ABA Dodd-Frank Tracker

GAO: Financial Crisis Cost Economy $13 Trillion

2013-02-15T07:55:00.000-05:00

The 2008 financial crisis cost the U.S. economy as much as $13 trillion, according to a Government Accountability Office report released yesterday. The report was published as part of a Dodd-Frank Act cost-benefit analysis.

While the Dodd-Frank Act’s “reforms could enhance the stability of the U.S. financial system and provide other benefits, the extent to which such benefits materialize will depend on many factors whose effects are difficult to predict,” the report said.

According to the report, financial federal regulators reported increasing funding resources associated with implementation of the Dodd-Frank Act in 2012. The CFPB reported funding resources associated with Dodd-Frank of $432 million since 2010, while the agency has hired or redirected 831 full-time equivalent employees to positions directly related to the implementation of the Dodd-Frank Act. The Federal Reserve reported cost directly related to Dodd-Frank implementation of $163 million since 2010, while hiring or redirecting 964 full-time equivalent employees to positions directly related to the implementation.

Read the report.

OFR & FSOC 2nd Annual Conference

2012-12-06T08:03:00.005-05:00

The Office of Financial Research (OFR) and the Financial Stability Oversight Council (FSOC) are co-hosting their second annual conference today entitled “Assessing Financial Intermediation: Measurement and Analysis.”

The conference brings together thought leaders from the research and regulatory communities, public interest groups, and the financial services industry to discuss challenges to financial stability posed by evolving financial activities. This year’s conference examines recent changes in financial institutions, markets, and activities, and explores the future implications for financial stability, risk management, and policy.

Read the conference agenda.
Watch a webcast of the conference.

OFR’s Financial Research Advisory Committee

2012-11-20T11:01:00.002-05:00

The Financial Research Advisory Committee of the Treasury's Office of Financial Research (OFR) has announced it will hold its first meeting on Wednesday, December 5, 2012.

The Committee will provide advice to the OFR, bring diverse perspectives to inform the OFR’s research-and-data agendas, and help the OFR fulfill its mission by developing and employing best practices for data management, data standards, and research methodologies.

The Dodd-Frank Act established the OFR within the Treasury to serve the Financial Stability Oversight Council (FSOC), its member agencies, and the public by improving the quality, transparency, and accessibility of financial data and information; conducting and sponsoring research related to financial stability; and promoting best practices in risk management.

The Financial Research Advisory Committee is made up of 30 members include two Nobel laureates in economics; leaders in business and nonprofit fields; and prominent researchers at major universities and think tanks.

The meeting will begin at 10 a.m. and will be open to the public via live webcast here.
Read more including a full list of members.

Tarullo on Financial Stability Regulations

2012-10-11T11:08:00.001-04:00

Federal Reserve Governor Daniel Tarullo spoke at the University of Pennsylvania Law School on financial stability regulations, primarily the Dodd-Frank Act and its effect on financial stability.

Dodd-Frank creates a legal and institutional framework within which financial stability regulation is to be developed but, with a couple of notable exceptions, it does not delineate the steps that should actually be taken to promote financial stability.

The necessarily somewhat extemporized character of Dodd-Frank has had several consequences for the development of financial stability regulation.

First, many of the new authorities and requirements of Dodd-Frank require extensive elaboration through administrative rulemaking, often coordinated or agreed among three or more agencies.

Second,…the provisions of the law that use the concept of risk to financial stability as a directly applicable legal standard provide only general guidance for regulators in applying that standard.

Third, broad as Dodd-Frank is in some respects, it does not grant direct regulatory authority in some areas that academic and agency analysis suggests may pose systemic risk.

Finally, the law made important institutional changes, creating novel governmental entities specifically designed to address financial stability, and binding existing agencies more closely together in their rulemaking and supervisory activities. The relationships among existing agencies and the evolving practice of these new entities may in turn pose some novel practical and administrative law issues.

Tarullo also spoke of the money market mutual funds market, noting it was unfortunate the SEC has not begun to form new regulations and rules for the market. Tarullo noted the money market funds remain a threat to financial stability and that having the Financial Stability Oversight Council (FSOC) or the Federal Reserve step in to regulate the market would be a worse option for all involved.

FSOC could designate money market funds as systemically important and thus subject the market to the prudential requirements under the Dodd-Frank Act.

Read Tarullo’s full speech.

The Week Ahead: September 17—September 21

2012-09-14T08:23:00.001-04:00

Tuesday

Comments Due Treasury: Nonbank Assessment Fees to Fund OFR. Read more.

