Dodd-Frank News Center

House passes bill amending Dodd-Frank bank swaps push out provision

This story appeared in Bank Digest.

The House has passed the Swaps Regulatory Improvement Act (H.R. 992) by a vote of 292 to 122. Sponsored by Rep. Randy Hultgren (R-Ill), the measure amends Section 716 of the Dodd-Frank Act, the bank derivatives push out provision, to allow banks to continue to conduct risk-mitigation efforts for clients, such as farmers and manufacturers, who use swaps to insure against price fluctuations. The bill also modifies Section 716 to allow commodity and equity derivatives in banks with federal deposit insurance. However, derivatives involving structured finance transactions would still need to be pushed out of a federally insured financial institution. Currently, Section 716 prevents federally insured banks from conducting certain swaps trading, including trading of commodity, equity, and credit derivatives. This prohibition compels banks to push out swaps trading into separately capitalized non-bank affiliates. Seventy Democrats voted in favor of the measure.

House passes Cummings legislation to protect servicemembers and veterans from foreclosure

This story appeared in Bank Digest.

The House of Representatives passed H.R. 2481, the Veterans Economic Opportunity Act of 2013, which included provisions introduced by Rep. Elijah E. Cummings (D-Md), Ranking Member of the Oversight and Government Reform Committee, to significantly expand home foreclosure protections for servicemembers, their families, and disabled veterans. Cummings said that the measure's "common-sense provisions will better protect military families and veterans with disabilities by closing loopholes and providing needed reforms to the Servicemembers Civil Relief Act (SCRA)." 

ATR/QM Rule Small Entity Compliance Guide updated

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has updated its Small Entity Compliance Guide to reflect finalized changes to the Ability-to-Repay and Qualified Mortgage Rule (ATR/QM Rule). Notable changes in the final rule impacting the guide content include: the amount of loan originator compensation to be included in the points-and-fees calculation; the treatment of non-consumer payments to be included in the points and fees calculation; and the period to be considered when making small credit status determinations after Jan. 10, 2016.

FHFA announces $5.1 billion settlement with J.P. Morgan

This story appeared in Bank Digest.

The Federal Housing Finance Agency has announced a settlement with J.P. Morgan Chase & Co. and related companies for $4 billion to address claims of alleged violations of federal and state securities laws in connection with private-label, residential mortgage-backed securities purchased by Fannie Mae and Freddie Mac. Under the terms of the agreement, J.P. Morgan will pay approximately $2.74 billion to Freddie Mac and $1.26 billion to Fannie Mae to resolve certain claims related to securities sold to the companies between 2005 and 2007 by J.P. Morgan Chase & Co., Bear Stearns & Co., Inc., and Washington Mutual.

DeMarco reviews failures, successes, and future of Fannie and Freddie

This story appeared in Bank Digest.

Speaking on the five-year anniversary of Fannie Mae and Freddie Mac being placed into conservatorship, Federal Housing Finance Agency Acting Director Edward DeMarco briefly remarked on the conservatorships' successes—such as their functioning as a secondary mortgage market and stabilized financial position, among other things--but he remained realistic about the work ahead. In a speech before Zillow and the Bipartisan Policy Center, DeMarco provided a review of the "failure of the Fannie Mae and Freddie Mac GSE business model, the steps FHFA has taken in the intervening five-years, and ... a look ahead at what to expect in the coming years if we remain without a legislative solution."

Regulators to propose minimum liquidity requirements for most important institutions

This story appeared in Bank Digest.

The Federal Reserve Board, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation announced that they are proposing joint rules that would establish a standardized minimum liquidity requirement for large and internationally active banking organizations and systemically important, non-bank financial companies designated by the Financial Stability Oversight Council. The proposal also would apply a less stringent requirement to bank holding companies and savings and loan holding companies that are not internationally active but have more than $50 billion in total assets.

OCC issues guidance on development and distribution of annual stress test

This story appeared in Bank Digest.

The Office of the Comptroller of the Currency has published final guidance indicating the processes and factors the OCC will use in developing and distributing the stress test scenarios for the annual stress test required by the Dodd-Frank Act as implemented by the stress test final rule. Under the rule, national banks and federal savings associations with total consolidated assets of more than $10 billion are required to conduct annual stress tests using a minimum of three scenarios (baseline, adverse, and severely adverse) provided by the OCC. The rule specified that the OCC will provide the required scenarios to the covered institutions by November 15th of each year. On Nov. 15, 2012, the OCC published interim guidance explaining how the OCC would develop the stress test scenarios. The OCC is now adopting the interim guidance as final.

Regulatory agencies address industry questions on qualified mortgages

This story appeared in Bank Digest.

Five federal regulatory agencies issued a statement on Oct. 22, 2013, to address industry questions about fair lending risks associated with offering only Qualified Mortgages. Creditors have asked for clarity regarding whether the disparate impact doctrine of the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B, allows them to originate only Qualified Mortgages. The statement counsels that creditors should continue to evaluate fair lending risk as they would for other types of product selections, including by carefully monitoring policies and practices and implementing effective compliance management systems. The statement was issued by the Federal Reserve Board, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency. 

 

FDIC issues stress test reporting templates and documentation

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation has issued a notice to describe the reports and information required to meet the Dodd-Frank Act Stress Testing (DFAST) Report requirements under Section 165(i)(2) of the Act for covered banks with total consolidated assets between $10 billion and $50 billion. The data collected through these templates will be used to assess the reasonableness of the covered bank's stress-test results and provide forward-looking information to the FDIC regarding a covered bank's capital adequacy. The FDIC coordinated with the Federal Reserve Board and the Office of the Comptroller of the Currency in the development of the templates.

FDIC Board Member Norton discusses resolution planning at ABA meeting

This story appeared in Bank Digest.

Federal Deposit Insurance Corporation Board Member Jeremiah O. Norton discussed the current state of resolution planning in remarks to the American Bankers Association annual convention in New Orleans, La. According to Norton, there seems to be universal agreement that large and complex financial institutions should be resolvable in an orderly way. "Without question," he said, "a great deal of effort from the official sector, private enterprise, academia, and the legal community has been spent addressing impediments and complications of differing resolution frameworks." However, Norton said there remain serious issues to consider and challenges to overcome before reaching the consensus policy objective.