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Supervisory Insights

Overview of Selected Regulations and Supervisory Guidance

This section provides an overview of recently released regulations and supervisory guidance, arranged in reverse chronological order. Press Release (PR) and Financial Institution Letter (FIL) designations are included so the reader can obtain more information.

ACRONYMS and DEFINITIONS
FDIC
Federal Deposit Insurance Corporation
FRB
Federal Reserve Bank
FFEIC
Federal Financial Institutions Examination Council
OCC
Office of the Comptroller of the Currency
OTS
Office of Thrift Supervision
NCUA
National Credit Union Administration
Banking agencies
FDIC, FRB, and OCC
Federal bank and thrift regulatory agencies
FDIC, FRB, OCC, and OTS
Federal financial institution regulatory agencies
FDIC, FRB, OCC, OTS, and NCUA


Subject
Summary
FDIC Adopts Policy Statement on Prudent Commercial Real Estate Loan Workouts (PR-194-2009, October 30, 2009; FIL-61-2009, October 30, 2009) The FDIC, in coordination with the other federal financial institution regulatory agencies and the FFIEC State Liaison Committee, adopts a Policy Statement supporting prudent commercial real estate workouts. This Statement replaces the Interagency Policy Statement on the Review and Classification of Commercial Real Estate Loans promulgated in November 1991. See http://www.fdic.gov/news/news/financial/2009/fil09061.html.
FDIC Seeks Comment on Proposed Rulemaking Regarding Timing of Payment of Quarterly Risk-Based Prepaid Assessments (FIL-58-2009, September 30, 2009) The FDIC adopts a Notice of Proposed Rulemaking that would require insured depository institutions to prepay their quarterly risk-based assessments for fourth quarter 2009, and for all of 2010, 2011, and 2012, on December 30, 2009, along with each institution's risk-based deposit insurance assessment for third quarter 2009. Comments were due by October 28, 2009. See http://www.fdic.gov/news/news/financial/2009/fil09058.html.
Joint Agency Request for Comment on Proposed Correspondent Concentration Risks Guidance (FIL-55-2009, September 25, 2009) The federal financial institution regulatory agencies solicit comment on proposed guidance addressing supervisory matters relating to identifying, monitoring, managing, and performing appropriate due diligence of concentration risks of correspondent institutions. See http://www.fdic.gov/news/news/financial/2009/fil09055.html.
Joint Agency Statement on Results of 2009 Shared National Credits Review (PR-175-2009, September 24, 2009) The federal financial institution regulatory agencies announce that credit quality declined sharply for loan commitments of $20 million or more held by multiple federally supervised institutions, according to the 32nd annual review of Shared National Credits. See http://www.fdic.gov/news/news/press/2009/pr09175.html.
FDIC Announces Launch of Foreclosure Prevention Initiative (PR-171- 2009, September 16, 2009; FIL-54-2009, September 16, 2009) The FDIC launches an initiative to help consumers and the banking industry avoid unnecessary foreclosures and stop foreclosure "rescue" scams that promise false hope to consumers at risk of losing their homes. This initiative includes outreach, referral services, and an informational tool kit. See http://www.fdic.gov/news/news/financial/2009/fil09054.html.
FDIC Adopts Final Rule Concerning Temporary Increase of Deposit Insurance Coverage Amounts (FIL-53-2009, September 9, 2009) This FIL describes the FDIC's adoption of a final rule to reflect the extension of the temporary increase in the standard maximum deposit insurance amount to $250,000 through December 31, 2013. The final rule also addresses 2008 interim rules regarding revocable trust accounts and mortgage servicing accounts. See http://www.fdic.gov/news/news/financial/2009/fil09053.html.
FDIC Adopts Final Rule Regarding Elimination of Three Transfer Sublimit for Withdrawals from Savings Deposits (FIL-52-2009, September 9, 2009) This FIL describes the FDIC's adoption of a final rule eliminating the monthly three transfer sublimit for certain types of withdrawals from the savings deposits of FDIC-supervised institutions. Under the final rule, the overall six-transfer limit on preauthorized or automatic withdrawals will continue to exist. See http://www.fdic.gov/news/news/financial/2009/fil09052.html.
FDIC Seeks Comment on Proposed Rulemaking Regarding Alternatives for Effectively Concluding Debt Guarantee Program (PR-166-2009, September 9, 2009; FIL-51-2009, September 9, 2009) The FDIC adopts a Notice of Proposed Rulemaking (NPR) that reaffirms the expiration of the Debt Guarantee Program of the Temporary Liquidity Guarantee Program on October 31, 2009. Under the NPR, the FDIC solicits comments on whether a temporary emergency facility should be retained for six months after the expiration of the current program. Comments were due September 24, 2009. See http://www.fdic.gov/news/news/financial/2009/fil09051.html.
FDIC Announces Enhanced Supervisory Procedures for Newly Insured FDIC-Supervised Institutions (FIL-50- 2009, August 28, 2009) This FIL describes supervisory changes for state nonmember institutions insured for seven or fewer years (de novo period). The FDIC will now extend the de novo period from the current three-year period to seven years for examinations, capital, and other requirements. See http://www.fdic.gov/news/news/financial/2009/fil09050.html.
Joint Agency Request for Comment on Proposed Regulatory Capital Standards Related to Adoption of FASB No. 166 and FASB 167 (PR-151-2009, August 26, 2009; FIL-49-2009, August 27, 2009) The federal financial institution regulatory agencies solicit comment on a proposal to better align capital requirements with the actual risk of certain exposures and obtain public comment on the effect on regulatory capital that will result from the implementation of the Financial Accounting Standards Boards Statement of Financial Accounting Standards Nos. 166 and 167. Comments were due September 26, 2009. See http://www.fdic.gov/news/news/financial/2009/fil09049.html.