Thursday

Comment Due CFTC: Clearing Exemption for Interaffiliate Swaps. Read more.
Meeting GMU: Using Disparate Impact Analysis to Establish Discrimination in Lending. Read more.
Hearing HFS: Semi-Annual Report of the CFPB. Read more.

All times in Eastern Standard Time. See future events on the Dodd-Frank Calendar.

Countdown to Convention
The ABA Annual Convention, Oct. 14-16 in San Diego, is our time to unite, commit and connect as we examine challenging issues and think strategically about how to compete and keep the lead. Look for insightful, nationally recognized speakers and learn from pragmatic strategic solutions sessions on critical topics. A Directors’ Forum, peer roundtables and gala receptions round out the experience. The countdown to California is underway — be there!

GAO: FSOC & OFR Lack Accountability & Transparency

2012-09-13T12:17:00.000-04:00

A GAO report released today found that two powerful regulatory organizations created by the Dodd-Frank Act lack an effective level of accountability and transparency. The GAO report found the new organizations—the Financial Stability Oversight Council (FSOC) and Office of Financial Research (OFR)—face challenges in achieving their missions.

Key FSOC missions—to identify risks and respond to emerging threats to financial stability—are inherently challenging, in part, because risks to financial stability often do not arise in similar manners. In addition, collaboration among FSOC members can also be challenging, as most represent independent agencies that retained existing authorities.

The OFR faces challenges of trying to establish and build a world-class research organization while meeting shorter-term goals and responsibilities.

The GAO report concluded the FSOC and OFR could be enhanced by providing greater accountability and transparency and made ten recommendations to aid the organizations.

The report is the result of an extensive, nine-month audit by the GAO at the request of the Financial Services Committee Chairman Spencer Bachus and Oversight and Investigations Subcommittee Chairman Randy Neugebauer.

Read the full report.

Keating Offers Perspective on DFA Anniversary

2012-07-23T08:10:00.000-04:00

The Dodd-Frank Act has made the American regulatory system hard for the typical bank to digest, ABA President and CEO Frank Keating told CNN in a program that aired on Saturday, the two-year anniversary of the law’s enactment.

Keating noted that banks are subject to an “alphabet soup of regulations.” Banks are subject to rules from numerous agencies, including the FSOC, the Fed, the FDIC, the OCC and the CFPB.

You want a regulatory system you can actually chew and digest. And when you’re looking at Dodd-Frank, with 240 rules, 100 yet to be written, 8,000 pages of proposed and final rules -- how many Dostoevsky and Danielle Steele novels is that? It’s pretty hard for these small banks to digest.

Watch the interview.

OFR Releases Annual Report

2012-07-23T06:18:00.001-04:00

The Office of Financial Research released its first annual report to Congress, a 150-page document that covers its progress on four goals:

Analyzing Threats to Financial Stability: an analysis of the six basic functions of the financial system—credit allocation and leverage, maturity transformation, risk transfer, price discovery, liquidity provision, and facilitation of payments—and an assessment of how threats may disrupt their functioning.

Conducting Research on Financial Stability: an analysis of three specific priority areas identified in Dodd-Frank: To develop metrics for measuring risks to financial stability; to evaluate stress tests that can aid in financial stability analysis; and to promote best practices in financial institution risk management.

Addressing Data Gaps: a description of how the OFR is working to identify and address data needs and data gaps among regulators and to define best practices that can be leveraged across FSOC member agencies.

Promoting Data Standards: an outline of the OFR’s goals for data standards
include the need for data integrity and quality control, data security, datasharing protocols, and data management.

Read the full report.

The Week Ahead: July 16 - July 20

2012-07-13T11:49:00.001-04:00

Monday

Final Rule Effective: FDIC's Swaps Pushout Effective. Read the Agencies' guidance.

Thursday

Comments Due CFPB: Consumer Complaint Data. Read more.
Hearing HFS: DFA Impact on Families, Communities, & Small Businesses. Read more.
Hearing HFS: DFA Impact on Consumer Choice, Access to Credit. Read more.

Friday

Final Rule Effective: Treasury's Assessment Fees to Fund OFR. Read more.
Interim Final Rule Effective: Treasury's Nonbank Assessment Fees to Fund OFR. Read more.
FDIC Info Session Dallas: Basel III for Community Banks. Read more.

