tag:blogger.com,1999:blog-86819881203615860932018-05-11T14:09:04.136-04:00ABA Dodd-Frank TrackerABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.comBlogger492125tag:blogger.com,1999:blog-8681988120361586093.post-41066379489884193612017-08-09T09:25:00.000-04:002017-08-09T09:25:06.080-04:00Fannie, Freddie Fail Stress Tests<span style="font-family: Arial, sans-serif; font-size: 10pt;">Fannie Mae and Freddie Mac could need upwards of $100 billion in bailout funds if faced with another financial crisis, according to the results of the GSEs’ Dodd-Frank Act stress tests. Under a “severely adverse” scenario that saw GDP fall 6.5 percent from its pre-recession peak and unemployment reaching 10 percent, Fannie and Freddie combined would require between $34.8 and $99.6 billion in Treasury funds, the Federal Housing Finance Agency said in its report. <br /><br />The findings underscore the need for housing reform that would shift risk away from taxpayers, which ABA has long called for. The association earlier this year outlined nine principles for reforming Fannie and Freddie, with the goal of reducing the direct role of the federal government in mortgage finance, restoring private participation in housing markets and ensuring equitable access. ABA also testified at a recent Senate Banking Committee hearing on housing reform, and will continue to encourage further engagement on the issue on Capitol Hill when Congress returns in September. </span><br /><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-080917-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=9378&elqTrackId=5bfeddaf646449f8b0f40f9b7ab56b4d&elq=ac714bf25ad14779a81a74179e2d6235&elqaid=16863&elqat=1" target="_blank">View the stress test results</a></span></strong>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com1tag:blogger.com,1999:blog-8681988120361586093.post-83065685233417492632017-08-09T09:13:00.001-04:002017-08-09T09:13:14.280-04:00Regulators Extend ‘Living Will’ Deadline For 21 Domestic, Foreign Banks<span style="font-family: Arial, sans-serif; font-size: 10pt;">The regulatory agencies announced that they will extend for one year the deadline for 21 domestic and foreign banks to file their so-called “living wills” detailing how they would be resolved in the event of bankruptcy. The new filing deadline is Dec. 31, 2018.</span><br /><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-080917-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=9376&elqTrackId=faba182c2799471da86c8b1dbaf5ac17&elq=ac714bf25ad14779a81a74179e2d6235&elqaid=16863&elqat=1" target="_blank">Read more</a></span></strong>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-10229426427302031782017-08-04T10:30:00.000-04:002017-08-04T10:30:33.333-04:00This Week Ahead: August 7-11<div><b>Monday</b></div><ul><li>Comments Due DOE: <b>Federal Direct Loan Program and Federal Family Education Loan Program Teacher Loan Forgiveness Forms</b><br /><a href="https://www.gpo.gov/fdsys/pkg/FR-2017-07-06/pdf/2017-14132.pdf" target="_blank">Read more.</a></li><li>Comments Due EBSA: <b>Request for Information Regarding the Fiduciary Rule and Prohibited Transaction Exemptions</b><br /><a href="https://www.gpo.gov/fdsys/pkg/FR-2017-07-06/pdf/2017-14101.pdf" target="_blank">Read more.</a></li><li>Comments Due FRB: <b>Annual Daylight Overdraft Capital Report for U.S. Branches and Agencies of Foreign Banks</b><br /><a href="https://www.gpo.gov/fdsys/pkg/FR-2017-07-07/pdf/2017-14259.pdf" target="_blank">Read more.</a></li></ul><div><b>Tuesday</b></div><ul><li>Comments Due FRB: <b>Capital Assessments and Stress Testing (PRA)</b><br /><a href="https://www.gpo.gov/fdsys/pkg/FR-2017-06-09/pdf/2017-12009.pdf" target="_blank">Read more.</a></li></ul>All times in Eastern Standard Time. See future events on the <a href="http://regreformtracker.aba.com/p/dodd-frank-calendar.html" target="_blank">Dodd-Frank Calendar</a>.ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com6tag:blogger.com,1999:blog-8681988120361586093.post-56906750532499496752017-08-04T09:50:00.000-04:002017-08-04T09:50:08.202-04:00Fed Proposes Guidance Distinguishing Roles of Bank Boards, Management<span style="font-family: Arial, sans-serif; font-size: 10pt;">The Federal Reserve issued a proposal to streamline its supervisory expectations for bank boards of directors. The proposal clarifies the distinction between the roles of bank boards and senior management teams. <br /><br />For large banks with more than $50 billion in assets, the Fed proposed new criteria by which it will assess bank boards. These five “key attributes” include setting clear, consistent strategic direction and risk tolerance; actively managing information flow and board discussions; holding senior management accountable; supporting independent risk management and internal audit functions; and maintaining a capable board composition and governance structure. <br /><br />The Fed proposed additional changes that would apply to banks of all sizes, including revising or rescinding supervisory expectations for boards that do not relate to their core responsibilities, starting with specific revisions to existing supervision and regulation letters, with revisions to board regulations and interagency guidance to follow. It also clarified that in most cases, matters requiring attention should be directed to the bank’s senior management team, not to the board. <br /><br />ABA has long urged regulators to restore the balance between bank boards and senior management teams to allow directors to focus on their core responsibilities of determining the bank’s strategic direction and risk tolerance. The association will carefully review the proposal and provide feedback to the Fed. Comments on the proposal are due 60 days after the notice is published in the Federal Register. </span><br /><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-080417-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=9319&elqTrackId=6678f158b68b4aeda6038ee6d3055718&elq=d973ccac8bc54bbc8f732a1ee133ed34&elqaid=16782&elqat=1" target="_blank">Read the proposal</a></span></strong></span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-91811031208789766022017-08-04T09:30:00.000-04:002017-08-04T09:30:23.583-04:00Fed Proposes New SIFI Risk Rating System<span style="font-family: Arial, sans-serif; font-size: 10pt;">The Fed proposed a new supervisory rating scale for large bank holding companies with more than $50 billion in assets. The Fed is seeking to better harmonize the ratings system with its existing supervisory program, while providing clarity and consistency around its supervisory expectations and the consequences of supervisory ratings. <br /><br />The new scale would assign ratings for capital planning, liquidity risk management and governance and controls. Banks would be assigned