• Implementation of Basel III Regulatory Capital Rules Delayed

The federal banking agencies announced on November 9 that the agencies do not expect that any of the three proposed regulatory capital rules published earlier this year would become effective on January 1, 2013, as previously planned. The agencies did not announce a new projected effective date for the proposed rules, which would implement portions of the Basel III capital accords, but said that they are working as expeditiously as possible to complete the rulemaking process.

Nutter Notes: The public comment period for the proposed regulatory capital rules ended on October 22. The agencies said that many commenters expressed concern that financial institutions would become subject to new capital requirements on January 1, 2013 without sufficient time to understand the rules or to make necessary systems changes. The agencies said that they “will take operational and other considerations into account when determining appropriate implementation dates and associated transition periods.”

  • Temporary Unlimited Noninterest-Bearing Transaction Account Coverage Set to Expire

The FDIC announced on November 5 that the temporary unlimited deposit insurance coverage for noninterest-bearing transaction accounts, including Interest on Lawyer Trust Accounts, is scheduled to expire on December 31, 2012 under Section 343 of the Dodd-Frank Act. Absent a change in law, the FDIC no longer will provide separate, unlimited deposit insurance coverage for those accounts beginning January 1, 2013.

Nutter Notes: The FDIC encouraged depository institutions to take reasonable steps to provide adequate advance notice to depositors with noninterest-bearing transaction accounts of the changes in FDIC insurance coverage so that they may consider the impact of any change in coverage in their management of those accounts.

  • CFPB to Delay Effective Date of New Dodd-Frank Truth in Lending Disclosures

The Consumer Financial Protection Bureau (“CFPB”) announced on November 16 that it will amend Regulation Z to delay the effective date of certain new home mortgage loan disclosures required under the Dodd-Frank Act in order to integrate them with other mortgage disclosures that have been proposed by the CFPB. The new mortgage disclosure requirements would have taken effect on January 21, 2013 under the Dodd-Frank Act.

Nutter Notes: The new disclosure requirements subject to the delay include disclosures on cancellation of escrow accounts, the consumer’s liability for debt payment after foreclosure, and the creditor’s policy for accepting partial payment. The new disclosures will not be required until after the CFPB’s previously proposed mortgage disclosure rules that will combine certain disclosures required by the Truth in Lending Act and the Real Estate Settlement Procedures Act are finalized.