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Federal Reserve Board announces final rule regarding Federal Reserve Bank accounts and services for financial market utilities designated as systemically important

Release Date: December 5, 2013
For immediate release
The Federal Reserve Board on Thursday issued a final rule that amends Regulation HH to set out the conditions and requirements for a Federal Reserve Bank to open and maintain accounts for and provid…

Federal Reserve Board releases guidance reminding financial institutions to exercise appropriate risk management and oversight when using service providers

Release Date: December 5, 2013
For immediate release
The Federal Reserve Board on Thursday released guidance reminding financial institutions it supervises to exercise appropriate risk management and oversight when using service providers.
The guidanc…

FinCEN, Federal Reserve finalize rule amending definitions in the Bank Secrecy Act

Board of Governors of the Federal Reserve SystemFinancial Crimes Enforcement Network

For immediate release
December 3, 2013

FinCEN, Federal Reserve Finalize Rule Amending Definitions in the Bank Secrecy Act
The Financial Crimes Enforcement Net…

Federal Reserve Board announces it has not objected to re-submitted capital plans from The Goldman Sachs Group, Inc. and JPMorgan Chase & Co.

Release Date: December 2, 2013
For immediate release
The Federal Reserve on Monday announced that it has not objected to re-submitted capital plans from The Goldman Sachs Group, Inc. and JPMorgan Chase & Co. During the 2013 Comprehensive Capital A…

Agencies announce increases in dollar thresholds in Regulations Z and M for exempt consumer credit and lease transactions

Board of Governors of the Federal Reserve System
Consumer Financial Protection Bureau

Agencies Announce Increases in Dollar Thresholds in Regulations Z and M for Exempt Consumer Credit and Lease Transactions

The Federal Reserve Board and the Consumer Financial Protection Bureau (CFPB) today announced they are increasing the dollar thresholds in Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) for exempt consumer credit and lease transactions. Transactions at or below the thresholds are subject to the protections of the regulations.

The adjustments to the thresholds reflect the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers as of June 1, 2013 and will take effect on January 1, 2014. These increases are consistent with amendments to the Truth in Lending and Consumer Leasing laws made by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Based on the adjustments announced today, the protections of the Truth in Lending and Consumer Leasing acts generally will apply to consumer credit transactions and consumer leases of $53,500 or less in 2014–an increase of $500 from 2013. However, private education loans and loans secured by real property (such as mortgages) are subject to the Truth in Lending Act regardless of the amount of the loan.

Although the Dodd-Frank Act generally transferred rulemaking authority under the Truth in Lending Act and the Consumer Leasing Act to the CFPB, the Federal Reserve Board retains authority to issue rules for certain motor vehicle dealers. Therefore, the agencies are issuing these adjustments jointly.

The attached notices will be published shortly in the Federal Register.

Regulation M (28 KB PDF)

Regulation Z (29 KB PDF)

Board Votes
 

Agencies release regulatory capital estimation tool for community banks

Board of Governors of the Federal Reserve SystemFederal Deposit Insurance CorporationOffice of the Comptroller of the Currency

For immediate release
November 19, 2013

Agencies Release a Regulatory Capital Estimation Tool for Community Banks
The fede…

Federal Reserve Board announces it has not objected to a re-submitted capital plan from Ally Financial Inc.

Release Date: November 15, 2013
For immediate release
The Federal Reserve on Friday announced that it has not objected to a re-submitted capital plan from Ally Financial Inc. Earlier this year, the Federal Reserve objected to Ally’s 2013 capital plan …

Agencies release final revisions to interagency questions and answers regarding community reinvestment

Federal Deposit Insurance Corporation
Board of Governors of the Federal Reserve System
Office of the Comptroller of the Currency
 

Agencies Release Final Revisions to Interagency Questions and Answers Regarding Community Reinvestment

The federal bank regulatory agencies with responsibility for Community Reinvestment Act (CRA) rulemaking today published final revisions to “Interagency Questions and Answers Regarding Community Reinvestment.” The Questions and Answers document provides additional guidance to financial institutions and the public on the agencies’ CRA regulations.

The revisions focus primarily on community development. Community development activities are considered as part of the CRA performance tests for large institutions, intermediate small institutions, and wholesale and limited purpose institutions. Small institutions may use community development activity to receive consideration toward an outstanding CRA rating. Among other things, the amendments:

• Clarify how the agencies consider community development activities that benefit a broader statewide or regional area that includes an institution’s assessment area.
• Provide guidance related to CRA consideration of, and documentation associated with, investments in nationwide funds.
• Clarify the consideration of certain community development services, such as service on a community development organization’s Board of Directors.
• Address the treatment of loans or investments to organizations that, in turn, invest those funds and use only a portion of the income from their investment to support a community development purpose.
• Clarify that community development lending performance is always a factor considered in a large institution’s lending test rating.

