New and Proposed Regulations
Loans in Areas Having Special Flood Hazards-Effective Date July 1, 2019.
The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), the Farm Credit Administration (FCA), and the National Credit Union Administration (NCUA) are amending their regulations regarding loans in areas having special flood hazards to implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act). Specifically, the final rule requires regulated lending institutions to accept policies that meet the statutory definition of ``private flood insurance'' in the Biggert-Waters Act; and permits regulated lending institutions to exercise their discretion to accept flood insurance policies issued by private insurers and plans providing flood coverage issued by mutual aid societies that do not meet the statutory definition of ``private flood insurance,'' subject to certain restrictions. (Federal Register Notice)
Disclosure of Financial and Other Information by FDIC-Insured State Nonmember Banks-Effective Date April 17, 2019.
The Federal Deposit Insurance Corporation (FDIC) is amending its regulations by rescinding and removing its regulations entitled Disclosure of Financial and Other Information By FDIC-Insured State nonmember Banks. Upon the removal of the regulations, all insured state Nonmember banks and insured state-licensed branches of foreign banks (collectively, ``banks'') would no longer be subject to the annual disclosure statement requirement set out in the existing regulations. The financial and other information that has been subject to disclosure by individual banks under the regulations is publicly available through the FDIC's website. (Federal Register Notice)
Delay of Effective Date: Regulatory Capital Rule: Implementation and Transition of the Current Expected Credit Losses Methodology for Allowances and Related Adjustments to the Regulatory Capital Rule and Conforming Amendments to Other Regulations-Effective Date July 1, 2019.
On February 14, 2019, the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (collectively, the agencies) published in the Federal Register a final rule to address changes to credit loss accounting under U.S. generally accepted accounting principles, including banking organizations' implementation of the current expected credit losses methodology (CECL) (final rule). The final rule had an effective date of April 1, 2019, and provides that banking organizations may early adopt the final rule prior to that date. The agencies have determined that a delay of the effective date to July 1, 2019, is appropriate. (Federal Register Notice)
Regulatory Capital Rule: Implementation and Transition of the Current Expected Credit Losses Methodology for Allowances and Related Adjustments to the Regulatory Capital Rule and Conforming Amendments to Other Regulations-Effective Date April 1, 2019.
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 address changes to credit loss accounting under U.S. generally accepted accounting principles, including banking organizations' implementation of the current expected credit losses methodology (CECL). The final rule provides banking organizations the option to phase in over a three-year period the day-one adverse effects on regulatory capital that may result from the adoption of the new accounting standard. In addition, the final rule revises the agencies' regulatory capital rule, stress testing rules, and regulatory disclosure requirements to reflect CECL, and makes conforming amendments to other regulations that reference credit loss allowances. (Federal Register Notice)
Technical Specifications for Submissions to the Prepaid Account Agreements Database - Effective Date April 1, 2019.
Beginning on April 1, 2019, prepaid account issuers are required to submit their currently-offered prepaid account agreements to the Bureau of Consumer Financial Protection (Bureau), to be posted on the Bureau's website. The Bureau is issuing technical specifications for those submissions, including the URL for the website at which issuers (or their designees) can register and submit their prepaid account agreements. This document relates to a final rule published in the Federal Register on November 22, 2016, as amended on April 25, 2017 and February 13, 2018, regarding prepaid accounts under Regulations E and Z. DATES: The requirement to submit prepaid account agreements on a rolling basis to the Bureau becomes effective on April 1, 2019. Issuers must submit to the Bureau no later than May 1, 2019 all prepaid account agreements they offer as of April 1, 2019. (Federal Register Notice)
Amendments to the Capital Plan Rule-Effective Date March 13, 2019.
The Board is amending the capital plan rule to limit the scope of potential objections to a firm's capital plan on the basis of qualitative deficiencies in the firm's capital planning process (qualitative objection). In particular, effective immediately, the Board will no longer issue a qualitative objection under the capital plan rule to a firm if the firm has been subject to a potential qualitative objection for four consecutive years, and the firm does not receive a qualitative objection in the fourth year of that period. In addition, except for certain firms that have received a qualitative objection in the immediately prior year, the Board will no longer issue a qualitative objection to any firm effective January 1, 2021. DATES: Effective date: March 13, 2019. Applicability date: The removal of the qualitative objection under the capital plan was applicable on March 6, 2019. (Federal Register Notice)
Limited Exception for a Capped Amount of Reciprocal Deposits From Treatment as Brokered Deposits-Effective Date March 6, 2019.