Saturday

Interim Final Rule Effective: OCC's Lending Limit Rule. Read more.
Prohibition of Federal Assistance to Swaps Entities. Read ABA's summary.
Removal of Statutory References and Use of Credit Ratings. Read ABA's summary of credit rating changes.
Restrictions on Lending to Insiders. Read ABA's summary.

All times in Eastern Standard Time. See future events on the Dodd-Frank Calendar.

ABA Fair Lending Toolbox The ABA Toolbox on Fair Lending will help bankers review the systems they have in place to continue their strong record of compliance with fair lending laws and regulations. This set of tools provides a framework for developing your Systems, Monitoring, Assessment, Accountability, Response, and Training needed. The concepts and tools discussed in this toolbox will help banks and their boards realize just how SMAART their programs are—and how little they need to do to adapt to current regulatory expectations. Read More.

SEC & CFTC Implementing Derivatives Reform

2012-05-22T11:02:00.001-04:00

The Senate Banking Committee will hold an open hearing today at 10:00 a.m. entitled “Implementing Derivatives Reform: Reducing Systemic Risk and Improving Market Oversight.” SEC Chairman Mary Schapiro and CFTC Chairman Gary Gensler will give testimony.

Title VII of the Dodd-Frank Act creates an new regulatory regime for over-the-counter (OTC) derivatives, authorizing the SEC and CFTC to write a number of new regulations.

In her prepared testimony SEC Schapiro stated, in the near term the SEC expects to complete the last of the core elements of the proposal phase, in particular, rules related to the financial responsibility of security-based swap dealers and major security-based swap participants. The SEC also expects to complete joint rulemaking on the product definitions with the CFTC in the “very near term.”

The witnesses also discussed the global impact of these reforms. CFTC Gensler outlined the CFTC’s upcoming proposal on the cross-border application of Dodd-Frank swaps market reforms for the committee. Gensler yesterday introduced the upcoming proposal at the FINRA Annual Conference.

During the Q&A session following the testimony, both Schapiro and Gensler stated it is not their agencies’ desire to remove risk from the banking industry through these regulations, remarking banks have managed risk for the markets for years and do markets a great service by managing this risk.

Watch the hearing live.
Read SEC Chairman Mary Schaprio’s testimony.
Read CFTC Chairman Gary Gensler’s testimony.

Treasury Assessment Fee Rules to Fund OFR

2012-05-22T08:13:00.000-04:00

The Treasury has issued a final rule and interim final rule to implement Section 155 of the Dodd-Frank Act which directs Treasury to establish an assessment schedule for bank holding companies with total consolidated assets of $50 billion or greater and nonbank financial companies supervised by the Federal Reserve to collect assessments equal to the total expenses of the Office of Financial Research (OFR).

Included in OFR’s expenses are expenses of the Financial Stability Oversight Council (FSOC), under Section 118, and certain expenses of the FDIC, under Section 210 of the Dodd-Frank Act.

The assessment schedule for bank holding companies is issued as a final rule. The assessments for nonbank financial companies is issued as an interim final rule.

The rules will allow Treasury to collect semiannual assessment fees from these companies beginning on July 20, 2012.

The final rule will be effective July 20, 2012.
The interim final rule will be effective July 20, 2012.
Comment relating to the nonbank interim final rule are due by September 18, 2012.

Read more.

HFS Markup Amendment: Abolish OFR

2012-04-18T15:23:00.003-04:00

The House Financial Services Committee yesterday approved by a 31-26 party-line vote a legislative package that is intended to cut the budget deficit by $35 billion.

Provisions in the package would, among other things, repeal the FDIC's Dodd-Frank Act-mandated authority to resolve large, failing financial institutions and subject the CFPB’s budget to annual congressional approval.

An amendment (no. 7) was offered by Mr. Canseco and agreed to by voice vote to abolish the Office of Financial Research (OFR).

The deficit-reduction legislation has little chance of becoming law this year because of Senate opposition.

Read a committee press release on the package.

Read more about the hearing.

Senate Banking Committee to Vote on Nominations

2012-03-29T08:14:00.000-04:00

The Senate Banking Committee today will vote on the nominations of Richard Berner to be director of Treasury’s new Office of Financial Research (OFR).

The panel also will vote on the nominations of Jeremiah Norton to be a member of the FDIC Board; Jerome Powell and Jeremy Stein to be members of the Federal Reserve’s Board of Governors; and Christy Romero to be Special Inspector General for the Troubled Asset Relief Program.

If approved, the nominations will join several others awaiting full Senate confirmation.

