In this problem. The Board of Governors of the Federal Reserve System (Federal Reserve) and the Federal Deposit Insurance Corporation (FDIC) are seeking public comment on proposed regulations relating to the financial stability of large banks; the FDIC Board of Directors held a meeting; and the Consumer Financial Protection Bureau (CFPB), the Federal Reserve and the Office of the Comptroller of the Currency (OCC) have announced increases to exemption thresholds.

Regulatory developments

Federal Reserve and FDIC Seek Public Comment on Proposed Big Bank Financial Stability Rules

On October 14, the Federal Reserve and the FDIC released for public comment a Notice of Proposal for Rulemaking (ANPR) indicating whether an additional layer of loss-absorbing capacity could improve the resolution optionality of a large banking organization. or its insured depository institution, and the costs and benefits of such a requirement. The ANPR includes 12 questions offered by the Federal Reserve and the FDIC. Comments will be accepted for 60 days after they are posted in the Federal Register.

FDIC Board Meeting

On October 18, following a meeting of the FDIC Board of Directors, the FDIC announced the following:

  • Development of Final Valuation Rules, Revised Deposit Insurance Valuation Rules: The FDIC passed a final rule to increase the initial base deposit insurance assessment rate schedules by 2 basis points. The FDIC also decided to maintain the designated reserve ratio for DIF at 2% for 2023. The revised rate schedules will be effective January 1, 2023 and will apply to all depository institutions insured during the first 2023 quarterly valuation. The FDIC also adopted a final rule incorporating updated distressed debt restructuring accounting standards.
  • Proposed Changes to the Guidelines for Appeals of Major Supervisory Decisions: As part of the Supervision Appeals Review Committee (SARC), the FDIC has asked for comments on proposed changes to its guidelines for appealing significant supervisory decisions. The proposed amendments expand and clarify the role of the agency ombudsman in the oversight appeal process, require documents reviewed by SARC to be shared with both parties to the appeal, and allow institutions to filing assured of seeking a stay of a material supervisory decision while an appeal is pending. The notice invites comments within 30 days of its publication in the Federal Register.

Federal agencies increase exemption thresholds

On October 13, the CFPB, the Federal Reserve and the OCC announced increases to exemption thresholds. The increases take effect on January 1, 2023.

  • The CFPB, OCC and Federal Reserve have raised the threshold for exempting loans from special valuation requirements under the TILA high-priced mortgage valuation rule from $28,500 to $31,000.
  • The CFPB and the Federal Reserve increased consumer credit transactions exempt from the Truth in Lending Act (Regulation Z) from $61,000 to $64,000, and consumer leases exempt from the Financial Leasing Act consumer (Regulation M) from $61,000 to $64,000.

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