On April 25, the FDIC issued proposed guidance relating to deposit-advance products and consumer protection risks. Comments on the proposed guidance must be received within 30 days of publication in the Federal Register. FDIC Release. Proposed Guidance.
On April 15, the FDIC and the Fed issued a joint release which provides additional guidance, clarification and direction for the first group of 11 institutions filing their resolution plans pursuant to the Dodd-Frank Act. Separate guidance was issued for domestic and foreign-based institutions. Joint Release. Domestic Guidance. Foreign-Based Guidance.
On April 8, U.S. District Judge Mariana R. Pfaelzer of the Central District of California dismissed the FDIC’s suit against Countrywide. FDIC, as the receiver for Colonial Bank, filed suit against Countrywide and Bank of America as its successor for violations of the 1933 Securities Act. FDIC alleged Countrywide made false statements in offering documents in connection with the issuance of residential mortgage-backed securities in violation of Sections 11 and 15 of the Act. Judge Pfaelzer held that each claim was barred by the statute of limitations of one year from when the plaintiff discovered, or a reasonably diligently investor would have discovered, the alleged misstatement. Judge Pfalezer held that a reasonably diligent plaintiff would have had adequate information to make such a discovery before August 14, 2008, and consequently the bank’s claims had expired by the time the FDIC was appointed receiver, one year later. Decision.
On March 18, the Fed, FDIC and OCC requested comment on proposed revisions to “Interagency Questions and Answers Regarding Community Reinvestment.” The Q&As provide guidance on the Community Reinvestment Act regulations. The proposed amendments would: (i) clarify how the agencies consider activities that benefit a statewide or regional area that includes an institution’s assessment area; (ii) provide guidance on investments in nationwide funds; (iii) clarify the consideration of certain community development services; (iv) address the treatment of qualified investments to organizations that use only a portion of the investment to support a community development purpose; and (v) clarify that community development lending should be evaluated so that it has a positive, neutral or negative effect on the large institution lending test rating. Comments are due within 60 days after publication in the Federal Register. Interagency Release.
On March 21, the Fed, FDIC and OCC released updated supervisory guidance on leveraged lending which covers transactions characterized by a borrower with a degree of financial leverage that significantly exceeds industry norms. The guidance applies to financial institutions supervised by the agencies that engage in leveraged lending activities and focuses on: (i) establishing a sound risk-management framework; (ii) underwriting standards; (iii) valuation standards; (iv) pipeline management; (v) reporting and analytics; (vi) risk rating leveraged loans; (vii) participants; and (viii) stress testing. Joint Release.
On February 12, the FDIC approved a notice of proposed rulemaking to clarify that deposits in foreign branches of U.S. banks are not FDIC-insured but they may be deposits for the national depositor preference statute enacted in 1993. Comments must be received within 60 days after publication in the Federal Register. FDIC Release. Proposed Rule.
On January 18, the Fed, CFPB, FDIC, FHFA, NCUA and OCC issued a joint final rule, effective January 18, 2014, which establishes new appraisal requirements for “higher-priced mortgage loans”. For these loans, the rule requires creditors to: (i) use a licensed or certified appraiser who prepares a written appraisal report based on a physical visit of the interior of the property and (ii) disclose to applicants information about the purpose of the appraisal and provide consumers with a free copy of any appraisal report. Joint Release. Final Rule.
On December 19, 2012, the Fed, FDIC and OCC released the annual adjustment to asset-size thresholds used to define small bank, small savings association, intermediate small bank and intermediate small savings association under the CRA. The asset-size threshold adjustment was effective January 1. Joint Press Release. Joint Technical Amendment.
On December 10, the Bank of England (the Bank) and the Federal Deposit Insurance Corporation (the FDIC) published a joint paper entitled ‘Resolving Globally Active, Systemically Important, Financial Institutions’ (G-SIFIs). The joint paper sets out the strategies that the Bank and the FDIC have designed to enable large and complex cross-border firms to be resolved without threatening financial stability or putting public funds at risk. The paper builds on the work of the Financial Stability Board, and focuses on the application of “top-down” resolution strategies whereby a single resolution authority applies its powers at parent company level.
In the UK, this will involve the use of the powers under the Banking Act 2009 and those that are anticipated to be provided by the European Union Recovery and Resolution Directive and the Financial Services Bill, and will involve the bail-in (write-down or conversion) of creditors at the top of the group in order to restore the whole group to solvency.
On November 26, the Fed, the FDIC, and the OCC, in conjunction with the Conference of State Bank Supervisions, issued “Interagency Statement on Section 612 of the Dodd-Frank Act: Restrictions on Conversions of Troubled Banks”. The statement describes the general prohibition on charter conversions by certain insured depository institutions. Bulletin. Statement.