ABA Dodd-Frank Tracker

This Week Ahead: August 28-September 1

2017-08-25T11:37:00.001-04:00

Monday

Comments Due CFTC: Disclosure and Retention of Certain Information Relating to Cleared Swaps Customer Collateral (PRA)
Read more.
Comments Due CFTC: Protection of Collateral of Counterparties to Uncleared Swaps; Treatment of Securities in a Portfolio Margining Account in a Commodity Broker Bankruptcy
Read more.
Comments Due FDIC: Consolidated Call Reports
Read more.

Thursday

Comments Due CFTC: Derivatives Clearing Organizations, General Regulations and International Standards
Read more.

Friday

Comments Due EBSA: Draft Model Non-Quantitative Treatment Limitations Form
Read more.

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

This Week Ahead: August 21-25

2017-08-18T11:00:00.000-04:00

Monday

Comment Due SEC: Covered Securities Pursuant to Section 18 of the Securities Act of 1933
Read more.
Comments Due CFTC: Conflicts of Interest Policies and Procedures by Swap Dealers and Major Swap Participants (PRA)
Read more.
Comments Due CFTC: Revisions to Freedom of Information Act Regulations
Read more.

Wednesday

Comments Due FHFA: Minority and Women Inclusion Amendments
Read more.
Comments Due OCC: Agency Information Collection Activities: Information Collection Revision; Submission for OMB Review; Uniform Interagency Transfer Agent Registration and Deregistration Forms
Read more.

Friday

Comments Due FDIC: Agency Information Collection Activities: Submission for OMB Review
Read more.

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

The Week Ahead: June 19 - 23

2017-06-16T11:55:00.000-04:00

Monday

Comments Due SBA: Data Collection Available for Public Comments (PRA)
Read more.
Comments Due SBA: Portfolio Financing Reports
Read more.
Comments Due SBA: SBIC Financial Reports
Read more.
Comments Due SBA: Small Business Size Standards; Adoption of 2017 North American Industry Classification System for Size Standards
Read more.

Tuesday

Comments Due CFTC: Real-Time Public Reporting and Block (PRA)
Read more.
Comments Due FRB: Survey of Small Business and Farm Lending (PRA)
Read more.

Thursday

Comments Due FDIC: Agency Information Collection Activities: Submission for OMB Review; Comment Request (PRA)
Read more.
Comments Due FDIC: Foreign Banking and Investment by Insured State Nonmember Banks
Read more.
Comments Due FDIC: Forms Relating to Processing Deposit Insurance Claims
Read more.
Comments Due FDIC: Interagency Notice of Change in Control
Read more.
Comments Due FDIC: Procedures for Monitoring Bank Secrecy Act Compliance
Read more.
9:30 AM Meeting SEC: Investor Advisory Committee Meeting
Read more.

Friday

Comments Due SEC: Rule 15c3-1 (PRA)
Read more
Effective Date CFTC: Disclosure and Retention of Certain Information Relating to Cleared Swaps Customer Collateral (PRA)
Read more.
Effective Date CFTC: Fees for Reviews of the Rule Enforcement Programs of Designated Contract Markets and Registered Futures Associations
Read more.

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

Trump Names Stump to CFTC

2017-06-13T11:04:00.000-04:00

President Trump has nominated Dawn DeBerry Stump to serve on the Commodity Futures Trading Commission. She was previously a senior executive at the Futures Industry Association and NYSE Euronext, as well a as senior congressional staffer. A Republican, Stump joins Brian Quintenz as a Trump CFTC nominee.

Read more.