OFR Working Paper Released: Forging Best Practices in Risk Management

2012-03-27T08:45:00.002-04:00

The Office of Financial Research (OFR) has released the second paper in its Working Paper Series to promote best practices in financial risk management. The paper, Forging Best Practices in Risk Management, provides a broad assessment of risk management practices and how risk management can be improved.

The paper approaches risk management from three perspectives: risk measurement by individual firms, governance and incentives, and systemic concerns.

The Dodd-Frank Act established the OFR to, among other things, improve the quality of data and analysis for assessing threats to financial stability. The OFR Working Paper Series makes accessible the OFR’s in-depth work to analyze and measure such data. The OFR has invited interested parties to review and discuss the working papers with the Agency.

The OFR’s first paper in the Working Paper Series, A Survey of Systemic Risk Analytics, focused on quantitative tools for assessing threats to financial stability.

Treasury Seeking Applicants for FRAC

2012-03-23T08:59:00.000-04:00

The Treasury has issued a notice to establish the Federal Research Advisory Committee (FRAC) and is seeking applications for committee members. The FRAC will present advice and recommendations to assist the Office of Financial Research (OFR) in carrying out its functions in support of the Financial Stability Oversight Council (FSOC). The Notice includes the criteria and procedures for the selection of members.
Comments and applications are due April 16th, 2012.

Read more.

More Than 8,000 Download Dodd-Frank Guide

2012-03-20T07:45:00.000-04:00

Bankers in the past month have downloaded more than 8,300 copies of “Dodd-Frank and Community Banks: Your Guide to 12 Critical Issues” -- ABA’s latest free resource to help bankers understand and manage Dodd-Frank Act provisions.

The guide describes 12 key DFA issues that are expected to see action in 2012, explains why they matter, and offers ways bankers can get involved in order to influence the outcome.

Download the guide.

View other Dodd-Frank resources.

OFR Strategic Framework for FY 2012

2012-03-16T07:34:00.000-04:00

The Office of Financial Research (OFR) released its Strategic Framework for FY 2012 to FY 2014. The strategic framework explains the goals and principles that will guide the OFR’s work, spells out the architecture for the OFR, and sets out a framework for accountability.

The Dodd-Frank Act established the OFR within the Treasury Department to serve the Financial Stability Oversight Council (FSOC). The strategic framework describes the mission, goals, objectives, and implementation priorities of the OFR, outlining five strategic goals:

Support the FSOC through the secure provision of high-quality financial data and analysis.
Develop and promote data-related standards and best practices.
Establish a center of excellence for research on financial stability and promote best practices for financial risk management.
Provide the public with key data and analysis, while protecting sensitive information.
Establish the OFR as an efficient organization and world-class workplace.

To meet these goals the OFR, for example, has been responsible for gathering and analyzing data related to the designation of nonbank financial companies and has been promoting stronger data standards in order to establish a global legal entity identifier (LEI) system.

Read the Treasury press release.
Read the OFR Strategic Framework.

Senate Banking Hearing Scheduled for OFR, Other Nominations

2012-03-14T10:38:00.002-04:00

Senate Banking Committee Chairman Tim Johnson (D-SD) announced yesterday that the Committee will hold a hearing next week on the nominations of Jerome Powell and Jeremy Stein to be Federal Reserve Board Governors, Jeremiah Norton to be an FDIC Board Member, Richard Berner to be Director of the Office of Financial Research, and Christy Romero to be Special Inspector General for the Troubled Asset Relief Program.

The hearing is scheduled for Tuesday, March 20, at 10:00 a.m.

Read more about the hearing.

ABA, The Clearing House Comment Letter on OFR Funding Assessment Fees

2012-03-06T08:31:00.000-05:00

ABA with The Clearing House in a comment letter yesterday discussed the assessment of fees on large bank holding companies - companies with total consolidated assets of $50 billion of more - and nonbank financial companies supervised b the Federal Reserve Board to cover the expenses of the Office of Financial Research (OFR). The Associations focused on assessment fees being “reasonably and fairly allocated among all covered companies.”

The letter notes the FSOC has spent considerable time and resources in designating Nonbanks, but has yet to identify these institutions.

Much of the OFR’s and the FSOC’s expenses have been, and are likely to continue to be, attributable to the agencies’ responsibilities to research, oversee and manage the systemic risks associated with Nonbanks. Because no nonbanks have yet been designated, BHCs will exclusively bear all OFR and FSOC expenses until the FSOC begins to designate Nonbanks. Forcing BHCs to bear all costs associated with the initial start-up of the OFR—an agency that will have to spend much of its budget researching, monitoring and designating nonbanks.