ratings in each category, rather than receiving a standalone composite rating. Each category must be highly rated for the bank holding company to be considered “well-managed.” <br /><br />ABA is reviewing the proposal to determine the extent to which it provides a more tailored and sensitive rating system. Bankers are invited to provide feedback on the proposal and whether further adjustments are needed. </span><br /><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20170803a2.pdf" target="_blank">Read the proposal</a></span></strong>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com1tag:blogger.com,1999:blog-8681988120361586093.post-78098295287905471652017-08-02T10:45:00.000-04:002017-08-02T10:45:05.652-04:00ABA Seeks to Inform Regulator-Led Exam Modernization Effort<span style="font-family: Arial, sans-serif; font-size: 10pt;">In a March 2017 report on regulatory burden reduction, the federal banking agencies committed to review parts of their safety and soundness exam process. ABA is working to ensure that this regulator-led review is informed by banker perspectives early in the process. To that end, ABA recently hosted two conference calls with bankers to discuss ways to improve the exam process, streamline exam reports, and make the Uniform Bank Performance Report more accessible and informative. <br /><br />ABA invited regulators to listen in on both calls to hear these banker perspectives directly. The association will continue working to facilitate an open dialogue between banks and regulators as the exam modernization effort moves forward, as it did for a similar effort to modernize the Call Report. Bankers are invited to submit their specific ideas on how to improve the safety and soundness exam process, exam report or UBPR. </span><br /><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-080217-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=9281&elqTrackId=963981fdd8da4758979f506380c71ae3&elq=0706ad47d61542bab2e2fb71951d6281&elqaid=16780&elqat=1" target="_blank">Read the report</a></span></strong>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com1tag:blogger.com,1999:blog-8681988120361586093.post-40246618344599329812017-07-28T09:40:00.000-04:002017-07-28T09:40:00.292-04:00Mnuchin Underscores Tailored Regulatory Approach<span style="font-family: Arial, sans-serif; font-size: 10pt;">Testifying before the House Financial Services Committee, Treasury Secretary Steven Mnuchin outlined his recommendations for financial reform, including tailoring capital requirements, reducing regulatory overlap, remedying the Volcker Rule and making the Consumer Financial Protection Bureau more accountable.<br /><br />As an example, during the question-and-answer period Mnuchin suggested that the Dodd-Frank Act’s $50 billion asset threshold for designation as a systemically important financial institution “should be raised substantially, at least to $250 or $300 billion.” He recommended further tailoring the designation process so that regulators have discretion to exempt “simple, un-complex banks” above whatever asset threshold is established.<br /><br />ABA has long supported a tailored approach to regulating SIFIs based on a broader range of systemic risk indicators, including business model, geographic exposure and interconnectedness. The association supports Rep. Blaine Luetkemeyer’s recently introduced bipartisan Systemic Risk Designation Improvement Act, which would eliminate the arbitrary $50 billion threshold.</span><br /><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-072817-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=9219&elqTrackId=a6f40f400ae549e6955989f66bca80fe&elq=47fa182394cf4a44b4389cd6276bd567&elqaid=16725&elqat=1" target="_blank">Read Mnuchin’s testimony</a></span></strong>.</span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com4tag:blogger.com,1999:blog-8681988120361586093.post-75220739885575051232017-07-28T09:29:00.000-04:002017-07-28T09:29:26.485-04:00Fed Nominee Quarles ‘Fully Supports’ Tailored Regulation<span style="font-family: Arial, sans-serif; font-size: 10pt;">During his confirmation hearing, Randal Quarles </span><span style="background-color: white; color: #545454; font-family: Roboto, arial, sans-serif; font-size: x-small;">—</span><span style="font-family: Arial, sans-serif; font-size: 10pt;"> President Trump’s nominee to serve as Federal Reserve vice chairman for supervision </span><span style="background-color: white; color: #545454; font-family: Roboto, arial, sans-serif; font-size: x-small;">—</span><span style="font-family: Arial, sans-serif; font-size: 10pt;"> endorsed the concept of tailored supervision that ABA has done much to work into the policy conversation over the past several years. “It makes for better and more efficient regulation,” he said, which in turn “makes it easier for the financial system to support the real economy.” He said he look at tailoring capital requirements as well as other regulations. </span><span style="font-family: Arial, sans-serif; font-size: 10pt;">Quarles also called for more transparency in the Dodd-Frank Act-mandated stress testing and capital planning processes.</span><br /><blockquote class="tr_bq"><span style="font-family: Arial, sans-serif; font-size: 10pt;">I would want that to be a theme of the Federal Reserve’s regulatory activity were I confirmed for this position. An example is the lack of transparency that has surrounded the CCAR stress tests up to now </span><span style="background-color: white; color: #545454; font-family: Roboto, arial, sans-serif; font-size: x-small;">—</span><span style="font-family: Arial, sans-serif; font-size: 10pt;"> so I do think the Federal Reserve can look at being more transparent about those activities and can do it in a way that does not in any way reduce the effectiveness.</span></blockquote><span style="font-family: Arial, sans-serif; font-size: 10pt;">Trump’s nominee for comptroller of the currency, former OneWest Bank CEO Joseph Otting, also testified. He called for the OCC to do more to enhance access to credit for low-income and minority communities, expressing concern that excessively prescriptive and narrow government rules have artificially limited bank services to these customers, citing small-dollar loans as an example.<br /><br />Both Otting and Quarles expressed concern about rising risks in student loans and the auto loan market, which Otting said “got a little overcooked” before lenders began reining things in. Quarles also said he was worried about the growing complexity of the regulatory system posing risks in itself.