Capital Surcharge Comment Period Extended

On February 26th, the Federal Reserve Board extended until April 3, 2015the period in which comments may be submitted in response to its proposed rule to implement capital surcharges for the largest, most systemically important U.S. bank holding companies. The proposed rule would establish a methodology to identify whether a firm is a global systemically important banking organization and would also establish the size of a firm's risk­ based capital surcharge. Federal Reserve Board Press Release.

FDIC Quarterly Banking Profile

On February 24th, the Federal Deposit Insurance Corporation (“FDIC”) published the Quarterly Banking Profile. Among other things, the survey notes that FDIC­insured commercial banks and savings institutions reported aggregate net income of $36.9 billion in the fourth quarter of 2014, down $2.9 billion (7.3 percent) from the prior year. The decline in earnings was mainly attributable to a $4.4 billion increase in litigation expenses at a few large banks. More than half of the 6,509 insured institutions reporting (61.2 percent) had year­over­year growth in quarterly earnings. The proportion of banks that were unprofitable during the fourth quarter fell to 9.4 percent from 12.7 percent a year earlier. FDIC Press Release.

Financial Regulators Provide Guidance on Youth Savings Programs

On February 24th, the Office of the Comptroller of the Currency (“OCC”), Board of Governors of the Federal Reserve System, the FDIC, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network, and the National Credit Union Administration issued “Guidance to Encourage Financial Institutions’ Youth Savings Programs and Address Frequently Asked Questions.” The interagency guidance provides answers to common questions, including those related to Customer Identification Program requirements that may arise as financial institutions collaborate with schools and other community stakeholders to facilitate youth savings and financial education programs. The guidance provides principles that national banks and federal savings associations should consider and is intended to encourage them to develop and implement programs to expand the financial capability of youth and build opportunities for the financial inclusion of more families. The guidance clarifies the application of existing guidelines and addresses uncertainties regarding legal and regulatory issues in connection with financial institutions’ establishing youth savings programs. OCC Bulletin. See also Joint Press Release.