Regulatory Roundup

OPEN FOR COMMENT

REGULATORY REVIEW: Proposal by the Federal Reserve Board to review the foreign bank supervision and bank holding company rules as part of its regulatory review process. Published Oct. 16. Comment period open indefinitely.

INVESTMENTS: Proposal by National Credit Union Administration to prevent credit unions from making certain types of investments and require more documentation of their holdings and policies. Published Nov. 29. Comments due March 28.

MARGIN REQUIREMENTS: Proposal by the Fed to make it easier for banks to finance certain securities purchases. Expected to be published soon. Comments due Feb. 15.

LEASING: Proposal by the Fed to revamp consumer leasing rules and add disclosures. Published Sept. 20. Comment period extended to Feb. 15.

INSIDER LENDING: Proposal by the Comptroller of the Currency to exempt from insider lending limits loans to executive officers that are secured by U.S. obligations, obligations backed by a federal agency, or segregated deposit accounts. Published Dec. 11. Comments due Feb. 9.

TRUTH-IN-LENDING: Proposal by the Fed to modify the Reg Z staff commentary to deal with high-cost mortgages. Published Dec. 7. Comments due Feb. 2.

TRUTH-IN-SAVINGS: Proposal by the Fed to clarify how banks calculate the annual percentage yield during a leap year. Published Dec. 6. Comments due Feb. 2.

FARM CREDIT: Advance notice of proposed rulemaking by the Farm Credit Administration asking whether the Farm Credit System should issue debt securities in foreign currencies. Published Nov. 24. Comments due Jan. 31.

COMMUNITY DEVELOPMENT: Proposal by the Treasury Department to issue rules governing operation of the Community Development Financial Institutions Fund. Published Oct. 19. Comments due Jan. 15.

CAPITAL: Proposal by the Fed to use a revised definition of capital when calculating the maximum amount a bank can lend to an affiliate. Published Dec. 4. Comments due Jan. 2.

AUDITS: Proposal to expand the scope of credit union supervisory committee audits. Published by National Credit Union Administration Nov. 2. Comments due Jan. 2.

FLOOD INSURANCE: Proposal to require escrow of flood insurance premiums if loan charges are escrowed. Published by the banking, thrift, and credit union agencies Oct. 18. Comments due Monday. ACTION EXPECTED SOON

MARKET RISK: In January, the Basel Committee on Banking Supervision will issue a revised version of its market risk capital standards, published by the U.S. banking agencies July 25. The standards, which direct regulators to use banks' internal models to measure risks associated with foreign exchange, derivatives, and other trading activities, are supposed to take effect at the end of 1997.

GOLDEN PARACHUTES: Proposal to limit severance payments to bank and thrift officers. Published by the Federal Deposit Insurance Corp. March 29. Comments were due May 30. Final action expected this month.

Column II continued: IMPORTANT, NOT IMMINENT

DATA REPORTING: Still no word yet on a proposal by the Fed to let banks voluntarily collect race and sex data on owners of small businesses. Banks could use these data to determine how well they are serving all segments of their markets; the data could not be used for underwriting purposes. Bankers are generally critical of the proposal, claiming the data would be unreliable. Published by the Fed April 26. Comments were due June 27.

INTEREST RATE RISK: The banking agencies are still working on a proposal to incorporate interest rate risk into capital standards. The Fed had scheduled a Dec. 13 meeting to debate the proposal, but withdrew it. The agencies also dropped a requirement that banks collect interest rate risk data during the first quarter. (See "Recent Actions.") Bankers have criticized the proposed interest rate risk formula, saying it is too rigid.

Published Aug. 2. Comments were due Oct. 2.

MARKET RISK II: The federal banking agencies are trying to find more accurate ways to measure market risk.

One proposal, agreed upon by the Basel Committee, is discussed under "Action Expected Soon."

A second plan, issued solely by the Fed, would let banks decide for themselves how much capital to set aside for trading activities - and make them pay fines if their losses exceeded the capital cushion. Published July 25. Comments were due Nov. 1.

BANK POWERS: The Comptroller's proposal to let national banks conduct new activities through subsidiaries is entering its second year with still no action on the horizon. Currently, nonbank products and services are offered through holding-company subsidiaries, not bank units. The plan was proposed last November; comments were due in January 1995.

Pending legislation to repeal the Glass-Steagall Act would go the other way on securities activities, requiring banks to conduct new securities activities in holding company subsidiaries.

