Banking

The three primary banking regulators are the Board of Governors of the Federal Reserve System (FRB), the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC).  Each regulator has unique responsibilities and powers. The FRB, for example, plays an important role in stabilizing the banking system during times of severe stress in the financial system; it also sets monetary policy and serves as the nation’s central bank. The FDIC insures bank deposits through the Deposit Insurance Fund (DIF) and takes the lead in resolving banks that fail, with the primary goal of safeguarding customer deposits.  And the OCC’s oversight includes savings and loan associations.  Collectively, the three regulators are responsible for chartering and overseeing the nation’s banks and thrifts to ensure that financial institutions remain financially sound, comply with the law, and provide the public with equal access to banking services.  

 

= Actions considered to be most consequential

1 - Office of the Comptroller of the Currency (OCC)

Date of Action:

06/17/2020

Summary of Action:  OCC bulletin addressing the potential preemption concerns of state COVID-19 relief actions that “address foreclosure and repossession moratoriums, loan forbearance, and limitations on the interest and fees banks may charge,” indicating that such measures may impermissibly conflict with federal regulation of banks.

https://www.occ.treas.gov/news-issuances/bulletins/2020/bulletin-2020-62.html

Type of Policy:  Bulletin

Expires:  No expiration

Additional Information: Conference of State Bank Supervisors has pushed back on the OCC’s assertion of preemption concerns.

https://www.csbs.org/why-occ-preemption-bulletins-do-not-impact-state-covid-19-relief-measures

Democratic Senators have sent a letter to the OCC indicating it exceeded its authority by issuing the bulletin.

2 - FRB, OCC, FDIC

Date of Action:

05/15/2020

Summary of Action: Relief allowing banking organizations (i.e. banks and bank holding companies) subject to the supplementary leverage ratio requirement to exclude U.S. Treasury securities and deposits at Federal Reserve Banks from supplementary leverage ratio denominator.  Depository institutions electing to take this relief must seek permission from their primary federal regulator before making certain capital distributions.

 

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200515a.htm

Type of Policy: Interim final rule

 

Expires: March 31, 2021; comments on proposal due 45 days after publication in the Federal Register

Additional Information:  Law360 explains this could result in up to $55 billion reduction in capital.

3 - Federal Deposit Insurance Corporation (FDIC)

Date of Action:

05/12/2020

Summary of Action:  Proposed rule that would neutralize the effect of participating in Paycheck Protection Program (PPP) on banks’ assessment rates and assessment base, by excluding PPP loans from banks’ loan portfolios and asset base, and also by excluding loans taken through the Paycheck Protection Program Liquidity Facility or Money Market Mutual Fund Facility from calculation of banks’ liabilities.

https://www.fdic.gov/news/news/press/2020/pr20059.html

Type of Policy:  Proposed Rule

Expires:  No expiration, comments on proposal are due 7 days from publication in Federal Register

4 - FRB, FDIC

Date of Action:

05/6/2020

Summary of Action: Extension of deadline for Barclays, Credit Suisse, Deutsche Bank, and UBS to submit resolution plans addressing previously identified weaknesses to September 29, 2020; extension of deadline for Category II and Category III banks to submit targeted resolution plans to September 29, 2020.

 

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200506a.htm

Type of Policy: Interim final rule

 

Expires: New deadline for submission is September 29, 2020

5 - FRB, OCC, FDIC

Date of Action:

05/06/2020

Summary of Action:  Excludes loans made to banks through the Money Market Mutual Fund Liquidity Facility or Paycheck Protection Program Liquidity Facility, and the assets securing such loans, from the calculation of the banks’ “total net cash outflow” amount for purposes of the liquidity coverage ratio, to neutralize the effect of taking such loans.

 

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200505a.htm

Type of Policy:  Interim Final Rule

Expires:  No Expiration Date

6 - Federal Reserve Board (FRB)

Date of Action:

04/24/2020

Summary of Action: Deletes provision of the Regulation D definition of “savings deposit” that prevented bank customers from making more than six (6) transfers per month from savings accounts.

