The Economy

  • Federal Open Market Committee meeting, Sept. 17-18. Statement available here. Economic projections available here.
    • Monthly bond-buying program ($45 billion in longer-term Treasury securities and $40 billion in agency MBS) to continue unchanged until FOMC receives more evidence of economic progress. Mixed signals:
      • Recent moderate economic growth, improvement in some labor market indicators, advances in household spending and business fixed investment, and strengthened housing sector.
      • Unemployment rate remains elevated, mortgage rates have risen, and U.S. fiscal policy is restraining economic growth.
    • Target federal funds rate remains at 0 to ¼%
      • Inflation currently running below FOMC longer-run objective, but longer-term inflation expectations have remained stable.
      • Target rate to remain in place as long as unemployment rate remains above 6.5%, one- and two-year inflation rate projections do not exceed 2.5%, and longer-term inflation expectations continue to be "well anchored.
      • "Highly accommodative" monetary policy will remain appropriate for a "considerable time" after bond-buying program ends and economic recovery strengthens.
    • Next FOMC meeting is Oct. 29-30.

Community Banking

  • The Freedom and Mobility in Consumer Banking Act introduced by Sen. Tom Harkin (D-IA) and Congresswoman Jan Schakowsky (D-IL). Press release available here.
    • Several new requirements on account-closing practices, including a prohibition on account-closing fees.
    • Constitutes reintroduction of similar bill, H.R. 3077, in previous Congress.

Allowance for Loan Losses

  • Remarks of the Comptroller of the Currency before the AICPA Banking Conference (Sept. 16, 2013), available here.
    • Supports FASB proposal to base ALL on expected loss rather than on incurred loss.


  • SEC proposes rule requiring public companies to disclose (in any document requiring compensation disclosure) the ratio of CEO compensation to median compensation of employees. Proposed rule available here.
    • No single methodology required, but noncash components of compensation must be taken into account.
    • Rule mandated by Dodd-Frank section 953(b).
    • Comments due 60 days after publication in Federal Register.

Electronic Banking

  • Cybersecurity: Remarks by the Comptroller of the Currency before the Exchequer Club (Sept. 18), available here.
    • Community banks likely targets of future attacks, given relatively less sophisticated defenses and reliance on third parties.
      • Resources for community banks include OCC Senior Critical Infrastructure Officer and FFIEC Cybersecurity and Critical Infrastructure Working Group.
    • Agency work to include implementation of Executive Order on Cybersecurity, available here.
    • FSOC expected to make recommendations on cybersecurity.

Mortgage Lending

  • Prepared remarks of Director Cordray, Consumer Advisory Board meeting, Mississippi Valley State Univ. (Sept. 18, 2013), available here.

Municipal Bonds

  • SEC finalizes rule on permanent registration regime for municipal advisers, as required by Dodd-Frank section 975. Rule available here.

Payday Lending

  • CFPB releases examination guidance on compliance with Military Lending Act by payday lenders. Guidance is available here. Act applies to all closed-end loans to servicemembers of $2,000 or less and with terms of 91 days or less. Statutory requirements include:
    • APR capped at 36%.
    • No rollover, unless new transaction has more favorable terms for servicemember.
    • No waiver of rights under Servicemembers Civil Relief Act or other consumer protection laws.
    • No waiver of right to litigate claims in court; no mandatory arbitration.
    • Lender may not require repayment by allotment, although servicemember may choose to do so.


  • Second proposed credit risk retention rule published in Federal Register, 78 57928 (Sept. 20, 2013), available here. Comment deadline Oct. 30.

Too Big to Fail

  • Prudential Financial, Inc., designated by FSOC as third nonbank SIFI subject to consolidated supervision by the Federal Reserve and enhanced prudential standards. FSOC announcement available here; notational vote and resolution available here.
    • Dissenting votes: FHFA and member having insurance expertise. Also opposed, state insurance commissioner (nonvoting member).
    • On July 8, AIG and GE Capital were designated.
  • "Macroprudential Regulation," Remarks by Federal Reserve Governor Tarullo at the Yale Law School Conference on Challenges in Global Financial Services (Sept. 20), available here.


  • "London Whale" settlements between JPMorgan and three U.S. agencies (Federal Reserve, OCC, SEC) and one U.K. regulator (Financial Conduct Authority) released Sept. 19. All orders may be accessed here. In addition to financial penalties (totaling approximately $920 million), lessons of settlements include:
    • "Admission" of wrongdoing in U.S. orders. Collateral estoppel effect to be determined.
    • Where any bank policy or procedure places a dollar limit on activity, any change to the methodology of calculating compliance with the limit must be accompanied by documented analysis of whether change to the limit is appropriate.
    • Jan. 2013 consent order with OCC available here.

Congressional Activity

  • Senate Banking Committee hearings
    • "Recovering from Superstorm Sandy: Assessing the Progress, Continuing Needs, and Rebuilding Strategy"(Sept. 18). Archived hearing and written testimony available here.
    • "Implementation of The Biggert-Waters Flood Insurance Act of 2012: One Year After Enactment" (Sept. 18). Archived hearing and written testimony available here.
  • House Financial Services Committee hearings
    • Hearing, "Examining the SEC's Money Market Fund Rule Proposal" (before the Capital Markets and GSE Subcommittee) (Sept. 18). Archived hearing and written testimony available here.
    • Hearing, "The Terrorism Risk Insurance Act of 2002" (full committee) (Sept. 19). Archived hearing and written testimony available here.

Upcoming Events

  • Sept. 25
    • Sen. Banking Comm. hearing, "Reauthorizing TRIA: The State of the Terrorism Risk Insurance Market."
    • Sen. Banking Comm. hearing, "Assessing the Investment Climate and Improving Market Access in Financial Services in India."
  • Oct. 29-30
    • FOMC meeting

Regulatory Comment Deadlines

  • Sept. 23 – SEC: Amendments to Regulation D.
  • Sept. 25 – Federal Reserve, FDIC, OCC: Stress Test Guidance for Medium-Sized Firms.
  • 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.
  • Oct. 4 – BCBS: Capital requirements for banks' equity investments in funds.
  • Oct. 11 – BCBS: Discussion paper, "Balancing risk sensitivity, simplicity and comparability."
  • Oct. 21 – Federal Reserve, OCC, FDIC: Supplementary Leverage Ratio.
  • Oct. 30 – Federal Reserve, OCC, FDIC, SEC, CFTC: Credit risk retention.
  • 60 days after publication – FRB, FDIC, OCC: Market risk capital rules.
  • 60 days after publication – SEC: Regulation S-K disclosure of ratio of CEO compensation to median employee compensation.