Federal Reserve System

Interim Final Rule and Interagency Statement for Real Estate-Related Financial Transactions Affected by the Coronavirus

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On April 14, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FRB), and the Federal Deposit Insurance Corporation (FDIC) today announced an interim final rule that allows financial institutions to defer completion of appraisals and evaluations after the closing of certain residential and commercial real estate transactions. The deferrals provide flexibility for completing appraisals and evaluations to help financial institutions meet the immediate liquidity needs of borrowers during the coronavirus emergency. The interim final rule authorizes deferrals of appraisals and evaluations for all residential and commercial real estate transactions, except for transactions involving the acquisition, development, and construction of real estate, allows a bank up to 120 days from the closing of a transaction to obtain the appraisal or evaluation required under the appraisal regulations, and authorizes deferrals until December 31, 2020, when the interim final rule terminates. Bulletin.

Federal Banking Agencies Issue Final Rule to Exempt Commercial Real Estate Transactions of $500,000 or Less from Appraisal Requirements:

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On April 2, 2018, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued a final rule that increases the threshold for commercial real estate transactions requiring an appraisal from $250,000 to $500,000. Press Release. Rule.

Annual Asset-Size Threshold Adjustments for Small and Intermediate Small Banks

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On December 29, 2016, the Office of the Comptroller of the Currency, the Federal Reserve System and the Federal Deposit Insurance Corporation amended their Community Reinvestment Act (CRA) regulations to adjust the asset-size thresholds used to define “small bank” or “small savings association” and “intermediate small bank” or “intermediate small savings association.” The adjustment is based on an annual percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers. As a result of the 0.84 percent increase for the period ending in November 2016, “small bank” or “small savings association” means “an institution that, as of December 31, 2016, of either of the prior two calendar years, had assets of less than $1.226 billion,” and “intermediate small bank” or “intermediate small savings association” means “a small institution with assets of at least $307 million as of December 31 of both of the prior two calendar years and less than $1.226 billion as of December 31, 2016, of either of the prior two calendar years.” Press Release. Rule.

Agencies Finalize Rule Exempting Certain Commercial and Financial End Users from Initial and Variation Margin Requirements

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On August 1, 2016, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency and the Farm Credit Administration announced a final rule that contains certain exemptions for “certain commercial and financial end users from margin requirements for certain swaps not cleared through a clearinghouse.”  The rule implemented without any changes the interim final rule from November 2015. Press Release. Press Release. Press Release. Press Release.

Federal Reserve Board and FDIC Welcome ISDA Announcement

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On October 11, the Board of Governors of the Federal Reserve System and the FDIC applauded the International Swaps and Derivatives Association (ISDA) for the agreement of a new resolution stay protocol.  The resolution stay amendments of the protocol are intended to facilitate an orderly resolution of a major global banking firm and reduce the potential negative impact of the resolution on financial stability by giving the bankruptcy court or resolution authority the ability to prevent early termination of financial contracts of the firm’s global subsidiaries.  Release.