</span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com1tag:blogger.com,1999:blog-8681988120361586093.post-2689976938787623552017-07-27T11:30:00.000-04:002017-07-27T11:30:12.767-04:00ABA Applauds Bill Ending Arbitrary $50B Threshold for SIFI Status<span style="font-family: inherit;">ABA welcomed the recent introduction of the Systemic Risk Designation Improvement Act by Rep. Blaine Luetkemeyer (R-Mo.). The bill <span style="background-color: white; color: #222222;">—</span> a key part of ABA’s <a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-072717-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=6980&elqTrackId=5eb19b793dde470687220ecd9a34d239&elq=33d3b2b59c9d41f3a941e4e2c9b077ae&elqaid=16724&elqat=1" target="_blank"><strong><span style="color: #005a8c;">Blueprint for Growth</span></strong></a> <span style="background-color: white; color: #222222;">— </span>replaces the arbitrary $50 billion asset threshold for systemically important status in the Dodd-Frank Act with a more tailored, nuanced set of systemic risk indicators. Under the bill, the Fed would review a financial institution’s size, interconnectedness, global activity and complexity to determine whether it should be subject to regulation as a systemically important financial institution. ABA explained the need for tailored regulation in its letter of support for the bill. </span><br /><blockquote class="tr_bq"><span style="font-family: inherit;">Since the enactment of [Dodd-Frank] and its statutory size thresholds, banking regulators have relied heavily on the asset size of financial institutions, creating regulatory ‘cliffs’ whereby all institutions over a certain size are subject to very similar regulatory and supervisory standards. ABA believes strongly that the most effective and value-added supervision regime is one that is risk-based and individually tailored.</span></blockquote><span style="font-family: inherit;">The bill has attracted wide bipartisan support, with 11 co-sponsors: Reps. Kyrsten Sinema (D-Ariz.), Roger Williams (R-Texas), David Scott (D-Ga.), French Hill (R-Ark.), Josh Gottheimer (D-N.J.), Ted Budd (R-N.C.), Steve Stivers (R-Ohio), Gregory Meeks (D-N.Y.), Joyce Beatty (D-Ohio), Pete Sessions (R-Texas) and Mia Love (R-Utah). The House passed a similar bill in the previous Congress by a wide bipartisan margin. </span><br /><span style="font-family: inherit;"><strong><br /></strong></span><span style="font-family: inherit;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-072717-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=9201&elqTrackId=dad8862711144e3ca44e486c7e8d0c9a&elq=33d3b2b59c9d41f3a941e4e2c9b077ae&elqaid=16724&elqat=1" target="_blank">Read ABA's letter</a></span></strong>.</span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com2tag:blogger.com,1999:blog-8681988120361586093.post-91128458376853916382017-07-14T08:45:00.000-04:002017-07-14T08:45:05.914-04:00Yellen Opens Door to Reforms of Enhanced Leverage Ratio<span style="font-family: inherit; font-size: 10pt;">Testifying before the Senate Banking Committee, Federal Reserve Chairman Janet Yellen acknowledged that aspects of the agency’s enhanced supplementary leverage ratio “may be having unintended adverse consequences” and said the Fed is looking into changes. Specifically, Yellen addressed concerns expressed by senators from both parties that the enhanced SLR is negatively affecting custody banks that serve institutional investors.<br /><br />For example, by including riskless assets such as reserves held at the Fed in its denominator, the enhanced SLR can increase volatility and raise costs that are passed on to customers. In the case of custody banks, Sen. Mike Rounds (R-S.D.) noted, this means that the structure of the enhanced SLR reduces returns for American retirement savers as mutual funds absorb higher costs to banks.<br /><br />“Perhaps it’s too high relative to risk-based capital requirements,” Yellen said of the enhanced SLR. “It is something where a regulation perhaps has had an unintended consequence, and we are looking at that carefully,” she added, although she did not specify a timeframe for a change. Among the possible options she identified were exempting central bank reserves from the denominator and recalibrating the leverage ratio.<br /><br />ABA has long pointed out the downsides of the current enhanced SLR calculation, most recently in its white paper sent to the Treasury Department this spring. “The inclusion of riskless assets (such as cash and bank reserves place with the Federal Reserve) in the denominator of leverage ratios could feed systemic risk,” the association said. “This would be especially likely during times of financial market stress when banks receive significant inflows of deposits.”</span><br /><span style="font-family: inherit;"><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-071417-%20HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=7561&elqTrackId=256578c40f98428e87ce6973d1aba37a&elq=68b3f02f2db44b0cb7baec72c6cfcccf&elqaid=16586&elqat=1">Read the white paper</a></span></strong>. </span></span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-16318289224480446922017-07-06T09:50:00.000-04:002017-07-06T09:50:12.284-04:00Fed, FDIC Release Public Sections of Resolution Plans <span style="font-family: Arial, sans-serif; font-size: 10pt;">The Federal Reserve and FDIC posted online the public sections of resolution plans for eight large financial institutions that were required to resubmit their “living wills” by July 1. </span><br /><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-070617-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8880&elqTrackId=0240488a8f0c43aaa2519998b76b2860&elq=7cec714c3c0043af97307863c3110bc0&elqaid=16508&elqat=1" target="_blank">Read more</a></span></strong>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-28896291647406504472017-06-29T13:00:00.000-04:002017-06-29T13:00:21.897-04:00Fed Approves U.S. Banks’ Capital Plans<span style="font-family: Arial, sans-serif; font-size: 10pt;">The Federal Reserve approved the capital plans of 34 large banks participating in the Comprehensive Capital Analysis and Review. One bank won a conditional “non-objection” and must submit a new capital plan by the end of the fourth quarter to address certain issues in its capital planning processes. But for the first time, all institutions were found to meet minimum capital requirements even under severely adverse conditions. <br /><br />The Fed’s annual CCAR evaluates the capital planning processes and capital adequacy of the largest banks, including their proposed capital actions such as dividend payments, share buybacks and issuances. The agency can object to a capital plan based on qualitative or quantitative concerns, and it considers factors such as a firm’s projected capital ratios under a hypothetical scenario of severe stress and the strength of the firm’s capital planning processes. <br /><br />The Fed noted that U.S. firms have substantially increased their capital since the first round