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Tuesday, June 30, 2015

CFTC Proposes Rule for Margin on Cross-Border Uncleared Swaps

The CFTC issued a proposal on when margin requirements would apply to uncleared swap transactions in a cross-border context.

The CFTC described the proposed approach as a hybrid of the entity and transaction-level approaches found in the agency’s advance notice of proposed rulemaking last fall. When finalized, the rule will apply to CFTCregistered swap dealers and major swap participants that do not have a prudential regulator, while the prudential regulators’ proposal describing margin requirements for uncleared swaps contains its own cross-border framework.

ABA’s new Center for Bank Derivatives Policy will comment on the proposal; comments are due 60 days after publication in the Federal Register.

Read the proposed rule.

Agencies Update Host-State Loan-to-Deposit Ratios

The federal banking agencies issued updated host-state loan-to-deposit ratios that they will use to determine compliance with Section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act.

Section 109 prohibits banks from establishing or acquiring branches outside their home states primarily for the purpose of deposit production. Congress enacted Section 109 to ensure that interstate branches would not take deposits from a community without helping to meet its credit needs.

Read more.

Friday, June 26, 2015

Rep. Tipton Introduces ABA, Alliance-Backed Tailored Regulation Bill

Rep. Scott Tipton introduced the TAILOR Act (H.R. 2896), which would require financial regulators to consider bank risk profiles and business models when taking regulatory actions. The bill has been strongly advocated by ABA and the alliance of state bankers associations.

“This type of smarter regulation would help America’s hometown banks by freeing up resources so they can better serve their customers and communities,” said ABA President and CEO Frank Keating. “We appreciate this bill’s measured approach that empowers regulators to focus on real risks rather than compliance exercises.”

In addition to requiring a tailored approach for future rulemakings, Tipton’s bill would require a review of regulations issued in the past five years and a report on how they might be better tailored. Regulators would be required to state in notices of proposed rulemaking how they applied the TAILOR Act.

“Many regulations have been indiscriminately applied to the whole industry whether or not they make economic or practical sense,” Keating added. “Regulators should be empowered —and directed — to make sure that rules, regulations and compliance burdens fit the various segments of the industry appropriately.”

Read more.

CFPB Unveils Complaint Narratives, Access for Government Workers

The CFPB published the first 7,700 consumer narratives that consumers had opted to have accompany their complaints in the CFPB’s public database. More than half of consumers submitting complaints since narratives were added in March have opted to share their narratives.

ABA strongly opposed the CFPB’s plan to publish narratives, arguing that doing so exceeds the bureau’s mandate and imposes excessive risks on banks and customers. “We’re disappointed that the bureau has chosen to become an official purveyor of unsubstantiated and potentially false information instead of fostering informed and responsible consumer choice,” ABA President and CEO Frank Keating said.

In related news, the CFPB yesterday published in the Federal Register a notice seeking comments on plans to develop a portal by which members of Congress, their staffs and state agencies can access individual complaints. Through this portal, congressional offices and agencies could search by company and complaint topic and export complaint data.

ABA is concerned that allowing access through this portal could increase the risk of a consumer data breach and will provide comments by the Aug. 24 deadline.

View the database.

Read the Federal Register notice.

The Week Ahead: June 29 - July 4

Wednesday
  • Final Rule FDIC: Restricting FDIC Sales of Assets of a Covered Financial Company Read more. 
  • Final Rule OCC:  Integration of National Bank and Federal Savings Association Regulations Read more.
Thursday
  • Comments Due FRB: Same-Day ACH Service Read more.
All times in Eastern Standard Time. See future events on the Dodd-Frank Calendar.

Thursday, June 25, 2015

CFPB Formally Proposes TRID Delay to Oct. 3

The CFPB issued its formal proposal delaying the effective date of the TILA-RESPA integrated disclosures.

The bureau attributed its decision in part to an administrative error in which it failed to notify Congress 60 days prior to the rule taking effect as required by law but also acknowledged that “moving the effective date may benefit both industry and consumers with a smoother transition to the new rules,” as ABA had advocated.

Under the proposal, the new disclosures would come into effect on Saturday, Oct. 3, more than two months after the original effective date. The bureau set the effective date for a Saturday to give the industry time over a weekend to reconfigure and test systems. Comments on the proposed delay are due by July 7.

Read the proposed rule.