Over the last two weeks, the FDIC has issued perhaps the most noteworthy documents.  The agency's summer Supervisory Insights contains useful information on de novo institutions and MRAs for directors. With the Federal Reserve and the OCC it has proposed significant changes to the call report for banks with less than $1 billion in assets.  The CFPB took enforcement action against a student loan servicer and issued guidance for federal student loan borrowers applying for income-driven repayment plans.

          The full set of developments over the past week includes:

The Economy

  • Federal Open Market Committee releases minutes of meeting on July 26-27 at which target range for federal funds rate was maintained at ¼ to ½ percent (Aug. 17).
    • Several participants concluded that the FOMC should wait to take another step in removing accommodation until the data on economic activity provided a greater level of confidence that economic growth was strong enough to withstand a possible downward shock to demand.
    • Some other participants judged that another increase in the federal funds rate was or would soon be warranted, with a couple of them advocating an increase at this meeting.
    • One dissenting vote on FOMC action.
    • Minutes available at https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm.
  • "Remarks on the U.S. Economy," speech by Federal Reserve Vice Chairman Fischer at The Aspen Institute (Aug. 21).
    • During the period 2006-2015, "there was a major decline in the rate of productivity growth."
    • "The combination of strong job gains and mediocre GDP growth has resulted in exceptionally slow labor productivity growth. Most recently, business-sector productivity is reported to have declined for the past three quarters, its worst performance since 1979…. [L]ooking at the past decade, productivity growth has been lackluster by post-World War II standards."
    • "Are we doomed to slow productivity growth for the foreseeable future? We don't know.  On the encouraging side, the technological frontier appears to be advancing rapidly in some sectors, and there are hints that the firm start-up rate is improving.  On the more discouraging side, investment continues to disappoint--and so the current capital stock is smaller and embodies fewer frontier technologies than might otherwise be the case--and the productivity slowdown is a global phenomenon, suggesting that it may not be easily or quickly remedied."
    • Remarks available athttp://www.federalreserve.gov/newsevents/speech/fischer20160821a.htm.

Bank Accounting

BSA/AML

  • New York Dep't of Financial Services enters into consent order with Mega International Commercial Bank of Taiwan to correct violations of NY anti-money laundering rules (Aug. 19).
    • Violations included:
      • Chief compliance officer with limited experience and conflicted interests.
      • Failure to review surveillance monitoring filter criteria.
      • Little guidance for NY branch.
    • Bank fined $180 million and required to install independent monitor.
    • Order available at http://www.dfs.ny.gov/about/press/pr1608191.htm.

Call Reports

  • Banking agencies circulate proposal for new, streamlined call report for banks with less than $1 billion in assets and domestic offices only (Aug. 15).
    • New call report form, FFIEC 051 includes following changes:
      • Addition of a Supplemental Schedule to collect indicator questions and indicator data items on certain complex and specialized activities as a basis for removing portions of the FFIEC 041.
      • Elimination of items identified during interagency reviews of existing call report data items as no longer necessary for smaller institutions.
      • Reduction in the frequency of data collection for certain items identified as needed less frequently than quarterly.
      • Removal of all data items for which a $1 billion asset-size reporting threshold currently exists.
    • FDIC FIL-53-2016 available athttps://www.fdic.gov/news/news/financial/2016/fil16053.html.

CRA

De Novos

  • "De Novo Banks: Economic Trends and Supervisory Framework," published in summer 2016 issue of FDIC Supervisory Insights (Aug. 22).
    • "The FDIC continues to support the formation of new financial institutions and welcomes applications for deposit insurance."
    • Article discusses trends in de novo formation, the FDIC review of applications for deposit insurance, supervision of de novos, and FDIC support of de novo formations.
    • Supervisory Insights available athttps://www.fdic.gov/regulations/examinations/supervisory/insights/index.html.

Examinations

  • "'Matters Requiring Board Attention' Underscore Evolving Risks in Banking," published in summer 2016 issue of FDIC Supervisory Insights (Aug. 22).

FDIC

Financial Literacy

Mortgage Lending

  • FDIC updates technical assistance videos on Ability-to-Repay and Qualified Mortgages regulations (Aug. 17).

Student Loans

Bank Closing

Upcoming Events

  • Sept. 8-9
    • FDIC 16th Annual Bank Research Conference.
  • Sept. 13
    • OCC Director Workshop, "Credit Risk," Duluth MN.
  • Sept. 14
    • OCC Director Workshop, "Compliance Risk," Duluth MN.
  • Sept. 19-21
    • OCC Director Workshop, "Building Blocks for Directors," St. Louis MO.
  • Oct. 19
    • FDIC Money Smart Train-the-Trainer Online Live Meeting.
  • Oct. 27-28
    • FDIC 6th Annual Consumer Research Symposium.

Regulatory Comment Deadlines

  • Aug. 22 – CFPB: ban on mandatory arbitration clauses.
  • Aug. 29 – FDIC: replacement of references to credit ratings in international banking regulations.
  • 30 days after publication in Federal Register
    • Federal Reserve/CFPB: changes to exemption thresholds under Truth in Lending Act for consumer loans and leases.
    • Federal Reserve/FDIC/OCC/CFPB: changes to threshold for exemption of small loans from higher priced mortgage loan appraisal requirements.
  • Aug. 30 
    • OCC: adjustment of maximum CMPs to account for inflation.
    • Federal Reserve: adjustment of maximum CMPs.
  • Sept. 14 – CFPB: payday loans.
  • Sept. 16 – Federal Reserve: capital requirements for certain insurance companies.
  • 60 days after publication in Federal Register – FDIC: appeals of supervisory determinations.
  • Oct. 14 – Federal Reserve, FDIC, OCC: streamlined call report for small banks.
  • Oct. 18 – CFPB: changes to required Know Before You Owe mortgage lending disclosures.
  • Oct. 27 – FDIC: third-party lending guidance.