OCC to Rotate Examiners
On May 28th, the Office of the Comptroller of the Currency (“OCC”) announced it will establish a formal rotation program for all examiners and formalize an enterprise risk management framework that will involve developing a risk appetite statement, creating a decision-tree process, and enhancing the OCC’s existing National Risk Committee framework and processes. OCC Press Release.
Comptroller’s Handbook Revisions
FDIC Quarterly Banking Profile
On May 28th, the Federal Deposit Insurance Corporation (“FDIC”) published its latest Quarterly Banking Profile. Commercial banks and savings institutions insured by the FDIC reported aggregate net income of $37.2 billion in the first quarter of 2014, down $3.1 billion (7.6 percent) from those reported a year earlier. The decline in earnings was mainly attributable to a $7.1 billion (10.7 percent) decline in noninterest income. Lower income from reduced mortgage activity and a drop in trading revenue contributed to a year-over-year decline in noninterest income. Additionally, noninterest income was higher one year ago due to a one-time gain at one institution. Despite the decline in earnings, more than half of the 6,730 insured institutions reporting (54 percent) had year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable during the first quarter fell to 7.3 percent from 8.5 percent a year earlier. FDIC Press Release.
FDIC Publishes Consumer Newsletter
Federal Reserve Board Changes to Consumer Protection Regulations
On May 22nd, the Federal Reserve Board repealed its Regulation DD (Truth in Savings) and Regulation P (Privacy of Consumer Financial Information) and issued final amendments to the Identity Theft Red Flags rule in Regulation V (Fair Credit Reporting). The Dodd-Frank Act transferred rulemaking authority for a number of consumer financial protection laws from the Board to the Consumer Financial Protection Bureau (“CFPB”). Because the CFPB has already issued interim final rules that are substantially identical to the Board’s Regulation DD and Regulation P, the Board is repealing its versions of those regulations. The Board’s amendments to Regulation V require financial institutions and creditors to implement identity theft prevention programs. The changes clarify that under amendments to the Fair Credit Reporting Act, these provisions apply only to creditors that regularly extend credit or obtain consumer reports in the ordinary course of their business. The amendments are effective 30 days after publication in the Federal Register, which is expected shortly. Federal Reserve Board Press Release.
OCC Proposes Integration of Licensing Rules
On May 21st, the OCC issued a Notice of Proposed Rulemaking (“NPRM”) that would integrate its rules for national banks and federal savings associations relating to policies and procedures for corporate activities and transactions (licensing rules). The NPRM revises some of these rules to eliminate unnecessary requirements or further the safe and sound operation of the institutions the OCC supervises and makes other technical and conforming changes. This integration would create, to a large extent, filing parity for national banks and federal savings associations for all activities and transactions addressed in the OCC’s licensing rules. As part of this rulemaking, the OCC also is proposing amendments to update its rules for the agency’s organization and function. Comments should be submitted within 60 days after publication in the Federal Register, which is expected shortly. OCC Press Release.
FDIC Discusses Rural Depopulation
On May 19th, the FDIC published an article in the FDIC Quarterly on the trends in rural depopulation and the implication of these trends on rural community banks. FDIC Press Release.
OCC Bulletin on Proposed Increased Assessment
On May 16th, the OCC issued a Bulletin on its proposed rule that would increase the amount of the OCC’s semiannual assessment on national banks and federal savings associations with more than $40 billion in assets. The proposal would raise the marginal assessment rates on assets in excess of $40 billion by 14.5 percent and would be effective for the assessment due on September 30, 2014. Comments should be submitted on or before June 12, 2014.