Open for Comment

PREDATORYLENDING: Advance notice of proposed rulemaking by the Office of Thrift Supervision regarding predatory lending. State-regulated nonbank mortgage lenders may choose to be regulated under rules issued by the state or rules issued by the OTS. In states with strong anti-predatory lending laws, some nonbank lenders are opting for OTS rules because they are seen as more lenient. The agency is considering making its regulations tougher. Published April 5. Comments due July 5.RECOURSE: Proposal by federal regulators to change risk-based capital rules covering asset securitizations. Published March 8. Comments due June 7.

FAIR VALUE: Proposal by the Financial Accounting Standards Board to make fair-value accounting mandatory for virtually the entire bank balance sheet. Under this form of accounting, a financial instrument's value is the price it would fetch on the open market. Issued Dec. 14 and published on FASB's Web site at Comments due May 31.

MERCHANTBANKING: Joint interim rule by the Federal Reserve Board and the Treasury Department laying out the rules under which financial holding companies may engage in merchant banking activities under the Gramm-Leach-Bliley Act. The rule limits the amount a company may invest in merchant banking activities to $6 billion, and requires that holdings be sold within 10 years of purchase. Published March 28. Comments due May 22.

CAPITAL REQUIREMENTS: Proposed rule by the Fed that would set the capital charge for merchant banking investments at 50%. Published March 28. Comments due May 22.

REGULATORY FLEXIBILITY: The National Credit Union Administration is soliciting public comment on whether, and under what circumstances, credit unions with high net worth and consistently strong performance ratings should be exempt from certain regulations not specifically required by statute. Published March 16. Comments due May 21.

PERMISSIBLE ACTIVITIES: Interim rule by the Fed listing the financial activities permissible for financial holding company affiliates under the Gramm-Leach-Bliley Act. Published March 17. Effective March 11; comments due May 16.

AFFILIATE LENDING: Interim rule by the Fed limiting transactions between two units of the same financial holding company. The rule requires that intra-day extensions of credit to a securities firm from an affiliated bank or thrift or U.S. branch or agency of a foreign bank be at market rates. Also, the limitations of sections 23A and 23B of the Federal Reserve Act are applied to certain covered transactions between a U.S. branch or agency of a foreign bank and a U.S. securities affiliate. Published March 12. Effective March 11, but comments will be accepted until May 12.

DEBT RATINGS: Interim rule by the Fed and Treasury setting debt requirements for banks that want to own financial subsidiaries. The Gramm-Leach-Bliley Act requires the 50 largest FDIC-insured U.S. banks to issue long-term debt rated in one of the top three categories by a nationally recognized ratings agency. The interim rule applies to the 50 next-largest, and requires them to hold an "issuer credit rating" within the same three categories. It does not require them to actually issue debt. Published and effective March 14. Comments due May 12.

TRUST BANKS: Advance notice of proposed rulemaking by the Office of the Comptroller of the Currency on assessments of independent trust banks. Under the proposal, trust banks would be assessed on the volume of their trust activities and book assets. Published March 21. Comments due April 20.

NEW HOLDING COMPANIES: Interim rule by the Fed establishing the method by which bank holding companies and foreign banks operating in this country may convert to financial holding companies under the Gramm-Leach-Bliley Act. Published Jan. 25. Effective March 11; comments were due March 27. Amendments to this rule, making the notice requirement for financial holding company applications identical for foreign and domestic banks were published March 15. Comments on the amendments due April 17.

HOMELOANBANKS: Interim final rule by the Finance Board to implement provisions of the Gramm-Leach-Bliley Act of 1999, including making membership voluntary and making it easier for banks under $500 million of assets to borrow from Federal Home Loan banks. Published and effective March 15, but comments accepted until April 14.

Recent Actions

SUSPICIOUS ACTIVITY: The Financial Crimes Enforcement Network on March 14 issued a final rule requiring money service businesses such as check cashers to report suspicious transactions as of Jan. 1, 2002. The agency plans to issue a similar final rule for casinos and then propose a suspicious-activity reporting rule for securities brokers and dealers.REG Z: The Fed amended Regulation Z, which implements the Truth in Lending Act, to consider payday loans as "credit" and subject them to the same disclosure rules as other credit products. Published March 31. Effective March 24. Compliance optional until Oct. 1.

THRIFT LIMITS: OTS plans to stop limiting the ability of thrifts to issue transfer and repurchase agreements for government securities. Published March 28. Effective May 29.

HOME LOAN BANKS: Final rule by the Finance Board establishing the annual assessment rate for Resolution Funding Corp. obligations at 20% of member institution earnings. Published and effective April 3.

Actions Expected Soon

FDIC REFORM: The FDIC is looking into reforming deposit insurance by doubling coverage to $200,000 and making the risk-based premium system more forward-looking. Roundtable discussions, to be held in April with industry officials, community activists and others, will be followed by meetings with bank executives in late May and early June. Policy options are expected by mid-July and recommendations are expected by yearend.SUBPRIMERESIDUALS: Bank and thrift regulators are considering a proposal that would prohibit banks from counting subprime-based residuals as capital, unless the bank can show there is a market for them. A residual, also known as a "retained interest," is the interest a bank retains when it securitizes and sells an asset.

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