On January 29, Federal Reserve Board (Fed) invited public comment on a proposed rule to expand the applicability of the Board’s Small Bank Holding Company Policy Statement (Policy Statement) for small bank holding companies as well as certain savings and loan holding companies. The Policy Statement facilitates the transfer of ownership of small community banks by allowing their holding companies to operate with higher levels of debt than would otherwise be permitted. Institutions subject to the Policy Statement are not subject to the Board’s regulatory capital requirements. Currently, bank holding companies with less than $500 million in total consolidated assets may be subject to the Policy Statement. The proposed rule will permit to certain bank holding companies and savings and loan holding companies with less than $1 billion in total consolidated assets that meet the qualitative requirements to qualify. The Fed also adopted an interim final rule to exclude from the Fed’s regulatory capital requirements savings and loan holding companies with less than $500 million in total consolidated assets that meet the qualitative requirements in the Policy Statement. Release. Policy Statement. Interim Final Rule.
Fed
The Fed Forms Advisory Council
On January 16, the Fed announced the formation of a new advisory council that will be comprised of individuals with consumer- and community development-related expertise. The council will meet semiannually with the Fed’s board to offer perspective on community and consumer needs. Release.
Fed Issues Final Rule to Amend Regulation HH and Payment System Risk Policy
On October 28, the Federal Reserve Board issued a final rule that amends the Regulation HH risk-management standards for companies that have been designated as systemically important by the Financial Stability Oversight Council and for which the Fed has standard-setting authority pursuant to Title VIII of Dodd-Frank. Key changes include establishing separate standards to address credit risk and liquidity risk, new requirements on recovery and orderly wind-down planning, a new standard on general business risk, a new standard on tiered participation arrangements, and increased requirements on transparency and disclosure. Release. Final Rule. Policy Statement.
Fed Issues Report on the Economic Well-Being of U.S. Households
On August 7, the Fed provided a snapshot of the self-perceived financial and economic well-being of U.S. households and the issues they face, based on responses to the Board’s 2013 Survey of Household Economics and Decisionmaking. The report provides insight into numerous topics of current relevance to household finances, including: housing and living arrangements; credit access and behavior; education and student loan debt; savings; retirement; and health expenses. Press Release.
The Fed Invites Comment on Proposal to Modify the Regulations for Capital Planning and Stress Testing
On June 12, the Fed invited comments on a proposal to modify the regulations for capital planning and stress testing. The proposed rule includes a number of measures that would alter the capital planning and stress test processes. Comments on the proposed rule will be accepted until August 11, 2014. Press Release. Proposal.
Fed Extends Comment Period for Rulemaking Regarding Physical Commodity Activities
On February 27, the Fed provided an additional 30 days to comment on an advance notice of proposed rulemaking regarding physical commodity activities conducted by financial holding companies. Public comment period is extended to April 16, 2014. Notice of Extension.
Fed Final Rule on Supervision and Regulation of Bank Holding Companies and Foreign Banks
On February 18, the Fed issued a final rule which establishes enhanced supervision standards for large U.S. bank holding companies and foreign banking organizations, as required by the Dodd-Frank Act. The final rule will be effective for U.S. entities on January 1, 2015, and for foreign entities in either 2016 or 2018, depending on the type of entity. Fed Release. Fed Final Rule.
Publication of Resolution Plans
On January 10, the Fed and the FDIC made available public portions of resolution plans for 116 institutions which are regulated by the Fed and the FDIC and required to submit resolution plans by the Dodd-Frank Act. Joint Release. Resolution Plans.
Volcker Rule Exclusion for TruPS CDOs
On January 14, the Fed, CFTC, FDIC, OCC and SEC issued an interim final rule which will permit banking entities to retain interests in certain collateralized debt obligations backed primarily by trust preferred securities (TruPS CDOs) if the following conditions are met: (i) the TruPS CDO was established and the interest was issued before May 19, 2010; (ii) the banking entity reasonably believes that the offering proceeds received by the TruPS CDO were invested primarily in Qualifying TruPS Collateral (as defined by the rule); and (iii) the banking entity’s interest in the TruPS CDO was acquired on or before December 10, 2013, the date the agencies issued final rules implementing section 619 of the Dodd-Frank Act (the Volcker Rule). The agencies also released a non-exclusive list of issuers which meet the requirements of the interim final rule. Comments must be submitted within 30 days of publication in the Federal Register. Joint Release. Joint Interim Final Rule. List of Excluded CDO Issuers.
Three Agencies Seek Comment on Joint Supplemental Guidance on Income Tax Allocation Agreements
On December 19, Fed, FDIC and OCC issued a statement seeking comment on supplemental guidance on income tax allocation agreements involving holding companies and insured depository institutions. The proposed guidance will clarify ownership of any tax refunds. Release. Proposed Addendum.