The FDIC is amending its regulations that implement brokered deposits and interest rate restrictions to conform with recent changes to section 29 of the Federal Deposit Insurance Act made by section 202 of the Economic Growth, Regulatory Relief, and Consumer Protection Act related to reciprocal deposits, which took effect on May 24, 2018. The FDIC is also making conforming amendments to the FDIC's regulations governing deposit insurance assessments. (Federal Register Notice)
Truth in Lending Act (Regulation Z) Adjustment to Asset-Size Exemption Threshold-Effective Date February 4, 2019
The Bureau of Consumer Financial Protection (Bureau) is amending the official commentary that interprets the requirements of the Bureau's Regulation Z (Truth in Lending) to reflect a change in the asset-size threshold for certain creditors to qualify for an exemption to the requirement to establish an escrow account for a higher-priced mortgage loan based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Based on the 2.6 percent increase in the average of the CPI-W for the 12-month period ending in November 2018, the exemption threshold is adjusted to increase to $2.167 billion from $2.112 billion. Therefore, creditors with assets of less than $2.167 billion (including assets of certain affiliates) as of December 31, 2018, are exempt, if other requirements of Regulation Z also are met, from establishing escrow accounts for higher-priced mortgage loans in 2019. (Federal Register Notice)
Regulatory Capital Rule: Capital Simplification for Qualifying Community Banking Organizations-DATES: Comments must be received by April 9, 2019.
SUMMARY: The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) are inviting public comment on a notice of proposed rulemaking (proposal) that would provide for a simple measure of capital adequacy for certain community banking organizations, consistent with section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. Under the proposal, most depository institutions and depository institution holding companies that have less than $10 billion in total consolidated assets, that meet risk-based qualifying criteria, and that have a community bank leverage ratio (as defined in the proposal) of greater than 9 percent would be eligible to opt into a community bank leverage ratio framework. Such banking organizations that elect to use the community bank leverage ratio and that maintain a community bank leverage ratio of greater than 9 percent would not be subject to other risk-based and leverage capital requirements and would be considered to have met the well capitalized ratio requirements for purposes of section 38 of the Federal Deposit Insurance Act and regulations implementing that section, as applicable, and the generally applicable capital requirements under the agencies' capital rule. (Federal Register Article)
Margin and Capital Requirements for Covered Swap Entities Dates: The Interim final rule is effective March 19, 2019. Comments should be received on or before April 18, 2019.
SUMMARY: The OCC, Board, FDIC, FCA, and FHFA (each an Agency and, collectively, the Agencies) are adopting and invite comment on an interim final rule amending the Agencies' regulations that require swap dealers and security-based swap dealers under the Agencies' respective jurisdictions to exchange margin with their counterparties for swaps that are not centrally cleared (Swap Margin Rule). The Swap Margin Rule takes effect under a phased compliance schedule stretching from 2016 through 2020, and the dealers covered by the rule continue to hold swaps in their portfolios that were entered into before the effective dates of the rule. Those swaps are grandfathered from the Swap Margin Rule's requirements until they expire according to their terms. There are currently financial services firms located within the United Kingdom (U.K.) that conduct swap dealing activities subject to the Swap Margin Rule. The U.K. has provided formal notice of its intention to withdraw from the European Union (E.U.) on March 29, 2019. If this transpires without a negotiated agreement between the U.K. and E.U., these entities located in the U.K. may not be authorized to provide full-scope financial services to swap counterparties located in the E.U. The Agencies' policy objective in developing the interim final rule is to address one aspect of the scenario likely to ensue, whereby entities located in the U.K. might transfer their existing swap portfolios that face counterparties located in the E.U. over to an affiliate or other related establishment located within the E.U. or the United States (U.S.). The Agencies seek to address industry concerns about the status of grandfathered swaps in this scenario, so the industry can focus on making preparations for swap transfers. These transfers, if carried out in accordance with the conditions of the interim final rule, will not trigger the application of the Swap Margin Rule to grandfathered swaps that were entered into before the compliance dates of the Swap Margin Rule. (Federal Register Notice)
Assessment of Fees: Dates: Comments must be received by April 19, 2019.
SUMMARY: The Office of the Comptroller of the Currency (OCC) proposes to revise its assessment rules to provide partial assessment refunds to national banks, Federal savings associations, and Federal branches and agencies of foreign banks (collectively, banks under OCC jurisdiction) that exit OCC jurisdiction within the first half of each six-month period beginning the day after the date of the second or fourth quarterly Consolidated Report of Condition and Income (Call Report). The proposed rule would not change the current dates of collection for assessments nor would it change the way in which assessments are calculated for banks that remain under the OCC's supervision. The proposed rule would also make technical changes to the assessments rules. (Federal Register Article)
Assessments: DATES: Comments must be received on or before April 22, 2019.
