While sometimes anodyne, the President's State of the Union address tonight is expected to include proposed legislation and executive action to enhance cybersecurity and the protection of consumer information.  The legislation would include a single national standard for protection and a consumer bill of rights, both of which would affect banking organizations of all sizes.  Otherwise on Capitol Hill, the House continued efforts to amend Dodd-Frank.  Elsewhere, the CFPB began the new year with several releases and statements on mortgage lending.  The OCC released two revised booklets for the Comptroller's Handbook.

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

The Economy

  • Federal Reserve issues January Beige Book (Jan. 15).
    • Reports from the twelve Federal Reserve Districts suggest that national economic activity continued to expand during the reporting period of mid-November through late December, with most Districts reporting a “modest” or “moderate” pace of growth. In contrast, the Kansas City District reported only slight growth in December. However, most of their contacts, along with those of several other Districts, expect somewhat faster growth over the coming months.
    • Payrolls in a variety of sectors expanded moderately during the reporting period. Significant wage pressures were largely limited to workers with specialized technical skills. Prices increased slightly, on balance, in most Districts.
    • Beige Book available at http://www.federalreserve.gov/monetarypolicy/beigebook/default.htm.

Community Banks

  • OCC publishes An Opportunity for Community Banks Working Together Collaboratively (Jan. 13).
    • Paper discusses OCC views on pooling or sharing of resources by community institutions to reduce costs and leverage specialized expertise.
    • Collaborative efforts include (but are not limited to):
      • Exchanging information and ideas.
      • Jointly purchasing materials or services.
      • Sharing back-office or other services.
      • Sharing a specialized staff member or team.
      • Jointly owning a service organization.
      • Participating in disaster mitigation agreements.
      • Jointly providing/developing products and services.
    • Paper available at http://www.occ.gov/news-issuances/news-releases/2015/nr-occ-2015-1.html.
    • Banks engaged in collaborative activities should also consult Antitrust Guidelines for Collaborations Among Competitors (April 2000), issued by the Justice Department and the FTC.
  • OCC releases 2015 schedule for community bank director workshops (Jan. 14).
    • Four workshops, offered multiple times.
      • "Building Blocks for Directors: Keys to Success"
      • "Risk Governance: Improve Director Effectiveness"
      • "Compliance Risk: What Directors Need to Know"
      • "Credit Risk: You Can Make a Difference"
    • Information available at http://www.seiservices.com/occ2015/.


Conflicts of Interest

  • OCC issues "Conflicts of Interest" booklet in Comptroller's Handbook (Jan. 14).



  • House passes H.R. 37, the "Promoting Job Creation and Reducing Small Business Burdens Act", following last week's failure to do so on a fast-track basis (Jan. 14).
    • Bill would amend several provisions of Dodd-Frank.
      • Volcker Rule and collateralized loan obligations – conformance period for divestiture of CLOs extended for two additional years to July 21, 2019.
      • Private equity funds that receive fees for investment banking services exempt from broker-dealer registration.
      • Loosens regulations on derivatives.
    • Other amendments:
      • Indemnification obligations for swap data repositories and clearinghouses in connection with information sharing with CFTC repealed.
      • Threshold for savings and loan holding companies to register set at same level for banks.
      • Emerging growth companies – simplified disclosure requirements and treatment of companies that cease to qualify as emerging growth companies.
      • Small company disclosures – exemption from XBRL requirements.
      • Small Business Investment Company advisers – relief from certain registration requirements.
      • Simplification of 10-K disclosures and changes to Regulation S-K.
      • Disclosures of compensatory benefit plans – threshold for disclosure lifted from $5 million to $10 million.
      • H.R. 37 available at http://thomas.loc.gov/cgi-bin/query/z?c114:H.R.37:

EGRPRA/Regulatory Reform

  • Agencies announce schedule of outreach meetings in 2015.
  • House of Representatives passes H.R. 185, the Regulatory Accountability Act of 2015 (Jan. 13).
    • Would require federal agencies (including but not limited to banking agencies) to conduct cost-benefit analysis in connection with any rulemaking.
    • SEC already subject to comparable requirement.
    • Whether President will sign into law is unknown.

