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Wednesday, June 28, 2017

Agencies Invite Comments on Proposed Call Report Changes

The federal regulatory agencies are inviting public comments on additional revisions to the Call Report, which will take effect March 31, 2018. The proposed changes would simplify the Call Report for many banks by removing or consolidating a number of existing data items, reducing the reporting frequency for other data items and increasing certain reporting thresholds.

The agencies also proposed ABA-recommended changes to provide greater transparency on the effect of unrealized gains and losses on certain equity investments; revisions that would align the method for determining the past-due status of certain loans and other assets with an accepted industry standard; and revisions that reflect recent changes from the Financial Accounting Standards Board.

ABA has been heavily involved in the ongoing process to streamline the Call Report, which the agencies initiated in response to ABA comments submitted through Economic Growth and Regulatory Paperwork Reduction Act process. As part of the initiative, ABA has facilitated numerous conversations between bankers and regulators to explain Call Report burdens and offer suggestions for its improvement. The association will comment on the proposal, and will continue to work constructively with regulators as they pursue further changes to the Call Report. 


View the request for comments

CFPB Issues Policy Guidance on Compliance Dates for Servicing Rule Amendments

The CFPB issued policy guidance stating that it does not intend to take supervisory or enforcement action for violations of existing Regulation X or Regulation Z resulting from a servicer’s early compliance with the 2016 final servicing rule for a period of three days before the applicable effective dates.

Certain amendments to the rule will take effect on Thursday, Oct. 19, 2017, while others have a compliance date of Thursday, April 19, 2018. Servicers are prohibited from early adoption of some of the 2016 servicing amendments, which further complicates the midweek compliance deadlines. Under the new policy guidance, servicers would be permitted to implement the new rules the Monday before the Thursday effective date. This will allow servicers to update and test their systems over a weekend rather than over a weeknight.

In addition, the CFPB also announced technical corrections to the rule, including those related to official comments and certain periodic statement sample forms, and the CFPB’s authority citation for Regulation Z. 


Read the policy guidance.  
View the technical corrections

Trades Seek Longer Comment Period for RFI on Serving LEP Borrowers

Eight financial trades – including ABA – wrote to the FHFA requesting that the agency extend the comment period for its request for information on how to improve service to borrowers with limited English proficiency. Given the complexity of the issue and the need for diverse participation by lenders of all sizes, the groups requested an extension of at least 45 days. The letter explained the importance of addressing LEP borrowers' needs through broad participation during the comment period:
Efficiently addressing the challenges of LEP borrowers is critical to both these borrowers and the mortgage market itself. The importance of this issue is expected to grow over time, as LEP borrowers continue to increase as a share of the overall population of borrowers in the years ahead.
Read the letter

Tuesday, June 27, 2017

Fed Gov. Powell Highlights Focal Points for Reg Reform

Noting the progress made over the last several years to improve the strength and resiliency of the U.S. financial system, Federal Reserve Governor Jerome Powell pointed to several key areas that the Fed is currently focusing on for regulatory reform. Powell’s comments echoed his previous testimony before the Senate Banking Committee.

Specifically, Powell noted that the Fed will look to simplify and recalibrate existing regulations for small and medium-sized banks, including call report and exam cycle requirements and certain capital rules. The agency is also considering changes to resolution plans, including an extension of the cycle from one year to two years; a reassessment of the Volcker rule; changes to increase the transparency of the stress testing process; and recalibrations to the supplementary leverage ratio.

“U.S. banks today are as strong as any in the world,” he said. “As we consider the progress that has been achieved in improving the resiliency and resolvability of our banking industry, it is important for us to look for ways to reduce unnecessary burden.” 


Read the speech

OCC's MDIAC Meets in Washington

The OCC’s Minority Depository Institutions Advisory Committee will meet in Washington, D.C. to discuss current topics of interest to the industry. Composed of directors and officers from OCC-supervised, minority-owned banks or OCC-supervised banks with a commitment to supporting minorities, the MDIAC advises the agency on steps it can take to ensure the continued health and viability of minority depository institutions.

Read more

Monday, June 26, 2017

Fed Gov. Powell Advocates for Central Counterparty Stress Testing

In a speech at the Federal Reserve Bank of Chicago, Federal Reserve Governor Jerome Powell said that regulators should increase their efforts to monitor for liquidity risk among central counterparties by conducting stress tests on those entities.

“Conducting supervisory stress tests on CCPs that take liquidity risks into account would help authorities better assess the resilience of the financial system,” he explained, adding that these efforts are already underway at the CFTC, which last year tested five major CCPs’ ability to withstand credit risk if one or more clearing members were to default. “This was innovative and necessary work. It would be useful to build on it by adding tests that focus on liquidity risks across CCPs and their largest common clearing members,” Powell said.

He also noted the interdependent relationship between banks and CCPs, and said that “global authorities… have a responsibility to ensure that bank capital standards and other policies do not unnecessarily discourage central clearing.” To that end, Powell said that the Basel Committee on Banking Supervision is considering changes to the supplementary leverage ratio for global systemically important banks, and that the Federal Reserve is considering additional changes to ease capital requirements for banks.


Read the speech