OPEN FOR COMMENT

Stock Buybacks

Interim rule by the Office of Thrift Supervision with request for comment. The rule amends regulations governing the repurchase of stock by thrifts that have converted from mutual ownership. It eliminates most of the restrictions on the amount of stock an institution may repurchase within three years of its conversion. Published in the Federal Register July 12. Comments due Oct. 10.

Thrift Conversions

Proposal by the OTS to modify the way mutual thrifts and their holding companies are examined and supervised by the agency. The rule also establishes new procedures for the conversion of a mutual thrift to a stockholder-owned thrift. Published July 12. Comments due Oct. 10.

Electronic Fund Transfers

Proposal by the Federal Reserve Board to revise staff commentary on Regulation E, governing electronic fund transfers. The proposal would offer guidelines for automatic recurring debits to customer accounts, telephone-initiated fund transfers, electronic check conversions, aggregation services, and other issues. Published June 29. Comments due Aug. 31.

Customer Information

Proposal by federal bank and thrift regulators to establish standards for the protection of confidential customer information. It would require institutions to develop an information security program that includes risk assessment, steps to mitigate risk, and a means of updating the program as necessary. Published June 26. Comments due Aug. 25.

Call Reports

Proposal by the three federal banking agencies to modify the quarterly call reports, including new data on subprime lending and asset securitization. The changes would take effect with the first quarter next year. Published May 31. Comments due July 31.

Consumer Advisers

Nominations are being accepted for memberships on the Federal Reserve Board's Consumer Advisory Council, whose membership represents the interests of consumers, communities, and the financial services industry. Published May 31. Nominations due Aug. 1.

ACH Deadlines

Proposal by the Fed to modify pricing practices and deposit deadlines for the central bank's automated clearing house. Private-sector clearing house operators have complained that the Fed's pricing creates an anti-competitive atmosphere and that it places more restrictive deposit deadlines on non-Fed clearing house customers. Published May 25. Comments due July 25.

Credit Cards

Proposal by the Fed to amend Regulation Z, which implements the Truth in Lending Act. The proposal would set strict rules for the disclosure of interest rates and other information in credit card solicitations and applications. It would mandate where the information must appear and the type size in which it must be printed. Published May 24. Comments due July 18.

CRA Sunshine

Proposal by federal regulators requiring banks and community groups to disclose the terms of some Community Reinvestment Act-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. Published May 19. Comments due July 21.

Home Loan Bank Capital

Proposal by the Federal Housing Finance Board designed to make the capital structure of the 12 Home Loan banks more risk-based. The proposal implements provisions of the Gramm-Leach-Bliley Act. Proposed May 22, but not published until July 13. Comments due Oct. 11 with a final rule expected by Nov. 12.

ATM Fee Disclosures

Proposal by the Fed to revise Regulation E to require ATM operators who impose a fee for transactions to disclose that fact prominently on or near the machine. The amount of any fee to be imposed must be disclosed to consumers before they are committed to making a transaction. Finally, when a customer first obtains an ATM card or other means of initiating electronic funds transfers, the operator must disclose that using another operator's service may result in additional fees. Not yet published. Available at the Fed Web site, http://www.federalreserve.gov. Comments due Aug. 18.

RECENT ACTIONS

Home Loan Bank Collateral The Federal Housing Finance Board on June 29 adopted a final rule allowing banks and thrifts with less than $500 million of assets to pledge a wider range of collateral for Federal Home Loan bank advances, such as small business and farm loans, and to use advances to fund these types of loans. On June 23, the agency adopted a final rule making membership in a Home Loan bank voluntary. The rule also exempts banks and thrifts with less than $500 million of assets from a requirement that Home Loan bank members have at least 10% of assets in residential mortgage loans. Published July 3.

Home Loan Bank Mission

The Finance Board on June 29 adopted a final rule outlining permissible investments for Federal Home Loan banks and converting the agency's Mortgage Partnership Finance pilot into a permanent program. The $9 billion cap on that program's assets was also lifted, allowing the Home Loan banks and their member banks and thrifts to make more mortgage loans and share the credit and interest rate risk. Expected to be published soon. Effective 30 days later.

IRS Small-Gifts Rule

The Internal Revenue Service issued a rule June 26 which makes small non-cash inducements offered by financial institutions tax-free. Published Monday.

Home Loan Bank Directors

The Finance Board on June 23 adopted a final rule clarifying the process for electing Home Loan bank directors. Because the Gramm-Leach-Bliley Act lengthened directors' terms to three years from two, the rule establishes a transition to the new timetable and prescribes a staggered schedule under which a third of each board's directors will be elected once a year. Published July 6.

Supicious Activities

Federal bank and thrift regulators, the National Credit Union Administration, and the Financial Crimes Enforcement Network on June 19 updated the suspicious activity reporting form that financial institutions must file to combat money laundering. Changes to the form are intended to make it easier to fill out and more useful for law enforcement agencies that review them. Reports filed on the old form will still be accepted through Dec. 31.

Credit Policy

Federal bank and thrift regulators on June 12 revised the Uniform Retail Credit Classification and Account Management Policy to give institutions more flexibility to work with borrowers who have temporary problems repaying loans. The revised policy relaxes the standards under which these loans must be classified as non-performing. Published June 12.

ACTIONS EXPECTED SOON

Loan-Loss ReservesThe American Institute of Certified Public Accountants is expected to present guidelines for banks' accounting for loan-loss reserves to the Financial Accounting Standards Board in September. An early draft of the proposal indicates that the AICPA will recommend that banks not be allowed to hold any unallocated reserves and that they disclose their methods of identifying troubled loans. If approved by FASB, the proposal will be put out for public comment.

Lending Guidelines

A policy statement outlining how regulators can use using existing laws to crack down on predatory lending is expected this summer from a task force of 11 federal agencies, including the Fed and the Justice Department. An early draft indicated that the task force is defining specific activities that are illegal and is considering a wide range of sanctions, from denial of CRA credit to criminal prosecution, to discourage them.

Market Discipline

A report is expected this fall from a private-sector working group on best practices for the public disclosure of information about risks being taken by banks and securities firms. Former Chase Manhattan Corp. chairman Walter Shipley is heading the group, which federal bank and securities regulators formed April 27. Recommendations may be incorporated into examiner guidelines.

FDIC Reform

The Federal Deposit Insurance Corp. is considering reforming deposit insurance by doubling coverage to $200,000 and making the risk-based premium system more forward-looking. Bank executives weighed in on the issue over the course of three meetings in May and June. The agency expects to issue policy options in late July and final recommendations by yearend.

Subprime Residuals

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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