measure banks’ lending and investment into low- and moderate-income communities, and a poor grade from regulators can limit mergers or branch growth. The law is overseen by the OCC, the Fed and the Federal Deposit Insurance Corp., and the three in the past have worked together to write the rules.

Not so in May 2020, when the OCC under former Comptroller Joseph Otting, a Trump appointee, released new CRA rules without the Fed or the FDIC.

The Fed then put out its own outline for CRA rules, which would go in a different direction than the OCC’s, that September.

The OCC under the Biden administration has since announced that it would rescind its CRA rule and work with the Fed and FDIC on a joint rule.

The speed with which the OCC attacked its CRA rewrite, the commencement of the Fed’s standalone process and the Biden administration’s abandonment of the OCC’s rule was a lot for banks to process, said Dafina Stewart, a senior vice president and associate general counsel for the Bank Policy Institute, a trade group Benjenk has worked with on the CRA since 2017.

Benjenk was invaluable in helping guide a trade group consisting of some of the biggest names in banking to a unified position during on those changes, she said.

“One of the best things about him is he’s fairly level-headed and always keeps his cool,” Stewart said, adding that that calmness was vital in getting BPI’s members aligned on a unified position on the CRA changes.