Mortgages

  • According to Reuters, regulators revising risk retention rule to expand types of loans eligible for QRM status.
    • Currently proposed 20% downpayment requirement appears to be at issue.
  • Mortgage servicing: Federal Reserve amends enforcement action against GMAC Mortgage requiring cash payments to borrowers. Amended order available here.

Student Loans

  • Bank regulators encourage prudent loan workouts. Interagency statement available here.
    • Regulators commit not to criticize lenders for such workouts, even if restructured loan results in adverse credit classifications of troubled debt restructurings.
    • Lenders encouraged to provide borrowers with information on any loan modification programs that they may offer.

Housing/GSE Reform

  • Privatization: Freddie Mac completes first credit risk transfer transaction: offering of $500 million in Structured Agency Credit Risk Debt Notes. Announcement available here. Description available here. Preliminary term sheet (July 15, 2013) available here.
    • Periodic and ultimate principal payments on the bonds are determined by the performance of reference pools of residential mortgage loans acquired in third quarter 2012. Freddie Mac to take initial losses.
    • Bonds not entitled to 20% risk weight on GSE-backed securities.
    • Statements of FHFA Acting Director available here and the Counselor to the Secretary of the Treasury for Housing Finance Policy here.
  • Markup: House Fin. Serv. Comm. approves H.R. 2767, "Protecting American Taxpayers and Homeowners (PATH) Act of 2013."
    • Original bill available here.
    • Markup materials available here.
  • Sen. Banking Comm. leaders release discussion draft of "FHA Solvency Act of 2013." Draft and related material are available here.
  • For comparison purposes, Corker-Warner bill, S. 1217, available here.

Bank Closings

  • None
     

Too Big to Fail

  • Stress tests: American Banker reports that Federal Reserve extends testing requirements to eleven more banking organizations.


Physical commodities

  • Federal Reserve to review determination that certain commodity activities are permissible for financial holding companies.
  • Hearing, Sen. Banking Comm., "Examining Financial Holding Companies: Should Banks Control Power Plants, Warehouses, and Oil Refineries?" (July 23, 2013). Archived webcast and testimony available here.

International

  • New Basel III-based Capital Requirements Regulation for the European Union became official July 17, 2012. Compliance to phase in beginning Jan. 1, 2014. Materials available here.

Congressional Activity

  • July 23
    • Hearing, Sen. Banking Comm., "Examining Financial Holding Companies: Should Banks Control Power Plants, Warehouses, and Oil Refineries?"
    • Hearing, Sen. Banking Comm., "Creating a Housing Finance System Built to Last: Ensuring Access fro Community Institutions"
  • July 24
    • Hearing, Sen. Banking Comm., "The FHA Solvency Act of 2012"
       

Upcoming Events

  • July 29
    • Federal Reserve Board closed meeting to consider advance and discount rates to be charged by Federal Reserve Banks
  • July 30
    •  Hearing, Sen. Banking Comm., "Managing Systemic Risk in Financial Markets through Wall Street Reforms"
  • July 31
    • Markup, Sen. Banking Comm., FHA Solvency Act (see above for link to bill text).

Regulatory Comment Deadlines

  • Aug. 4 – Federal Reserve: Application of swaps push-out rule to uninsured branches and agencies of foreign banks.
  • Aug. 12 – CFTC: Exemptive Order relating to cross-border swap activities.
  • Aug. 21 – SEC: Cross-border security-based swap transactions.
  • Aug. 27 – Federal Reserve: data collection requirements for certain money market instruments
  • Sept. 9 – CFTC, other agencies: Exemptions from appraisal requirements for certain high-priced mortgage loans.
  • Sept. 17 – SEC: Money market reforms.
  • Sept. 27 – BCBS: Capital treatment of bank exposures to central counterparties

Non-internal model method for capitalising counterparty credit risk exposures

  • Sept. 30 – FSB: Principles for an Effective Risk Appetite Framework
  • 60 days after publication – FRB, FDIC, OCC: Market risk capital rules
  • Oct. 4 – BCBS: Capital requirements for banks' equity investments in funds.
  • Oct. 11 – BCBS: Discussion paper, "Balancing risk sensitivity, simplicity and comparability."