The Week Ahead: May 29 - June 2

2017-05-26T11:55:00.000-04:00

Tuesday

Comments Due CFTC: Agency Information Collection Activities: Notice of Intent To Extend Collection 3038-0049: Procedural Requirements for Requests for Interpretative, No-Action, and Exemptive Letters (PRA)
Read more.
Comments Due FDIC: Agency Information Collection Activities: Proposed Collection Renewals; Comment Request (3064-0099; -0118; -0148 and -0153) (PRA)
Read more.
Comments Due FDIC: Agency Information Collection Activities: Submission for OMB Review; Comment Request (3064-0006 & -0184) (PRA)
Read more.
Comments Due FDIC: Application for Waiver of Prohibition on Acceptance of Brokered Deposits
Read more.
Comments Due FDIC: Interagency Biographical and Financial Report
Read more.
Comments Due FDIC: Interagency Statement on Sound Practices Concerning Complex Structured Finance Transactions
Read more.
Comments Due FDIC: Management Official Interlocks
Read more.
Comments Due FDIC: Prohibitions and Restrictions on Proprietary Trading and Certain Interests In and Relationships With, Hedge Funds and Private Equity Funds
Read more.
Comments Due FDIC: Regulatory Capital Rules
Read more.
Comments Due FINCEN: Due Diligence Programs for Correspondent Accounts for Foreign Financial Institutions (PRA)
Read more.
Comments Due FINCEN: Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery (PRA)
Read more.
Comments Due FSA: Disaster Assistance Program (General) (PRA)
Read more.
Comments Due FSA: Information Collection Request; Customer Data Worksheet Request for Business Partner Record Change (PRA)
Read more.
Effective Date SEC: Securities Transaction Settlement Cycle; Final Rule
Read more.

Wednesday

Comments Due SBA: Borrower Information Form, Lenders Application for Guaranty, and 7(a) Loan (PRA)
Read more.
Comments Due SBA: Certified Development Company (CDC) Annual Report Guide (PRA)
Read more.

Thursday

Comments Due SBA: Small Business Investment Companies: Passive Business Expansion and Technical Clarifications
Read more.

Friday

Comments Due FRB: Proposed Agency Information Collection Activities; Comment Request
Read more.
Comments Due SBA: Entrepreneurial Development Customer Intake Form & Training Report Form
Read more.

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

The Week Ahead: May 14 - 20

2017-05-12T11:30:00.000-04:00

Monday

Comments Due CFTC: Capital Requirements of Swap Dealers and Major Swap Participants
Read more.
Comments Due FHFA: Freedom of Information Act Implementation
Read more.
Comments Due SEC: Proposed Amendments to Municipal Securities Disclosure; Proposed Rule
Read more.

Tuesday

Comments Due SEC: Inline XBRL Filing of Tagged Data; Proposed Rule
Read more.

Wednesday

9AM Meeting CFPB: Academic Research Council Meeting
Read more.

Friday

Comments Due CFPB: Request for Information Regarding Use of Alternative Data and Modeling Techniques in the Credit Process
Read more.

Saturday

Revised Effective Date SBA: Small Business Investment Companies: Passive Business Expansion and Technical Clarifications
Read more.

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

Fed, FDIC Issue FAQs on Large Bank Resolution Plans

2017-05-08T09:41:00.000-04:00

The Federal Reserve and the FDIC have published the answers to frequently asked questions about guidance issued last year on the resolution plans that the nation’s eight largest banks are required to submit detailing how they would be wound down in the event of bankruptcy.

The FAQs address capital and liquidity requirements and forecasting, governance mechanisms, management of critical third-party vendors and other operational issues, derivatives and trading activities, legal entity rationalization and other general and legal matters related to the resolution planning process.

Read the FAQs.

The Week Ahead: May 8 - 12

2017-05-05T11:45:00.000-04:00

Monday

Comments Due CFTC: Ownership and Control Reports, Forms 102/102S, 40/40S, and 71 (Trader and Account Identification Reports) (OMB Control No. 3038-0103) (PRA)
Read more.
Comments Due IRS: Carryover Allocations and Other Rules Relating to the Low-Income Housing Credit (PRA)
Read more.
Comments Due IRS: Proposed Collection; Comment Request for Statements to Recipients of Dividend Payments
Read more.
Comments Due SEC: Request for Comment on Possible Changes to Industry Guide 3 (Statistical Disclosure by Bank Holding Companies)
Read more.
Effective Date SBA: Termination of Nonmanufacturer Rule Class Waiver
Read more.

Thursday

Comments Due CFTC: Adaption of Regulations to Incorporate Swaps--Records of Transactions (PRA)
Read more.

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

The Week Ahead: March 13 - 17

2017-03-10T11:00:00.000-05:00

Monday

Comments Due FDIC: Agency Information Collection Activities: Proposed Collection Renewals; Comment Request (3064-0006, & -0184) (PRA)
Read more.
Comments Due FDIC: Agency Information Collection Activities: Submission for OMB Review; Comment Request (3064-0112, -0125, -0127 & -0175) (PRA)
Read more.
Comments Due FDIC: Foreign Banking and Investment by Insured State Nonmember Banks
Read more.
Comments Due FDIC: Interagency Biographical and Financial Report
Read more.
Comments Due FDIC: Interagency Guidance on Sound Incentive Compensation Practices
Read more.
Comments Due FDIC: Occasional Qualitative Surveys
Read more.
Comments Due FDIC: Prohibitions and Restrictions on Proprietary Trading and Certain Interests In and Relationships With, Hedge Funds and Private Equity Funds
Read more.
Comments Due FDIC: Real Estate Lending Standards
Read more.