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200424a.htm

Type of Policy: Interim final rule

 

Expires: No expiration; comments on interim final rule due 60 days from date of publication in the Federal Register

7 - Federal Reserve Board (FRB)

Date of Action:

04/23/2020

Summary of Action:  Relief temporarily eliminating caps on uncollateralized intraday credit, and overdraft fees, for those institions eligible for primary credit from the discount window (i.e., those “in generally sound financial condition”).  The relief also provides a “streamlined procedure” for secondary credit institutions to request collateralized intraday credit.

 

https://www.federalreserve.gov/newsevents/pressreleases/other20200423a.htm

Type of Policy:  Policy statement

Expires:  September 30, 2020

8 - Treasury

Date of Action:

04/20/2020

Summary of Action: Agency statement that Office of Foreign Assets Control will consider the need to temporarily reallocate compliance resources as part of a risk-based approach to compliance, in assessing possible administrative responses to OFAC sanctions violations.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20200420.aspx

Type of Policy: Agency statement

 

Expires: No expiration date

9 - Federal Reserve Board (FRB)

Date of Action:

04/17/2020

Summary of Action:  Relief exempting Paycheck Protection Program loans from restrictions on loans to bank insiders. 

 

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200417a.htm

Type of Policy:  Interim final rule.

Expires:  No expiration date; comments on interim final rule due June 8, 2020

10 - OCC, FRB, FDIC

Date of Action:

04/14/2020

Summary of Action:  Relief allowing financial institutions engaging in certain residential or commercial real estate transaction to defer obtaining appraisal or evaluation for up to 120 days after closing (excluding transactions for acquisition, development, and construction of real estate).

 

https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20200414a1.pdf

Type of Policy:  Interim final rule.

Expires:  December 31, 2020 (comments due 45 June 1, 2020).

11 - FRB, FDIC, OCC

Date of Action:

04/09/2020

Summary of Action:  Establishment of zero percent risk weight for PPP loans, to neutralize the regulatory capital effects of participating in FRB’s PPP facility. 

 

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200409a.htm

Type of Policy:  Interim final rule.

Expires:  No expiration date; comments on interim final rule May 13, 2020

12 - Federal Reserve Board (FRB)

Date of Action:

04/09/2020

Summary of Action:  Establishment of Main Street Business Lending Program to provide funds for purchasing loan participations, to facilitate lending to small- and medium-sized businesses by banks.

 

https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a7.pdf

 

https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a4.pdf

Type of Policy:  Section13(3) authority.

Expires:  September 30, 2020.

13 - Federal Reserve Board (FRB)

Date of Action:

04/08/2020

Summary of Action:  Temporary relief for Wells Fargo from growth restrictions imposed “because of widespread compliance and operational breakdowns that resulted in harm to consumers” and insufficient oversight by Wells Fargo’s board; loans made pursuant to Paycheck Protection Program and FRB’s Main Street Business Lending Program do not count towards cap.

 

https://www.federalreserve.gov/newsevents/pressreleases/enforcement20200408a.htm

Type of Policy:  Amendment to consent order. 

Expires:  Loans excluded from cap must be made pursuant to PPP (expires June 30, 2020) or Main Street Business Lending Program (expires September 30, 2020)

14 - Federal Reserve Board (FRB)

Date of Action:

04/06/2020

Summary of Action:  Establishment of facility to provide term financing backed by Payback Protection Program loans.

 

https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a6.pdf

Type of Policy:  Section 13(3) authority.

Expires:  September 30, 2020

> Additional Information:  The Project on Government Oversight has released an analysis of the shortcomings of the Office of Management and Budget’s oversight guidance for CARES Act programs. Read the analysis here. 

15 - FRB, FDIC, OCC

Date of Action:

04/06/2020

Summary of Action:  Temporary reduction of the threshold for qualifying community banking organizations, i.e. those with less than $10 billion in assets and who meet certain other criteria, to meet capital and leverage requirements using the “community bank leverage” ratio, from 9% to 8%, for 2020 and to allow a two-quarter grace period for banks that fall below the 8% ratio so long as they stay above 7% community bank leverage ratio, a reduction from 8%, the previous threshold to be entitled to the grace period

 

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200406a.htm

Type of Policy:  Interim final rule.

Expires:  The community banking leverage ratio goes to 8.5% for 2021, and to the previous level of 9% in 2022. Comments on the final rule are due 45 days.

 16 - Federal Reserve Board (FRB)

Date of Action:

03/31/2020

Summary of Action:  Establishment of FIMA repurchase authority to allow central banks and other international monetary authorities to exchange U.S. Treasury Securities held with FRB for U.S. dollars.

