OCC

Federal Agencies Make Joint Release Announcing Actions to Support Lending to Households and Businesses

 

On March 27, the Federal Reserve Board, the FDIC and the OCC announced two actions to support continued lending by banking organizations to households and businesses. The first action is early adoption of the standardized approach for measuring counterparty credit risks finalized in November 2019, with a new effective date of April 1, 2020. The second action is an interim final rule that allows banking organizations that would otherwise be required to adopt the new current expected credit loss accounting standard this year, to have the option of delaying adopting the new standard for up to two years. Federal Reserve Release. FDIC Release. OCC Release.

Joint Agency Statement Issued Regarding Residential Mortgage Loan Modifications and Troubled Debt Restructuring

 

On March 22, the Board of Governors of the FRB, FDIC, the National Credit Union Administration, OCC, CFPB and the State Banking Regulators issued an interagency statement encouraging financial institution cooperation with borrowers during the COVID-19 pandemic. The statement provided guidance on the troubled debt restructurings and related accounting requirements. Release.

Federal Bank Regulatory Agencies Issue Final Rule on Treatment of High Volatility Commercial Real Estate

 

On November 19, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board (FRB) implemented a final rule addressing high volatility commercial real estate (HVCRE).  The rule aims to clarify the definition of HVCRE exposure and the treatment of credit facilities financing one- to four-family residential properties and land development. Banking institutions will have the option to maintain their current capital treatment for acquisition, development or construction loans originated between January 1, 2015 and the effective date of the final rule on April 1, 2020. FDIC ReleaseFRB ReleaseOCC Release.

Agencies Finalize Changes to Supplementary Leverage Ratio as Required by EGRRCPA

 

On November 19, the OCC, the FDIC and the FRB finalized changes that affect a capital requirement for banking organizations performing custodial activities under the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The EGRRCPA allows banking organizations performing custodial activities to exclude qualifying deposits at certain central banks from their supplementary leverage ratio, with the primary aim to fortify financial stability within the banking system. The rule will be effective on April 1, 2020. FDIC ReleaseFRB ReleaseOCC Release.

 

 

Federal Bank Regulatory Agencies Finalize Rule to Update Calculation of Counterparty Credit Risk for Derivative Contracts

 

On November 19, the OCC, the FDIC and the FRB published a final rule that implements a “standardized approach for measuring counterparty credit risk,” that banking organizations must follow with respect to derivative contracts. This methodology is intended to better reflect the current derivatives market. The final rule will be effective on April 1, 2020. FDIC ReleaseFRB ReleaseOCC Release.

 

Banking Agencies Publish Capital Simplifications for Qualifying Community Banking Organizations

 

On November 13, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board (FRB) published in the Federal Register a final rule creating an optional Community Bank Leverage Ratio (CBLR) framework for measuring capital adequacy of qualifying community banking organizations. Banks that meet the qualifying criteria, including maintaining a leverage ratio greater than 9 percent, and elect to use the CBLR framework will be considered to have met the capital requirements for the “well capitalized” category under the agencies’ Prompt Corrective Action (PCA) framework and will no longer be subject to the generally applicable capital rule. The final rule will become effective on January 1, 2020. OCC ReleaseFederal Register.

Thresholds Increase for the Major Assets Prohibition of the Depository Institution Management Interlocks Act Rules

 

On October 10, the Office of the Comptroller of the Currency (OCC) published a final rule in the Federal Register that increases the major assets prohibition thresholds for management interlocks in the OCC’s rule implementing the Depository Institution Management Interlocks Act (DIMIA). The final rule reduces the number of national banks and federal savings associations subject to the major assets prohibition in the OCC’s DIMIA rule by increasing both major assets prohibition thresholds from $1.5 billion and $2.5 billion to $10 billion. Release.

Amendments to the Stress Testing Rule for National Banks and Federal Savings Associations

 

On October 10, the OCC published a final rule in the Federal Register that will amend the OCC’s stress testing rule at 12 CFR 46. The final rule implements requirements imposed by section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The final will raise the minimum asset threshold for national banks and federal savings associations covered by the company-run stress testing requirement from $10 billion to $250 billion in total consolidated assets. Release.

OCC Extends Dodd-Frank Act Stress Test Requirements Through November 25

 

The Office of the Comptroller of the Currency (OCC) announced that the deadline to comply with Dodd-Frank Act Stress Test (DFAST) requirements will be extended to November 25, and thereafter will be discontinued. The OCC believes that sufficient stress testing programs have been adopted and integrated into the risk management policies of banks and federal savings institutions to which the DFAST rules apply. Press Release.