Thursday

Comments Due CFTC: Capital Requirements of Swap Dealers and Major Swap Participants; Proposed Rule
Read more.

Friday

Comments Due CFPB: Truth In Lending Act (Regulation Z)--Appraisals for Higher-Priced Mortgage Loans (PRA)
Read more.
Comments Due EBSA: Definition of the Term ``Fiduciary''; Conflict of Interest Rule--Retirement Investment Advice; Best Interest Contract Exemption (Prohibited Transaction Exemption 2016-01); Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs (Prohibited Transaction Exemption 2016-02); Prohibited Transaction Exemptions 75-1, 77-4, 80-83, 83-1, 84-24 and 86-128
Read more.

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

The Week Ahead: Feb. 27 - Mar. 3

2017-02-24T11:00:00.000-05:00

Monday

Comments Due CFTC: Rules Relating to the Operations and Activities of Commodity Pool Operators and Commodity Trading Advisors and to Monthly Reporting by Futures Commission Merchants (PRA)
Read more.
Comments Due FDIC: Recordkeeping Requirements for Qualified Financial Contracts
Read more.
Comments Due FRB: Rules Regarding Availability of Information
Read more.
Comments Due FRB: Rules Regarding Availability of Information
Read more.
Comments Due OCC: Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery (PRA)
Read more.

Tuesday

Comments Due CFTC: Position Limits for Derivatives; Proposed Rule
Read more.

Thursday

10:30 AM Meeting CFPB: Consumer Advisory Board Meeting
Read more.

Friday

Comments Due HUD: 30-Day Notice of Proposed Information Collection: FHA-Insured Mortgage Loan Servicing of Payments, Prepayments, Terminations, Assumptions and Transfers (PRA)
Read more.

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

Fed, OCC Issue Transition Period Guidance on Variation Margin

2017-02-24T09:06:00.001-05:00

The Federal Reserve and the OCC have issued guidance on how examiners will review compliance with the requirement for when swap dealers and major swap participants must exchange variation margin for swaps not cleared through a central counterparty. While the requirement takes effect March 1, ABASA and other groups have sought a transition period to facilitate compliance.

The Fed and the OCC said that priority in compliance efforts should be given “based on the size of and risk inherent in the credit and market risk exposures presented by each counterparty,” with full compliance by March 1 for counterparties “that present significant exposures.” For other counterparties, examiners will “focus on a covered swap entity's good faith efforts to comply with the variation margin requirements of the final rule as soon as possible, and in no case later than Sept. 1, 2017.”

“The scope and scale of changes necessary for each covered swap entity to achieve effective compliance for each of its non-cleared swap transactions is recognized,” the Fed said. During initial examinations, examiners will evaluate covered entities’ compliance management systems and programs, governance processes and training programs.

Although the FDIC, Farm Credit Administration and Federal Housing Finance Agency also administer the final rule on variation margins, they supervise no entities affected by the guidance. They issued supportive statements.

Read the Fed guidance.
Read the OCC guidance.
Read the ABASA letter.

ABA, Groups Seek Forbearance on Variation Margin Rule

2017-02-16T09:00:00.000-05:00

With a March 1 compliance deadline for when swap dealers and major swap participants must exchange variation margin for swaps not cleared through a central counterparty, ABA and several other trade groups have urged regulators to provide a transition period to facilitate compliance.

The groups said:

While the systemic risk implications of granting forbearance are low, it is clear to the associations that the documentation and operational challenges that are necessary to comply with the VM regulations by March 1 are high, despite concerted and continuing effort by our members and other market participants.

They warned that without a transition period, many market participants might have to significantly curtail their derivatives trading activities – resulting in disruption and market fragmentation. They said:

[R]egulatory forbearance with respect to the VM regulations strikes an appropriate balance between upholding the integrity of the regulations while preserving an open and stable derivatives market.

Read the letter.

Fed to Evaluate Large Bank ‘Living Wills,’ Fintech in 2017

2017-01-09T09:30:00.000-05:00

Speaking at a legal event in Washington, D.C., Federal Reserve General Counsel Scott Alvarez outlined several issues the agency will focus on in 2017, including certain regulatory relief measures and the entrance of nonbank fintech companies into the Federal Reserve System.