 

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200331a.htm 

Type of Policy:  FOMC action. 

Expires:  Until at least October 6, 2020 (6 months after program begins on April 6)

17 - Federal Reserve Board (FRB)

Date of Action:

03/31/2020

Summary of Action:  Delay of implementation, from April 1, 2020 to September 30, 2020, of revised framework for determining when one company controls another for determining whether a company is a bank holding company under the BHCA.

 

https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20200331a1.pdf

Type of Policy:  Final rule delaying effective date.

Expires:  Delays effective date until September 30, 2020.

18 - OCC, FRB, FDIC

Date of Action:

03/27/2020

Summary of Action:  Allows banking organizations that adopt CECL during 2020 the option to delay, for two years, the estimated impact of CECL on regulatory capital, followed by a three year transition to phase out aggregate capital benefit provided by the two-year phase in. 

 

https://www.federalregister.gov/documents/2020/03/31/2020-06770/regulatory-capital-rule-revised-transition-of-the-current-expected-credit-losses-methodology-for 

Type of Policy:  Interim final rule. 

Expires:  Banks have until the end of 2020 to adopt CECL to take advantage of the extended phase-in (Comments on the IFR are due May 15, 2020)

19 - Federal Reserve Bank (FRB)

Date of Action:

03/26/2020

Summary of Action:  FRB will not take action against small financial institutions, i.e. banks with less than $5 billion in assets, for submitting March 31, 2020 financial statements (FR Y-9C or FR Y-11, as applicable) after the deadline, so long as reports are filed by 30 days after the deadline.

 

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200326b.htm

Type of Policy:  Agency statement.

Expires:  Until further notice.

20 - Federal Financial Institutions Examination Council (FFIEC)

Date of Action:

03/25/2020

Summary of Action:  FFIEC agencies will not take action against banks that fail to submit March 31, 2020 call reports by the filing deadline, as long as reports are filed by 30 days after the deadline.

 

https://www.ffiec.gov/press/pr032520.htm

Type of Policy:  Agency statement. 

Expires:  Banks have 30 additional days to submit call report.

21 - Federal Reserve Board (FRB)

Date of Action:

03/24/2020

Summary of Action:  FRB explanation of supervisory approach during crisis, including the following: (1) FRB will not criticize FIs that work with borrowers (consistent with interagency statement issued on 3/22/20), (2) FRB will increase focus on monitoring, and decrease focus on examinations (including ceasing exams for banks under $100 billion in assets), and (3) FRB will provide additional time to remediate supervisory findings.  Banks still expected to submit CCAR plans by April 6, 2020.

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200324a.htm

Type of Policy:  Agency statement.

Expires:  No expiration.

22 - Federal Reserve Board (FRB)

Date of Action:

03/24/2020

Summary of Action:  Delay in implementation of changes to Payment Systems Risk Policy, governing the provision of intraday credit to U.S. branches of foreign banks, from April 1 to October 1, in order to allow banks to focus on heightened priorities (COVID-19) instead of establishing new arrangements for intraday credit.

 

https://www.federalreserve.gov/newsevents/pressreleases/other20200324a.htm

Type of Policy:  Notice of delay. 

Expires: Delays implementation of PSRP changes to October 1, 2020.

23 - Federal Reserve Board (FRB)

Date of Action:

03/23/2020

Summary of Action:  Re-establishment of Term Asset-Backed Securities Loan Facility, a crisis-era bailout program, to serve as a funding backstop to facilitate issuance of asset-backed securities.

 

https://www.federalreserve.gov/monetarypolicy/talf.htm

Type of Policy:  Section 13(3) authority.

Expires:  September 30, 2020

24 - Federal Reserve Board (FRB)

Date of Action:

03/23/2020

Summary of Action:  Establishment of Primary Market Corporate Credit Facility and Secondary Market Corporate Credit Facility to provide liquidity for new and outstanding corporate bonds.

 

https://www.federalreserve.gov/monetarypolicy/pmccf.htm

 

https://www.federalreserve.gov/monetarypolicy/smccf.htm 

Type of Policy:  Section 13(3) authority. 

