These announcements give prompt notice of amendments and proposed amendments to Federal Reserve regulations and policies, summarize them, and provide links to full information.
The Board of Governors has adopted a final policy statement laying out the framework it will follow and explaining the factors it will consider as it sets the Countercyclical Capital Buffer, which is intended to help the largest banking organizations absorb shocks that arise when credit conditions worsen. The policy statement takes effect October 14, 2016.
The deadline for public comment on the Board of Governors proposal detailing conceptual capital requirements for certain systemically important insurance companies and insurance companies that own a bank or thrift has been extended to September 16, 2016.
A new joint interagency proposed rule would allow certain exemption thresholds for small loans to keep pace with the Consumer Price Index for Urban Wage Earners and Clerical Workers. Currently, loans of $25,500 or less are exempt from appraisal requirements applicable to higher-priced loans. A companion proposal would amend the implementing interpretations and commentary for Regulations Z and M. The deadline for public comment on either proposal is September 6, 2016.
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 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.
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.
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.