The U.S. economy continued to improve as the national unemployment rate fell to 5.5 percent for February and both personal income and disposable personal income increased in January.  The Federal Reserve also reported in its Beige Book that economic activity continued to expand across most regions and sectors from early January through mid-February.  The bank regulatory agencies were fairly quiet this week.  The Federal Reserve released the results of the fifth round of stress testing in which all of the 31 participating bank holding companies passed.  The OCC also issued the “Deposit-Related Credit” booklet which replaces and clarifies the recently released “Deposit-Related Consumer Credit.”

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

The Economy

  • Jobs Report for February released (Mar. 6).
  • Additional Bureau of Labor Statistics reports.
    • Regional and State Unemployment Report, 2014 Annual Average Summary (Mar. 4).
      • In 2014, annual average unemployment rates declined in all 50 states and the District of Columbia.
      • The U.S. jobless rate decreased by 1.2 percentage points to 6.2 percent in 2014, while the national employment-population ratio increased by 0.4 percentage points to 59.0 percent.
      • Summary available at
    • Consumer spending in 2013 (Mar. 6).
  • Bureau of Economic Analysis, Personal Income and Outlays, January 2015 (Mar. 2).
    • Personal income increased $50.8 billion, or 0.3 percent, and disposable personal income (DPI) increased $52.6 billion, or 0.4 percent, in January. 
    • Personal consumption expenditures (PCE) decreased $18.9 billion, or 0.2 percent.  In December, personal income increased $45.3 billion, or 0.3 percent, DPI increased $37.3 billion, or 0.3 percent, and PCE decreased $35.7 billion, or 0.3 percent, based on revised estimates.
    • Report available at
  • Federal Reserve Beige Book released (Mar. 4).
    • Reports from the twelve Federal Reserve Districts indicate that economic activity continued to expand across most regions and sectors from early January through mid-February.
    • Consumer spending rose in most Districts, and contacts were generally optimistic about near-term sales.
    • Payrolls remained stable or expanded across the Districts, and contacts noted employment gains in a broad range of sectors.
    • Report available at

Community Banking


  • Basel III Monitoring Report (Mar. 3).
    • A total of 224 banks participated in the study, comprising 98 large internationally active banks (“Group 1 banks”, defined as internationally active banks that have Tier 1 capital of more than €3 billion) and 126 Group 2 banks (i.e., representative of all other banks).
    • As of June 30, 2014, all large internationally active banks met the Basel III risk-based minimum requirements.
      • Capital shortfalls relative to higher target levels have been reduced.
    • Average common equity tier 1 ratios are 10.8% for Group1 banks and 11.8% for Group 2 banks.
    • 80% of surveyed banks meet fully phased-in liquidity coverage ratio.
    • 80% of surveyed banks meet fully phased-in net stable funding ratio.
    • Press release and the results of the report available at

Mortgage Lending

  • FHFA Director Watts prepared remarks at the Goldman Sachs Housing Finance Conference (Mar. 5).
    • Review of 2015 Conservatorship Scorecard. 
      • Maintain:
        • Maintaining, promoting and expanding access to credit in a safe and sound manner; and
        • Continuing to improve Fannie and Freddie's loss mitigation and foreclosure prevention activities
      • Reduce:
        • Reduce risks to taxpayers by increasing the role of private capital in the mortgage market.
      • Build:
        • Continue to make progress in building a new securitization infrastructure for Fannie and Freddie that is adaptable for use by other secondary market participants in the future.
  • Counselor to the Secretary for Housing Finance Policy Dr. Michael Stegman remarks before the Goldman Sachs Housing Finance Conference (Mar. 5).

Student Loans

Too Big to Fail

  • Dodd-Frank Act Stress Test 2015: Supervisory Stress Test Methodology and Results released by Federal Reserve (Mar. 5).
    • Each of the 31 participating U.S.-based bank holding companies passed; each exceeds minimum requirements even in the severely adverse scenario. 
    • The most severe hypothetical scenario projects that loan losses at the participating bank holding companies would total $340 billion during the nine quarters tested.
    • Report and press release available at   
  • Improving the Oversight of Large Financial Institutions, remarks by Federal Reserve Chair Yellen at the Citizens Budget Commission (Mar. 3).
    • Five regulatory reforms
      • Higher capital requirements for all banks.
      • Increased liquidity standards.
      • Stress testing.
      • Resolution planning.
      • More explicit responsibilities for Federal Reserve in safeguarding financial stability.
    • Enhanced supervision of large financial institutions by Federal Reserve.
    • Remarks available at
  • FSOC designations.  Remarks of Treasury Deputy Assistant Secretary of FSOC Pinschmidt at the Investment Adviser Association's 2015 Compliance Conference (Mar. 5).
  • Remarks of Treasury Under Secretary Sheets  at the National Association for Business Economics (Mar. 9).

