Open for Comment
TRUTH-IN-LENDING: Proposal by the Federal Reserve Board to revise its staff commentary on Regulation Z to clarify that payday loans are credit transactions. Published Nov. 5. Comments due Jan. 10.FED REPORTS: Announcement by the Fed that it is reviewing how to improve or whether to eliminate any of its publications. Published Nov. 2. Comments due Dec. 17.
RECEIVERSHIP ASSETS: Proposal by the Federal Deposit Insurance Corp. to prohibit the agency - when acting as receiver or conservator - from recovering financial assets transferred by the failed institution as part of a securitization or participation. For the prohibition to apply, such transfers would have to meet all conditions for sale accounting under generally accepted accounting principles. Published Sept. 21. Comments due Dec. 20.
ASSET PURCHASES: Proposal by the FDIC to bar people who profited from, or helped cause, the failure of a bank or thrift from buying that institution's assets. In some cases, prohibitions would also apply to people who have defaulted on loans or been convicted of financial crimes. Published Sept. 21. Comments due Dec. 20.
ELECTRONIC DISCLOSURES: Interim rule by the Fed to let banks send savings account statements electronically, effective Sept. 1. Proposal to let banks make consumer protection disclosures on-line to borrowers revised by the Fed. Published Sept. 14. Comment deadline extended to March 3.
CAPITAL RULES: Proposal by the Basel Committee to update the 1988 international risk-based capital accords. Rather than basing capital requirements on the type of asset a bank holds, capital would be based on the riskiness of the bank's borrowers as determined by a rating agency such as Standard & Poor's. Released June 3. A copy is available on the Bank for International Settlements' Web site at www.bis.org. Comments due March 31.
FANNIE/FREDDIE CAPITAL: Proposal by the Office of Federal Housing Enterprise Oversight to create risk-based capital standards for Fannie Mae and Freddie Mac. Published April 13. Comment deadline extended a second time, to March 10.CU SURVEY: The National Credit Union Administration voted Nov. 18 to survey credit unions about their efforts to serve the poor. The 11-question survey, which is voluntary, will be mailed to chief executive officers of the more than 6,000 federally chartered credit unions early next year.
CAPITAL & CLOs: The Fed and the Office of the Comptroller of the Currency issued guidelines Nov. 17 on how capital charges could be reduced by using certain credit derivatives. The agencies listed conditions that must be met by "synthetic" collateralized loan obligations to receive the favorable treatment.
Y2K: Federal regulators reissued guidelines Nov. 19 reminding bank and thrift management on how to protect computer systems from fraud or sabotage in the weeks surrounding Jan. 1.
CHARGEOFFS: The FDIC, OCC, and the Fed agreed to delay loan chargeoff guidelines adopted last February. Originally, the agencies said banks should be given until June 30, 1999, to implement manual changes to their procedures, but until Dec. 31, 2000, to implement computer-related changes. But in response to industry complaints, the three bank agencies decided to push all compliance back to Dec. 31, 2000. When the Office of Thrift Supervision approves the date change, the adjustment will be noted in the Federal Register.
Action Expected Soon
ASSET SECURITIZATIONS: Bank and thrift regulators are expected to issue a bulletin soon concerning risky securitization practices. Such practices include the failure to hold sufficient capital against recourse obligations, the overvaluation of residuals, and the failure to obtain independent audits. Regulators also are considering a proposal to prohibit banks from counting subprime-based residuals as capital, unless the bank can show there is a market for them.SUBPRIME LENDING: Bank and thrift regulators are considering a proposal by the FDIC to crack down on subprime lending. Under the plan, banks involved in subprime lending would be required to maintain tougher-than-average underwriting standards, higher-than-average capital, and more loan-loss reserves. The FDIC submitted its proposal to the OCC, the OTS, and the Fed on Nov. 19.
FINANCIAL REFORM: Bank and thrift regulators are drafting rules to implement the Gramm-Leach-Bliley Act of 1999. Among other things, the rules will address new bank powers, requirements concerning the privacy of customer data, and changes to the Community Reinvestment Act. The due dates for the various rules are staggered throughout 2000. The first, covering bank holding companies, is expected to be released in mid-March.
REG B: The Fed will vote next year on whether to allow banks to collect information on race, gender, and other data identifying consumer loan applicants and borrowers.
HOME LOAN BANKS: The Federal Housing Finance Board will propose a series of regulations in the first half of 2000 to implement provisions of the financial reform law, including rules regarding capital, investments, membership, collateral, and governance. The regulations mirror some parts of an earlier proposal that the Finance Board withdrew after the law was enacted Nov. 12. The most controversial part of that proposal - proposed limits on mortgage-backed securities - might be revised in 2001. An alternative - risk-sharing investments in mortgages originated by member banks and thrifts similar to those of three authorized pilot programs - is scheduled to be proposed in March.
CREDIT REPORTING: Bank and thrift regulators are working on joint guidelines urging subprime lenders to report positive borrower payment histories to credit bureaus. Separately, the OCC has been discussing the credit reporting issue with the Federal Trade Commission.
THRIFT RULE: The OTS is expected to issue a rule this month to clarify when a unitary thrift holding company may own more than one thrift but still engage in nonfinancial activities.
SUSPICIOUS ACTIVITY: The Financial Crimes Enforcement Network plans, by the end of March 2000, to issue a final rule requiring money service businesses - such as check cashers - to report suspicious transactions made by their customers. Sometime later, the agency plans to issue a similar final rule for casinos, and then propose a suspicious-activity reporting rule for securities brokers and dealers. Fincen is authorized to draft suspicious-activity reporting rules for all financial institutions under a 1992 law, but the agency has yet to propose a rule for brokers and dealers that are not part of a bank holding company. Brokers and dealers that are part of a bank holding company are already covered under the rules for depository institutions.
LOAN POOLING: The Small Business Administration is expected to propose a rule as early as February that would let multiple lenders pool and sell the nonguaranteed portions of their 7a loans.
MERGER ACCOUNTING: Proposal by the Financial Accounting Standards Board to eliminate the pooling-of-interests method of M&A accounting. Public hearings are expected in the first quarter, and a final standard could be issued late next year. An interim draft approved April 21 suggested requiring merging parties to use the purchase accounting method. Released Sept. 8. A copy is available on the FASB's Web site at www.fasb.org. Comments were due Dec. 7.BASEL PAPERS: The Basel Committee on Banking Supervision issued three proposals, covering principles for managing and disclosing capital risk, best practices for credit risk disclosure, and guidelines for managing settlement risk in foreign exchange transactions. Released July 27. A copy is available on the Bank for International Settlements' Web site at www.bis.org. Comments were due Nov. 30.
INSURANCE PREMIUMS: Proposal by the FDIC to reduce to 15 days, from 30, the time a bank is given to pay its deposit insurance premium after being billed. Proposal also would triple, to 90 days, the time a bank or thrift has to request a review of its premium assessment. Published Sept. 8. Comments were due Oct. 25.