INTERSTATE I: The three banking agencies are expected in several weeks to consider a final rule to prevent out-of-state branches from draining deposits out of communities. The proposed rule would require branches of out-of-state banks to lend at least half as much as the average home-state bank. It was published March 17, and comments were due May 2. It was supposed to have been ready in time for full-scale interstate branching June 1.
FOREIGN BANKS: The rewriting of Regulation K is now more than six months late. The rule, which governs the overseas operations of domestic banks and the U.S. operations of foreign banks, now is not expected until late summer.
The proposal is expected to relax limits on the amount of income foreign banks may earn outside the United States from insurance and securities activities. It also would eliminate scores of duplicative filing requirements, and it would make it easier for foreign banks to expand their operations here. Release of the rule has been delayed several times as Fed officials worked on changing Regulation Y and the section 20 rules.
MONEY LAUNDERING: Know-your-customer rules are still on track for a summer release by the Fed. The regulation is expected to require banks to take specific steps to verify the identity of each customer. Regulators have been working on draft rules since May 1996.
RECOURSE: The exam council's supervision task force is still grappling with a long-delayed proposal that would reduce the amount of risk-based capital banks must hold against some assets sold with recourse. The plan, which regulators may issue for comment as early as July, also may require banks to hold more capital in recourse arrangements involving letters of credit, warranties, and other "direct credit substitutes."
The major cause of the delay: determining how much capital a bank should hold when pieces of its loan pool are securitized and sold to different buyers. An advance notice of proposed rulemaking was issued for comment in May 1994. Comments were due that July.