Virtual Currency

  • Digital currency legislation introduced (Feb. 27).
    • Bill AB 1326 would require most persons engaged, in California, in the business of virtual currency (defined as any type of digital unit that is used as a medium of exchange or a form of digitally stored value or that is incorporated into payment system technology) to obtain a license from the California Commissioner of Business Oversight.
    • The bill would not affect current money transmitters who would continue to be subject to the California Money Transmission Act, but rather would require persons engaged in the business of virtual currency (which currently is not regulated by the California Money Transmission Act) to be licensed.
    • Bill AB 1326 is available at

Congressional Activity

Congressional Events – Upcoming

  • Mar. 5 (Postponed TBA)
    • House Financial Services Committee - Capital Markets and Government Sponsored Enterprises Subcommittee, “Oversight of the SEC’s Division of Enforcement.”
  • Mar. 10
    • Senate Banking Committee, “Venture Exchanges and Small-Cap Companies.”
  • Mar. 17
    • Senate Banking Committee, “Systemically Important Financial Institution Threshold.”
  • Mar. 19
    • Senate Banking Committee, “Systemically Important Financial Institution Threshold.”
  • Mar. 24
    • Senate Banking Committee, “Financial Stability Oversight Council Accountability and Transparency.”

Upcoming Events

  • 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.
  • Mar. 18
    • FDIC Event, Money Smart Train-the-Trainer Online Live Meeting.   
  • Mar. 24
    • Federal Reserve Bank of Boston, CRA for Community-Based Organizations: Partnering for Success.
  • Mar. 25
    • NCUA Event, Successful Strategies for Field of Membership Expansion.
  • Mar. 30 – Apr. 1
    • Federal Reserve Bank of Atlanta, 20th Annual Financial Markets Conference, Central Banking in the Shadows: Monetary and Financial Stability Postcrisis.
  • Mar. 31
    • Federal Reserve Bank of Kansas City, Midwest Anti-Money Laundering Conference.
  • Apr. 13-15
    • OCC Director Workshop, Building Blocks for Directors: Keys to Success, Indianapolis, IN.
  • Apr. 21
    • OCC Director Workshop, Compliance Risk, Denver, CO.
  • Apr. 22
    • OCC Director Workshop, Credit Risk, Denver, CO.
  • May 4
    • EGRPRA outreach meeting, Boston MA.
  • May 5
    • OCC Director Workshop, Risk Governance, Louisville, KY.
  • May 6
    • OCC Director Workshop, Compliance Risk, Louisville, KY.
  • May 19
    • OCC Director Workshop, Risk Governance, Birmingham, AL.
  • May 20
    • OCC Director Workshop, Compliance Risk, Birmingham, AL.
  • May 20 – 21
    • Federal Reserve Bank of New York, Mortgage Contract DesignImplications for Households, Monetary Policy, and Financial Stability.
  • Jun. 14 – 17
    • ABA National Regulatory & Compliance Conference.

Regulatory Comment Deadlines

  • Mar. 10 – CFPB: information regarding an initiative on safe student banking.  
  • Mar. 13 – CFPB: submission of credit card agreements under the Truth In Lending Act (Regulation Z).  
  • Mar. 23 – CFPB: revisions to Regulations E and Z covering prepaid cards.  
  • Mar. 24 – FinCEN: renewal of information collection in existing regulations requiring development and implementation of written anti-money laundering programs.  
  • Mar. 25 – FSOC: U.S. financial stability and asset management products and activities.  
  • Mar. 28 – CFTC: position limits for physical commodity derivatives and aggregation.  
  • Mar. 30 – CFPB: amendments to mortgage rules regarding small creditor status, creditors in rural or underserved areas, and qualified mortgages.  
  • Mar. 30 – CFPB: safe student account scorecard.  
  • Mar. 31 – FDIC: definition of qualifying master netting agreement and related terms.  
  • Apr. 3 – Federal Reserve: methodology for determining capital surcharge on U.S. GSIBs.  
  • Apr. 20 – SEC: disclosure of permissibility of hedging of equity securities of company by directors or employees.  
  • May 14 – Federal Reserve/OCC/FDIC: EGRPRA review of regulations covering banking operations, capital, and CRA.