The Fed is currently exploring whether to change its annual filing requirement for banks submitting “living wills” detailing how they would be resolved in the event of bankruptcy, Alvarez said. He noted that the agency is also considering creating different asset-based schedules for banks required to file. Additionally, the Fed will continue streamlining reporting and capital requirements for community banks this year, and plans to move forward with rulemakings related to derivatives contracts for global systemically important banks, physical commodities activities and metrics reporting for the Volcker rule, he said.

Another important focus will be the treatment of fintech firms entering the Fed system under the OCC’s proposed limited-purpose national bank charter, which was announced by Comptroller of the Currency Thomas Curry in December 2016. The OCC and the Fed are currently working closely to determine how fintech companies under a limited-purpose charter will access the benefits of the Federal Reserve System, such as the payments network, Alvarez said.

OCC: Bank Trading Revenues Fell in Q3

2017-01-05T09:30:00.000-05:00

Commercial banks reported total trading revenue of $6.4 billion in the third quarter of 2016, down from $7 billion in the previous quarter, according to the OCC’s Quarterly Report on Bank Trading and Derivatives Activities. Trading revenue decreased 9% from the second quarter of 2016, largely due to a decline in combined interest rate and foreign exchange revenue, the OCC said. Despite this decrease, however, trading revenue was up 20% year-on-year.

The net current credit exposure decreased $24 billion, or 4.7% in the third quarter, the report said. The notional amount of derivatives held by banks decreased $12.4 trillion to total $177.5 trillion.

Read the report.

Trades Highlight Differences in European, U.S. Plans for NSFR

2017-01-04T09:45:00.000-05:00

A joint comment letter by ABA and several financial trade groups highlighted the differences between U.S. and European Union proposals for the Net Stable Funding Ratio, a long-term liquidity measurement included in the Basel III liquidity standards.

The associations identified a total of 10 primary differences (along with a number of technical discrepancies) between the two proposals, including the required stable funding levels assigned to Level 1 securities, unsecure wholesale lending, gross derivatives and other activities. The groups also noted that while the U.S. proposal is set to take effect Jan. 1, 2018, the European proposal would not be in effect until 2019 at the earliest.

ABA previously criticized the U.S. proposal for the NSFR, which consists of the amount of available stable funding over a year divided by the institution’s required stable funding, with the numerator required to equal or exceed the denominator. In previous comments, the association said that the NSFR is unnecessary, given the wide array of regulatory standards already in place, and added that it relies on flawed assumptions.

If adopted, the U.S. proposal would apply to banking institutions with more than $250 billion in total assets or $10 billion or more in on-balance sheet foreign exposures. A modified NSFR would apply to institutions with between $50 billion and $250 billion in assets.

Read the joint comment letter.

The Week Ahead: Dec. 19 - 23

2016-12-16T11:00:00.000-05:00

Monday

Comments Due CFTC: Cross-Border Application of the Registration Thresholds and External Business Conduct Standards Applicable to Swap Dealers and Major Swap Participants; Proposed Rule
Read more.
Comments Due OCC: Diversity Self-Assessment Template for OCC-Regulated Entities (PRA)
Read more.
Comments Due OCC: Retail Foreign Exchange Transactions (PRA)
Read more.

Wednesday

Comments Due FDIC: Joint Standards for Assessing Diversity Policies and Practices (PRA)
Read more.
Comments Due FHFA: Indemnification Payments; Correction and Extension of Comment Period
Read more.

Thursday

Comments Due FRB: Regulations Q and Y; Risk-Based Capital and Other Regulatory Requirements for Activities of Financial Holding Companies Related to Physical Commodities and Risk-Based Capital Requirements for Merchant Banking Investments
Read more.

Friday

Effective Date FEMA: National Flood Insurance Program (NFIP): Financial Assistance/Subsidy Arrangement
Read more.

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

The Week Ahead: Dec. 12 - 16

2016-12-09T11:00:00.000-05:00

Monday

Comments Due FDIC: Restrictions on Qualified Financial Contracts of Certain FDIC-Supervised Institutions; Revisions to the Definition of Qualifying Master Netting Agreement and Related Definitions
Read more.
Comments Due SEC: Definition of Covered Clearing Agency; Proposed Rule
Read more.
Effective Date SEC: Standards for Covered Clearing Agencies; Final Rule
Read more.

