WASHINGTON — The Federal Reserve Board and Office of the Comptroller of the Currency are extending the comment deadline for a proposal to adjust a key capital measure for large banks.
The Fed and OCC issued their proposal last month to change the enhanced Supplementary Leverage Ratio, or eSLR, from a fixed ratio applied to all global systemically important banks to a variable ratio based in part on banks’ G-SIB capital surcharge. The regulator extended the comment period from May 21 to June 25 amid concerns that stakeholders need more time.
The federal bank regulators have been divided over the proposal. Fed Gov. Lael Brainard voted against the plan, saying it was inconsistent with the current climate. The Federal Deposit Insurance Corp. also withheld support, with FDIC Chairman Martin Gruenberg saying the proposal would require big banks to hold $121 billion less in Tier 1 capital. Their views were echoed by former FDIC Chairman Sheila Bair and Thomas Hoenig, the agency's former vice chairman.
But backers of the plan say those concerns are unfounded. Fed Vice Chairman for Supervision Randal Quarles suggested in a speech earlier this month that the total capital reductions at the bank holding company level would be far less, on the order of about $400 million across all eight holding companies. Stakeholders are at odds about which figure more closely represents the actual release of capital, and the subject is likely to be at the heart of many comments the agency will receive.
The Jackson, Mississippi, company will use proceeds from the sale of its Fisher Brown Bottrell Insurance unit to restructure its investment portfolio, moving $1.6 billion of low-yield securities off the balance sheet.
The store-branded card issuer is raising annual percentage rates and adding fees for paper statements to compensate for lost revenue. The Consumer Financial Protection Bureau's new regulation is scheduled to take effect on May 14.
At the banks' annual meetings, shareholders at both companies struck down proposals that would have split the board chair and CEO roles. Two other proposals also failed to win shareholder support, one concerning energy financing and another on pay gap analysis.
Congressional Review Act resolutions are ramping up ahead of the 2024 election cycle. Experts say that, although none are likely to become law, the resolutions are still powerful messaging and political tools.
The ABA is testing an information-exchange network to allow banks to share their fraud data with each other. Companies including Baselayer are also building solutions.
Republicans on the House and Senate Small Business committees are accusing the SBA of being irresponsible in granting Funding Circle permission to participate in its flagship loan-guarantee program.