Dodd-Frank News Center

Transaction Account Guarantee Program Extended

This story appeared in Bank Digest.

The Federal Deposit Insurance Corp. has amended its Temporary Liquidity Guarantee Program (TLGP) regulations by extending the Transaction Account Guarantee (TAG)  component of the TLGP for six months until June 30, 2010. The FDIC took this action to assure an orderly phase out of the TAG program. Each insured depository institution (IDI) that participates in the extended TAG program will be subject to increased fees during the extension period for the FDIC’s guarantee of qualifying noninterest-bearing transaction accounts. However, each IDI that is currently participating in the TAG program will have an opportunity to opt out of the extended TAG program. Each IDI that is currently participating in the TAG program must review and update its disclosure postings and notices to accurately reflect whether it is participating in the extended TAG program.

http://www.fdic.gov/news/board/aug26no4.pdf

New Banks to Get Enhanced Scrutiny

This story appeared in Bank Digest.

Newly chartered state nonmember banks will be subject to higher capital requirements and more frequent examinations for a term of seven years, rather than the current three years, under a new policy of the Financial Deposit Insurance Corp. In addition, to reduce bank failures, the FDIC is replacing its current requirement that banks provide written notice of proposed business plan changes during the first three years of operation with a requirement of prior FDIC approval. Finally, new banks will be required to submit updated financial statements and business plans for years four through seven.

FIL-50-2009 at http://www.fdic.gov/news/news/financial/2009/fil09050.html

Collaboration Necessary for Community Development Programs

This story appeared in Bank Digest.

National Credit Union Administration Board member Gigi Hyland urged interagency community affairs staff to make financial literacy and empowerment “a component of every conversation about community development and economic recovery. Consumers and small businesses need to have access to user-friendly, user-focused information about money. Many of the agencies, including NCUA, have links on their websites to other financial education initiatives like Jump$tart®, NeighborWorks® America, and Operation HOPE. But we need to do more.”

Credit CARD Act Compliance Concerns Addressed

This story appeared in Bank Digest.

In response to credit union concerns about compliance with new requirements under the Credit Card, Accountability, Responsibility, and Disclosure Act of 2009 (Credit CARD Act), National Credit Union Administration Chairman Debbie Matz underscored the NCUA’s commitment to consumer protection and ensuring credit union compliance, while recognizing some credit unions may have technical difficulties and the need for examiners to work with credit unions on a case-by-case basis. Matz noted “understand some credit unions may experience difficulties complying with the requirement of the Credit CARD Act and the Federal Reserve Board’s interim rule regarding the mailing of periodic statements. The amount of time necessary to come into full compliance will likely vary, depending on the type of credit arrangements a credit union offers its members and, in many cases, the cooperation of third party vendors in revising billing procedures and statements. All credit unions are expected to come into full compliance as early as reasonably possible, and to demonstrate their efforts to do so. In the interim, credit unions should follow the alternative allowed by the Federal Reserve. Like any regulatory compliance matter, examiners will review credit union efforts to achieve compliance. In no event can credit unions impose a late fee or change terms except as permitted by the Credit CARD Act and the Federal Reserve’s regulation.”

http://www.ncua.gov/news/press_releases/2009/MR09-0828c.htm

Townhall Meetings Scheduled

This story appeared in Bank Digest.

National Credit Union Administration Chairman Deborah Matz has announced three NCUA Town Hall Meetings to discuss corporate credit unions and other credit union issues. Matz noted, “The dislocations experienced by the financial markets have had a significant effect on both corporate and natural person credit unions, and it is incumbent on NCUA and the industry to come together in a forward-looking and reasoned manner to find solutions.” She added, “we can turn the broader challenges into a catalyst for changes that will set a course for an even brighter future for the credit union industry.”

http://www.ncua.gov/news/press_releases/2009/MR09-0828b.htm

Residential and Small Business Lending Conference Scheduled

This story appeared in Bank Digest.

The Community Affairs Departments of the Office of Thrift Supervision, Office of the Comptroller of the Currency, Federal Reserve Bank of Minneapolis and Federal Deposit Insurance Corp. have partnered on the development of an Interagency Community Development Conference entitled “Community Banks and the Outlook for Residential and Small Business Lending.” The conference is scheduled to be held Oct. 15, 2009, at the Federal Reserve Bank of Minneapolis, on 90 Hennepin Avenue Minneapolis, Minn. The conference will feature an open-format discussion during which regulatory senior compliance staff members will respond to questions and comments about Community Reinvestment Act compliance and the impact of the foreclosure crisis on financial institutions’ activities.

http://files.ots.treas.gov/4811561.pdf

OTS Discusses Restructuring of Troubled Mortgages

This story appeared in Bank Digest.

The Office of Thrift Supervision has issued guidance, including a set of questions and answers, on the regulatory and accounting issues that arise from modifying or restructuring troubled mortgages on one- to four-family properties. The guidance notes that although not all loan modifications are troubled debt restructurings (TDRs), a modification during a period of market deterioration should be presumed to be a TDR unless the presumption can be overcome by a preponderance of the evidence. For each loan, that evidence must include new underwriting documentation—updated property value, credit report and income analysis—showing that the modification reflects market rates and terms for a new loan with comparable risk.

CEO Ltr 315 at http://files.ots.treas.gov/25315.pdf

TB 85 at http://files.ots.treas.gov/84303.pdf

National Bank Permitted to Extend Time for Satisfying Redemption Requests

This story appeared in Bank Digest.

In Interpretive Letter No. 1121, the Office of the Comptroller of the Currency has permitted a national bank to extend the time period allowable for satisfying redemption requests from participants in the bank's collective investment fund. The fund holds primarily commercial real estate assets and due to current economic and market conditions and the large volume of redemption requests the bank is unable to satisfy all the requests within the one-year notice period required by the OCC.

Interpretive Letter No. 1121 at http://www.occ.treas.gov/interp/aug09/int1121.pdf

National Bank Permitted to Join ICE Europe

This story appeared in Bank Digest.

The Office of the Comptroller of the Currency has issued Interpretive Letter No. 1122 authorizing a national bank to become a self-clearing member of ICA Clear Europe Limited Credit Default Swap Clearinghouse (ICE Europe). Permission was granted provided the bank has established a comprehensive risk management framework to govern the risks associated with membership and obtains a written examiner-in-charge (EIC) supervisory no-objection as addressed in Interpretive Letter No. 1113. The bank's exposure to ICE Europe is subject to the lending limit in 12 USC 84 or any lower limit set by the EIC.

Interpretive Letter No. 1122 at http://www.occ.treas.gov/interp/aug09/int1122.pdf

Interpretive Letter No. 1113 at http://www.occ.treas.gov/interp/mar09/int1113.pdf

Treasury Posts CPP Contract

This story appeared in Bank Digest.

In its move to increase transparency, the Treasury Department has posted the investment contract it has entered into with Financial Services of Winger on July 31, 2009, under the Capital Purchase Program (CPP).

http://www.financialstability.gov/impact/contracts_list.htm