On January 19, 2021, the FDIC’s Board of Directors approved revised Guidelines for Appeals of Material Supervisory Determinations (the “Guidelines”), which are applicable to insured depository institutions (“IDIs”) the FDIC supervises as well as other IDIs for which the FDIC makes material supervisory determinations. The FDIC stated that the amendments are intended to: (1) improve the independence of appeals decisions via the implementation of an independent, standalone office—the Office of Supervisory Appeals (the “Office”)—that will replace the existing Supervision Appeals Review Committee (the “SARC”); and (2) clarify the procedures and timeframes applicable to appeals, including those relating to formal enforcement actions.
Continue Reading FDIC Adopts Revised Guidelines for Appeals of Material Supervisory Determinations

On June 23, 2020, the Federal Reserve, FDIC, OCC, NCUA, and state financial regulators (“the agencies”) issued guidance outlining the supervisory principles for assessing the safety and soundness of institutions amidst the COVID-19 pandemic. The guidance highlights that while examiners will consider the unique stresses caused by COVID-19 on financial institutions, the agencies will continue to assess institutions in accordance with existing policies and procedures and may provide supervisory feedback, or downgrade institutions’ composite or component ratings under the applicable rating system when conditions have deteriorated. Although an assessment may result in a lower rating, in determining the appropriate supervisory response, examiners will consider whether weaknesses were caused by external economic problems related to the pandemic or by intrinsic risk management and governance issues. Overall, the guidance suggests that while examiners will take into account the unique impact of the pandemic on financial institutions, ratings will depend on each individual institution’s ability to assess and manage risk appropriately, including taking appropriate action in response to stresses caused by the COVID-19 pandemic.

Continue Reading Federal and State Regulators Issue Interagency Guidance Regarding Assessing Safety and Soundness During COVID-19

On October 22, 2019, the U.S. Government Accountability Office (“GAO”) issued two letters concluding that three Federal Reserve Supervision and Regulation letters, SR 12-17: Consolidated Supervision Framework for Large Financial Institutions, SR 14-8: Consolidated Recovery Planning for Certain Large Domestic Bank Holding Companies, and SR 11-7: Guidance on Model Risk Management, are “rules” under the Congressional Review Act (“CRA”) and therefore must be submitted to Congress and the Comptroller General for review before they can take effect.  The GAO letters respond to requests made by several senators for determinations of whether the three SR letters, as well as SR 15-7: Governance Structure of the Large Institution Supervision Coordinating Committee (LISCC) Supervisory Program, are rules under the CRA.  The GAO concluded that SR 15-7 is not a rule under the CRA.

Continue Reading GAO Concludes Three SR Letters Are Rules Under Congressional Review Act

On October 17, 2019, the Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and National Credit Union Administration released for public comment a proposed interagency policy statement on allowances for credit losses (“ACLs”).  The proposed policy statement reflects the Financial Accounting Standards Board’s adoption of the current expected credit losses (“CECL”) methodology.

Continue Reading Agencies Propose CECL Policy Statement

On July 9, 2019, the federal banking agencies released a final rule to simplify aspects of the regulatory capital rules for banking organizations that are not “advanced approaches” banking organizations, i.e., those with less than $250 billion in total consolidated assets and less than $10 billion in total foreign exposure.  Initially proposed in September 2017 as part of the agencies’ ongoing efforts to meaningfully reduce regulatory burden on small and mid-sized banking organizations, the final rule is intended to simplify and clarify certain aspects of the capital rules, and in particular the capital treatment of mortgage servicing assets, certain deferred tax assets, investments in the capital instruments of unconsolidated financial institutions, and minority interests.  Importantly, the Board of Governors of the Federal Reserve System (“Board”) also used the rulemaking as an opportunity to streamline an important aspect of its regulatory framework by permitting bank holding companies, savings and loan holding companies, and state member banks of all sizes to redeem or repurchase their common stock without obtaining formal, prior regulatory approval under most circumstances.

Continue Reading Federal Reserve Rationalizes Stock Buyback Rules

On March 28, 2018, the Consumer Financial Protection Bureau (“CFPB”) issued a Request for Information (“RFI”) regarding the effectiveness and accessibility of its guidance materials and activities, including implementation support.  Specifically, the RFI asks for information about the following aspects of the CFPB’s methods of providing guidance to the public:

  • Regulatory Inquiries Function: This function

On February 7, 2018, the New York State Department of Financial Services (“DFS”) issued guidance for all virtual currency business entities (“VCBEs”) regarding the prevention of market manipulation and other wrongful activity. In a brief, two-page document, the DFS: (1) emphasized the importance of effectively preventing and responding to fraud and similar wrongdoing; (2) stated