CCH Financial Reform News Center

Senior Senators Introduce Hedge Fund SEC Registration Bill

A bill requiring hedge funds to register with the SEC has been introduced by Senators Carl Levin and Charles Grassley. The Hedge Fund Transparency Act would make hedge funds subject to SEC regulation and oversight by requiring them to register with the SEC, to file an annual public disclosure form with basic information, to maintain books and records required by the SEC, and to cooperate with any SEC information request or examination. The measure also requires hedge funds to establish anti-money laundering programs and report suspicious transactions, thereby clarifying that hedge funds have the same obligations under US money laundering statutes as other financial institutions.

FDIC-Guaranteed Debt Exempt from OCC Registration Requirements

The Office of the Comptroller of the Currency has determined that the securities registration exemption found in 12 CFR 16.5 is applicable to guaranteed senior unsecured debt issued by a national bank under the Federal Deposit Insurance Corp.’s Temporary Liquidity Guarantee Program (TLGP). The Section 16.5 exemption applies eligible debt that matures by June 30, 2012, the expiration date of the FDIC’s guarantee under the TLGP. The OCC added, however, that the Section 16.5 exemption would not apply to eligible debt with a maturity that extends beyond June 30, 2012.

http://www.occ.treas.gov/interp/jan09/int1108.pdf

TARP Oversight Panel Calls for Systemic Risk Regulator

The Congressional Oversight Panel, the watchdog body overseeing implementation of the Troubled Asset Relief Program (TARP), is calling for the creation of a regulator to tackle the problem of systemic risk within the financial system.

In a report issued January 29, which was approved by three out of its five members, the panel noted that systemic risk “needs to be managed before moments of crisis by regulators who have clear authority and the proper tools.”

House-Passed Stimulus Bill Would Repeal IRS Notice 2008-83

By James Hamilton, J.D., LL.M., Principal Analyst, CCH Federal Securities Law Reporter

The House has passed an economic stimulus bill, H.R. 1, prospectively repealing IRS Notice 2008-83 that interprets Section 382 of the Internal Revenue Code to allow banks and other financial institutions pursuing acquisitions to write off acquired losses stemming from takeovers of other banks to offset future income. The bill would also exclude Fannie Mae, Freddie Mac and companies receiving TARP benefits from a five-year carryback of net operating losses for companies.

Treasury Publishes TARP/CPP Contracts to Increase Transparency

Building on President Barrack Obama and Treasury Secretary Tim Geithner's commitment to increase transparency and accountability in the Troubled Assets Relief Program (TARP), the Treasury has begun to publish investment contracts for completed transactions. As part of this new policy, any newly-completed investment contracts will be made available to the public five to 10 business days. 

Contracts: http://www.treas.gov/initiatives/eesa/agreements/index.shtml

Press Release: http://www.ustreas.gov/press/releases/tg04.htm

Fed Clarifies Holding Company Participation in TLGP

The Federal Reserve Board has issued SR 09-3 to provide bank and financial holding companies guidance regarding participation in the Federal Deposit Insurance Corp.’s Temporary Liquidity Guarantee Program (TLGP). SR 09-3 clarifies that a holding company that did not have senior unsecured debt outstanding as of Sept. 30, 2008, must seek prior approval from the FDIC before issuing any debt guaranteed by the FDIC under the TLGP.

http://www.federalreserve.gov/boarddocs/srletters/2009/SR0903.htm

FOMC Votes to Keep Interest Rates Unchanged

The Federal Open Market Committee (FOMC) has voted to keep its target range for the federal funds rate at 0 to ¼ percent. In announcing its decision, the FMOC anticipates “economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.” The Committee added “inflation pressures will remain subdued in coming quarters.

http://www.federalreserve.gov/newsevents/press/monetary/20090128a.htm

NCUA Board Approves Corporate Stabilization Efforts

The National Credit Union Administration Board has approved a series of actions designed to enhance and support a corporate credit union system facing unprecedented strains on liquidity and capital due to extraordinary market disruptions and the current economic climate. Corporate credit unions provide investment and liquidity services to consumer-owned natural person credit unions. The NCUA’s efforts take a three-prong approach: maintain liquidity, strengthen capital and restructure the corporate system. 

http://www.ncua.gov/news/press_releases/2009/MR09-0128.htm

CBO: Banks Need “Hundreds of Billions of Dollars” of Extra Capital

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter.

The U.S. banking system will need “hundreds of billions of dollars” of extra capital, in addition to what has already been allocated to the Troubled Asset Relief Program (TARP), in order to weather the current financial crisis, Congressional Budget Office (CBO) Director Douglas Elmendorf told a Senate hearing January 28.

Treasury Provides Funding to Bolster Healthy, Local Banks

The Treasury Department has announced investments of approximately $386 million in 23 banks across the nation as part of its Capital Purchase Program, which the department calls a means to directly infuse capital into healthy, viable banks with the goal of increasing the flow of financing available to small businesses and consumers.  http://www.ustreas.gov/press/releases/tg03.htm