By Heath Tarbert and Dimia Fogam
The Board of Governors of the Federal Reserve System (FRB), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the Agencies) issued guidance to clarify the effective date of Section 716 of Dodd-Frank, commonly referred to as the Push-Out Rule. The Agencies stated that Section 716 will become effective on July 16, 2013.
Section 716 prohibits federal assistance, including access to the Federal Reserve discount window and FDIC deposit insurance, to any swaps entity with respect to any swap, security-based swap, or other activity of the swaps entity. The term “swap entity” refers to any swap dealer, security-based swap dealer, major swap participant, or major security-based swap participant that is registered under the Commodity Exchange Act or Securities Exchange Act of 1934. However, the rule allows certain entities to remain eligible for [click to continue…]
By Heath Tarbert and Dimia Fogam
The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FRB), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the Agencies) released for public comment their proposed joint guidance on leveraged lending activities.
The proposed guidance is a revision to the interagency leveraged finance guidance issued in 2001 and would apply to all OCC-, FRB- and FDIC-supervised financial institutions that are substantively engaged in leveraged lending activities—such as those common to the private equity and hedge fund lending market.
Given the immense growth in the volume of leveraged credit as well as the increased participation of non-regulated investors over the last decade, the Agencies have expressed concerns that [click to continue…]
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…]
Derrick D. Cephas, the head of Weil’s Financial Institutions Regulatory practice, published an interesting article with Bank Director magazine detailing how banks can approach new industry regulations in a constructive manner and how the new rules have changed the regulatory landscape.
Full-Text Article from Bank Director Magazine
Weil’s Marcia L. Goldstein, Heath P. Tarbert, and Kathlene M. Burke authored a column for The New York Law Journal discussing the recently finalized implementing rule in connection with resolution plans, or “living wills,” concluding that the regulations still leave a substantial degree of uncertainty as to what exactly it will take to ensure a plan is “credible.”
Access Full-Text Article from The New York Law Journal (may require subscription)