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Monday, October 20, 2014

Fed Finalizes Shift in Stress Test, CCAR Schedules

The Federal Reserve finalized shifting the timing of the annual stress test and capital planning cycle by three months, a change long sought by ABA.

The planning and testing cycle beginning on Oct. 1 in a given year will be shifted to Jan. 1 of the following year. Starting with the 2015-16 planning cycle, submissions to the agencies will be due by April 5 for banks with over $50 billion in assets and July 31 for banks with $10-50 billion in assets.

The rule included several additional changes to the stress testing and Comprehensive Capital Analysis and Review program. The Fed made other small changes to its proposed rule based on ABA’s comments, including providing more flexibility in the net distribution test.

Read the final rule.

Sen. Crapo Calls for Community Bank Regulatory Relief

Senate Banking Committee Ranking Member Mike Crapo (R-Idaho) argued for community bank regulatory relief in an American Banker op-ed. “If regulators and Congress miss this opportunity to lift unnecessary regulatory burdens, many more small banks will disappear,” he said.

Crapo specifically called for eliminating the annual privacy notice requirement when nothing has changed and ensuring a more aggressive effort by regulators to pare back unnecessary rules during the ongoing Economic Growth and Regulatory Paperwork Reduction Act process. “We cannot afford another tepid review process,” he explained.

Crapo cited ABA Chairman Jeff Plagge’s September testimony before the Senate panel, in which he warned that excessive regulation “could threaten the model of community banking that is so important to strong communities, strong job growth and a better standard of living.” Added Crapo: “I could not agree more.”

Read the op-ed.

Friday, October 17, 2014

The Week Ahead: October 20-October 24

  • FTC & CFPB Roundtable: Debt Collection Read more.
All times in Eastern Standard Time. See future events on the Dodd-Frank Calendar.

Big Data is transforming the world, and agriculture stands to be among the most transformed. Are ag bankers ready for this new, big data world? Are the big times going to continue to roll? Omaha, Nebraska will be the setting for Big Times Demand Big Data - the epicenter of the great American agricultural boom of the 21st Century. Our planning committee is working to bring the best qualified, most expert speakers on agricultural finance to help you and your colleagues sort it all out. Read more.  

Thursday, October 16, 2014

CFPB Issues Report on Private Student Loan Borrowers Driven Into Default

The CFPB has released a report highlighting complaints by struggling private student loan borrowers who express being driven into default. Distressed borrowers report that they receive little information or help, that there are no affordable loan modification options available, and that the alternatives to default are temporary at best.

CFPB Director Richard Cordray noted:
We are hearing from consumers that they are driven into default because private student loan companies are not providing concrete loan modification options. Struggling private student loan borrowers are finding themselves out of luck and out of options. Lenders and servicers must redouble their efforts to deal with these distressed borrowers.

Read the report.

Regulators to Finalize QRM Rule

The Federal Reserve will meet later this month to finalize a piece of the Dodd-Frank Act which would define what qualifies as a QRM and its associated risk requirements. The final rule will require lenders to retain some of the risk for loans they securitize in the secondary market. As reported by the American Banker, the Federal Reserve Board announced it will meet in open session on Oct. 22 to discuss the rule.

Wednesday, October 15, 2014

FSB Releases Framework for Nonbank Securities Financing

The Basel, Switzerland-based Financial Stability Board on Monday released a new framework for collateral requirements in repurchase agreements and securities financing transactions with nonbanks.

Intended to limit the growth of potentially destabilizing leverage at insurers, pension funds and shadow banks, the framework calls for regulators to impose qualitative standards on how firms apply haircuts to collateral, as well as fixed numerical floors for haircuts related to trades between banks and nonbanks.

Read more.