of stress tests in 2009. The 34 bank holding companies in this year’s test have increased common equity capital by more than $750 billion since the beginning of 2009. </span><br /><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-062917-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8801&elqTrackId=9a8a96e20763497aa5b344634512b89c&elq=ce392e6ed8314bcb813d2d77abddefd2&elqaid=16439&elqat=1" target="_blank">View the CCAR results</a></span></strong>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-44980784121850004402017-06-27T10:00:00.000-04:002017-06-27T10:00:14.354-04:00Fed Gov. Powell Highlights Focal Points for Reg Reform<span style="font-family: Arial, sans-serif; font-size: 10pt;">Noting the progress made over the last several years to improve the strength and resiliency of the U.S. financial system, Federal Reserve Governor Jerome Powell pointed to several key areas that the Fed is currently focusing on for regulatory reform. Powell’s comments echoed his previous testimony before the Senate Banking Committee.<br /><br />Specifically, Powell noted that the Fed will look to simplify and recalibrate existing regulations for small and medium-sized banks, including call report and exam cycle requirements and certain capital rules. The agency is also considering changes to resolution plans, including an extension of the cycle from one year to two years; a reassessment of the Volcker rule; changes to increase the transparency of the stress testing process; and recalibrations to the supplementary leverage ratio. <br /><br />“U.S. banks today are as strong as any in the world,” he said. “As we consider the progress that has been achieved in improving the resiliency and resolvability of our banking industry, it is important for us to look for ways to reduce unnecessary burden.” </span><br /><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-062717-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8766&elqTrackId=21c5d5f5ebb6437c98a58718b60e321b&elq=7324e04f6f0c4a1885e3efbbf00cd6a9&elqaid=16437&elqat=1" target="_blank">Read the speech</a></span></strong>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-60369067101628469402017-06-26T10:43:00.001-04:002017-06-26T10:43:57.779-04:00Fed Gov. Powell Advocates for Central Counterparty Stress Testing<span style="font-family: Arial, sans-serif; font-size: 10pt;">In a speech at the Federal Reserve Bank of Chicago, Federal Reserve Governor Jerome Powell said that regulators should increase their efforts to monitor for liquidity risk among central counterparties by conducting stress tests on those entities. <br /><br />“Conducting supervisory stress tests on CCPs that take liquidity risks into account would help authorities better assess the resilience of the financial system,” he explained, adding that these efforts are already underway at the CFTC, which last year tested five major CCPs’ ability to withstand credit risk if one or more clearing members were to default. “This was innovative and necessary work. It would be useful to build on it by adding tests that focus on liquidity risks across CCPs and their largest common clearing members,” Powell said. <br /><br />He also noted the interdependent relationship between banks and CCPs, and said that “global authorities… have a responsibility to ensure that bank capital standards and other policies do not unnecessarily discourage central clearing.” To that end, Powell said that the Basel Committee on Banking Supervision is considering changes to the supplementary leverage ratio for global systemically important banks, and that the Federal Reserve is considering additional changes to ease capital requirements for banks.</span><br /><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-062617-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8736&elqTrackId=883daf8a5d2347cd8671ec65f17ff1af&elq=240c2058e81e4860b6f35d7f59941ad9&elqaid=16399&elqat=1" target="_blank">Read the speech</a></span></strong>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-21125403343211043182017-06-23T10:30:00.000-04:002017-06-23T10:30:34.279-04:00Fed: Large Banks Would Remain Well-Capitalized Under Severe Stress<span style="font-family: "arial" , sans-serif; font-size: 10pt;">The largest U.S. banks collectively showed that they can withstand a severe economic downturn and continued to improve their capital positions, according to the results of Dodd-Frank Act-mandated stress tests the Federal Reserve.<br /><br />“This year's results show that, even during a severe recession, our large banks would remain well capitalized,” said Fed Governor Jerome Powell. “This would allow them to lend throughout the economic cycle, and support households and businesses when times are tough.”<br /><br />Aggregate Tier 1 capital ratios at the 34 firms subjected to the Fed’s stress-test program would fall from an actual 12.5% in the fourth quarter of 2016 to a minimum of 9.2% under the test’s most extreme hypothetical scenario </span><span style="font-family: "times new roman"; font-size: 13.3333px;">–</span><span style="font-family: "arial" , sans-serif; font-size: 10pt;"> which includes, among other things, 10% unemployment, falling treasury rates, a 25% decline in home prices and a 35% drop in commercial real estate prices.</span><br /><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><br />“Today’s results reaffirm that U.S. banks are strong and remain well positioned to continue playing their important role in accelerating economic growth,” said ABA President and CEO Rob Nichols. “From this solid foundation, the focus should now turn to what can be done to help U.S. banks promote economic growth even further.”<br /><br />Even with the hypothetical declines, capital levels at the banks would still be much higher than they were following the 2008 financial crisis, when Tier 1 capital ratios for the firms fell to about 5.5% at the end of that year. </span><br /><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-062317-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8718&elqTrackId=2e9a927b377042ebb6ff14294ff74aa3&elq=808b306d5c5549e4ac35a79549ffc50f&elqaid=16350&elqat=1" target="_blank">Review the methodology and results</a></span></strong>. </span><br /><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-062317-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8717&elqTrackId=2abca6aa8f5247249b2ea3803244e14f&elq=808b306d5c5549e4ac35a79549ffc50f&elqaid=16350&elqat=1" target="_blank"><strong><span style="color: #005a8c;">Read Nichols' statement</span></strong></a>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com2tag:blogger.com,1999:blog-8681988120361586093.post-55509829035389564022017-06-23T10:00:00.000-04:002017-06-23T10:00:04.714-04:00State Associations Call on Senate to Advance Reg Relief Legislation<span style="font-family: "arial" , sans-serif; font-size: 10pt;">As the debate over financial regulatory reform now shifts to the Senate, 52 state bankers associations called on Senate leadership to support a bipartisan reg relief bill that would help create economic growth and improve the availability of credit to consumers.