OCC

Agencies Approve Amendments to Swap Margin Rule

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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

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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

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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

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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

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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

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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.

New Comptroller’s Handbook Booklet and Rescissions

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On May 11, 2018, the Office of the Comptroller of the Currency (“OCC“) issued the “Military Lending Act” (“MLA“) booklet of the Comptroller’s Handbook. This new booklet is for use by OCC examiners when assessing compliance with the MLA, as implemented by 32 CFR 232, “Limitations on Terms of Consumer Credit Extended to Service Members and Dependents.” The MLA applies to closed-end and most open-end consumer credit consummated or established on or after October 3, 2016, and to credit card accounts established on or after October 3, 2017, that are covered by the MLA and 32 CFR 232. Release.

New York Regulator’s Fintech-Charter Lawsuit Dismissed

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On December 12, 2017, a federal judge in Manhattan dismissed a state regulator’s lawsuit challenging the Office of the Comptroller of the Currency’s (“OCC“) federal-fintech-charter effort, finding that legal challenges to the initiative were premature. In an order filed Tuesday, the judge found that the lawsuit filed in May by New York’s Superintendent for Financial Services Maria Vullo lacked merit, because the OCC’s initiative hasn’t been implemented yet. To view the full article, click here.

Agencies Propose Simplifying Regulatory Capital Rules

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On September 27, 2017, the Federal Deposit Insurance Corporation, the Federal Reserve Board and the Office of the Comptroller of the Currency announced a proposed rule intended to decrease regulation under these entities’ “regulatory capital rule.” The proposed rule “would apply only to banking organizations that are not subject to the ‘advanced approaches’ in the capital rule, which are generally firms with less than $250 billion in total consolidated assets and less than $10 billion in total foreign exposure.” FDIC Release. Federal Reserve Release. OCC Release.