Read the full comment letter.

Comment Letter: Assessment Fees to Fund OFR

2012-03-05T11:48:00.000-05:00

ABA has filed a comment letter jointly with four other trade associations regarding the assessment of fees on large bank holding companies and nonbank financial companies supervised by the Federal Reserve Board to cover the expenses of the Office of Financial Research(OFR) under Section 155 of the Dodd-Frank Act. The proposed rule defines large bank holding companies as companies with total consolidated assets of $50 billion or more.

The Associations’ primary concern is that the OFR assessments should be transparent, equitable, reasonable, and predictable.

In the letter the Associations note while congress has given broad mandates to the OFR, public visibility into how the mandates will be executed and the resources needed has remained extremely limited.

The letter offers a variety of suggestions to Treasury, such as; requesting the OFR develop and release a strategic plan detailing long-term objectives of the organization, allowing Treasury to develop an OFR advisory committee to ensure assessments are reasonable allocated, and offering clarified calculations of the assessments.

Read the full letter.

The Week Ahead: March 5 - March 9

2012-03-02T10:00:00.001-05:00

Monday

Comments Due: CFPB on Streamlining Regulations. Read more.
Comments Due: Treasury on Outline of Assessment Program. Read more.

Wednesday

House Financial Services Committee Hearing: “The Securities Investor Protection Corporation: Past, Present, and Future.” Read more.
ABA Telephone Briefing: Planning Your Strategic Response to Dodd-Frank: An Update Read more and register.

Friday

CFTC Final Rule: Swap Transaction Data. Read more.
CFTC Public Meeting. Read more.

All times in Eastern Standard Time. See future events on the Dodd-Frank Calendar. Analyze Today's Crimes. Prevent Tomorrow's The ABA Bank Capture system provides a data sharing platform for banks to report, share and analyze their robbery and other bank crime data. It is a national platform for sharing bank crime information in a secure and confidential manner.With ABA Bank Capture, bankers and law enforcement will be able to fight illegal activity including robberies, burglaries, ATM crime and other bank fraud. Weekly webinars will demonstrate the system capabilities and highlight key system functionality. Sign up for a demo.

FSB: Legal Entity Identifier Expert Group and Industry Advisory Panel

2012-01-23T12:11:00.001-05:00

The Financial Stability Board (FSB) announced last week the creation of a Legal Entity Identifier (LEI) Expert Group. The LEI Expert Group will be made up of public officials from around the world and supported by an industry advisory panel. The FSB has committed the group to deliver proposals by April on the implementation of a global LEI system for review by the FSB and delivery to the G-20 at the June 2012 Summit. Included in this proposal will be recommendations for the appropriate governance framework for implementation of the global LEI initiative, as requested at the G-20 Cannes Summit in November 2011.

Read the Treasury blog post.

OFR Proposes Assessment Rule for Large Institutions

2011-12-30T09:28:00.002-05:00

The Office of Financial Research - along with Treasury and the Financial Stability Oversight Council - released a rule yesterday that outlines how assessments will be calculated for institutions over $50 billion in assets. Assessments will be collected starting in July 2012.

Comments are due 60 days after publication in the Federal Register.

Read the proposed rule.

President Nominates OFR Director

2011-12-19T11:17:00.001-05:00

President Obama on Friday nominated Dick Berner for a six-year term as Director of the Treasury Department’s new Office of Financial Research (OFR). The Office, created by Dodd-Frank, has the authority to collect and analyze data on financial markets to better detect systemic threats. Berner is a former Chief Economist at Morgan Stanley and is currently Counselor at Treasury’s Office of Research and Quantitative Studies.

Treasury Delayed Proposal for Universal Identifier

2011-08-14T21:48:00.000-04:00

The Treasury's Office of Financial Research has delayed releasing a proposal that would establish the creation of a legal entity identifier (LEI) for all financial market participants.

An LEI is a unique number that would be used across markets and jurisdictions to identify firms involved in financial markets.

In November 2010, the Office of Financial Research said that if a universal LEI had been established by July 15, 2011, it would release a proposal that would require all data reporting to be based off that identifier. As no global consensus has been reached on the LEI, the proposal has been delayed.

The Financial Stability Board will host a workshop on September 28 and 29 to coordinate efforts on the creation of an LEI.

The Office of Financial Research will work with the CFTC and SEC for the initial implementation of the LEI for all swap transaction reporting in 2012.

Read more.