<br /><br />The associations encouraged lawmakers to support several measures included in ABA’s <a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-062317-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=6980&elqTrackId=3892e067a7e14a24ab308a3125d8604a&elq=808b306d5c5549e4ac35a79549ffc50f&elqaid=16350&elqat=1" target="_blank"><strong><span style="color: #005a8c;">Blueprint for Growth</span></strong></a>, including a Qualified Mortgage safe harbor for mortgage loans held in portfolio, more tailored supervision based on an institution’s risk profile and business model, greater flexibility for savings associations, relief from various reporting requirements and repeal of the Volcker Rule. They also called for a review of arbitrary asset thresholds, and for regulators to consider changes to capital and liquidity requirements.<br /><br />With the Treasury Department, regulators and individual lawmakers all expressing support recently for various reg reform initiatives, the associations expressed optimism for a bipartisan bill to move through the Senate. </span><br /><blockquote class="tr_bq"><span style="font-family: "arial" , sans-serif; font-size: 10pt;">It is encouraging to see lawmakers of both parties, the House of Representatives, and the Treasury Department lay the foundation for changes <span style="font-family: "times new roman"; font-size: 13.3333px;">–</span> regulatory calibrations that can kick-start our economy while maintaining a financial system that is safe, sound, and resilient. We urge the Senate not to allow partisanship to stand in the way of promptly passing much-needed reforms, and we stand ready to work with you in support of the financial needs of America’s communities.</span></blockquote><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-062317-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8715&elqTrackId=03b77abdcaa643e69c0329ec8fc4ce62&elq=808b306d5c5549e4ac35a79549ffc50f&elqaid=16350&elqat=1" target="_blank">Read the letter</a></span></strong>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com1tag:blogger.com,1999:blog-8681988120361586093.post-32314469816744756302017-06-22T10:30:00.000-04:002017-06-22T10:30:27.448-04:00Regulators to Support Certain Reg Relief Measures in Hearing<span style="font-family: "arial" , sans-serif; font-size: 10pt;">The heads of the regulatory agencies are expected to endorse various proposals for regulatory relief in a hearing in the Senate Banking Committee.<br /><br />In written testimony submitted in advance of the hearing, representatives from the Federal Reserve, FDIC and the OCC expressed support for various actions to simplify the stress testing process, more closely tailor regulation and encourage the formation of new banks. Several measures addressed by the regulators echoed recommendations from the recent Treasury report on regulatory reform that was released earlier this month. <br /><br />Notably, Federal Reserve Governor Jerome Powell expressed his agency’s support for extending the timeline for living will submissions from annually to every two years. FDIC Chairman Martin Gruenberg agreed, calling the change “worthwhile” and adding that “there may be opportunities to greatly reduce the submission requirements for a large number of firms due to their relatively small, simple and domestically-focused banking activities.” Regulators also supported revisiting various asset-size thresholds, including the $10 billion threshold for company-run stress tests and the $50 billion threshold for enhanced prudential standards. <br /><br />As part of efforts to remove outdated, unnecessary or overly burdensome regulation, Acting Comptroller of the Currency Keith Noreika proposed that Treasury conduct a periodic review of all Bank Secrecy Act Regulations, similar the EGRPRA process. This “would give financial institutions an opportunity to express their concerns directly to the agency with the authority issue, repeal and modify BSA rules,” Noreika said in his written statement. <br /><br />In addition, Noreika proposed that Congress streamline the de novo application process by giving new banks the ability to obtain FDIC deposit insurance upon receiving a charter from the OCC. Currently, banks are required to submit an application to both the FDIC and the chartering authority (either the OCC or state regulatory agency, depending on charter type). Noreika recommended that Congress consider designating a time period that the FDIC could object to the granting of deposit insurance following the charter approval by OCC or state regulator. <br /><br />Regulators also said they would be receptive to, among other things, an exemption for small banks from the Volcker Rule, additional enhancements to the capital planning and stress-testing process and additional exam relief, particularly for community banks. </span><br /><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-062217-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8701&elqTrackId=c9f4fe224bf44e5da5d20dbb17e23187&elq=08142e158df64ef78026d4c34158b582&elqaid=16348&elqat=1" target="_blank">Read the regulators' testimonies</a></span></strong>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com4tag:blogger.com,1999:blog-8681988120361586093.post-27590003072169265812017-06-20T11:00:00.000-04:002017-06-20T11:00:03.267-04:00Yellen Signals Greater Transparency in Stress Tests<span style="font-family: "arial" , sans-serif; font-size: 10pt;">In a letter to Rep. Blaine Luetkemeyer (R-Mo.), Federal Reserve Chair Janet Yellen said that the Fed will provide banks with more details on the stress testing process in response to calls from lawmakers and others <span style="font-family: "times new roman"; font-size: 13.3333px;">– </span>including ABA <span style="font-family: "times new roman"; font-size: 13.3333px;">–</span> for greater transparency. The results of this year’s stress tests <span style="font-family: "times new roman"; font-size: 13.3333px;">–</span> which include the Dodd-Frank Act stress tests and the Comprehensive Capital Analysis and Review <span style="font-family: "times new roman"; font-size: 13.3333px;">–</span> will be published this month. <br /><br />Along with the results, the Fed will release information on how it approaches the qualitative assessment and offer specific examples of how institutions in the past failed to meet financial stability requirements, Yellen said. In a letter last month, Luetkemeyer and Keith Rothfus (R-Pa.) noted that the Fed’s opacity about the stress testing process forces institutions to overspend and invest excess time in developing models and tests and that the Fed could do more to increase public awareness of what goes into its scenario design for the capital planning exercise. Yellen added that the Fed will release instructions and scenarios for the next testing cycle by Feb. 15, 2018. <br /><br />ABA has strongly advocated with regulators and on Capitol Hill for improvements to CCAR and DFAST that will promote efficiency for participating banks without sacrificing contributions to financial stability. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com1tag:blogger.com,1999:blog-8681988120361586093.post-12732719224273048252017-06-16T10:06:00.000-04:002017-06-16T10:21:46.589-04:00ABA: Regulations Should Be Tailored Based on Risk, Business Model<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: 10pt;">Regulations based on asset size are “inappropriate and needlessly burdensome” for many banks with non-complex business models, and ultimately lead to higher costs and fewer choices for consumers, ABA said in written testimony submitted for a Senate Banking Committee hearing on regulatory relief for midsize and regional banks.<br /><br />While size-only regulations may provide regulators a simple framework for supervising financial institutions, ABA noted that:</span><br /><blockquote class="tr_bq"><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: 10pt;">Thresholds of any type are arbitrary and a poor substitute for effective regulatory policy. Rather than adding more thresholds, what is needed are better overall principles for bank regulation. The best solution is to tailor regulations according to the risks and business model of the bank.</span></blockquote><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-family: "arial" , sans-serif; font-size: 10pt;">Voicing support for </span><span style="font-family: "arial" , sans-serif; font-size: 10pt;">the recent Treasury Department report which called for proper tailoring of financial regulations, the association encouraged Congress and regulators to apply that approach to both existing rules and new regulatory initiatives going forward. Several bills in the current Congress would help to lessen banks’ regulatory burden and unleash economic growth, ABA noted. These include the Tailor Act; a bill to expand banks’ abilities to count municipal securities as high quality liquid assets under the Liquidity Coverage Ratio; a bill to require a risk-based</span><span style="font-family: "arial" , sans-serif; font-size: 10pt;"> analysis in order to make SIFI designations; and a bill to provide relief from Dodd-Frank Act stress tests.<br /><br />Bankers testifying at the hearing described the implications of arbitrary asset thresholds. Robert Hill Jr., CEO of $11 billion South State Corporation in Columbia, S.C., said that in crossing the $10 billion asset threshold, his bank was subjected to heightened compliance requirements which now cost the bank more than $20 million per year.<br /><br />B</span><span style="font-family: "arial" , sans-serif; font-size: 10pt;">anker Harris Simmons, chairman and CEO of $65 billion Zion’s Bancorporation, also questioned the validity of the $50 billion threshold at which banks are designated systemically important financial institutions. He noted that as the smallest SIFI bank, Zions is subject to the same prudential standards as the nation’s largest banks <span style="font-family: "times new roman";">–</span> including onerous stress testing requirements <span style="font-family: "times new roman";">–</span> despite the fact that its size and lending portfolio are significantly smaller.</span></span><br /><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-061617-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8611&elqTrackId=4464e40e3a4f411bbd22b8579d4f38a9&elq=5042c1c321904322815b64f637214408&elqaid=16275&elqat=1" target="_blank">Read more</a></span></strong>. </span></span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-41139994281931820772017-06-09T11:59:00.000-04:002017-06-09T11:59:10.367-04:00House Passes Financial Choice Act<span style="font-family: Arial, sans-serif; font-size: 10pt;">The House passed the Financial Choice Act by a mostly party line vote of 233 to 186. The legislation is Financial Services Committee Jeb Hensarling’s sweeping, 600-page bill aimed at reforming parts of the Dodd-Frank Act’s extensive supervisory regime and providing regulatory relief for banks. <br /><br />The bill includes a number of regulatory relief provisions long sought by ABA as part of its <a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-060917-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=6980&elqTrackId=c08be76aa16f469199a231be941db4a7&elq=87c0ff6a399c48c3bd755044925c0348&elqaid=16201&elqat=1" target="_blank"><strong><span style="color: #005a8c;">Blueprint for Growth</span></strong></a>, including a Qualified Mortgage safe harbor for mortgage loans held in portfolio, more tailored supervision based on an institution’s risk profile and business model, greater flexibility for savings associations, relief from various reporting requirements, and repeal of the Volcker Rule. <br /><br />Included in the bill is a “regulatory off-ramp” for larger institutions subject to DFA’s heightened prudential standards and Basel III’s capital and liquidity standards, provided those institutions elect to maintain a 10 percent non-risk weighted leverage ratio. The Choice Act also focuses on ending “too big to fail” by replacing DFA’s Orderly Liquidation Authority with a new Bankruptcy Code designed to accommodate the failure of a large, complex financial institution. <br /><br />Also targeted for reform by the bill is the CFPB, which would be renamed the Consumer Law Enforcement Agency and stripped of its examination powers and “UDAAP” enforcement authority. The agency would be led by a single director removable at will by the president, and subject to the congressional appropriations process. <br /><br />The bill’s passage reflects an important step toward providing meaningful regulatory reform that will help America’s banks better serve their customers and communities, ABA President and CEO Rob Nichols said, though he noted that the bill “would have been much stronger had a provision to repeal the Durbin Amendment been retained.” With the bill’s passage, the fight for regulatory reform now shifts to the Senate. </span><br /><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-060917-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8515&elqTrackId=01efb849301545a88e8a6e08e2b7133c&elq=87c0ff6a399c48c3bd755044925c0348&elqaid=16201&elqat=1" target="_blank">Read ABA's statement</a></span></strong>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-30620776015245757532017-06-09T11:15:00.000-04:002017-06-09T11:15:20.382-04:00Savarese