On November 29, pursuant to Section 939A of the Dodd-Frank Act, the OCC proposed a rule to remove references to credit ratings from various regulations and related guidance. In addition, the OCC issued proposed guidance on the procedures banks should follow in order to demonstrate that their investments satisfy the new credit quality standards created by the proposed rule. Comments must be submitted by December 29. OCC Release. OCC Proposed Rule. OCC Proposed Guidance.
Section 939A
Fed Report on Credit Ratings
On July 25, pursuant to Section 939A of the Dodd-Frank Act, the Fed published a report identifying instances in which Fed regulations reference or have requirements regarding credit ratings. The report finds that most references to credit ratings occur in the Fed’s capital requirements for state member banks and bank holding companies, and anticipates the removal of these references upon the implementation of recent Basel III international agreements on regulatory capital. Fed Report.
Updates to IRS Regulations Pursuant to Dodd-Frank Act
On July 6, the IRS, pursuant to Section 939A of the Dodd-Frank Act, published final and temporary regulations that remove any reference to, or requirement of reliance on, credit ratings in the Internal Revenue Code. Federal Register Notice.
Proposed Amendment for Short-Form Eligibility
On February 9, the SEC proposed rule amendments, in connection with Section 939A of the Dodd-Frank Act, to remove the use of investment-grade ratings as a condition of “short-form” eligibility for public offerings of non-convertible securities, such as debt securities. A new test would be tied to the amount of debt and other non-convertible securities the company has sold in the prior three years. Comments must be submitted by March 28. SEC Release. Proposed Rule.