Federal Reserve Board

Federal Reserve Announces Plan to Develop a New Round-the-Clock Real-Time Payment and Settlement Service to Support Faster Payments

 

On August 5, the Federal Reserve Board announced that the Federal Reserve Banks will develop a new round-the-clock real-time payment and settlement service, called the FedNow℠ Service, to support faster payments in the United States. The rapid evolution of technology presents a pivotal opportunity for the Federal Reserve and the payment industry to modernize the nation’s payment system and establish a safe and efficient foundation for the future. The Federal Reserve believes faster payment services, which enable the near-instantaneous transfer of funds day and night, weekend and weekdays, have the potential to become widely used and to yield economic benefits for individuals and businesses by providing them with more flexibility to manage their money and make time-sensitive payments. Release.

Agencies Complete Resolution Plan Evaluations and Extend Deadline for Certain Firms

 

The Federal Reserve Board and the FDIC completed their evaluation of 82 foreign banks’ 2018 resolution plans, which describe a company’s strategy for rapid and orderly resolution in the event of bankruptcy. In light of proposed resolution plan rule changes, the agencies also extended the deadline to file their next resolutions plans to 2021 for these 82 foreign banks and 15 additional domestic banks. Release. Joint Release.

Federal Bank Regulatory Agencies Release Joint Statement on Risk-Based Approach to BSA/AML Supervision

 

On July 22, the Federal Reserve Board, FDIC, Office of the Comptroller of the Currency (OCC), National Credit Union Administration (NCUA) and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) released a joint statement outlining the agencies’ risk-based approach to examining banks’ BSA/AML compliance programs. Release.

Agencies Publish Rule Excluding Community Banks from Volcker Rule

 

On July 9, the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board, the Commodity Futures Trading Commission (CFTC), the Office of the Comptroller of the Currency (OCC) and the Securities and Exchange Commission (SEC) adopted a final rule that excludes community banks from the Volcker Rule, which restricts banking entities from engaging in proprietary trading and from owning, sponsoring or having certain relationships with hedge funds or private equity funds. Under the final rule that was adopted, community banks with $10 billion or less in total consolidated assets, and which have total trading assets and liabilities that are 5% or less than such community bank’s total consolidated assets, will be excluded from the Volcker Rule.

 

Agencies Issue Joint Amendments to Regulation CC

 

On June 24, the Consumer Financial Protection Bureau and the Federal Reserve Board published joint amendments to Regulation CC. Regulation CC implements the Expedited Funds Availability Act of 1987, as amended by the Dodd-Frank Act. The joint amendments implement a statutory requirement to adjust for inflation the funds depository institutions are required to make available to their customers in certain circumstances. Release. Notice.

 

Federal Reserve Approves Final Rule to Repeal Regulations that Incorporated the S.A.F.E. Act

 

On May 9, the Federal Reserve Board approved final amendments to its regulations to reflect the transfer of the Board’s rulemaking authority for the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act) to the Consumer Financial Protection Bureau (CFPB). Entities that were subject to the Board’s rules are now subject to the CFPB’s rules. Press Release.

Shared National Credit Review Finds Some Improvement in Credit Quality, While Risk Remains Elevated in Leveraged Loans

 

On January 25, the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency released a report reviewing Shared National Credit Loans, which found that risk associated with large syndicated loans has declined, while the risk associated with leveraged lending has not improved. The report encourages banks to update credit risk management policies according to the current risk climate. Release.

Federal Reserve Board Announces Annual Indexing of Reserve Requirement Exemption Amount and of Low Reserve Tranche For 2019

 

On October 25, the Federal Reserve Board announced the annual indexing of the reserve requirement exemption amount and the low reserve tranche, which two amounts are used in determining reserve requirements of depository institutions. The annual adjustment is based on growth in total reservable liabilities and net transaction accounts at all depository institutions between June 30, 2017 and June 30, 2018. Release.

Agencies Propose Rule to Update Calculation of Derivative Contract Exposure Amounts Under Regulatory Capital Rules

 

On October 30, the Federal Reserve Board, the Federal Depository Insurance Corporation and the Office of the Comptroller of the Currency (collectively, the “Agencies“) proposed changes to their standards for how large federal institutions measure counterparty credit risk posed by derivatives contracts under the Agencies’ regulatory capital rules. The proposal would provide the “standardized approach for measuring counterparty credit risk” as an alternative approach to the Agencies’ current exposure methodology for calculating derivative exposure. Release.