Tuesday

Effective Date CFTC: Clearing Requirement Determination Under Section 2(h) of the Commodity Exchange Act for Interest Rate Swaps; Final Rule
Read more.
10 AM Meeting CFTC: Sunshine Act Meetings
Read more.

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

The Week Ahead: Oct. 31 - Nov. 4

2016-10-28T11:01:00.000-04:00

Monday

Comments Due CFTC: Privacy Act of 1974 System of Records Notice
Read more.

Tuesday

Comments Due SEC: Access to Data Obtained by Security-Based Swap Data Repositories
Read more.

Wednesday

Comments Due SEC: Extension of Comment Period for Disclosure Update and Simplification
Read more.

Thursday

Comments Due CFPB: Agency Information Collection Activities: Submission for OMB Review; Comment Request (PRA)
Read more.
Comments Due SBA: Application for Section 504 Loans (PRA)
Read more.
9:00 AM Meeting FDIC: FDIC Advisory Committee on Community Banking; Notice of Meeting
Read more.

Friday

Comments Due CFPB: Notice of a Public List of Companies Offering Existing Customers Free Access to a Credit Score
Read more.
11:00 AM Meeting CFTC: Sunshine Act Meeting
Read more.

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

The Week Ahead: Oct. 24 - 28

2016-10-21T11:06:00.002-04:00

Monday

Comments Due CFPB:Amendments Relating to Disclosure of Records and Information; Proposed Rule
Read more.
Comments Due CFPB:Application Forms for Financial Empowerment Partnerships (PRA)
Read more.
Comments Due CFPB:Federal Home Loan Bank New Business Activities
Read more.
Comments Due CFTC:Core Principles and Other Requirements for Swap Execution Facilities (PRA)
Read more.
Comments Due FDIC:Joint Standards for Assessing Diversity Policies and Practices (PRA)
Read more.
Comments Due OCC:Diversity Self-Assessment Template for Entities Regulated by the OCC (PRA)
Read more.

Thursday

10:30 AM Meeting CFPB:Consumer Advisory Board Meeting
Read more.

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

The Week Ahead: Oct. 17 - 21

2016-10-14T10:00:00.000-04:00

Monday

Comments Due CFTC:Rules Relating to the Operations and Activities of Commodity Pool Operators and Commodity Trading Advisors and to Monthly Reporting by Futures Commission Merchants (PRA)
Read more.

Tuesday

Comments Due CFPB:Amendments to Federal Mortgage Disclosure Requirements Under the Truth in Lending Act (Regulation Z); Proposed Rule
Read more.
Comments Due OCC:Mandatory Contractual Stay Requirements for Qualified Financial Contracts
Read more.
8:30 AM Meeting OCC:Minority Depository Institutions Advisory Committee
Read more.

Wednesday

Comments Due CFPB:Notice of Availability of Revised Methodology for Determining Average Prime Offer Rates
Read more.
Comments Due CFTC:Clearing Exemption for Certain Swaps Entered into by Cooperatives (PRA)
Read more.

Thursday

Comments Due SEC:List of Rules To Be Reviewed Pursuant to the Regulatory Flexibility Act
Read more.
9:00 AM Meeting FDICFDIC Advisory Committee on Economic Inclusion (ComE-IN); Notice of Meeting
Read more.

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

CFTC Postpones Expiration of Current De Minimis Threshold

2016-10-14T09:00:00.000-04:00

The CFTC has issued an order delaying the termination date of the phase-in period of the swap dealer de minimis threshold until Dec. 31, 2018. In doing so, the CFTC prevented the de minimis threshold from dropping to $3 billion at the end of 2017. ABA has previously noted that lowering the de minimis threshold could limit the ability of many commercial end users to access the swaps market in order to manage risk responsibly. (Entities that deal in notional amounts greater than the de minimis threshold are required to register with the CFTC as swaps dealers.)

The CFTC order follows the publication of a final staff report on the swap dealer de minimis exception in which CFTC staff provided analysis of available swaps data and the effects of a lower or higher de minimis threshold. As recognized by the CFTC, however, the current data set available to the CFTC is incomplete and unreliable. The commission said that during the delay, it will continue to evaluate data and the effects of new regulations, particularly capital requirements for swap dealers. The order also noted that “prior to the termination of the phase-in period, the commission may take further action regarding the de minimis threshold by rule amendment, order, or other appropriate action.”