Makes Case to Senators for Reg Relief<span style="font-family: Arial, Helvetica, sans-serif; font-size: 10pt;">Testifying before the Senate Banking Committee, ABA Chairman Dorothy Savarese urged Congress to “remove regulatory impediments and let us accelerate growth in the American economy.” She urged the Senate to act on several proposals, including bills that would require tailored supervision, enhance flexibility for mutuals and thrifts, provide stress test relief, streamline and ease paperwork requirements and increase mortgage lending, among others. </span><br /><span style="font-family: Arial, Helvetica, sans-serif; font-size: 10pt;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><span style="font-family: Arial, sans-serif; font-size: 10pt;">Savarese <span style="font-family: "times new roman"; font-size: small;">–</span> who is chairman, president and CEO of Cape Cod Five Cents Savings Bank, Orleans, Mass. </span><span style="font-family: "times new roman"; font-size: small;">– </span>emphasized that banks’ resilience in the face of a tough regulatory environment does not abate the need for urgent regulatory reform. </span><br /><blockquote class="tr_bq"><span style="font-family: Arial, Helvetica, sans-serif;">Loans are growing, but at half the pace they did years before the financial crisis. Is it any accident that both GDP growth and the business startup rate are running well below historical levels, especially at this point in an economic recovery?</span></blockquote><span style="font-family: Arial, Helvetica, sans-serif;"><span style="font-family: Arial, sans-serif; font-size: 10pt;">Compliance costs have placed a significant burden on community banks in particular, she noted. For example, in a recent analysis conducted at her bank, Savarese found that “right now, over 24% [of non-interest expenses] – one out of every four dollars – goes toward compliance-related expenses. On the mortgage side, it’s over a third.” She added that complying with complex rules and regulations – </span><span style="font-family: Arial, sans-serif; font-size: 10pt;">such as the new HMDA reporting requirements – diverts time and resources away from developing new products and services to meet customers’ needs. <br /><br />In conjunction with the hearing, which focused on community banks and credit unions, the committee issued 130 submissions it has received related for regulatory relief measures as Congress prepares to draft an “economic growth” bill. The committee is expected to hold another hearing focused specifically on regional and midsize banks. </span></span><br /><span style="font-family: Arial, Helvetica, sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: Arial, Helvetica, sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-060917-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8511&elqTrackId=0d3a175c640640aabff9e46ea257c774&elq=87c0ff6a399c48c3bd755044925c0348&elqaid=16201&elqat=1" target="_blank">Read Savarese's testimony</a></span></strong>. </span><br /><span style="font-family: Arial, Helvetica, sans-serif; font-size: 10pt;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-060917-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8510&elqTrackId=4a737dd24d7f4f7aba63503fe405e4c8&elq=87c0ff6a399c48c3bd755044925c0348&elqaid=16201&elqat=1" target="_blank"><strong><span style="color: #005a8c;">Read the submissions forregulatory relief</span></strong></a>.</span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-16508310285998639192017-06-09T10:38:00.002-04:002017-06-09T10:38:45.176-04:00Basel Committee Issues FAQs on Liquidity Coverage Ratio <!--END of Individual Newsbyte--><!--BEGIN Individual Newsbyte below--><!--Paste NewsBytes Department Head below--><br /><span style="color: black; font-family: "Arial",sans-serif; font-size: 10.0pt;">The Basel Committee released a second set of FAQs on Basel III’s Liquidity Coverage Ratio, which requires banks to hold highly liquid assets relative to cash outflows over a 30-day period during a stressed scenario. The LCR generally applies to banking organizations with more than $50 billion in assets. The FAQs are intended to provide clarification on the rule’s interpretation.</span><br /><span style="color: black; font-family: "Arial",sans-serif; font-size: 10.0pt;"><strong><br /></strong></span><span style="color: black; font-family: "Arial",sans-serif; font-size: 10.0pt;"><strong><span style="color: #005a8c; font-family: "Arial",sans-serif;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-060917-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8497&elqTrackId=a40ca14ccfa14e09ae1b025af41c9107&elq=87c0ff6a399c48c3bd755044925c0348&elqaid=16201&elqat=1" target="_blank">View the FAQs</a></span></strong>. </span><o:p></o:p>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-13073543799684329872017-06-08T11:50:00.000-04:002017-06-08T11:50:06.346-04:00ABA Commends House Reg Reform Effort Ahead of Choice Act Vote<span style="font-family: "arial" , sans-serif; font-size: 10pt;">As Congress prepares to vote on the Financial Choice Act, ABA wrote to House leadership commending the House Financial Services Committee Chairman Jeb Hensarling (R-Texas) for his efforts to bring regulatory relief to the nation’s banks. The full House is expected to vote on the bill on June 8, 2017. The ABA said:</span><br /><blockquote class="tr_bq"><span style="font-family: "arial" , sans-serif; font-size: 10pt;">We agree with members of Congress on the need for strong regulation of our financial system. However, within the 25,000 pages of new and proposed rules since Dodd-Frank became law are requirements that are harming our ability to serve creditworthy customers and our communities… The Financial Choice Act will help address many of these concerns and allow banks to get back to serving their customers.</span></blockquote><span style="font-family: "arial" , sans-serif; font-size: 10pt;">The bill includes several ABA-supported provisions that would provide regulatory relief for banks, including a Qualified Mortgage safe harbor for mortgage loans held in portfolio, more tailored supervision based on an institution’s risk profile and business model, greater flexibility for savings associations, relief from various reporting requirements and repeal of the Volcker Rule. </span><br /><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><br /></span><span style="font-family: "arial" , sans-serif; font-size: 10pt;">ABA also applauded an amendment by Rep. John Faso (R-N.Y.) that would help level the playing field for mutual holding companies and allow them to raise additional capital without placing their mutual structure at risk.