These announcements give prompt notice of amendments and proposed amendments to Federal Reserve regulations and policies, summarize them, and provide links to full information.
A new joint interagency statement provides initial supervisory views on implementation of the new accounting standard, Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued by the Financial Accounting Standards Board. The new standard applies to all banks, savings associations, credit unions, and financial institution holding companies.
A new advance notice of proposed rulemaking, published today in the Federal Register, contains approaches to consolidated capital requirements for 1) depository institution holding companies significantly engaged in insurance activities and 2) nonbank financial companies that have been designated by the Financial Stability Oversight Council for Federal Reserve supervision and that have significant insurance activities. The approach for depository institution holding companies would aggregate the firm’s existing legal-entity capital requirements to arrive at a combined group-level requirement. The approach for significant insurance activities at FSOC-designated nonbank financial companies would categorize the entire firm’s assets and insurance liabilities into risk segments and apply appropriate risk factors at each segment. The deadline for public comment is August 17, 2016.
A new proposed rule, published today in the Federal Register, would set corporate governance, risk-management, and liquidity risk-management standards for nonbank financial companies that have been designated by the Financial Stability Oversight Council for Federal Reserve supervision and that have significant insurance activities. The deadline for public comment is August 17, 2016.
A new proposed interagency rule would implement requirements of the Dodd-Frank Act and prohibit incentive-based compensation arrangements that encourage inappropriate risks at financial institutions with total assets of $1 billion or greater. The requirements would be tailored to an institution’s size, with much of the proposed rule addressing significant risk-takers at institutions with total assets of $50 billion or greater. The deadline for public comment is July 22, 2016.
A new proposed rule would require U.S. global systemically important banking institutions (GSIBs) and the U.S. operations of foreign GSIBs to amend qualified financial contracts (QFCs) to prevent those QFCs’ immediate cancellation in the event of bankruptcy or resolution. The change is designed to prevent firms from terminating their QFCs with a failed GSIB at the same time, reducing the risk of a run on the failed GSIB’s solvent subsidiaries. The deadline for public comment is August 5, 2016.
A new proposed rule would require large banking organizations to require a minimum level of stable funding in order to reduce liquidity risk in the banking system and enhance financial stability. This net stable funding ratio (NSFR) requirement would be tailored to a banking organization’s risk. Holding companies with total assets of $250 billion or greater, total on-balance-sheet foreign exposures of $10 billion or greater, or depository institution subsidiaries with total assets of $10 billion or greater would be subject to the most stringent requirements. The NSFR would take effect January 1, 2018. The deadline for public comment is August 5, 2016.
As part of a Federal Reserve effort to reduce burden, improve efficiency, and maintain the quality of its supervision, state member banks and U.S. branches and agencies of foreign banking organizations with less than $50 billion in total assets can now elect to allow Federal Reserve examiners to review loan files off-site.
New technical amendments to a rule finalized in 2015 would clarify the way global systemically important banks (GSIBs) must calculate systemic risk surcharges and report their surcharge data. The deadline for public comment is May 13, 2016.
A new final rule will allow large banking organizations supervised by the Federal Reserve to count investment-grade, U.S. general obligation state and municipal securities as high-quality liquid assets in satisfaction of the liquidity coverage ratio requirement. Those organizations can count the securities toward the requirement if the securities meet the same liquidity criteria that currently apply to corporate debt securities. The limits on the amount of securities that can qualify depend on the securities’ liquidity characteristics. The rule is effective July 1, 2016.
New federal interagency guidance clarifies that customer identification programs should apply to certain types of prepaid cards. The guidance, which applies to banks, savings associations, credit unions, and U.S. branches and agencies of foreign banks, describes when a holder of one of these prepaid cards should provide information sufficient to verify the cardholder’s identity.