Indications that the Federal Open Market Committee will raise the target range for the federal funds rate at its September meeting – presumably from the range of ¼ to ½% to that of  ½ to ¾% – is the most significant development of last week.  In addition, the CFPB and OCC entered into consent orders with First National Bank of Omaha relating to sales of credit card add-on products.  Other banks offering add-on products would do well to review the provisions of the orders.

          The full set of developments over the past week includes:

The Economy

  • "The Federal Reserve's Monetary Policy Toolkit: Past, Present, and Future," speech by Federal Reserve Chair Yellen at the Jackson Hole symposium (Aug. 26).
    • "Looking ahead, the FOMC expects moderate growth in real gross domestic product, additional strengthening in the labor market, and inflation rising to 2 percent over the next few years."
    • "Based on this economic outlook, the FOMC continues to anticipate that gradual increases in the federal funds rate will be appropriate over time to achieve and sustain employment and inflation near our statutory objectives."
    • "Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months." 
    • However, "the range of reasonably likely outcomes for the federal funds rate is quite wide."
      • Currently, 70% possibility that federal funds rate will be between 0 and 3¼% by end of 2017 and between 0 and 4½% by end of 2018.
    • Remarks widely understood to mean that FOMC will raise current target range for federal funds rate of ¼ to ½% to a range of ½ to ¾% at its Sept. 20-21 meeting.
    • Text of speech available at
  • "Remarks on the U.S. Economy," speech by Federal Reserve Vice Chairman Fischer at The Aspen Institute (Aug. 21).
    • During the period 2006-2015, "there was a major decline in the rate of productivity growth."
    • "The combination of strong job gains and mediocre GDP growth has resulted in exceptionally slow labor productivity growth. Most recently, business-sector productivity is reported to have declined for the past three quarters, its worst performance since 1979…. [L]ooking at the past decade, productivity growth has been lackluster by post-World War II standards."
    • "Are we doomed to slow productivity growth for the foreseeable future? We don't know.  On the encouraging side, the technological frontier appears to be advancing rapidly in some sectors, and there are hints that the firm start-up rate is improving.  On the more discouraging side, investment continues to disappoint--and so the current capital stock is smaller and embodies fewer frontier technologies than might otherwise be the case--and the productivity slowdown is a global phenomenon, suggesting that it may not be easily or quickly remedied."
    • Remarks available at


  • FinCEN proposes to extend requirements for customer identification and anti-money laundering programs as well as for beneficial ownership determinations to banks that lack a federal functional regulator (Aug. 25).

Credit Cards – Add-On Products

  • CFPB and OCC enter into consent orders with First National Bank of Omaha relating to deceptive practices in the sale of debt cancellation add-on products (Aug. 25).
    • Violations:
      • Deceptive marketing of products.
      • Hindering consumers from obtaining debt cancellation product benefits.
      • Making cancellation of debt cancellation products difficult.
      • Billing for credit monitoring services that were not provided.
    • CFPB relief:
    • OCC relief:
      • Bank to submit Comprehensive Action Plan describing actions taken and to be taken to comply with order.
        • Assistant Deputy Comptroller to review plan and when satisfied to provide supervisory non-objection.
      • Special requirements for third party vendor management.
      • $3 million civil money penalty.
      • OCC orders available at

De Novos

  • "De Novo Banks: Economic Trends and Supervisory Framework," published in summer 2016 issue of FDIC Supervisory Insights (Aug. 22).
    • "The FDIC continues to support the formation of new financial institutions and welcomes applications for deposit insurance."
    • Article discusses trends in de novo formation; the FDIC review of applications for deposit insurance, supervision of de novos, and FDIC support of de novo formations.
    • Supervisory Insights available at
  • De Novo Outreach Meetings scheduled by FDIC in September, October, and November in San Francisco, New York, and Atlanta, respectively.


  • "'Matters Requiring Board Attention' Underscore Evolving Risks in Banking," published in summer 2016 issue of FDIC Supervisory Insights (Aug. 22).


Financial Literacy


  • Remarks by OCC Senior Deputy Comptroller for Compliance and Community Affairs before the 2016 Association of Military Bankers of America Workshop (Aug. 19).

Student Loans

  • CFPB enters into consent order with Wells Fargo for "illegal private student loan servicing practices that increased costs and unfairly penalized certain student loan borrowers" (Aug. 22).

Upcoming Events

  • Sept. 8-9
    • FDIC 16th Annual Bank Research Conference.
  • Sept. 13
    • OCC Director Workshop, "Credit Risk," Duluth MN.
  • Sept. 14
    • OCC Director Workshop, "Compliance Risk," Duluth MN.
  • Sept. 19-21
    • OCC Director Workshop, "Building Blocks for Directors," St. Louis MO.
  • Sept. 28
    • FDIC Community Banking Initiative: De Novo Outreach Meeting, San Francisco CA.
  • Oct. 13
    • FDIC Community Banking Initiative: De Novo Outreach Meeting, New York NY.
  • Oct. 19
    • FDIC Money Smart Train-the-Trainer Online Live Meeting.
  • Oct. 27-28
    • FDIC 6th Annual Consumer Research Symposium.
  • Nov. 29
    • FDIC Community Banking Initiative: De Novo Outreach Meeting, Atlanta GA.

Regulatory Comment Deadlines

  • Aug. 29 – FDIC: replacement of references to credit ratings in international banking regulations.
  • Aug. 30 
    • OCC: adjustment of maximum CMPs to account for inflation.
    • Federal Reserve: adjustment of maximum CMPs.
  • Sept. 6
    • Federal Reserve/CFPB: changes to exemption thresholds under Truth in Lending Act for consumer loans and leases.
    • Federal Reserve/FDIC/OCC/CFPB: changes to threshold for exemption of small loans from higher priced mortgage loan appraisal requirements.
  • Sept. 14 – CFPB: payday loans.
  • Sept. 16 – Federal Reserve: capital requirements for certain insurance companies.
  • Oct. 3 – FDIC: appeals of supervisory determinations.
  • Oct. 14 – Federal Reserve, FDIC, OCC: streamlined call report for small banks.
  • Oct. 18 – CFPB: changes to required Know Before You Owe mortgage lending disclosures.
  • Oct. 24 – FinCEN: extension of BSA/AML requirements to banks without a federal functional regulator.
  • Oct. 27 – FDIC: third-party lending guidance.