By Heath P. Tarbert and Dimia Fogam
Two federal banking regulators set a new deadline of April 30, 2012 for the comment period for their proposed rules to implement the annual stress test requirements in Section 165 of the Dodd-Frank Act.
Previously, on January 24, 2012, the Office of the Comptroller of the Currency (“OCC”) proposed a rule to implement section 165(i)(2) that would require any national bank or federal thrift with total consolidated assets exceeding $10 billion (“Covered Institutions”) to conduct an annual stress test. A week prior, the Federal Deposit Insurance Corporation (“FDIC”) released its own proposed stress testing rule for FDIC-insured state nonmember banks and thrifts with total consolidated assets of more than $10 billion dollars (“Covered Banks”). The OCC and FDIC proposed rules are “consistent and comparable” as required by Section 165(i)(2), and each direct Covered Institutions and Covered Banks respectively to assess the potential impact of economic conditions on their capital—taking into account their current condition along with corresponding risks, exposures, strategies, and activities. Every year, after being provided with at least three scenarios (including “baseline,” “adverse,” and “severely adverse”) at some point in the Autumn, Covered Institutions and Covered Banks will have until January 5 of the subsequent year to [click to continue…]
by Michael Lyle, Heath Tarbert, and Sunny Thompson
On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank” or “the Act”), which was passed in direct response to the global financial crisis. Just one year later, that Act – representing the most comprehensive package of reforms since the Great Depression – has already begun altering the regulatory landscape for banks, investment funds, securities firms, and publicly listed companies outside the financial sector. But the most significant changes are yet to come. [click to continue…]
By: Derrick D. Cephas and Alex Radetsky
Title III of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) mandates the wind-down of the Office of Thrift Supervision (“OTS”), the issuer of charters for federal savings associations (commonly called “thrifts”) and the primary regulator of federal and state thrifts and savings and loan holding companies, and the distribution of its authority to the other U.S. banking regulators. Title III provides the Office of the Comptroller of the Currency (“OCC”) with regulatory authority over federally chartered savings associations and the Federal Deposit Insurance Corporation (“FDIC”) with regulatory authority over State-Chartered savings associations. All functions, powers, authorities, rights and duties of the OTS with respect to federal and state chartered savings associations will be transferred to the OCC and FDIC, respectively, as part of the transfer process established by the Dodd-Frank Act. In connection with this effort, on July 6, 2011, the OCC and the FDIC issued a joint notice (the “Joint Notice”) listing out those regulations previously promulgated by the OTS which shall survive under the authority of the OCC and FDIC, respectively. [click to continue…]
By: Derrick D. Cephas and Heath P. Tarbert
On June 14, 2011, the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System (the “Federal Reserve”), and Federal Deposit Insurance Corporation (collectively, the “Agencies”) adopted a final rule that imposes a permanent floor for risk-based capital requirements while providing some risk calculation flexibility for certain low-risk assets. The final rule implements provisions of Section 171 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), commonly referred to as the “Collins Amendment.” The Collins Amendment requires minimum risk-based capital requirements for insured depository institutions, depository institution holding companies, and nonbank financial companies supervised by the Federal Reserve (“covered institutions”).
The final rule creates a permanent floor for risk-based capital requirements and therefore prevents covered institutions from lowering their capital requirements below the levels established by the Agencies’ current general risk-based capital rules. Under these rules, each bank must have a total risk-based capital ratio of 8.0% and a tier 1 risk-based capital ratio of 4.0%, using the risk weights established by the current guidelines.
[click to continue…]
by: Alex Radetsky & Carlos Larkin
On March 29, 2011, the Office of the Comptroller of the Currency (“OCC’), the Board of Governors of the Federal Reserve System (“FRB”), the Federal Deposit Insurance Corporation (“FDIC”), the U.S. Securities and Exchange Commission (“SEC”), the Federal Housing Finance Agency (“FHFA”), and the Department of Housing and Urban Development (“HUD”) jointly issued a proposed rule to implement Section 941(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Proposed Rule”). Althought this rule is extenstive, this post will be limited to a discussion of Qualified Residential Mortgages (“QRMs”), their exempt status and the underwriting standards that create this exemption.
[click to continue…]