Federal Deposit Insurance Corporation (“FDIC”)

Federal Banking Agencies Exempt Premium Finance Lending from BSA/AML Customer Identification Program Requirements

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On October 9, the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Federal Reserve), Federal Deposit Insurance Corporation (FDIC), and National Credit Union Administration (NCUA), with approval from the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), issued a revised order exempting premium finance loans (loans made to facilitate a borrower’s purchase of property and casualty insurance policies) from the customer identification program requirements applicable to a lender’s Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program. Order.

Federal Bank Regulatory Agencies Modify Liquidity Coverage Ratio for Banks Participating in Money Market Mutual Fund Liquidity Facility and Paycheck Protection Program Liquidity Facility

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On May 5, the Federal Deposit Insurance Corporation (“FDIC”), the Federal Reserve, and the Office of the Comptroller of the Currency (“OCC”) announced an interim final rule to facilitate the flow of credit to households and businesses from banking organizations participating in the Federal Reserve’s Money Market Mutual Fund Liquidity Facility and the Paycheck Protection Program Liquidity Facility. The rule neutralizes the impact of the Liquidity Coverage Ratio rule associated with the funding provided by these facilities. Release. Rule.

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 Bank Regulators Issue Interim Final Rule for Paycheck Protection Program Facility

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On April 9, the federal bank regulatory agencies today announced an interim final rule to encourage lending to small businesses through the Small Business Administration’s Paycheck Protection Program (PPP). The interim final rule modifies the agencies’ capital rules to neutralize the regulatory capital effects of participating in the Federal Reserve’s PPP facility because there is no credit or market risk in association with PPP loans pledged to the facility. Consistent with the agencies’ current capital rules and the CARES Act requirements, the interim final rule also clarifies that a zero percent risk weight applies to loans covered by the PPP for capital purposes. The rule is effective immediately. Release.

Federal Deposit Insurance Corporation Releases Economic Scenarios for 2020 Stress Testing

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On February 14, the Federal Deposit Insurance Corporation (FDIC) released the hypothetical economic scenarios for use in the upcoming stress tests for covered institutions with total consolidated assets of more than $250 billion. Required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the economic stress test scenarios include 28 variables – such as gross domestic product, the unemployment rate, stock market prices, and interest rates – covering domestic and international activity designed to assess the strength and resilience of financial institutions. Release.

Agencies to Propose Amending CRA Regulations to Conform to HMDA Regulation Changes, and Remove References to the Neighborhood Stabilization Program

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On September 13, 2017, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency jointly released proposed changes to each agency’s Community Reinvestment Act’s regulations relating “Regulation C, which implements the Home Mortgage Disclosure Act[.]” FDIC Release. Federal Reserve Release. OCC Release.

Agencies Extend Comment Period for Advance Notice of Proposed Rulemaking on Enhanced Cyber Risk Management Standards

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On January 13, 2017, the Federal Reserve Board, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation changed, from January 17, 2017 to February 17, 2017, the deadline for comments “for the advance notice of proposed rulemaking on enhanced cyber risk management standards for large and interconnected entities under their supervision and those entities’ service providers.” Cyber standards are being contemplated in five areas: “cyber risk governance; cyber risk management; internal dependency management; external dependency management; and incident response, cyber resilience, and situational awareness.” Federal Reserve Release. OCC Release. FDIC Release.

OCC Publishes Final Rule on Expanding Examination Cycle Eligibility

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On January 6, 2017, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation published a final rule amending the regulations governing eligibility for the 18‑month on‑site examination cycle, which broadened the eligibility requirements to include certain qualifying banks with less than $1 billion in total assets. The final rule adopted, without change, each of the provisions of the interim final rule published on February 29, 2016. Release.

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.