Agencies issue flood insurance rule. Five federal regulatory agencies — FRB, Farm Credit Administration (FCA), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and Office of the Comptroller of the Currency (OCC) — announced the approval of a joint final rule that modifies regulations that apply to loans secured by properties situated in special flood hazard areas. The final rule implements provisions of the Homeowner Flood Insurance Affordability Act of 2014 relating to the escrowing of flood insurance payments and the exemption of certain detached structures from the mandatory flood insurance purchase requirement. The final rule also implements provisions in the Biggert-Waters Flood Insurance Reform Act of 2012 relating to force placement of flood insurance, but does not address the private flood insurance provisions in the Biggert-Waters Act. (6/22/2015) Joint press release. 

FRB releases statement on FOMC meeting. The FRB released a statement and economic projections summarizing the conclusions of the June 16 and 17 Federal Open Market Committee (FOMC) meetings. Based on reports of moderate improvements in economic activity and stagnant inflation and unemployment rates, FOMC recommended maintaining federal fund rates at current levels. (6/17/2015) FRB press release. 

Lew testifies regarding FSOC annual report. In testimony before the House Committee on Financial Services, Treasury Secretary Jacob Lew emphasized the role of the Financial Stability Oversight Council (FSOC) in identifying emerging threats to the financial system. Lew recounted the findings of FSOC’s 2015 annual report, highlighting several areas requiring continued attention and action as they relate to financial stability, including cybersecurity, changes to financial market structure, and risk-taking incentives of large, interconnected financial institutions. (6/17/2015) Lew testimony. According to a report in Market Watch, Committee Chair Jeb Hensarling questioned Lew regarding the impact of federal regulation on financial stability, suggesting the Volcker Rule has made trading in the bond market more volatile. 

Agencies announce final capital rules for advanced approaches banking organizations. The OCC, FRB, and FDIC issued a final rule revising the advanced approaches risk-based capital rule applicable to large, international banking organizations using this rule to determine their regulatory capital ratios. The rule will become effective October 15, 2015. (6/16/2015) Joint agency press release. 

Money laundering and terrorist financing risk assessments. The Treasury Department issued the National Money Laundering Risk Assessment (NMLRA) and the National Terrorist Financing Risk Assessment (NFTRA). Both found that the US has maintained its ground in combatting money laundering and terrorist-financing activities. The NMLRA found that the US framework for anti-money laundering has prevented money launderers from employing innovation or exploiting vulnerabilities effectively. The NFTRA found that terrorists have been forced to move their financing transactions outside of US banks, instead relying upon more expensive, less efficient, and riskier methods to facilitate these transactions. (6/12/2015) Treasury Department press release.