Since Martin Luther King Day, the banking agencies have become more active.  The agencies issued new guidance on student loans.  The CFPB proposed rules to expand the mortgage lending capability of small creditors, particularly in rural or underserved areas and to revise certain disclosures in the Loan Estimate under the know-before-you-owe rules.  The Federal Reserve proposed to implement a recent statute and raise the ceiling on eligibility for the Small Bank Holding Company Policy Statement from $500 million to $1 billion.  The Federal Reserve also published a white paper on payment systems, which warrants review by all banks.

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

Monetary Policy

  • Federal Open Market Committee meeting (Jan. 27-28).  FOMC reaffirms federal funds rate target of 0 to ¼%.
    • Statement observes that:
      • Information received since the Federal Open Market Committee met in December suggests that economic activity has been expanding at a solid pace.
      • Labor market conditions have improved further, with strong job gains and a lower unemployment rate. On balance, a range of labor market indicators suggests that underutilization of labor resources continues to diminish.
      • Household spending is rising moderately; recent declines in energy prices have boosted household purchasing power.
      • Business fixed investment is advancing, while the recovery in the housing sector remains slow.
      • Inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices. Market-based measures of inflation compensation have declined substantially in recent months; survey-based measures of longer-term inflation expectations have remained stable.
      • Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy.
    • Statement available at  
  • “Advancing Macroprudential Policy Objectives,” Remarks by Federal Reserve Governor Tarullo at the Office of Financial Research and Financial Stability Oversight Council’s 4thAnnual Conference (Jan. 30).
    • Three objectives:
      • Continuing the task of ensuring that very large, complex financial institutions do not threaten financial stability.
      • Developing policies to deal with leverage risks and susceptibility to runs in financial markets that are not fully contained within the  universe of prudentially regulated firms.
      • Dealing with the vulnerabilities associated with the growing importance of central counterparties.
    • Remarks available at

Community Banks

  • Federal Reserve issues interim final rule and request for comments to exempt savings and loan holding companies with assets of less than $500 million (and that meet certain other qualifications) from capital requirements in Regulation Q (Jan. 29).
    • Places thrift holding companies on a par with bank holding companies.  Amendment of Small Bank Holding Company Policy Statement (see below) would apply to small savings and loan holding companies.
    • Implements Pub. L. 113-250.
    • Interim final rule available at
    • Comment deadline: Mar. 4.
  • Federal Reserve proposes rule to expand applicability of Small Bank Holding Company Policy Statement to cover companies with up to $1 billion (Jan. 29).  Current ceiling is $500 million.





EGRPRA/Regulatory Reform

  • Agencies announce schedule of outreach meetings in 2015.

Financial Literacy

Financial Stability Oversight Council

Mortgage Lending

  • CFPB proposes changes to mortgage rules to increase the number of small creditors able to offer mortgage loans in rural and underserved areas (Jan. 29).
    • Currently, small creditors, defined as lenders with less than $2 billion in assets and that make fewer than 500 first-lien mortgage loans annually, can receive qualified mortgage status for loans held in portfolio, even if they are based on a debt-to-income ratio that exceeds 43% and for certain balloon loans in rural and underserved areas.
    • Changes include:
      • Expansion of definition of small creditor to include lenders making no more than 2,000 first-lien mortgage loans.
      • Inclusion of assets of mortgage lending affiliates in determining whether lender is under the $2 billion asset cap on small creditors.
      • Expansion of definition of "rural" areas (for purpose of rural or underserved creditor status) to include non-urban census blocks.
      • 3 month grace period for lenders that exceed limits on small creditor or rural or underserved creditor status.
      • Extension of conformance period with restrictions on balloon-payment loans for qualified mortgage status from Jan. 10, 2016 to Apr. 1, 2016.
    • Proposal available at
    • Comment deadline: Mar. 30.
  • CFPB amends "Know Before You Owe" mortgage rules (Jan. 20).
  • FDIC releases technical assistance video on CFPB Loan Originator Compensation Rule (Jan. 27), available at

Operation Choke Point

Payment Systems

Privacy and Data Security

Student Loans

  • Agencies release Guidance on Private Student Loans with Graduated Repayment Terms at Origination (Jan. 29).
    • Six principles:
      • Ensure orderly repayment.
      • Avoid payment shock.
      • Align payment terms with a borrower's income.
      • Provide borrowers with clear disclosures.
      • Comply with all applicable federal and state consumer laws and regulations and reporting standards.
      • Contact borrowers before reset dates.
    • Guidance available at

Swaps and Derivatives

Too Big to Fail

Virtual Currency

Bank Closings

  • Highland Community Bank (Chicago, IL) (Jan. 23)
    • All deposit accounts transferred to United Fidelity Bank, fsb (Evansville, IN) pursuant to P&A agreement.

Congressional Events – Upcoming

  • Feb. 4
    • House Financial Services Committee, "Exploring Alleged Ethical and Legal Violations at the U.S. Department of Housing and Urban Development."

Congressional Activity

Upcoming Events

  • OCC Community Bank Director Workshops, full 2015 schedule available at  
  • Feb. 4
    • FedForum teleseminar on payment system reforms.
    • EGRPRA outreach meeting, Dallas TX.
  • Feb. 10
    • FedForum teleseminar on payment system reforms.
  • Feb. 13
    • White House summit on cybersecurity, Palo Alto, CA.
  • 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

  •  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. 9 – CFPB: safe student account scorecard.  
  • Mar. 23 – CFPB: revisions to Regulations E and Z covering prepaid cards.  
  • Mar. 30 – CFPB: amendments to mortgage rules regarding the status of small creditors, creditors in rural or underserved area, and qualified mortgages.  
  • Mar. 31 – FDIC: definition of qualifying master netting agreement and related terms.