Open for Comment

COMMUNITY REINVESTMENT ACT "SUNSHINE PROVISIONS": Proposal by federal regulators requiring banks and community groups to disclose the terms of some CRA-related agreements. Banks would have to file annual reports on these agreements, and community groups would have to report annually on how they spent grants and loans from banks. Required by the Gramm-Leach-Bliley Act of 1999. Available on Federal Reserve Board Web site, www.federalreserve.gov. Expected to be published shortly, with comments due 60 days later.

PREDATORY LENDING: 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 laws against predatory lending, 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.

HOMELOANBANK ADVANCES: Proposal by the Federal Housing Finance Board to expand the types of collateral financial institutions with less than $500 million of assets may pledge for Home Loan bank advances. The proposal, which implements provisions of the Gramm-Leach-Bliley Act of 1999, would allow small business loans and agricultural loans to be used as collateral. Published May 8. Comments due June 7.

HOME LOAN BANKS: A proposal by the Finance Board authorizing Home Loan bank acquisition of member assets and defining core mission activities. The plan defines a core mission activity as an investment in an asset of a member institution, but does not restrict Home Loan banks from buying non-mission assets, like mortgage-backed securities. The proposal would also lift a $9 billion cap on risk-sharing investments in mortgages originated by member banks and thrifts through an authorized pilot program. Published May 3. Comments due June 2.

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 www.fasb.org. 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.

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 March 20; effective March 14. Comments are due Monday.

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 are due Friday.

AFFILIATELENDING: 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 17; effective March 11. Comments are due Friday.


Recent ActionsPRIVACY: The banking regulators, the National Credit Union Administration, the Securities and Exchange Commission, the Federal Trade Commission, and the Treasury Department this week approved the privacy rules required by the Gramm-Leach-Bliley Act. They require financial institutions to annually disclose their privacy policies and give customers a chance to block information shared with third parties. Effective Nov. 13, but compliance optional until July 1, 2001. Available at www.occ.treas.gov.

FDIC: Interim final rule issued by the FDIC requiring FDIC-insured, state non-member banks to file a notice before engaging in a financial activity through a subsidiary if national banks must conduct that activity through a financial subsidiary. Published March 23; effective March 11.

RETAIL INSURANCE: The FDIC is expected to issue an advanced notice of proposed rulemaking in June, implementing provisions of the Gramm-Leach-Bliley Act governing sales of insurance products by FDIC-insured institutions.


Actions Expected SoonFDIC 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. Bank executives will weigh in on the issue over the course of three meetings scheduled for late May and early June. The agency expects to issue policy options in mid-July and final recommendations 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.

HOME LOAN BANK DEBT: The Finance Board is expected to issue a final rule May 22 so that Home Loan Bank system debt will be issued in the name of the banks instead of the agency's Office of Finance.

HOME LOAN BANK CAPITAL: The Finance Board is expected to issue a proposed rule May 22 making the capital structure of the 12 Home Loan Banks more risk-based. The proposal implements provisions of the Gramm-Leach-Bliley Act.

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 were due April 20.


Comments ClosedNEW 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 were due April 17.

HOME LOAN BANK MEMBERSHIP: 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. Comments were due April 14.

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