The final revisions are being issued by the Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency. The attached notice will be published shortly in the Federal Register. The agencies also are revising the relevant interagency CRA examination procedures, which will be released soon.

For more information on the CRA, including these Questions and Answers and the agencies’ CRA regulations, visit the Federal Financial Institutions Examination Council website at: http://www.ffiec.gov/cra.

Attachment (PDF)

Board Votes

Federal Reserve Board issues final policy statement for developing scenarios for future capital planning and stress testing exercises

Release Date: November 7, 2013
For immediate release
The Federal Reserve Board on Thursday issued a final policy statement describing the processes it will use to develop scenarios for future capital planning and stress testing exercises.
The policy s…

Federal Reserve Board releases supervisory scenarios and instructions for 2014 capital planning and stress testing

Release Date: November 1, 2013

For immediate release

The Federal Reserve Board on Friday issued the supervisory scenarios that will be used in the 2014 capital planning and stress testing program, as well as instructions to firms with timelines for submissions.  The program includes the Comprehensive Capital Analysis and Review (CCAR) of 30 bank holding companies with $50 billion or more of total consolidated assets. 

The aim of the annual reviews is to ensure that large financial institutions have robust, forward-looking capital planning processes that account for their unique risks, and to help ensure that they have sufficient capital to continue operations throughout times of economic and financial stress.  Capital is important to banking organizations, the financial system, and the economy broadly because it acts as a cushion to absorb losses and helps to ensure that losses are borne by shareholders, not taxpayers.

“The capital planning and stress testing program has been an integral component of the Federal Reserve’s broader supervisory and regulatory efforts to make the financial system stronger and safer since the financial crisis,” Gov. Daniel K. Tarullo said. 

Financial institutions submitting capital plans will be evaluated to ensure they have sufficient capital to continue to lend to households and businesses even under stressful conditions.  In addition, they must incorporate the transition requirements from the recently finalized Basel III capital standards into their stress tests and capital plans.

CCAR includes an evaluation of institutions’ plans to make capital distributions, such as dividend payments or stock repurchases.  The Federal Reserve will approve capital distributions only for institutions whose capital plans it approves and who demonstrate sufficient financial strength even after making the planned capital distributions to continue operating as financial intermediaries under stressful economic and financial conditions.

Eighteen bank holding companies will be participating in the CCAR for the fourth consecutive year in 2014.  An additional 12 financial institutions will be participating in CCAR for the first time during this stress testing cycle. 

The capital planning and stress testing program led by the Federal Reserve since the financial crisis has contributed to a significant increase in capital at the largest banking organizations in the United States.  The 18 bank holding companies have increased their aggregate tier 1 common capital to $836 billion in the second quarter of 2013, the period of most recent data, from $392 billion in the first quarter of 2009.  The tier 1 common ratio for these firms, which compares high-quality capital to risk-weighted assets, has more than doubled to a weighted average of 11.1 percent from 5.3 percent.

All 30 of the companies in the CCAR in 2014 must submit their capital plans on or before January 6, 2014.

As in previous years, the Federal Reserve in March will release summary results, including supervisory projections of capital ratios, losses, and revenues under stress scenarios. For the first time in 2014, the Federal Reserve will publish the results of stress tests conducted under the supervisory adverse scenario.  As in prior years, results of stress tests under the severely adverse scenario will also be released.

The Federal Reserve will require institutions to use the supervisory scenarios in both the stress tests conducted as part of the CCAR and in the stress tests that are part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Some companies that are not part of CCAR, including state member bank subsidiaries of CCAR participants and some companies with between $10 billion and $50 billion in assets, also will use the supervisory scenarios for Dodd-Frank Act stress tests.

The baseline, adverse, and severely adverse scenarios include 28 variables, including economic activity, unemployment, exchange rates, prices, incomes, and interest rates.  To accompany the scenarios, the Federal Reserve is publishing a narrative that describes the general conditions surrounding the scenarios, changes to the scenarios from previous years, and a general description of other variables that firms may use in their stress tests. 

As in prior years, six bank holding companies with large trading operations will be required to factor in a global market shock as part of their scenarios.  The Federal Reserve will publish the components of the global market shock soon.  In addition, for the first time in 2014, eight bank holding companies with substantial trading or custodial operations will be required to incorporate a counterparty default scenario.
 

2014 Supervisory Scenarios for Annual Stress Tests Required under the Dodd-Frank Act Stress Testing Rules and the Capital Plan Rule (PDF)

Comprehensive Capital Analysis and Review 2014: Summary Instructions and Guidance (PDF)

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