On September 30, 2020, the Federal Reserve released a proposal to update its capital planning requirements in a number of respects, including to integrate the capital plan rule with the Federal Reserve’s October 2019 final rules tailoring its enhanced prudential standards.  The proposal would make the following notable changes:

  • Replacement of Company-Run Stress Testing for

The federal banking agencies issued a final rule today that permits banking organizations not subject to the advanced approaches capital rules to adopt simplifications to the calculation of their regulatory capital beginning January 1, 2020, rather than April 1, 2020 as was originally finalized in July 2019.

Continue Reading Federal Banking Agencies Permit First Quarter 2020 Adoption of Capital Simplifications Rule

On March 29, 2019, the board of the FDIC approved a notice of proposed rulemaking that would revise the supplementary leverage ratio (“SLR”) to exclude certain deposits placed at central banks from custodial banks’ SLR denominators, implementing section 402 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”).  The OCC and Federal Reserve are expected to adopt substantially identical proposals.

Continue Reading Agencies to Revise SLR to Exclude Custodial Deposits at Central Banks

On Tuesday October 2, leaders of the federal prudential regulators testified before the Senate Committee on Banking, Housing, and Urban Affairs (“Banking Committee”) on their agencies’ efforts to implement the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA” or the “Act”). All of the regulators expressed support for the goals of EGRRCPA, particularly with respect to tailoring regulations, and highlighted the steps being taken to implement the law.

The witnesses at the hearing were: Joseph Otting, Comptroller, Office of the Comptroller of the Currency (“OCC”); Randal Quarles, Vice Chairman for Supervision, Board of Governors of the Federal Reserve System (“FRB”); Jelena McWilliams, Chairman, Federal Deposit Insurance Corporation (“FDIC”); and J. Mark McWatters, Chairman, National Credit Union Administration (“NCUA”).

This post summarizes below, as highlighted in the witnesses’ testimony:

  • some of the key steps these agencies have taken to implement the Act, which include the release of a number of proposed and interim final rules; and
  • the steps the agencies intend to take next, including tailoring enhanced prudential standards for larger bank holding companies (“BHCs”).


Continue Reading After Senate Banking Committee Testimony, Where Does Dodd-Frank Reform Stand?

On September 18, 2018, the federal banking agencies issued a release with a proposed rule to implement the changes made to the capital treatment of certain high-volatility commercial real estate (“HVCRE”) loans by section 214 of the Economic Growth, Regulatory Reform, and Consumer Protection Act (“EGRRCPA”). The deadline for comments on the proposal is 60 days after publication of the proposal in the Federal Register and thus will likely fall in late November.

Before turning to the substance of section 214 and the proposed rule, two features of the implementation of section 214 are worth noting. First, because section 214 took effect immediately upon enactment, the agencies provided initial guidance more than two months ago on how to report loans subject to section 214 in the call report. This guidance remains in effect, even though the proposed rule is unlikely to be finalized for several months. Second, section 214 by its terms applies only to capital treatment at the bank level, but under the proposed rule, the Federal Reserve Board would apply section 214’s changes to holding companies as well.

Continue Reading Federal Banking Agencies Issue Proposed Rule to Implement Changes to Capital Treatment of High-Volatility Commercial Real Estate Loans

On September 10, 2018, the Office of the Comptroller of the Currency (“OCC”) released a proposed rule to implement section 206 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, codified in section 5A of the Home Owners’ Loan Act (“HOLA”).  Section 5A permits a federal savings association with total consolidated assets of $20 billion or less as of December 31, 2017, to elect to operate as a “covered savings association.”  A covered savings association would have the same rights and privileges as a national bank that has its main office situated in the same location as the home office of the covered savings association, and would be subject to the same duties, restrictions, penalties, liabilities, conditions, and limitations that would apply to such a national bank.  Under the terms of the statute, however, a covered savings association would still be treated as a federal savings association for certain purposes, including governance, dividends, and mergers.

Continue Reading OCC Releases Proposal to Allow Federal Savings Associations to Exercise National Bank Powers

Following enactment of the Economic Growth, Regulatory Relief and Consumer Protection Act (“EGRRCPA”) in May 2018, the Board of Governors of the Federal Reserve System (“FRB”), the Office of the Comptroller of the Currency (“OCC”), and the Federal Deposit Insurance Corporation (“FDIC” and collectively, the “Agencies”), have begun the process of implementing the regulatory relief required under the law.

Most recently, the Agencies issued two interim final rules under EGRRCPA, and Senate Republicans submitted a letter to FRB Vice Chairman for Supervision Randal Quarles expressing concern about recent public comments by FRB leadership.

Interim Final Rule Regarding High-Quality Liquid Assets – Municipal Securities

On August 22, 2018, the Agencies issued an interim final rule to treat certain municipal securities as high-quality liquid assets. EGRRCPA required the Agencies to amend their liquidity coverage ratio (LCR) rule to treat municipal obligations that are “liquid and readily-marketable” and “investment grade” as high-quality liquid assets, and the interim rule implements this requirement.

Continue Reading Dodd-Frank Reform Update: Banking Agencies Issue Two Interim Final Rules; Senate Republicans Push for Regulatory Relief for Certain Banks