Basel III Implementation in the U.S.

On July 2, the Fed finalized a rule to implement Basel III in the U.S. The Fed has indicated that the rule will help ensure banks maintain strong capital positions that will enable them to continue lending to creditworthy households and businesses even after unforeseen losses and during severe economic downturns. Fed Release. Federal Register Notice. Community Bank Guide.

Joint Proposal on Leverage Ratio Standards

On July 9, the Fed, the FDIC and the OCC issued a joint proposed rule to strengthen the leverage ratio standards for large, systemically significant U.S. banking organizations. Under the proposed rule, bank holding companies with more than $700 billion in consolidated total assets or $10 trillion in assets under custody (covered BHCs) would be required to maintain a tier 1 capital leverage buffer of at least 2 percent above the minimum supplementary leverage ratio requirement of 3 percent, for a total of 5 percent. The proposed rule would be effective on January 1, 2018. Comments must be submitted within 60 days of publication in the Federal Register. Joint Release. Proposed Rule.

Appraisal Exemption for Higher-Priced Mortgages

On July 10, the Fed, the CFPB, the FDIC, the FHFA and the OCC issued a joint proposed rule which would create exemptions from certain appraisal requirements for a subset of higher-priced mortgage loans. The proposed rule would provide exemptions for: (i) transactions secured by existing manufactured homes and not land; (ii) certain "streamlined" refinancings; and (iii) transactions of $25,000 or less. Comments must be received on or before September 9. Joint Release. Proposed Rule.

Extension of FATCA Withholding Start Date and Grandfathering End Date

On July 12, Treasury and the IRS announced that they intend to amend final Treasury regulations implementing the U.S. Foreign Account Tax Compliance Act (FATCA) to provide for a six-month extension to the start of FATCA withholding and the end of the FATCA grandfathering period, from January 1, 2014 (under current regulations) to July 1, 2014, in order to allow for a more orderly implementation of FATCA. In addition, the timelines for implementing certain FATCA account due diligence requirements and FATCA registration requirements are to be extended, and Treasury and the IRS will provide a list of jurisdictions that will be treated as having in effect an intergovernmental agreement (IGA) with the U.S. FATCA withholding is scheduled to apply to payments of U.S. source dividends, interest and other fixed payments beginning July 1, 2014, and to payments from the disposition of property producing such payments beginning January 1, 2017. IRS Notice 2013-43.