Bank Prudential Regulation & Regulatory Capital
US Federal Deposit Insurance Corporation Issues Proposed Rule to Facilitate Access to Deposits in Large Bank Failures
On February 17, 2016, the US Federal Deposit Insurance Corporation issued a proposal that would require certain insured depository institutions to maintain certain books and records in order to facilitate the payment of insured deposits to customers in the event such institutions were to fail. The proposed rule applies to insured depositary institutions with a large number of deposit accounts (more than 2 million). Based on current data, 36 insured depository institutions would be covered by the rule. The recordkeeping requirements would require the institutions covered by the rule to maintain complete and accurate data on each depositor and would require such institutions to ensure that their information technology systems have the ability to calculate the amount of insured money for each depositor within 24 hours of a failure. Comments on the proposed rule must be received within 90 days after the date of publication in the Federal Register.
The full text of the FDIC proposed rule is available at: https://www.fdic.gov/news/board/2016/2016-02-17_notice_dis_b_fr.pdf?source=govdelivery&utm_medium=email&utm_source=govdelivery.
US Federal Deposit Insurance Corporation and US Securities Exchange Commission Issues Proposed Rule Regarding the Orderly Liquidation of Covered Broker-Dealers
On February 17, 2016, the FDIC and the US Securities and Exchange Commission jointly issued a proposed rule to implement provisions for the orderly liquidation of covered brokers and dealers as required under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Specifically, Title II provides for federal receivership proceedings of qualifying financial companies, including covered broker-dealers, with the FDIC serving as receiver. The proposed rule defines a covered broker or dealer as any covered financial company that is registered with the SEC as a broker or dealer and is a member of the Securities Investor Protection Corporation. A covered financial company is generally one that is in danger of default and whose failure would have serious adverse effects on US financial stability, as determined by the Secretary of the Treasury. In the case of covered broker-dealer, the FDIC will serve as receiver, but the SIPC will serve as trustee.
Comments on the proposed rule must be received within 60 days after the date of publication in the Federal Register.
The full text of the proposed rule is available at: https://www.sec.gov/rules/proposed/2016/34-77157.pdf.
US Office of the Comptroller of the Currency Issues Certain Revised Booklets of the Comptroller's Handbook
On February 12, 2016, the US Office of the Comptroller of the Currency issued two revised booklets of the Comptroller's Handbook: the "Country Risk Management" booklet and the "Installment Lending" booklet. Each revised booklet updates and replaces the previous versions of the respective booklets. The "Installment Lending" booklet provides updated guidance to examiners regarding the administration of installment lending practices and the controls and processes necessary to manage the risks associated with those practices as well as updated guidance for assessing the quantity of risk associated with installment lending activities. The "Country Risk Management" booklet provides updated guidance to examiners regarding country risk management, based on lessons learned from the financial crisis of 2008 as well as the European banking and debt crises. The booklet also updates descriptions of the risks associated with international activities and contains a more detailed discussion of the effects of country risk, cross-border risk and sovereign risk on the OCC's 8 risk categories (credit, interest rate, liquidity, price, operational, compliance, strategic, and reputation).
The full text of the "Installment Lending" booklet is available at: http://www.occ.gov/publications/publications-by-type/comptrollers-handbook/pub-ch-a-il.pdf.
The full text of the "Country Risk Management" booklet is available at: http://www.occ.gov/publications/publications-by-type/comptrollers-handbook/pub-ch-crm.pdf.
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