Three developments last week warrant the attention of community banks.  First, the OCC revised its guidance on "matters requiring attention," changes that appear to reflect a more rigorous approach to a bank's correction of the agency's supervisory concerns.  Second, the FDIC published a survey on the unbanked and underbanked, suggesting that a significant part of the populations remains untapped by traditional banks.  Third, that FDIC report and some other developments reinforce the need for banks to consider their approaches to mobile banking.

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

Monetary Policy

  • FOMC issues statement after meeting on Oct. 28-29.
    • "The Committee anticipates, based on its current assessment, that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program this month, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored."
    • Purchases of longer term Treasury securities and agency MBS to cease, although Federal Reserve holdings are not economically divested: principal payments on MBS are reinvested in agency MBS, and maturing Treasury securities are rolled over at auction.
    • Statement available at

Community Banks

  • OCC announces that loan growth in community banks and thrifts in the Northeast Region doubled in the second quarter from the rate in the second quarter of 2013 (Oct. 28).
  • Remarks by OCC Deputy Comptroller Benhart on credit risk (Oct. 28).
  • FDIC releases 2013 FDIC National Survey of Unbanked and Underbanked Households.
    • See Unbanked below.


  • FinCEN rules that virtual currency platform is a money transmitter for BSA/AML purposes (Oct. 27).  See Virtual Currency below.


  • Open Commission meeting scheduled for Nov. 3.

Examinations – Matters Requiring Attention

  • OCC issues updated guidance on policies and procedures regarding matters requiring attention (Oct. 30).
    • Addresses recommendations in international peer review report on OCC supervision of large and midsize institutions, but revised guidance applies to all national banks and federal savings associations.
    • MRAs to include "Five Cs": concern, cause, consequence, corrective action, and commitment.
    • Board duties include:
      • holding management accountable for the deficient practices;
      • directing management to develop and implement corrective actions;
      • approving the necessary changes to the bank’s policies, processes, procedures, and controls; and
      • establishing processes to monitor progress and verify and validate the effectiveness of management’s corrective actions.
    • Bulletin 2014-52 available at

Financial Stability Oversight Council


  • Basel Committee on Banking Supervision releases final net stable funding ratio (Oct. 31).
    • Available amount of stable funding divided by required amount of stable funding must be equal to or greater than 100%.
      • Five categories of available stable funding.
      • Eight categories of required stable funding.
    • Rule available at
    • U.S. banking regulators now to begin NSFR rulemaking.

Marijuana Businesses

Mobile Banking

  • FDIC releases 2013 FDIC National Survey of Unbanked and Underbanked Households (Oct. 29).  See Unbanked below.
    • 29.2% of the underbanked used mobile devices to access their accounts, compared to rate of 21.7% for fully banked households.  
  • NY Times reports that Rite Aid and CVS have disabled Apple Pay in their stores, in favor of forthcoming system, CurrentC, developed by a consortium of large merchants known as Merchant Customer Exchange (MCX) (Oct. 27).
    • CurrentC will be linked to debt and other bank accounts, as well as gift card, but apparently not to credit card accounts.
    • Information on CurrentC available at

Mortgage Lending – Right of Rescission

  • Supreme Court to hear argument in Jesinoski v. Countrywide Home Loans, No. 13-684, on Nov. 4.
    • Question presented: Does a borrower exercise his right to rescind a transaction in satisfaction of the requirements of Section 1635 of the Truth in Lending Act by "notifying the creditor" in writing within three years of the consummation of the transaction, as the Third, Fourth, and Eleventh Circuits have held, or must a borrower file a lawsuit within three years of the consummation of the transaction, as the First, Sixth, Eighth, Ninth, and Tenth Circuits have held?
    • Briefs available at

Payment Systems

  • Federal Reserve finalizes revisions to Part I of the Federal Reserve Policy on Payment System Risk (Oct. 28).
    • Based on and generally consistent with the April 2012 Principles for Financial Market Infrastructures.
    • Separate standards to address credit risk and liquidity risk.
    • New requirements on recovery and orderly wind-down planning
    • New standard on general business risk.
    • New standard on tiered participation arrangements.
    • Heightened requirements on transparency and disclosure.
    • Accompanies amendments to Regulation HH with revised standards for financial market utilities designated as systemically important.  See Too Big to Fail below.
    • Amended Policy available at

