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 15, the Fed requested comment on a proposed rule to establish an annual assessment for bank holding companies and savings and loan companies with $50 billion or greater in total consolidated assets, as well as for nonbank financial companies designated for Fed supervision by the FSOC. Comments on the proposed rule must be submitted by June 15. Fed Release. Proposed Rule.
On April 3, the Fed approved a final rule establishing the requirements to determine when a nonbank financial company is ‘predominantly engaged in financial activities‘ in order for the Financial Stability Oversight Council (FSOC) to determine whether the company should be supervised by the Fed. The final rule will become effective on May 6. Fed Release. Fed Final Rule.
On March 14, the Fed announced that it has approved the capital plans of 14 financial institutions in the Comprehensive Capital Analysis and Review. The Fed gave two institutions conditional approval and rejected the plans of two firms. Fed Release.
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 26, the Fed issued a proposed rule that would amend Regulation HH to set out the conditions and requirements for a Federal Reserve Bank to open and maintain accounts for and provide financial services to financial market utilities designated as systemically important by the FSOC. Comments must be submitted within 60 days of publication in the Federal Register. Fed Release. Proposed Rule.
On February 28, the OCC and the Fed released amendments to their consent orders against 13 mortgage servicers for deficient practices in mortgage loan servicing and foreclosure processing. The amendments memorialize the previously announced agreements with the mortgage servicers and require them to provide $9.3 billion in payments and other assistance (including loan modifications and forgiveness of deficiency judgments) to borrowers. Joint Release.
On February 22, the Fed extended, until April 30, the comment period on a proposed rule to implement the enhanced prudential standards and early remediation requirements under Sections 165 and 166 of the Dodd-Frank Act for foreign banking organizations and foreign nonbank financial companies supervised by the Fed. Comments were originally due by March 31. Fed Release.
On January 28, the Fed announced that results from the supervisory stress tests under the Dodd-Frank Act will be released on March 7, and the related results from the Comprehensive Capital Analysis and Review (CCAR) will be released on March 14. The Dodd-Frank Act supervisory stress test results will include data such as capital ratios, revenue and loss estimates under a severely adverse scenario and assuming a common set of capital actions that is used in the analysis of all of the firms. Fed Release.