OPEN FOR COMMENT
FDIC Reform
The Federal Deposit Insurance Corp. unveiled various options for reforming deposit insurance. It outlined possible legislative changes relating to the nature and size of the insurance funds, the pricing of premiums, and the amount of coverage. Options include moving to a "user fee" system under which all institutions pay a small, steady premium each year, changes in the risk-based pricing plan to include market information, and increasing the coverage limit to $200,000 per account. Released Aug. 8. Not yet published in the Federal Register but available at www.fdic.gov. No comment deadline was set.
Strategic Plan
The Office of Federal Housing Oversight is requesting comment on its strategic plan for the years 2000-2005, which will "clarify OFHEO's mission and guide its activities." Published Aug. 4. Comments due Sept. 13.
Holding Company Powers
Proposal by the Federal Reserve Board to let financial holding companies act as "finders," or intermediaries, that bring together buyers and sellers of financial or nonfinancial products for transactions the buyers and sellers negotiate themselves. A finder would be prohibited from acting as a broker or agent on behalf of one of the parties and from having an ownership stake in the product or service sold. A finder also would be required to disclose the difference between its products and those offered by third parties through the finder service. Published Aug. 3. Comments due Sept. 5.
Stock Buybacks
Interim rule by the Office of Thrift Supervision amending 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 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 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 Fed 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. Institutions would be required 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.
Thrift Financial Report
Proposal by the OTS to modify the quarterly thrift financial report, including new data on subprime lending. The changes would take effect for the first quarter. Published Aug. 4. Comments due Oct. 3.
Home Loan Bank Capital
Proposal by the Federal Housing Finance Board to make the capital structure of the 12 Home Loan banks more risk-based. The proposal enforces 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 incur additional fees. Published July 18. Comments due Aug. 18.
RECENT ACTIONS
Securitized Assets
The FDIC adopted a final rule July 27 pledging not to exercise its powers to repudiate contracts or to recover, or reclaim as property, assets that were sold as securitizations to another insured depository institution. The agency made exceptions covering contracts that do not follow proper accounting standards or were fraudulent. Expected to be published Aug. 11.
Pooling of Interests
The Financial Accounting Standards Board on July 5 postponed the release of a final statement that is expected to ban pooling-of-interests accounting for mergers and acquisitions. The agency said a final statement will probably be released in the first quarter.
ACTIONS EXPECTED SOON
Subprime Residuals
Bank and thrift regulators are considering a proposal that would prohibit banks from counting subprime-based residuals as capital, unless the institution can show there is a market for them. A residual, also known as a "retained interest," is the interest a bank keeps when it securitizes and sells an asset. The FDIC is expected to act first; the proposal is to be discussed at the agency's Monday board meeting.
National Charters
The Farm Credit Administration is expected, by January, to let the Farm Credit System's roughly 200 lenders apply for national charters, making them eligible to lend in any state. Farm Credit lenders have previously been limited geographically. The agency has said it will publish a proposal for carrying out the plan and a request for public comments before yearend.
Loan-Loss Reserves
The American Institute of Certified Public Accountants is expected this fall to present guidelines for bank accounting of loan-loss reserves to the Financial Accounting Standards Board. 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 would be put out for public comment.
Lending Guidelines
A policy statement is expected this summer from a task force of 11 federal agencies, including the Fed and the Justice Department, outlining how regulators can use existing laws to crack down on predatory lending. 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 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.
COMMENTS CLOSED
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 imposes more restrictive deposit deadlines on non-Fed clearing house customers. Published May 25. Comments were due July 25.
Credit Cards
Proposal by the Fed to amend Regulation Z, which enforces 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 were due July 18.
Call Reports
Proposal by the three federal banking agencies to modify quarterly call reports, including new data on subprime lending and asset securitization. The changes would take effect in the first quarter. Comments were due July 31. Final revisions expected to be unveiled this fall.
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. Comments were due July 21.