Student Loans

Too Big to Fail

  • Federal Reserve finalizes amendments to risk management standards for financial market utilities that have been designated as systemically important (Oct. 28).
    • Regulation HH amended to replace existing two sets of risk management standards for (i) payment systems and (ii) central securities depositories and central counterparties with a common set of standards.
    • Accompanies revisions to Part I of the Federal Reserve Policy on Payment System Risk.  See Payment Systems above.
  • FSOC closed meeting scheduled for Nov. 3.  See FSOC above.  
  • Basel Committee on Banking Supervision completes net stable funding ratio.  See Liquidity above.


  • FDIC releases 2013 FDIC National Survey of Unbanked and Underbanked Households (Oct. 29).
    • Unbanked – no banking accounts:
      • 9.6 million households; 7.7% of all households.
      • Unbanked status usually the result of significant income loss or job loss.
      • 22.3% used prepaid debit cards in prior 12 months.  (Rate for fully banked is 5.3%.)
    • Underbanked – banking accounts but have obtained financial products and services from nonbank alternative financial services providers in prior 12 months:
      • 24 million households; 20% of all households.
      • 29.2% used mobile devices to access their accounts.  (Rate for fully banked households is 21.7%.)
      • 13.1% used prepaid debt cards in prior 12 months.
    • Use of nonbank check cashing, payday lending, or other alternative nonbank arrangements.
      • 25% of all households within prior 12 months.
      • 12% of all households within past 30 days; rate for unbanked and underbanked is 40%.
    • Recommendations for banks:
      • Develop strategies to help households maintain or renew banking relationships through economic transitions, such as job loss.
      • Explore opportunities to deploy and market checkless checking accounts and other options to meet the transactional needs of households; and
      • Integrate mobile banking initiatives with branch-based strategies in overall efforts to address consumers' needs.
    • Report available at

Virtual Currency

  • FinCEN rules that virtual currency platform is a money transmitter for BSA/AML purposes.  FIN-2014-R012 (Oct. 27).
    • Company acts as "exchanger" of convertible virtual currency under 2011 money services business rule.
    • Two exemptions from definition not available in this instance:
      • Payment processor exemption – inapplicable because company operates through systems that allow non-BSA regulated institutions as members.
      • Payments not "integral" or necessary part of another non-money transmission service.
    • Ruling available at

Bank Closings

  • None.

Congressional Hearings – Upcoming

  • NewYorkTimesDealBook reports that Senate Banking Committee will hold hearing Nov. 21 to examine relationship between federal banking regulators and banking industry (Nov. 3).
    • Not yet listed on Senate Banking Committee website.

Upcoming Events.

  • Nov. 3
    • FSOC closed meeting.
    • CFTC open meeting.
  • Nov. 5-6
    • OCC director workshops, Compliance Risk and Credit Risk: A Director's Focus, in Kansas City, MO.
  • Nov. 6
    • FDIC Interagency CRA Workshop for Banks (Waukesha, WI).
  • Nov. 18-10
    • OCC director workshops, Compliance Risk and Credit Risk: A Director's Focus, in Newton, MA.
  • Nov. 20
    • FDIC San Francisco Region Bankers' Forum, Consumer Protection and Hot Topics.
  • Nov. 21
    • Reported Senate Banking Committee hearing on federal bank regulators and banking industry.
  • Dec. 1-3
    • OCC director workshop, Mastering the Basics: A Director's Challenge in Phoenix, AZ.

Regulatory Comment Deadlines

  • Nov. 10 – Federal Reserve/OCC/FDIC: additions to CRA Q&As.  
  • Nov. 10 – HUD: streamlined discussion of refinancing in FHA handbook on single family loans.  
  • Nov. 10 – SEC: circulation of price quotes of security-based swaps that may be purchased only by eligible contract participants not deemed an offer to sell.  
  • Nov. 10 – CFPB: amendments to 2013 Integrated Mortgage Disclosures Rule.  
  • 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.