RECOURSE II: The agencies are trying to come up with a comprehensive, credit-rating-based method for determining how much capital banks must hold against assets sold with recourse. An advance notice of proposed rulemaking was issued for comment in May 1994. Comments were due in July 1994. A more concrete proposal was expected by yearend but has been pushed back and could surface in the first quarter.

PREMIUM BASE: The FDIC has pending an advance notice of proposed rulemaking that would change the way it calculates how much institutions pay for deposit insurance.

The September 1994 proposal sought ideas for adding liabilities to the domestic deposits that now make up the assessment base, or for converting the base to assets. Narrower changes that have been suggested include eliminating the current float and measuring domestic deposits by quarterly average. RECENT ACTIONS

INTEREST RATE RISK II: The federal banking agencies abandoned plans to collect interest rate risk data from banks during the first quarter of 1996. The data collection was supposed to be a preliminary step toward incorporating interest rate risk into the capital standards. Issued Dec. 12. Effective Dec. 12.

ACCOUNTING RULES: The Federal Financial Institutions Examination Council gave banks permission to use "generally accepted accounting principles" on their call reports. Expected to be published soon. Effective with March 1997 call reports.

FARM CREDIT II: The Farm Credit Administration approved an interim rule allowing the Federal Farm Credit Banks Funding Corp. to issue debt securities on global markets. Published by the FCA Nov. 24. Comments due Dec. 26. Effective 30 days from Nov. 24 not counting days when neither house of Congress is in session.

BANK FEES: The OCC is lowering examination fees for national banks by 3%. Effective Jan. 31.

LOAN PARTICIPATION: NCUA eased loan participation rules. Published Nov. 27. Effective Jan 26.

CHECK CLEARING FEES: The Fed approved new check clearing and automated clearing house fees. Expected to be published soon. Effective Jan. 2.

FED WIRE II: The Fed established new closing times for the Fed Wire securities system, 3:15 p.m. for transfers and 3:30 p.m. for reversals. Published Aug. 15. Effective Jan. 2.

INSURANCE PREMIUMS: FDIC cut Bank Insurance Fund premiums by four basis points. The highest-rated institutions will now pay the legal minimum of $2,000 a year; others will pay premiums ranging as high as 27 basis points. Savings Association Insurance Fund premiums were not changed. Published Dec. 11. Effective Jan. 1.

HMDA: The Fed adopted a revised commentary for the Home Mortgage Disclosure Act detailing new guidance on prequalifications, loan applications received through brokers, and home-equity lines. Published Dec. 11. Effective Jan. 1.

LENDER LIABILITY: The Environmental Protection Agency limited lender liability for underground storage tanks. Published Sept. 7. Effective Dec. 6.

SMALL-BANK EXAMS: The OCC revised exam guidelines for "noncomplex" national banks with assets of less than $250 million to include two new areas: derivatives and data processing done outside the bank. Released Nov. 28. Effective Nov. 28. COMMENTS CLOSED

FARM CREDIT: Proposal to relax eligibility restrictions on Farm Credit System loans. Published by the Farm Credit Administration Sept. 11. Comments were due Dec. 10.

COMMON BOND: Proposal to tighten and clarify credit union membership base limits. Published Oct. 4 by NCUA. Comments were due Dec. 4.

COMMUNITY DEVELOPMENT PROFITS: Proposal to let national banks keep profits generated from community development investments. Published Oct. 26. Comments were due Nov. 27.

FOREIGN SECURITIES: Proposal to ease the rules that govern purchases of foreign government securities. Published Sept. 21 by the FDIC. Comments were due Nov. 20.

CREDIT INSURANCE: Proposal to clarify that bank insiders are not allowed to profit from selling credit life insurance to bank customers. Published Sept. 13 by the OCC. Comments were due Nov. 13.

SUSPICIOUS ACTIVITIES: Proposal to require banks to file revised suspicious-activity reports. Published Sept. 7 by Financial Crimes Enforcement Network. Comments were due Oct. 10. The FDIC issued the same proposal Sept. 14; comments were due Nov. 13.

ACH ACCESS: Proposal to limit third-party access to a bank's automated clearing house account. Published Aug. 15 by the Fed. Comments were due Nov. 9.

GOVERNMENT CHECKS: Proposal by Treasury to allow the agency five months to pay banks on government checks. Would also allow Treasury to refuse payment of government checks that were counterfeited. Published Sept. 21. Comments were due Nov. 6.

LEASING: Proposal to ease restrictions on personal property leasing by national banks. Published Sept. 6 by the Comptroller's office. Comments were due Nov. 6.

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