For most banks, the most important regulatory event last week was the OCC's forum on "regulatory innovation."  The agency is moving to make "operational" the principles it announced last March, and it continues to work on the concept of a limited national bank charter for certain FinTech firms.  For further discussion, see our alert, Community Banks and FinTech: Notes on the OCC Responsible Innovation Forum, available at /newsletters/community-banks-and-fintech-notes-on-the-occ-responsible-innovation-forum. As for the largest U.S. banks, the Federal Reserve released last Thursday its supervisory stress test results.  Brexit otherwise dominated the news; whether it will have an impact on the U.S. banking industry different from other significant foreign actions remains to be seen.

          The full set of developments over the last week includes:

The Economy

Credit Ratings

  • FDIC issues proposed rule to replace references to credit ratings in its international banking regulations with standards of creditworthiness (June 22).

Financial Inclusion

FinTech

LIBOR and Reference Rates

Mortgage Servicing

Too Big to Fail

  • Federal Reserve releases results of supervisory stress tests for the 33 U.S. banking firms with $50 billion or more in assets (June 23).
    • Under "severely adverse" hypothetical scenario (global recession, domestic unemployment rising 5 percentage points, negative yields for short-term U.S. Treasuries), the firms would suffer loan losses of $385 billion and a reduction in common equity tier 1 capital from 12.3% to 8.4%.
    • Dodd-Frank Act Stress Test 2016: Supervisory Stress Test Methodology and Resultsavailable at http://www.federalreserve.gov/newsevents/press/bcreg/20160623a.htm.
    • Other CCAR results to be announced June 29.
  • FSOC releases 2016 annual report (June 21).
  • "Comments on the Resolution Framework for Banks and Bank Holding Companies in the United States," remarks by Federal Reserve Vice Chairman Fischer at the Panel Discussion on Resolution, Riksbank Macroprudential Conference (June 22).

Congressional Activity – Recent

Congressional Activity – Upcoming

  • July 14
    • Senate Banking Committee hearing, "Evaluating the Financial Risks of China."

Upcoming Events

  • June 28
    • OCC Director Workshop, "Risk Governance," Milwaukee WI.
  • June 29
    • OCC Director Workshop, "Credit Risk," Milwaukee WI.
  • July 19
    • OCC Director Workshop, "Compliance Risk," Sioux Falls SD.
  • July 20
    • OCC Director Workshop, "Operational Risk."
    • FDIC Money Smart Train-the-Trainer Online Live Meeting.
  • July 21
    • FDIC New York Region Teleconference, "Commercial Real Estate – Risks and Effective Risk Management."
  • July 26
    • OCC Director Workshop, "Credit Risk," Tampa FL.
  • July 27
    • OCC Director Workshop, "Operational Risk," Tampa FL.
  • Aug. 4
    • FDIC 2016 Joint Mutual Forum, Arlington VA.

Regulatory Comment Deadlines

  • July 5 – FFIEC: changes to Uniform Interagency Consumer Compliance Rating System.
  • July 22 – Banking agencies et al.: incentive-based compensation limits.
  • Aug. 2
    • Federal Reserve: ANPR on capital rules for certain insurance companies.
    • Federal Reserve: proposed enhance prudential standards for systemically important insurance companies.
    • FinCEN: imposition of special measures against North Korea.
  • Aug. 5 
    • Federal Reserve/FDIC/OCC: net stable funding ratio.
    • Federal Reserve: amendment of QFCs to prevent immediate cancellation in event of bankruptcy or other resolution.
  • Aug. 8 – Treasury/IRS: foreign-owned, single-owner entities required to obtain EIN.
  • Aug. 22 – CFPB: ban on mandatory arbitration clauses.
  • 60 days following publication in Federal Register – FDIC: replacement of references to credit ratings in international banking regulations.
  • Sept. 14 – CFPB: payday loans.