Dodd-Frank News Center

Fed Reports on Credit and Lending Facilities

This story appeared in Bank Digest.

The Federal Reserve Board has issued a report under Section 129(b) of the Emergency Economic Stabilization Act of 2008 that provides an update concerning the lending facilities established by the Fed under Section 13(3) of the Federal Reserve Act. The report is the fifth periodic report filed by the Fed and covers all of the loans and lending facilities authorized by the agency since March 1, 2008, that are outstanding.

Mortgage Interest Rates Reported

This story appeared in Bank Digest.

The Federal Housing Finance Agency has reported that the average interest rate on conventional 30-year, fixed-rate mortgage loans increased 19 basis points to 5.31 percent in July. The average interest rate on 15-year, fixed-rate loans increased 9 basis points to 4.89 percent in July. These rates pertain to mortgages closed during the July 27-31 period. Typically, the interest rate is determined 30 to 45 days before the loan is closed. Thus, according to the agency, the reported rates depict market conditions prevailing in mid to late June. The August index value will be announced on Sept. 29, 2009.

Treasury IG Issues City National Corporation CPP Report

This story appeared in Bank Digest.

The Treasury Department's Office of the Inspector General has issued a case study of how City National Corporation, Los Angeles, Calif., was selected to participate in the Capital Purchase Program. The report concludes that the Treasury and the Office of the Comptroller of the Currency followed the policies and procedures of the Troubled Assets Relief Program at the time of the investment, although it characterizes those policies and procedures as “limited.”

UK Reaffirms Comply or Explain Model for Corporate Governance as Financial Crisis Roils

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

Despite concerns that the comply or explain principle of corporate governance may not be robust enough in light of the financial crisis, the principle recently received a strong endorsement from the Walker Report on corporate governance, as well as from UK senior officials. There is no indication that the UK and other EU member corporate governance codes will abandon comply or explain in favor of a US-type Sarbanes-Oxley model, which they view as prescriptive and rules-based. Their main bow to the financial crisis is a call for increased shareholder vigilance and a closer inspection of company explanations.

Additional Guidance Issued on Credit Card Account Rate Increases

This story appeared in Bank Digest.

The Office of the Comptroller of the Currency has issued a bulletin on provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009. The bulletin describes an interim final rule issued by the Federal Reserve Board. The Fed rule requires banks to notify customers 45 days in advance of any rate increase or significant changes in credit card account terms and requires lenders to disclose that their customers have the right to reject those changes.

Thrift Industry Breaks Even in Second Quarter of 2009

This story appeared in Bank Digest.

The U.S. thrift industry essentially broke even in the second quarter of 2009, reporting a slight profit of $4 million—the first positive earnings for the industry since the third quarter of 2007, the Office of Comptroller of the Currency has announced. “Although significant challenges lie ahead, thrift managers are making progress toward positioning their institutions for a positive future,” stated OTS Acting Director John E. Bowman.

Capital Regulations Would Account for Off-Balance Sheet Securitized Assets

This story appeared in Bank Digest.

The Office of the Comptroller of the Currency, Federal Reserve Board, Federal Deposit Insurance Corp. and Office of Thrift Supervisions are seeking comment on a proposed regulatory capital rule related to the Financial Accounting Standards Board's adoption of Statements of Financial Accounting Standards Nos. 166 and 167. Beginning in 2010, these accounting standards will make substantive changes to how banking organizations account for many items, including securitized assets, that are currently excluded from these organizations' balance sheets.

TALF Agents Granted Limited Exchange Act Exemption

This story appeared in Bank Digest.

The Securities and Exchange Commission has granted to any broker-dealer designated by the Federal Reserve Bank of New York as a Term Asset-Backed Loan Facility (TALF) agent a limited exemption pursuant to Section 36 of the Exchange Act from the prohibitions on arranging for the extension or maintenance of credit contained in Section 11(d)(l) of the Exchange Act solely with respect to such broker-dealer's facilitation of extensions and maintenance of nonrecourse credit on behalf of the FRBank to purchasers of asset-backed securities pursuant to the TALF.

Problem Bank List Rises to 416 as Industry Posts Q2 Net Loss of $3.7 Billion

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

According to the latest issue of the Quarterly Bank Profile, the number of institutions on the Federal Deposit Insurance Corporation’s (FDIC) “problem list” rose to 416 at the end of the second quarter, up from 305 at the end of the first quarter, and the highest level since June 30, 1994. FDIC-insured institutions also posted a net loss of $3.7 billion in the second quarter, reflecting one-time losses and falling asset values.

FDIC Issues Policy Statement on Private Capital Investments

By Richard Roth, J.D., Editor, the CCH Federal Banking Law Reporter, CCH Bank Compliance Guide and Bank Digest.

The Federal Deposit Insurance Corp. has approved a Statement of Policy on the Acquisition of Failed Insured Depository Institutions that provides guidance to private capital investors interested in acquiring or investing in the deposit liabilities of failed banks or thrifts. The final statement includes a number of changes from the proposed statement issued in July, such as refining the description of the types of investors covered, changing the capital standard to one that is intended to be a better measure of the capital available to absorb losses and clarifying the circumstances in which the cross support obligation would apply.  The statement is intended to open the door to additional sources of the capital needed to support the industry as the agency is called upon to take over more institutions.