Little in the way of developments with immediate relevance for community banks emerged from the agencies or other forums last week.  HELOCs were the subject of interagency guidance on lines of credit nearing their end-of-draw periods.  New host state loan-to-deposit ratios were released, which should be reviewed in connection with a bank's entry into a new host state.  Several enforcement actions should remind banks of the importance of compliance with BSA/AML requirements, global sanctions, and consumer protection requirements for student loans. 

The full set of developments over the past week was as follows:

The Economy

  • June jobs report: unemployment rate at 6.1%; 288,000 new jobs in June (July 3).
    • "Job gains were widespread, led by employment growth in professional and business services, retail trade, food services and drinking places, and health care."
    • Most recent FOMC statement indicates that target range for federal funds rate of 0 to 1/4% will change when economy approaches maximum employment.
    • Per earlier FOMC statements, changes to fed funds rate to be considered when unemployment rate drops below 6.2%.
    • Report available at
  • Monetary Policy and Financial Stability, Remarks by Federal Reserve Chairman Yellin at the 2014 Michel Camdessus Central Banking Lecture, IMF (July 2).

Community Banking

  • New interagency guidance for HELOCs; see HELOCs below.


Capital Planning and Stress Testing

  • Public portions of resolution plans of 17 financial firms released by Federal Reserve and FDIC (July 2).
    • 13 firms are bank holding companies that previously had submitted at least one resolution plan.
    • First-time plans of 3 nonbanking firms designated for supervision by the Federal Reserve: AIG, GE Capital, and Prudential Financial.
    • Initial plan also submitted by Bankia SA.
    • Extensions until Oct. 1 granted to BNP Paribas and Royal Bank of Scotland.
    • Public portions available at



  • Federal Reserve invokes unfair and deceptive practices prohibition in enforcement action (July 1).  See Student Loans below.

Global Sanctions


  • Federal banking agencies and CSBS issue Interagency Guidance on Home Equity Lines of Credit Nearing Their End-of-Draw Periods (July 1).
    • Examiners to consider five risk management principles:
      • Prudent  underwriting for renewals, extensions, and rewrites.
      • Compliance with pertinent existing guidance, including but not limited to the Credit Risk Management Guidance for Home Equity Lending [FRB SR Letter 05-11]and the Interagency Guidelines for Real Estate Lending Policies [12 CFR part 208, subpart E and App. C].
      • Use of well-structured and sustainable modification terms.
      • Appropriate accounting, reporting, and disclosure of troubled debt restructurings.
      • Appropriate segmentation and analysis of end-of-draw exposure in allowance for loan and lease losses (ALLL) estimation processes.
    • Ten additional management expectations.
    • Guidance available at

Interstate Branching

  • Host state loan-to-deposit ratios released by federal banking agencies (July 2).

Student Loans

Too Big to Fail

  • Living wills: agencies release public portions of resolution plans submitted by 17 financial firms (July 2).  See Capital Planning and Stress Testing above.

Virtual Currency

Bank Closings

  • None.

Upcoming Events

  • July 8
    • Senate Banking Committee hearing, "The Role of Regulation in Shaping Equity Market Structure and Electronic Trading."
  • July 8-9
    • OCC bank director workshops, "Risk Assessment" and "Credit Risk" (Seattle WA).
  • July 9
    • FDIC Atlanta Region webinar, "Bankers' Export Financing Resources."  
  • July 10
    • SEC full commission closed meeting.
    • House Financial Services Committee hearing, "Legislation to Reform the Federal Reserve on its 100-year Anniversary."  
  • July 22-23
    • OCC bank director workshops, "Compliance Risk" and "Risk Assessment" (Minneapolis MN).
  • July 23
    • OCC Mutual Savings Association Advisory Committee public meeting.
  • July 23-24
    • Joint Mutual Forum hosted by FDIC and OCC.
  • July 28-30
    • OCC bank director workshop, "Mastering the Basics: A Director's Challenge" (Columbus OH).
  • July 29-30
    • FOMC meeting.
  • July 29
    • Don't Forget About Deposit Regulations, FDIC Chicago Region regulatory conference call.
  • Sept. 23-24
    • Community Banking in the 21st Century, Federal Reserve System/CSBS Second Annual Community Banking Research Conference.. 
  • Oct. 16-17
    • FDIC annual Consumer Research Symposium.  

Regulatory Comment Deadlines

  • July 7 – CFPB: correction or cure of debt-to-income overages and credit extension limit for small creditor definition; "small servicer" definition.  
  • July 8 – Federal Reserve: Dodd-Frank section 622 concentration limits on large financial companies.  
  • Aug. 4 – FHFA: Fannie and Freddie guarantee fees.  
  • Aug. 4 – CFTC: position limits on physical commodity derivatives and aggregation.  
  • Aug. 11 – OCC: integration of national bank and federal savings association rules on corporate activities and transactions.  
  • Aug. 11 – Federal Reserve: shift in 12-month cycle for capital planning and stress testing.  
  • Aug. 22 – Federal Reserve/FDIC/OCC: changes to Schedules RC-R and RC-L of call report.  
  • Sept. 2 – Federal Reserve/FDIC/OCC: regulatory burden with respect to applications and reporting, powers and activities, and international operations.  
  • Sept. 2 – OCC/FDIC: shift in 12-month cycle for capital planning and stress testing.  
  • Sept. 10 – CFPB: request for information on mobile financial services.