OCC

Federal Reserve Board Releases Scenarios for 2019 Stress Test Exercises

 

On February 5, the Federal Reserve Board and Office of Comptroller of Currency released the stress scenarios for the 2019 stress test cycle for domestic bank holding companies and foreign bank intermediate bank holding companies with more than $100 billion in total consolidated assets. Banks are required to submit the results of their stress tests to the Federal Reserve by April 5, and the Federal Reserve will release results of its supervisory stress tests by June 30. The Federal Reserve Board announced that banks with consolidated assets between $100 and $250 billion will be relieved from the 2019 cycle. Release.

Agencies Approve Amendments to Swap Margin Rule

 

On September 21, the Farm Credit Administration, the FDIC, the Federal Housing Finance Agency, the Federal Reserve and the OCC approved final amendments to swap margin requirements to conform with recent rule changes that impose new restrictions on certain qualified financial contracts of systemically important banking organizations. These amendments established minimum margin requirements for swaps and security-based swaps that are not cleared through a clearinghouse. The margin requirements are designed to help ensure the safety and soundness of swap entities and reduce risks to the stability of the financial system associated with non-cleared swaps activity. Rule.

Agencies Issue Interim Final Rules Expanding Examination Cycles for Qualifying Small Banks and U.S. Branches and Agencies of Foreign Banks

 

On August 23, 2018, the Board of Governors of the Federal Reserve System (“Federal Reserve Board“), the Federal Deposit Insurance Corporation (“FDIC“) and the Office of the Comptroller of the Currency (“OCC“) “issued interim final rules to expand the number of insured depository institutions and U.S. branches and agencies of foreign banks eligible for an 18-month on-site examination cycle.” Once the interim final rules are published in the Federal Register, there will be 60 days available to provide comments. Federal Reserve Board Press Release. FDIC Press Release. OCC Press Release.

Community Reinvestment Act: Revisions to Impact of Evidence of Discriminatory or Other Illegal Credit Practices on Community Reinvestment Act Ratings

 

On August 15, 2018, the Office of the Comptroller of the Currency released guidance “which clarifies [its] policy for applying the regulatory framework to determine the effect of evidence of discriminatory or other illegal credit practices on the Community Reinvestment Act (“CRA”) rating of a national bank, federal savings association, or federal branch.” Release.

Federal Regulators Issue Key Guidance on Fintech Issues

 

On July 30, 2018, the U.S. Department of the Treasury (“Treasury“) and the Office of the Comptroller of the Currency (“OCC“) provided important guidance on a broad range of issues confronting the fintech industry. Treasury released a long-awaited report titled A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation (the “Treasury Report“).

Following a specific recommendation in the Treasury Report, the OCC formally announced that it would begin to accept applications for special purpose national bank charters, and it provided guidance on the procedures and standards that would govern such applications through the issuance of a Licensing Manual Supplement for Special Purpose National Banks (the “Manual Supplement“). Taken together, the Treasury Report and the OCC announcement reinforce the commitment of the federal government to promote the growth of the fintech industry. Click here to read the full Orrick-authored alert.

Agencies Issue Final Rulemaking to Shorten Settlement Cycle

 

On June 1, 2018, the Office of the Comptroller of the Currency (the “OCC“) and the Federal Deposit Insurance Corporation (the “FDIC“) issued a final rule to shorten the standard settlement cycle for securities purchased or sold by OCC-supervised and FDIC-supervised institutions from T+3 to T+2. This change is consistent with the industry’s transition to T+2 – banks are already complying with a two business day settlement standard. The effective date of the final rule is October 1, 2018. FDIC Press Release. OCC Press Release (dated June 7). Rule.

Notice of Proposed Rulemaking

 

On May 14, 2018, the Office of the Comptroller of the Currency (“OCC“), Board of Governors of the Federal Reserve System, and Federal Deposit Insurance Corporation (collectively, the agencies) published a notice of proposed rulemaking to implement the Financial Accounting Standards Board’s Accounting Standards Update (“ASU“) 2016-13, “Financial Instruments—Credit Losses,” in their rules. Release.