New and Proposed Regulations

New Regulations:

Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships With, Hedge Funds and Private Equity Funds-Effective Date: The effective date for amendatory instructions 1 through 14 (OCC), 16 through 29 (Board), 31 through 44 (FDIC), and 46 through 58 (CFTC) is January 1, 2020; the effective date for amendatory instructions 60 through 73 (SEC) is January 13, 2020; and the effective date for the addition of appendices Z at amendatory instructions 15 (OCC), 30 (Board), and 45 (FDIC) is January 1, 2020, through December 31, 2020, except for amendatory instruction 74 (SEC), which is effective January 13, 2020, through December 31, 2020.  Compliance date: Banking entities must comply with the final amendments by January 1, 2021. Until the compliance date, banking entities must continue to comply with the 2013 rule (as set forth in appendices Z to 12 CFR parts 44, 248, and 351 and 17 CFR parts 75 and 255). Alternatively, a banking entity may voluntarily comply, in whole or in part, with the amendments adopted in this release prior to the compliance date, subject to the agencies’ completion of necessary technological changes.
SUMMARY: The OCC, Board, FDIC, SEC, and CFTC are adopting amendments to the regulations implementing section 13 of the Bank Holding Company Act. Section 13 contains certain restrictions on the ability of a banking entity and nonbank financial company supervised by the Board to engage in proprietary trading and have certain interests in, or relationships with, a hedge fund or private equity fund. These final amendments are intended to provide banking entities with clarity about what activities are prohibited and to improve supervision and implementation of section 13.  (Federal Register Notice)

Responsible Business Conduct: Self-Assessing, Self-Reporting, Remediating, and Cooperating (CFPB BULLETIN 2020-01)-Effective Date: This Bulletin is applicable on March 20, 2020
SUMMARY: In 2013, the Bureau of Consumer Financial Protection (Bureau) issued a Bulletin that identified several activities that businesses could engage in that could prevent and minimize harm to consumers, referring to these activities as ``responsible conduct.'' The Bureau is issuing this updated Bulletin to clarify its approach to responsible conduct and to reiterate the importance of such conduct.  (Federal Register Notice)

Order of Temporary Extension of Maturity Limits for Short-Term Investment Funds-Effective Date: The administrative order is effective March 23, 2020, and is applicable beginning March 21, 2020.
SUMMARY: The OCC has adopted an interim final rule adding a reservation of authority provision to the OCC's short-term investment fund (STIF) rule (STIF Rule) for national banks acting in a fiduciary capacity. The reservation of authority addresses the STIF Rule's limits on weighted average portfolio maturity, weighted average portfolio life maturity, and the method for determining those limits. The OCC has also issued an administrative order pursuant to the reservation of authority contained in the interim final rule. The order states that banks seeking to comply with the STIF Rule's portfolio maturity and life limits will be deemed to be in compliance with those requirements, if the STIF maintains a dollar-weighted average portfolio maturity of 120 days or less, and the STIF maintains a dollar-weighted average portfolio life maturity of 180 days or less.  (Federal Register Notice)

Regulation D: Reserve Requirements of Depository Institutions-Effective Date: The amendments to part 204 (Regulation D) are effective March 24, 2020.  Applicability date: The IORR and IOER rate changes are applicable on March 16, 2020
SUMMARY: The Board of Governors of the Federal Reserve System (``Board'') is amending Regulation D (Reserve Requirements of Depository Institutions) to revise the rate of interest paid on balances maintained to satisfy reserve balance requirements (``IORR'') and the rate of interest paid on excess balances (``IOER'') maintained at Federal Reserve Banks by or on behalf of eligible institutions. The final amendments specify that IORR is 0.10 percent and IOER is 0.10 percent, a 1.00 percentage point decrease from their prior levels. The amendments are intended to enhance the role of IORR and IOER in maintaining the Federal funds rate in the target range established by the Federal Open Market Committee (``FOMC'' or ``Committee'').  (Federal Register Notice)

Regulatory Capital Treatment for High Volatility Commercial Real Estate (HVCRE) Exposures-Effective Date: April 1, 2020.
SUMMARY: The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) are adopting a final rule to revise the definition of ``high volatility commercial real estate (HVCRE) exposure'' in the regulatory capital rule. This final rule conforms this definition to the statutory definition of ``high volatility commercial real estate acquisition, development, or construction (HVCRE ADC) loan,'' in accordance with section 214 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The final rule also clarifies the capital treatment for loans that finance the development of land under the revised HVCRE exposure definition.  (Federal Register Notice)

Securitization Safe Harbor Rule-Effective Date: May 4, 2020
SUMMARY: The FDIC is amending its securitization safe harbor rule, which relates to the treatment of financial assets transferred in connection with a securitization transaction, in order to eliminate a requirement that the securitization documents require compliance with Regulation AB of the Securities and Exchange Commission in circumstances where Regulation AB by its terms would not apply to the issuance of obligations backed by such financial assets.  (Federal Register Notice)

Standardized Approach for Calculating the Exposure Amount of Derivative Contracts-Effective Date:  March 31, 2020
SUMMARY: In light of recent economic disruptions caused by the COVID-19 virus and recent volatility in U.S. financial markets, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) are issuing a document to allow depository institutions and depository institution holding companies to implement the final rule titled Standardized Approach for Calculating the Exposure Amount of Derivative Contracts (SA-CCR rule) for the first quarter of 2020, on a best efforts basis.  (Federal Register Notice)

Proposed Regulations:

Community Reinvestment Act Regulations; Extension of Comment Period - DATES: The comment period for the CRA-related NPR published on January 9, 2020 (85 FR 1204),\1\ is extended from March 9, 2020, to April 8, 2020.
SUMMARY: On January 9, 2020, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) published in the Federal Register a Notice of Proposed Rulemaking (NPR) entitled ``Community Reinvestment Act Regulations'' proposing comprehensive amendments to the rules implementing the Community Reinvestment Act (CRA). The NPR provided for a 60-day comment period, which would have closed on March 9, 2020. The FDIC and the OCC have determined that an extension of the comment period until April 8, 2020, is appropriate. This action will allow interested persons additional time to analyze the proposal and prepare their comments.  (Federal Register Notice)

Unsafe and Unsound Banking Practices: Brokered Deposits Restrictions - DATES: Comments must be received by the FDIC no later than April 10, 2020.
SUMMARY: The FDIC is inviting comment on proposed revisions to its regulations relating to the brokered deposits restrictions that apply to less than well capitalized insured depository institutions. The proposed rule would create a new framework for analyzing certain provisions of the ``deposit broker'' definition, including ``facilitating'' and ``primary purpose.'' The proposed rule would also establish an application and reporting process with respect to the primary purpose exception. The application process would be available to insured depository institutions and third parties that wish to utilize the exception.  (Federal Register Notice)

Debt Collection Practices (Regulation F) - DATES: Comments must be received on or before May 4, 2020.
SUMMARY: The Bureau of Consumer Financial Protection (Bureau) proposes to amend Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA) and currently contains the procedures for State application for exemption from the provisions of the FDCPA. On May 21, 2019, the Bureau published in the Federal Register a proposed rule (May 2019 Proposed Rule) that would prescribe Federal rules governing the activities of debt collectors, as that term is defined in the FDCPA. This proposal supplements the May 2019 Proposed Rule by proposing to require debt collectors to make certain disclosures when collecting time-barred debts.  (Federal Register Notice)

Debt Collection Practices (Regulation F); Extension of Comment Period - DATES: The comment period for the debt collection SNPRM published March 3, 2020, at 85 FR 12672, is extended. Responses to the SNPRM must now be received on or before June 5, 2020.
SUMMARY: On March 3, 2020, the Bureau of Consumer Financial Protection (Bureau) published in the Federal Register a Supplemental Notice of Proposed Rulemaking (SNPRM) requesting comment on the Bureau's proposal to amend Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA), to require debt collectors to make certain disclosures when collecting time-barred debts. The SNPRM provided a 60-day comment period that was set to close on May 4, 2020. To allow interested persons more time to consider and submit their comments, the Bureau has determined that an extension of the comment period until June 5, 2020, is appropriate.  (Federal Register Notice)

Regulatory Capital Rule: Eligible Retained Income - DATES: The interim final rule is effective March 20, 2020. Comments on the interim final rule must be received no later than May 4, 2020.
SUMMARY: In light of recent disruptions in economic conditions caused by the coronavirus disease 2019 (COVID-19) and current strains in U.S. financial markets, the Board, OCC and FDIC (together, the agencies) are issuing an interim final rule that revises the definition of eligible retained income for all depository institutions, bank holding companies, and savings and loan holding companies subject to the agencies' capital rule (together, a banking organization or banking organizations). The revised definition of eligible retained income will make any automatic limitations on capital distributions that could apply under the agencies' capital rules more gradual.  (Federal Register Notice)

Regulatory Capital Rule: Money Market Mutual Fund Liquidity Facility - DATES: The interim final rule is effective March 23, 2020. Comments on the interim final rule must be received no later than May 7, 2020.
SUMMARY: To provide liquidity to the money market sector to help stabilize the financial system, the Board of Governors of the Federal Reserve System authorized the Federal Reserve Bank of Boston to establish the Money Market Mutual Fund Liquidity Facility (MMLF), pursuant to section 13(3) of the Federal Reserve Act. Under the MMLF, the Federal Reserve Bank of Boston will extend non-recourse loans to eligible financial institutions to purchase certain types of assets from money market mutual funds (MMFs). To facilitate this Federal Reserve lending program, the Board, OCC and FDIC (together, the agencies) are adopting this interim final rule to allow banking organizations to neutralize the regulatory capital effects of participating in the program. This treatment would extend to the community bank leverage ratio.  (Federal Register Notice)

Regulatory Capital Rule: Revised Transition of the Current Expected Credit Losses Methodology for Allowances - DATES: Effective date: The interim final rule is effective March 31, 2020.  Comment date: Comments on the interim final rule must be received no later than May 15, 2020.
 SUMMARY: The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) are inviting comment on an interim final rule that delays the estimated impact on regulatory capital stemming from the implementation of Accounting Standards Update No. 2016-13, Financial Instruments--Credit Losses, Topic 326, Measurement of Credit Losses on Financial Instruments (CECL). The interim final rule provides banking organizations that implement CECL before the end of 2020 the option to delay for two years an estimate of CECL's effect on regulatory capital, relative to the incurred loss methodology's effect on regulatory capital, followed by a three-year transition period. The agencies are providing this relief to allow such banking organizations to better focus on supporting lending to creditworthy households and businesses in light of recent strains on the U.S. economy as a result of the coronavirus disease 2019 (COVID-19), while also maintaining the quality of regulatory capital.  (Federal Register Notice)

Regulation D: Reserve Requirements of Depository Institutions - DATES:      Effective date: The amendments to part 204 (Regulation D) are effective on March 24, 2020.   Applicability date: The changes to reserve requirement ratios are applicable on March 26, 2020.  Comments: Comments must be received on or before May 26, 2020.
SUMMARY: The Board of Governors of the Federal Reserve System (``Board'') is amending its Regulation D (Reserve Requirements of Depository Institutions, 12 CFR part 204) to lower reserve ratios on transaction accounts maintained at depository institutions to zero percent.  (Federal Register Notice)

​For More Information Contact:
​Jennifer Heaton, Vice President of Government & Executive Affairs