Investment Products

  • OCC issues "Retail Nondeposit Investment Products" booklet in Comptroller's Handbook(Jan. 14).
    • Booklet:
      • Clarifies guidance applicable to current business practices.
      • Incorporates significant regulatory changes adopted in the Gramm-Leach-Bliley Act and the Dodd- Frank Act that affect banks’ securities-related activities and the OCC’s supervisory authority.
      • Incorporates interagency statements and guidance on retail sales of nondeposit investment products.
      • Updates risk management guidance and OCC expectations for effective risk management.
    • Handbook available at http://www.occ.gov/news-issuances/bulletins/2015/bulletin-2015-2.html.

Litigation Risk

  • OCC issues revised "Litigation and Other Legal Matters" booklet of Comptroller's Handbook(Jan. 16).
    • Booklet provides
      • Guidance to examiners in identifying risks directly associated with potential or pending litigation and other legal matters, along with related risk factors.
      • Supervisory expectations for managing legal risk.
      • Expanded examination procedures to assess the quantity of risk and quality of risk management.
    • Booklet available at http://www.occ.gov/news-issuances/bulletins/2015/bulletin-2015-4.html.

Mortgage Lending

Privacy and Data Security

  •  President announces several actions to protect identities and privacy (Jan. 12).

Student Loans

Too Big to Fail

Volcker Rule

  • House passes H.R. 37, the "Promoting Job Creation and Reducing Small Business Burdens Act" (Jan. 14).

Bank Closings

Congressional Events – Upcoming

  • Senate Banking Committee
    • Hearing, "Perspectives on the Strategic Necessity of Iran Sanctions", Jan. 27.
    • Mark-up, "Nuclear Weapon Free Iran Act of 2015", Jan 29.

Upcoming Events

  • OCC Community Bank Director Workshops, full 2015 schedule available at http://www.seiservices.com/occ2015/default.aspx/eurl.axd/535dadfc0f8b0b46aa59a491ad7e75c1
  • Jan. 21
    • FDIC board meeting.
  • Jan. 27-28
    • FOMC meeting.
  • Feb. 4
    • EGRPRA outreach meeting, Dallas TX.
  • Feb. 23-25
    • OCC Workshop, Building Blocks for Directors: Keys to Success, Miami FL.
  • Mar. 3
    • FDIC New York Region Regulatory Conference Call, BSA Today – Regulatory Tips, Trends, and Hot Topics.
  • Mar. 10
    • OCC Workshop, Risk Governance: Improve Director Effectiveness, Morristown NJ.
  • Mar. 11
    • OCC Workshop, Credit Risk: You Can Make a Difference, Morristown NJ.
  • Mar. 16-18
    • OCC Workshop, Building Blocks for Directors: Keys to Success, San Antonio TX.
  • Mar. 17-18
    • FOMC meeting.
  • May 4
    • EGRPRA outreach meeting, Boston MA.
  • Dec. 2
    • EGRPRA outreach meeting, Washington DC.

Regulatory Comment Deadlines

  •  Jan. 22 – CFTC: position limits on exempt and agricultural commodity futures, options, and economically equivalent physical commodity swaps.
  • Jan. 26 – FDIC: filing requirements and processing procedures for Change in Bank Control Act notices.
  • Feb. 2 – Federal Reserve: enhanced prudential standards for GE Capital.
  • Feb. 16 – CSBS: Model Regulatory Framework for virtual currency.
  • Feb. 17 – Federal Reserve/OCC/FDIC: revisions to capital rules for advanced approaches banks.
  • Feb. 23 – FSOC: asset management and systemic risk.
  • Feb. 29 – Federal Reserve: application of common equity tier 1 capital rules to holding companies organized in forms other than stock corporations.
  • Mar. 2 – Federal Reserve: methodology for determining capital surcharge on U.S. GSIBs.
  • Mar. 3 – Federal Reserve/OCC: definition of qualifying master netting agreement and related terms.
  • Mar. 16 – CFPB: safe student account scorecard.
  • Mar. 23 – CFPB: revisions to Regulations E and Z covering prepaid cards.