Risk management continues to be the watchword of the week, with remarks of the Comptroller underscoring the OCC's concerns about cyber security and the use of third party service providers.  Otherwise, with Congress and schools in the Washington, D.C., area out for spring break, as well as the arrival of the religious holidays, the past week was a relatively quiet one. 

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

The Economy

  • "Monetary Policy and the Economic Recovery," Remarks by Federal Reserve Chair Yellen at Economic Club of New York (April 16).
    •  "In sum, the central tendency of FOMC participant projections for the unemployment rate at the end of 2016 is 5.2 to 5.6 percent, and for inflation the central tendency is 1.7 to 2 percent. If this forecast was to become reality, the economy would be approaching what my colleagues and I view as maximum employment and price stability for the first time in nearly a decade. I find this baseline outlook quite plausible."
    • Three big questions for the FOMC.
      • Is there still significant slack in the labor market?
      • Is inflation moving back toward 2 percent?
      • What factors may push the recovery off track?
    •  Text available at http://www.federalreserve.gov/newsevents/speech/yellen20140416a.htm.
  • Beige book for April 2014 released.

CRA

  • CRA examination procedures for large institutions issued by federal banking agencies (April 18).

Cyber Security

Housing Reform

  • Mark-up of Johnson-Crapo bill originally scheduled for April 29 has been cancelled.

Monetary Policy

Remittances

Risk Management

  • OCC "Compliance Risk" and "Risk Assessment" workshops for directors of national community banks and federal savings associations scheduled for May 6-7 in San Diego, CA.

Securities

Swaps and Derivatives

  • SEC proposes regulation for security-based swap dealers and major security-based swap participants (April 17).
    • Recordkeeping, reporting, and notification requirements.
    • Securities count requirements for certain security-based swap dealers.
    • Additional capital charge to be added to proposed capital rule for certain security-based swap dealers.
    • Recordkeeping requirements for broker-dealers to account for security-based swap and swap activities.
    • Comment deadline: 60 days from date of publication in the Federal Register.
    • Proposal available at http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370541519773.

Systemic Risk

Third Party Vendors

  • Remarks by Comptroller Curry before a Meeting of CES Government (April 16).
    • Three trends of concern:
      • Increased consolidation of service providers, leaving much of industry reliant on a single vendor.
      • Increased reliance on service providers, particularly foreign-based, for critical services.
      • Third party access to large amounts of sensitive bank or customer data.
    •  Text available at http://www.occ.gov/news-issuances/news-releases/2014/nr-occ-2014-59.html.

Volcker Rule

  • Federal Reserve extends by two additional years the compliance date for conformance of investments in collateralized loan obligations to Volcker rule.  Conformance likely to mean divestiture (April 7).
    • Compliance deadline now July 21, 2017.  Until then,
      • Banks not required to include CLO ownership interests in determining investment limits under Volcker.
      • Banks not required to deduct CLO investments from tier 1 capital.
    • Limited to CLOs in place as of Dec. 31, 2013.
    • Affects primarily securitization vehicles backed predominantly by commercial loans.
    •  Announcement available at http://www.federalreserve.gov/newsevents/press/bcreg/20140407a.htm.

Bank Closings

  • None.

Upcoming Events

  • April 24
    • SEC closed meeting.
  • April 29
    • Senate Banking Committee mark-up of Johnson-Crapo bill.
    • OCC Mutual Savings Association Advisory Committee meeting.
  • April 29-30
    • FOMC meeting.
  • May 6-7
    • OCC workshops for directors on "Compliance Risk" and "Risk Assessment" in San  Diego, CA.
  • May 19
    • FSOC conference on asset management industry and its activities.

Regulatory Comment Deadlines

  • April 21 – Federal Reserve: modification of definition of “creditor” in Identity Theft Red Flags Rule.  
  • April 21 – Federal Reserve: repeal of Regulation DD.  
  • April 25 – CFTC: interim final rule on access to counterparty data for swap executed anonymously.  
  • April 28 – SEC: asset-backed securities; dissemination of potentially sensitive asset-level data.  
  • May 2 – Federal Reserve: Application of Regulation CC to electronic checks and electronic returned checks.  
  • 30 days from date of publication in Federal Register – CFPB: revisions to Reg E for international remittances.  
  • May 27 – SEC: standards for covered clearing agencies.  
  • May 27 – CFTC: swap reporting and recordkeeping requirements under 17 CFR part 45.  
  • June 9 – federal banking agencies: standards for asset management companies and state agencies.  
  • June 20 – FDIC: filing and disclosure requirements for securities issued by state savings associations.  
  • 60 days from publication in the Federal Register – SEC: recordkeeping, reporting, and notification requirements for security-based swap dealers and major security-based swap participants.