</span><br /><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><strong><br /></strong></span><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><strong><span style="color: #005a8c;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-060817-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8483&elqTrackId=7b0a9c119a97449daebd706915cc05c1&elq=573fa6d3b1ce4e31848faa6bbe7e7f25&elqaid=16200&elqat=1" target="_blank">Read the letter</a></span></strong>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-15922356996410363022017-06-05T11:00:00.000-04:002017-06-07T10:59:52.300-04:00With Choice Act Up for Vote and Treasury Report Expected, Nichols Tees Up Week Ahead <span style="font-family: "arial" , sans-serif; font-size: 10pt;">The week ahead is expected to be a busy one for financial reform in Washington, D.C. In an essay posted on Medium, ABA President and CEO Rob Nichols teed up the expected release of the Treasury Department's report responding to President Trump's call to streamline financial regulations, as well as Rep. Jeb Hensarling's Financial Choice Act, which comes up for a vote later this week.<br /><br />Nichols emphasized that all Americans have a stake in the future of financial reform.</span><br /><blockquote class="tr_bq"><span style="font-family: "arial" , sans-serif; font-size: 10pt;">This busy week in D.C. will be a significant start on the regulatory reforms we need to accelerate this economy, grow jobs and create opportunity. If you’re concerned about job creation, local economic growth and access to affordable credit, you might want to pay attention to this other Washington story this week.</span></blockquote><span style="font-family: "arial" , sans-serif; font-size: 10pt;">Nichols was interviewed on NPR’s “All Things Considered” about the Financial Choice Act, which includes many provisions advocated by ABA as part of its <a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-060517-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=6980&elqTrackId=8b5c0574f0234b71a5eb822f997a3e22&elq=f029ee34bd724cb3a74bb5ccbf2253c2&elqaid=16197&elqat=1" target="_blank"><strong><span style="color: #005a8c;">Blueprint for Growth</span></strong></a>. He emphasized that ABA is not seeking a total repeal of the Dodd-Frank Act.</span><br /><blockquote class="tr_bq"><span style="font-family: "arial" , sans-serif; font-size: 10pt;">We are not seeking to roll back all of Dodd-Frank. Our intention is to acknowledge what many regulators and legislators will tell you, publicly and privately, which is: aspects of Dodd-Frank overshot.</span></blockquote><span style="font-family: "arial" , sans-serif; font-size: 10pt;">Examples of ABA-supported provisions in the Choice Act include a Qualified Mortgage safe harbor for mortgage loans held in portfolio, more tailored supervision based on an institution’s risk profile and business model, greater flexibility for savings associations, relief from various reporting requirements, and repeal of the Volcker Rule.</span><br /><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><br /></span><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-060517-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8431&elqTrackId=06df1dbca7864ddaa169ef7aa2a21630&elq=f029ee34bd724cb3a74bb5ccbf2253c2&elqaid=16197&elqat=1" target="_blank"><strong><span style="color: #005a8c;">Read Nichols' Medium article</span></strong></a>.</span><br /><span style="font-family: "arial" , sans-serif; font-size: 10pt;"><a href="http://app.response.aba.com/e/er?utm_campaign=ABA-Newsbytes-060517-HTML&utm_medium=email&utm_source=Eloqua&s=1527&lid=8430&elqTrackId=3d14074cc30143e993304b388daeed07&elq=f029ee34bd724cb3a74bb5ccbf2253c2&elqaid=16197&elqat=1" target="_blank"><strong><span style="color: #005a8c;">Listen to the interview</span></strong></a>. </span>ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com0tag:blogger.com,1999:blog-8681988120361586093.post-4080959037160766822017-06-02T11:15:00.000-04:002017-06-02T11:15:06.322-04:00Fed’s Powell Signals More ‘Transparency’ in Stress TestsThe Fed will work in the coming months to provide greater transparency into the stress testing process, Governor Jerome Powell said in an interview on CNBC.<br /><blockquote class="tr_bq">We’re working on something…in the coming months which will provide much more granular information about our expectations for loss rates on particular portfolios, of corporate loans and other kinds of loans. We’ll also provide more guidance, when we announce the results on June 22…on how we think about the qualitative requirement. And we’re going to seek comment from the public on how we go about providing more transparency.</blockquote>ABA EVP Wayne Abernathy welcomed Powell’s remarks.<br /><blockquote class="tr_bq">The idea of providing greater transparency on how the tests treat certain kinds of loans is consistent with recommendations ABA made in our recent white paper to Treasury as well as in our conversations with the Fed over the years. There is a growing consensus, among regulators and the regulated, about the value of stress testing, so efforts to refine the tests to make them even more valuable for supervision and management is a welcome step.</blockquote>The Fed announced its schedule for stress test results. The Fed will release results of the Dodd-Frank Act-mandated stress tests on June 22, 2017 and will release the results of the Comprehensive Capital Analysis and Review process for larger and internationally active bank holding companies on June 28. Company-run stress tests results will be available on or before July 7.<br /><br />Powell also said that with the bulk of post-crisis rulemaking completed, it is time to revisit how new regulations are working.<br /><blockquote class="tr_bq">I think it’s our obligation now…to ask what aspects of it may be redundant or inefficient, or utterly essential and should be protected down to every letter. But there are going to be some adjustments and I think that’s only appropriate. Much of this new stuff was novel and it would be very surprising if we got it all exactly right the first time.</blockquote>He added that the Fed is rethinking the way its supervision affects bank directors.<br /><blockquote class="tr_bq">We’re going to move to a more principles-based approach and we’re going to eliminate many of the really specific directives that we give to boards of directors. We want directors to focus on their main job of overseeing and holding accountable the management, not running the company and not getting tied up in a lot of checklists.</blockquote><a href="http://www.cnbc.com/2017/06/01/changes-coming-to-bank-stress-tests-feds-powell-says.html?utm_campaign=ABA-Newsbytes-060217-HTML&utm_medium=email&utm_source=Eloqua" target="_blank">Watch the interview</a>.ABA Regulatory Policy Staff 2http://www.blogger.com/profile/11301563447196059381noreply@blogger.com1