SUMMARY: The Federal Deposit Insurance Corporation (FDIC) invites public comment on a notice of proposed rulemaking (NPR or proposal) that would amend its deposit insurance assessment regulations to apply the community bank leverage ratio (CBLR) framework to the deposit insurance assessment system. The FDIC, the Board of Governors of the Federal Reserve System (Federal Reserve) and the Office of the Comptroller of the Currency (OCC) (collectively, the Federal banking agencies) recently issued an interagency proposal to implement the community bank leverage ratio (the CBLR NPR). Under this proposal, the FDIC would assess all banks that elect to use the CBLR framework (CBLR banks) as small banks. Through amendments to the assessment regulations and corresponding changes to the Consolidated Reports of Condition and Income (Call Report), CBLR banks would have the option of using either CBLR tangible equity or tier 1 capital for their assessment base calculation, and using either the CBLR or the tier 1 leverage ratio for the Leverage Ratio that the FDIC uses to calculate an established small bank's assessment rate. Through this NPR, the FDIC also would clarify that a CBLR bank that meets the definition of a custodial bank would have no change to its custodial bank deduction or reporting items required to calculate the deduction; and the assessment regulations would continue to reference the prompt corrective action (PCA) regulations for the definitions of capital categories used in the deposit insurance assessment system, with technical amendments to align with the CBLR NPR. To assist banks in understanding the effects of the NPR, the FDIC plans to provide on its website an assessment estimation tool that estimates deposit insurance assessment amounts under the proposal. (Federal Register Notice)
Joint Ownership Deposit Accounts Dates: Comments will be accepted until May 6, 2019.
SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is seeking comment on a proposed rule that would amend the regulation governing one of the requirements for an account to be separately insured as a joint account. Specifically, the proposed rule would provide an alternative method to satisfy the ``signature card'' requirement. Under the proposal, the ``signature card'' requirement could be satisfied by information contained in the deposit account records of the insured depository institution establishing co-ownership of the deposit account, such as evidence that the institution has issued a mechanism for accessing the account to each co-owner or evidence of usage of the deposit account by each co-owner. (Federal Register Notice)
Advance Notice of Proposed Rulemaking on Residential Property Assessed Clean Energy Financing
DATES: Comments must be received by May 7, 2019.
SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is issuing this Advance Notice of Proposed Rulemaking (ANPR) to solicit information relating to residential Property Assessed Clean Energy (PACE) financing. The Bureau will consider the information it receives in response to this ANPR in implementing section 307 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). In relevant part, EGRRCPA section 307 amends the Truth in Lending Act (TILA) to mandate that the Bureau prescribe certain regulations relating to PACE financing. Specifically, the regulations must carry out the purposes of TILA's ability-to-repay (ATR) requirements, currently in place for residential mortgage loans, with respect to PACE financing, and apply TILA's general civil liability provision for violations of the ATR requirements the Bureau will prescribe for PACE financing. The regulations must ``account for the unique nature'' of PACE financing. This ANPR solicits information to better understand the PACE financing market and the unique nature of PACE financing. (Federal Register Notice)
Unsafe and Unsound Banking Practices: Brokered Deposits and Interest Rate Restrictions-DATES: Comments must be received by the FDIC no later than May 7, 2019.
SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is undertaking a comprehensive review of the regulatory approach to brokered deposits and the interest rate caps applicable to banks that are less than well capitalized. Since the statutory brokered deposit restrictions were put in place in 1989, and amended in 1991, the financial services industry has seen significant changes in technology, business models, and products. In addition, changes to the economic environment have raised a number of issues relating to the interest rate restrictions. A key part of the FDIC's review is to seek public comment through this Advance Notice of Proposed Rulemaking (ANPR) on the impact of these changes. The FDIC will carefully consider comments received in response to this ANPR in determining what actions may be warranted. (Federal Register Notice)
Payday, Vehicle Title, and Certain High-Cost Installment Loans-DATES: Comments must be received on or before May 15, 2019.
SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is proposing to rescind certain provisions of the regulation promulgated by the Bureau in November 2017 governing Payday, Vehicle Title, and Certain High-Cost Installment Loans (2017 Final Rule or Rule). The provisions of the Rule which the Bureau proposes to rescind provide that it is an unfair and abusive practice for a lender to make a covered short-term or longer-term balloon-payment loan, including payday and vehicle title loans, without reasonably determining that consumers have the ability to repay those loans according to their terms; prescribe mandatory underwriting requirements for making the ability-to-repay determination; exempt certain loans from the mandatory underwriting requirements; and establish related definitions, reporting, and recordkeeping requirements. This proposal is related to another proposal, published separately in this issue of the Federal Register, seeking comment on whether the Bureau should delay the August 19, 2019 compliance date for these portions of the 2017 Final Rule. (Federal Register Notice)
For More Information Contact:
Jennifer Heaton, Vice President of Government & Executive Affairs