In its comment letter to the agency, ABA urged the CFTC to provide market certainty while it continues to analyze data by, at a minimum, maintaining the current $8 billion threshold level. ABA will continue to engage with the CFTC as it deliberates over the proper threshold level.

Read more.

OCC Proposes Limits on Qualified Financial Contracts

2016-10-04T09:00:00.000-04:00

The OCC has proposed a rule that would establish restrictions on qualified financial contracts – such as derivative transactions, repurchase agreements, reverse repurchase agreements and securities lending and borrowing agreements – of national banks and federal thrifts that are subsidiaries of U.S. and foreign-based global systemically important banks. The objective of the proposal is to facilitate the orderly resolution of a failed institution by limiting the ability of the firm’s QFC counterparties to terminate contracts immediately upon the entry of the covered entity or one of its affiliates into resolution.

The rule is “substantively identical” to the QFC rule proposed earlier this year by the Federal Reserve that would require G-SIBs’ QFCs to contain contractual provisions that recognize the automatic stay of termination provisions and transfer provisions applied in resolutions under the Dodd-Frank Act and the Federal Deposit Insurance Act, the OCC said. Comments are due by Oct. 18.

Read the proposed rule.

The Week Ahead: Sep. 19 – 23

2016-09-16T11:00:00.000-04:00

Monday

Comments Due OCC: Supplier Registration Form (PRA)
Read more.
Comments Due SEC:Political Contributions by Certain Investment Advisers: Ban on Third-Party Solicitation; Notice of Order With Respect to FINRA Rule 2030
Read more.

Tuesday

Comments Due CFTC: Commodity Pool Operator Annual Report
Read more.

Wednesday

Comments Due OCC: Uniform Interagency Transfer Agent Registration and Amendment Form (PRA)
Read more.

Friday

Comments Due CFTC: Process for a Swap Execution Facility or Designated Contract Market to Make a Swap Available to Trade (PRA)
Read more.

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

The Week Ahead: Sep. 12 – 16

2016-09-09T11:30:00.000-04:00

Monday

Comments Due CFTC: Chief Compliance Officer Annual Report Requirements for Futures Commission Merchants, Swap Dealers, and Major Swap Participants; Amendments to Filing Dates
Read more.
Comments Due CFTC:SmartCheck Annual Campaign Impact Tracking Survey (PRA)
Read more.

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

Agencies Issue Report and Propose Action to Limit Bank Activities

2016-09-09T10:20:00.000-04:00

The Federal Reserve, FDIC and OCC have issued a long-awaited report mandated by Section 620 of the Dodd-Frank Act in which they called for sweeping changes to banks’ powers. Notably, the Fed recommended that Congress repeal the following: merchant banking authority for financial holding companies; grandfathered authority for physical commodities activities for certain FHCs; regulatory exemptions for industrial loan companies; and regulatory exemptions for grandfathered unitary savings and loan holding companies.

The Fed said it believes that “the existing statutory merchant banking authority enables FHCs to engage in activities that pose risks to the organizations’ safety and soundness,” adding in a footnote that it is “considering regulatory measures” to limit risks it associates with merchant banking authority independent of any action Congress might take.

ABA and other financial trade groups roundly opposed the “unfortunate and ill-considered” merchant banking recommendation. The groups said:

For the last 15 years, bank holding companies have successfully used the merchant banking authority granted to them by law to finance startups and growing companies, fueling jobs and economic growth. The regulators have made these recommendations without pointing to any evidence that these activities have ever posed any problem, and have made no attempt to assess the costs to businesses and jobs.

As part of its Section 620 review, the OCC issued a proposed rule that would prohibit national banks from dealing or investing in industrial and commercial metal. The rule – which would exempt the buying and selling of exchange, coin and bullion – would principally target bank involvement in the copper market, which was permitted under an OCC interpretive letter issued two decades ago. Comments are due on the proposal 60 days after it is published in the Federal Register.

The OCC also said it would clarify minimum prudential standards for national banks engaged in swap dealing, review risks posed to banks by membership in clearinghouses, update its investment securities regulations to reflect restrictions in the Volcker Rule, issue guidance or propose regulations to address concentration in mark-to-model assets and liabilities and reconsider whether to allow national banks to hold asset-backed securities as Type III securities. ABA staff will thoroughly review the recommendations and provide appropriate feedback to the agencies.

Read the report.
Read the OCC’s proposed rule.