Capital

  • Final Basel-based capital rules to be approved by Federal Reserve at Board meeting on July 2 at 9:30 am.
    • Board also to propose rule conforming market risk capital rule to Basel III.
    • FDIC Board and OCC likely to follow during same week.
  • Leverage ratio to be part of capital rules; media reports ratio at 5-6%.
    • Requirement to be in proposed form.
  • Basel consultative papers released
    • The non-internal model method for capitalising counterparty credit risk exposures, available here.
    • Capital treatment of bank exposures to central counterparties, available here.

CFPB

  • Supreme Court grants certiorari in NLRB v. Noel Canning, No. 12-1281.
    • Case involving recess appointments to NLRB.

Debit cards

  • Texas bans merchant surcharges on use of debit cards.

GSEs

  • Corker-Warner bill, "Housing Finance Reform and Taxpayer Protection Act," S. 1714, introduced, June 25, 2013, available here.
    • Fannie Mae and Freddie Mac wound down
    • New mortgage loan insurance regime
      • 10% capital requirement

Money Market Funds

  • Data collection: Federal Reserve proposes daily reports on federal funds transactions, Eurodollar transactions, and CDs from U.S. banks with more than $25 billion in assets and U.S. branch and agency offices of foreign banks with third party assets of more than $900 million in assets. Available here.

Mortgages

  • CFPB proposes additional changes to 2013 mortgage rules. Materials available here. Areas covered include:
    • Procedures for obtaining follow-up information on loss-mitigation applications.
    • Short-term forbearance plans
    • Lending in rural or underserved areas
    • Financing of credit insurance premiums
    • Definition of loan originator
    • Points and fees thresholds for manufactured housing employees
    • Revised effective dates of Loan Originator rule and ban on financing of credit insurance
  • OCC Mortgage Metrics Report for the First Quarter of 2013 released and available here.

    • Modest but generally favorable changes in performance
    • Material reductions in loans in process of foreclosure and completed foreclosures
    • Slight decrease in home retention actions

Nonbank Supervision

  • CFPB issues final rule on supervision of nonbanks. Material available here.
    • Rule implements Dodd-Frank standard: whether CFPB has "reasonable cause" to believe that financial service or product poses "risk" to consumers.
    • Notice and response
    • Once supervised, nonbanks must wait two years before petitioning for end of supervision.
  • CFPB has separate authority, without making a reasonable cause finding, to regulate mortgage, payday, and private education lenders.
  • CFPB also has separate authority to regulate "larger participants" and has used this authority to supervise credit reporting market and debt collectors. Supervision of credit reporting market has been proposed.

Student Loans

  • Hearing, "Private Student Loans: Regulatory Perspectives," Sen. Banking Comm. (June 25, 2013). Archived webcast and related material available here.

Swaps

  • Series of CFTC no-action letters providing time-limited relief on Dodd-Frank requirements (June 26, 27, 2013). Individual links available here. Topics covered include:
    • Reporting valuation data for cleared swaps by SDs and MSPs: June 30, 2014.
    • Reporting requirements for bespoke or complex swaps: Sept. 30.
    • Reports on cleared credit default swaps: Dec. 31.
    • Certain floor trader activities: Dec. 19.
    • Documentation requirements on SDs and MSPs for foreign exchange transactions that are swaps and certain physically settled forwards and swap agreements: Sept. 1/Dec. 31.
    • Portfolio reconciliation requirements for SDs and MSPs: Aug. 23.
    • Certain identifying information about counterparties: June 30, 2014.

Too Big to Fail

  • Hearing, House Fin. Serv. Comm., "Examining How the Dodd-Frank Act Could Result in More Taxpayer-Funded Bailouts" (June 26, 2013). Archived webcast and materials available here.

Bank Closings

  • None

Congressional Activity

  • Hearing, Sen. Banking Comm., "Private Student Loans: Regulatory Perspectives" (June 25, 2013). See above.
  • Hearing, Sen. Appropriations Comm., Subcomm. On Financial Institutions and General Government, "FY14 CFTC, SEC Budget Hearing." Archived webcast and materials available here.
  • Hearing, House Fin. Serv. Comm., Housing and Insurance Subcomm., "Evaluating How HUD's Moving-to-Work Program Benefits Public and Assisted Housing Residents" (June 26, 2013). Archived webcast and materials available here.
  • Hearing, House Fin. Serv. Comm., "Examining How the Dodd-Frank Act Could Result in More Taxpayer-Funded Bailouts" (June 26, 2013). See above.
  • Nominations hearing, Sen. Banking Comm. (June 27, 2013)
    • Melvin Watt, to be Director, FHFA
    • Jason Furman, to be Chairman, CEA
    • Kara Stein, to be Commissioner, SEC
    • Michael S. Piwowar, to be Commissioner, SEC
    • Richard T. Metsger, to be Member, NCUA

Upcoming Events

  • July 1 – Federal Reserve Board meeting
    • Advance and discount rates to be charged by Federal Reserve Banks
  • July 2 – Federal Reserve Board meeting on capital rules. See above.
  • July __ -- FDIC likely to approve same final and proposed Basel-based capital rules.

The Economy

  • FOMC cont'd, speeches and remarks clarifying that June 19 statement does not reflect decision to raise interest rate target or to pull back from bond-buying program absent demonstrable improvement in labor market and economy. Remarks include:
    • Governor Jerome Powell, "Thoughts on Unconventional Monetary Policy," Remarks at The Bipartisan Policy Center (June 27, 2013), available here.
    • Governor Jeremy Stein, "Comments on Monetary Policy," Speech at the C. Peter McColough Series on International Economics (June 28, 2013), available here.
    • William C. Dudley, Federal Reserve Bank of New York, "Are Recent College Graduates Finding Good Jobs?" Remarks at the Regional Economic Press Briefing (June 27, 2013), available here.
    • Dennis Lockhart, Federal Reserve Bank of Atlanta, Remarks before the Kiwanis Club of Marietta (June 27, 2013), available here.
  • FOMC dissenting views

    • Dove: James Bullard, President, Federal Reserve Bank of St. Louis, Interview, Washington Post (June 21, 2013), available here.
    • Hawk: Esther George, President, Federal Reserve Bank of Kansas City. No public statement beyond FOMC Statement.

Regulatory Comment Deadlines

  • July 8 – CFPB: Consumer financial civil penalty fund.

SEC: Regulatory systems compliance and integrity

  • July 15 – CFPB: 60-day Paperwork Reduction Act notice: Truth in Savings Act.

FHFA: Executive compensation

FHFA: Golden parachute and indemnification payments

  • July 22 – SEC: all Dodd-Frank Title VII proposed rules on security-based swaps and security-based swap market participants have been reopened for comment.
    • Includes S7-43-10: End-User Exception to Mandatory Clearing of Security-Based Swaps

FHFA: Removal of references to credit ratings

CFPB: Modifications to mortgage ___ rules

  • August 4 – Federal Reserve: Application of swaps push-out rule to uninsured branches and agencies of foreign banks.
  • August 21 – SEC: Cross-border security-based swap transactions.
  • 60 days after Federal Register publication – Federal Reserve: data collection requirements for certain money market instruments
  • September 17 – SEC: Money market reforms.
  • September 27 – BCBS: Capital treatment of bank exposures to central counterparties

Non-internal model method for capitalising counterparty credit risk exposures