Expires:  September 30, 2020

25 - Federal Reserve Bank

Date of Action:

03/23/2020

Summary of Action:  Relaxes the definition of “eligible retained income,” which serves as a cap on the amount of capital distributions a bank can make.  This will make the onset of capital distribution restrictions more gradual, which according to FRB will prevent banks from limiting lending, by incentivizing use of TLAC buffers for lending, in response to economic shocks (such as that caused by COVID-19).

 

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200323a.htm

Type of Policy:  Interim final rule.

Expires:  No expiration (deadline for comments on the interim final rule is May 11, 2020)

26 - Office of the Comptroller of Currency (OCC)

Date of Action:

03/22/2020

Summary of Action:  Allows Short-Term Investment Funds operated by national banks to have longer dollar-weighted average portfolio maturity (must be 60 days or less under the rule, can be 120 days or less under the relief) and dollar-weighted average portfolio life maturity (must be less than 120 days under the rule, can be 180 days or less under the relief).

 

https://www.occ.gov/news-issuances/news-releases/2020/nr-occ-2020-38.html

Type of Policy:  Exemptive Order. 

Expires:  July 20, 2020

27 - Federal Reserve Bank (FRB)

Date of Action:

03/18/2020

Summary of Action:  Establishment of Money Market Mutual Fund Liquidity Facility to provide loans to financial institutions secured by assets purchased from money market mutual funds.

 

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200318a.htm

Type of Policy:  Section 13(3) authority.

Expires:  September 30, 2020

> Additional Information:  This facility is another taxpayer bailout for Money Market Funds.  If the SEC doesn’t finally regulate them adequately, we’ll continue to see the same outrageous cycle:  MMFs will reap their profits when times are good while taxpayers pay for their losses when crisis hits. Read more in our Comment Letter.

28 - Federal Reserve Bank (FRB)

Date of Action:

03/17/2020

Summary of Action:  Re-establishment of financial crisis bailout programs, including the Commercial Paper Funding Facility, to provide a backstop for commercial paper, and the Primary Dealer Credit Facility, to provide a liquidity backstop to primary dealers of FRBNY.

 

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200317a.htm

 

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200317b.htm

Type of Policy:  Section 13(3) authority.

Expires:  CPFF terminates on March 17, 2021; PDCF will operate for at least 6 months.

29- OCC, FRB, and FDIC

Date of Action:

03/17/2020

Summary of Action:  Relaxes the definition of “eligible retained income,” which serves as a cap on the amount of capital distributions banks with insufficient regulatory capital buffers can make.  This will make the onset of capital distribution restrictions more gradual, which according to the agencies will prevent banks from limiting lending, by incentivizing use of capital buffers for lending, in response to economic shocks (such as that caused by COVID-19). 

 

https://www.govinfo.gov/content/pkg/FR-2020-03-20/pdf/2020-06051.pdf

 

Type of Policy:  Interim final rule.

 

Expires: No expiration

> Additional Information: See Better Markets' comment letter submitted on
May 4, 2020.

30 - Federal Reserve Board (FRB)

Date of Action:

03/15/2020

Summary of Action: Effective March 26, 2020, reserve requirements, i.e. the amount banks have to hold as a percentage of deposits, are reduced to zero.  Increases the potential liquidity for banks, allowing greater ability to lend.

https://www.federalreserve.gov/monetarypolicy/reservereq.htm

Type of Policy: Monetary policy authority under Section 9 of Federal Reserve Act

 

Expires: No expiration date given. According to FRB: “Currently, the Board has no plans to re-impose reserve requirements.”

31- FRB, OCC, CFPB, FDIC, NCUA, CSBS

Date of Action:

03/22/20

Summary of Action:  Explanation of supervisory expectations during COVID-19 crisis, including that banks will work with customers impacted by the crisis, and explaining that actions such as loan modifications to support customers are viewed as positive action and will not lead to negative supervisory actions.

 

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200322a.htm; https://www.federalreserve.gov/supervisionreg/srletters/SR2004.htm

 

Type of Policy:  Interagency statement; Supervisory letter

 

Expires: No expiration date

1825 K Street NW, Suite 1080

Washington, DC 20006

www.bettermarkets.com

Send Us a Message
  • White LinkedIn Icon
  • White Facebook Icon
  • White Twitter Icon

© 2020 Better Markets, Inc. TRACER is a trademarked name of Better Markets. All rights reserved.