Three developments in the past week warrant careful attention by most community banks.  First, in the mortgage area, the CFPB proposed new mortgage servicing rules and issued a bulletin on lending to individuals with disability income. Second, the FDIC revised the capital measurements in the Deposit Insurance Assessment System to align them with the Basel III-based capital rules. Third, the Defense Department announced new limits on loans to servicemembers involving the discretionary allotment system.

The full set of developments over the past week is as follows: 

Monetary Policy

Community Banking


  • OCC issues bulletin on relationships with money services businesses (Nov. 19).
    • "The OCC does not direct banks to open, close, or maintain individual accounts, nor does the agency encourage banks to engage in the termination of entire categories of customers without regard to the risks presented by an individual customer or the bank’s ability to manage the risk."
    • "MSBs present varying degrees of risk."
    • "Banks are expected to assess the risks posed by an individual MSB customer on a case-by-case basis and to implement controls to manage the relationship commensurate with the risks associated with each customer."
    • Bulletin 2014-58 available at



Corporate Culture/Tone at the Top


De Novos

Deposit Insurance Assessments

Electronic Banking

  • CFPB warns of consumer abuses in electronic payments systems (Nov. 20).  See Payments Systems below.

Executive Compensation

  • OCC Director Curry "hopeful that [agencies] are nearing the end of a process" for a final rule on incentive-based executive compensation under Dodd-Frank section 956.

Federal Housing Administration

Financial Stability Oversight Council

Flood Insurance

  • House Financial Service Committee hearing on private flood insurance market Nov. 19.

Foreign Asset Control

  • New York State Department of Financial Services announces settlement with Bank of Tokyo Mitsubishi UFJ over response to previous regulatory instruction on transactions with Sudan and Myannmar (Nov. 18).
    • Original transactions sanctioned in June 2013.
    • Civil money penalty: $315 million.
    • Certain individual managers resign.
    • Action based on same violations underlying NYS DFS action against PriceWaterhouse in August 2014.
    • Order available at

Foreign Banks



  • "Liquidity Regulation," remarks of Federal Reserve Governor Tarullo at The Clearing House 2014 Annual Conference (Nov. 20).

Money Services Businesses

  • OCC issues Bulletin 2014-58 on national bank customer relationships with MSBs.  SeeBSA/AML above.

Mortgage Lending

Mortgage Servicing

  • CFPB proposes additional measures relating to foreclosures (Nov. 20).

Operation Choke Point

Payments Systems

Physical Commodities


  • SEC finalizes Regulation SCI (Systems Compliance & Integrity) (Nov. 19).


Swaps and Derivatives

Too Big to Fail

  • Federal Reserve announces two reviews of examinations of large banking organizations are underway to ensure the examinations are consistent, sound, and supported by all relevant information (Nov. 20).
    • IG examining two aspects of examination program.
      • Whether there are adequate methods for decision-makers at the relevant Reserve Banks and at the Board to obtain all necessary information to make supervisory assessments and determinations.
      • Whether channels exist for decision-makers to be aware of divergent views among an examination team regarding material issues.
    • Internal Federal Reserve review of its supervision of largest, most systemically important financial institutions in the United States, with focus on:
      • Whether the decision-makers at the Board receive the information needed to ensure consistent and sound supervisory decisions regarding the supervision of the largest, most complex banking organizations;
      • And whether adequate methods are in place for those decision-makers to be aware of material matters that require reconciliation of divergent views related to supervision of those firms.
    • Press release and Federal Reserve letter to IG available at
  • Basel Committee on Banking Supervision submits two reports to G-20 Leaders' Summit (Nov. 15-16).


  • Lame duck session began Nov. 13.
  • Pending legislation that could become law during lame duck session.
    • S. 1369
      • Exempting depository institutions primarily engaged in business of insurance from capital requirements of Collins Amendment.
    • H.R. 5461, passed House Sept. 16, 2014.
      • Amending Collins Amendment to allow Federal Reserve to apply insurance-based (rather than bank-based) capital standards to systemically important insurance companies.
      • Amending Volcker Rule to exempt collateralized loan obligations.
      • Amending Title VII to exempt end-users from margin requirements under the swaps rules.
      • Amending CFPB qualified mortgage rule with respect to the calculation of certain points and fees.
    • Renewal of Terrorism Risk Insurance Act.  Note that absent legislation TRIA will expire on Dec. 31, 2014.  Senate and House bills differ.
      • S. 2244 passed Senate on July 17.
      • H.R. 4871 reported out of House Financial Services Committee on July 16.
  • House Financial Services Committee
    • Jeb Hensarling (R-TX) re-elected Chairman and Maxine Waters (D-CA) re-elected Ranking Member (Nov. 19).
  • Senate Banking Committee
    • Sen. Richard Shelby (R-AL) to become Chairman of Senate Banking Committee in 2015.  Term limited to 2 years under party rules.
    • Committee agenda to be determined.
    • Ranking Member from among the Democrats to be determined.

Congressional Hearings – Last Week

Congressional Hearings – Upcoming

  • None scheduled.

Upcoming Events.

  • Dec. 1-3
    • OCC director workshop, Mastering the Basics: A Director's Challenge in Phoenix, AZ.
  • Dec. 2
    • Regulatory review outreach meeting at Los Angeles branch of Federal Reserve Bank of San Francisco.
  • Dec. 11
    • FDIC: Alliance for Economic Inclusion Meeting in Kansas City MO.
  • Dec. 16-17
    • Federal Open Market Committee meeting.
  • Dec. 17
    • FDIC Chicago Region Regulatory Conference Call, "Identifying and Mitigating UDAP Risk."
  • Jan. 13, 2015
    • Treasury Department public forum on money services businesses and banking access.

Regulatory Comment Deadlines

  • Nov. 24 – Federal Reserve/OCC/FDIC/FHFA/Farm Credit Administration: margin requirements for uncleared swaps.  
  • Dec. 2 – CFTC: margin requirements for uncleared swaps for swap dealers and major swap participants.  
  • Dec. 8 – CFPB: definition of "larger participant" in nonbank auto lending market.  
  • Dec. 23 – FDIC: restrictions on sales of assets by FDIC under part 340.  
  • Dec. 29 – Federal Reserve/FDIC/OCC/NCUA/Farm Credit Administration: revisions to flood insurance regulations.  
  • Jan. 12, 2015 – FHFA: FHLB membership to require 1% of assets in home mortgage loans.  
  • 60 days from publication in Federal Register – Federal Reserve/OCC/FDIC: revisions to capital rules for advanced approaches banks.  
  • 90 days after publication in Federal Register – CFPB: revisions to Regulations E and Z covering prepaid cards.