What do banking lawyers do?

This article discusses what banking lawyers do, how they assist both banks and consumers, and what Canada’s banking regulations are
What do banking lawyers do?

Among the professionals who keep up with the day-to-day transactions of banks and financial institutions are banking lawyers.

Behind the scenes, these lawyers provide a wide array of services to their clients, both in and out of the courtroom. What do banking lawyers do and what do they engage in? If you’re interested in becoming one, then this article is for you.

What do banking lawyers do?

The work of Canadian banking lawyers stretches from offering legal advice to helping clients protect their rights. Their services also include assisting clients with finance-related matters, commercial transactions, and corporate governance.

While banking lawyers’ main clients are the domestic banks and foreign branches of banks running in the country, they may also include other parties such as:

  • consumers of financial products
  • direct clients of banks
  • financial institutions other than banks

Most importantly, with the fast-evolving regulations that banks need to comply with, banking lawyers are a must in the operations of banks and financial institutions. For example, Canada’s Bank Act is constantly amended, with an update taking effect in July 2022. Banking lawyers can help their clients navigate these changes.

Watch this video for this amendment’s short explanation:

Want to know more about Canada’s banking regulations and what banking lawyers do? Contact a lawyer in your area. If you’re in Montréal, reach out to any of the best banking lawyers in Québec as ranked by Lexpert.

Corporate and business management

Canadian banking lawyers can help clients address their financing needs by transacting with potential investors and financers.

They also advise clients on how to comply with Canadian banking laws and regulations whenever investments and securities are involved, especially from foreign sources.

Banking lawyers also assess a bank’s compliance with these laws and regulations.

Forming and enforcement of contracts

In most financial transactions of banks, there is the presence of contracts – from capital financing, to transacting with borrowers or lenders, and even when growing assets or investments.

It is one of the jobs of banking lawyers to draft, review, negotiate, and even enforce these contracts to ensure that their clients are protected.

It is also the role of banking lawyers to maintain the contractual relationship among the bank, its clients, and other stakeholders.

They may also be involved in conducting due diligence and fact-checking on the parties that their client-bank is transacting with.

All of these are made possible through the Canadian banking lawyers’ knowledge of contract law and the applicable common law.

Compliance with Canadian banking regulations

Banking lawyers in Canada have extensive knowledge of Canadian banking regulations. They can help clients navigate the overlapping – and sometimes confusing – laws and regulations governing banks.

Although banking regulations apply to both domestic and foreign banks operating in Canada, they may also apply to other financial institutions. A banking lawyer can help financial institutions comply with these banking lawys and regulations.

Litigation and alternative dispute resolution

Banks and financial institutions are prone to litigation either as a plaintiff or as a defendant. This is another area where a banking lawyer can help their clients.

The usual cause of action for banks to sue their clients or other stakeholders is when contracts are breached. A banking lawyer who is into litigation knows court rules and procedures, ensuring that every step is taken to preserve the rights of their clients.

Consumer protection

Canadian banking lawyers can also help customers and clients sue their banks or financial institutions. A banking lawyer can help when a customer or client is aggrieved by a bank or by a financial institution, and when the resolution that they offer is not just.

From being transactional in nature, a banking lawyer in Canada may shift to litigation, helping clients in filing a court case until a final decision is reached.

In other cases, and when clients agree to it, a banking lawyer may also use alternative dispute resolution in settling a client’s case. These methods include:

  • negotiating with the bank or financial institution
  • submitting the issue to mediation or arbitration

What are the specialization areas of banking lawyers in Canada?

Since banking law is a broad legal practice area, lawyers may specialize in certain areas of banking law.

These specializations may include:

  • acquisition finance
  • asset financing
  • corporate finance
  • insolvency and restructuring
  • insurance
  • lending and mortgages
  • mergers and acquisitions
  • private equities
  • project finance

These specializations may also overlap with each other, depending on the needs of the client.

Where do Canadian banking lawyers work?

A banking lawyer may either do private practice or work for the government.

When in private practice, Canadian banking lawyers become part of the legal team for banks, acting as counsel or doing litigation whenever necessary.

Working for the government may include working for regulatory bodies or agencies that have jurisdiction over banks and other financial institutions.

What banking laws do banking lawyers in Canada deal with?

There are many federal, provincial or territorial laws which banks (and financial institutions) must follow.

These laws and regulations range from ensuring financial stability and consumer protection to restricting illegal activities related to financial services.

Other Canadian laws on liquidation, bankruptcy, insolvency, fraud, money-laundering and terrorist financing are also dealt with by a banking lawyer.

One example of regulatory laws at the federal level is the Bank Act. This law governs the incorporation and corporate governance of banks. It also classifies banks into three categories, with certain restrictions for foreign banks in the country.

As to consumer protection, examples of Canadian laws include the provincial or territorial consumer protection statutes.

For instance, the Business Practices and Consumer Protection Act is British Columbia’s law that protects customers of banks and other financial institutions against unfair business practices.

In addition to Canadian laws, a banking lawyer is also knowledgeable of foreign and international laws that may apply to their clients.

This applies if transactions of their client-bank cross multiple jurisdictions, or if their client-bank is a foreign entity itself doing business in Canada.

Learn more about what banking lawyers do – contact one of the Lexpert-Ranked banking and financial institution lawyers in Canada.