FDIC Adopts Final Rule Extending the Transaction Account Guarantee Program (FIL-48-2009, August 27, 2009) This FIL describes the FDICs adoption of a final rule extending the Transaction Account Guarantee portion of the Temporary Liquidity Guarantee Program for six months, through June 30, 2010. For institutions that elect to remain in the program, the fee will be raised and adjusted to reflect the institution's risk. See http://www.fdic.gov/news/news/financial/2009/fil09048.html.
FDIC Board Approves Final Statement of Policy on the Acquisition of Failed Depository Institutions (PR-152-2009, August 26, 2009) This Policy Statement provides guidance to investors interested in acquiring or investing in the deposit liabilities of banks or thrifts about the standards they will be expected to meet to qualify to bid on a failed institution. See http://www.fdic.gov/news/news/press/2009/pr09152.html.
FDIC Announces Nationwide Seminars for Bank Officers and Employees (FIL-46-2009, August 10, 2009) This FIL describes a series of six seminars for bank officers and employees that will provide guidance on how to calculate FDIC deposit insurance coverage for their customers. The seminars will be conducted between August 24 and December 9, 2009. See http://www.fdic.gov/news/news/financial/2009/fil09046.html.
Notice of Changes to Regulation Z Regarding Open-End Consumer Credit: Immediate and 90-day Changes (FIL- 44-2009, August 6, 2009) This Notice describes amendments to the Truth in Lending Act (Regulation Z) to establish fair and transparent practices for open-end credit plans. The FDIC expects the institutions it supervises to take appropriate steps to ensure compliance with these new requirements. See http://www.fdic.gov/news/news/financial/2009/fil09044.html.
Statement on Allowance for Loan and Lease Losses; Residential Mortgages Secured by Junior Liens (FIL-43-2009, August 3, 2009) This FIL reiterates the need for financial institutions to consider all factors that affect collectability of loans secured by junior liens on one- to four-family residential properties in areas where the value of such properties has declined. See http://www.fdic.gov/news/news/financial/2009/fil09043.html.
FDIC Announces Testing of Funding Mechanism for Legacy Loan Program (PR-131-2009, July 31, 2009) This release announces that the FDIC will continue to develop the Legacy Loan Program (LLP) by testing the LLP's funding mechanism through the sale of receivership assets. See http://www.fdic.gov/news/news/press/2009/pr09131.html.
Joint Agency Release of Revised Questions and Answers Regarding Flood Insurance (PR-127-2009, July 21, 2009; FIL-42-2009, July 21, 2009) The federal financial institution regulatory agencies and the Farm Credit System are issuing five new frequently asked questions to help financial institutions meet compliance responsibilities under the federal flood insurance laws and regulations. See http://www.fdic.gov/news/news/financial/2009/fil09042.html.
Joint Statement by Secretary of the Treasury Timothy F. Geithner, Chairman of the Board of Governors of the Federal Reserve System Ben S. Bernanke, and Chairman of the FDIC Sheila Bair (PR-121-2009, July 8, 2009) On March 29, 2009, the Treasury Department, the FRB, and the FDIC announced the designs of the Legacy Loan and Legacy Securities Programs. This Statement describes the continuing progress on implementing these programs, including Treasury's launch of the Legacy Securities Public-Private Investment Program. See http://www.fdic.gov/news/news/press/2009/pr09121.html.
Interagency Statement on California Registered Warrants (FIL-41-2009, July 8, 2009) This Statement issued by the federal financial institution regulatory agencies provides guidance for financial institutions regarding the regulatory capital treatment for registered warrants issued by the state of California as payment for certain obligations. See http://www.fdic.gov/news/news/financial/2009/fil09041.html.
FFIEC Statement on Regulatory Conversions (FIL-40-2009, July 7, 2009) This FFIEC Statement reaffirms that charter conversions or changes in the primary federal regulator should be conducted only for legitimate business and strategic reasons. Institutions that intend to change their charter or banking supervisor will continue to seek approval through an application process with the prospective chartering authority and primary federal regulator, in consultation with state authorities. See http://www.fdic.gov/news/news/financial/2009/fil09040.html.
Frequently Asked Questions on Sweep Account Disclosure Requirements (FIL-39-2009, July 6, 2009) This FIL addresses questions regarding the establishment of practices for determining deposit and other account balances at a failed depository institution and disclosure requirements for certain sweep accounts. See http://www.fdic.gov/news/news/financial/2009/fil09039.html.
FDIC Board Approves Proposed Policy Statement on Qualifications for Failed Bank Acquisitions (PR-112-2009, July 2, 2009) This proposed Policy Statement would provide guidance to private capital investors interested in acquiring or investing in the assets and liabilities of failed banks or thrifts regarding the terms and conditions of potential acquisitions or investments. See http://www.fdic.gov/news/news/press/2009/pr09112.html.
Joint Agency Release Publishing Final Rules and Guidelines to Promote Accurate Reports About Consumers (PR-111-2009, July 2, 2009) The federal financial regulatory agencies and the Federal Trade Commission published final rules and guidelines to promote the accuracy and integrity of information furnished to credit bureaus and other credit-reporting agencies. See http://www.fdic.gov/news/news/press/2009/pr09111.html.
Joint Agency Statement Seeking Comment on Proposed Interagency Guidance on Funding And Liquidity Risk Management (PR-107-2009, June 30, 2009; FIL-37-2009, June 30, 2009) The federal financial institution regulatory agencies issue this proposed guidance to communicate consistent expectations on sound practices for the management of funding and liquidity risks and strengthening liquidity risk management practices. The proposed guidance, when finalized, will apply to all domestic institutions, including banks, thrifts, and credit unions. Comments were due August 29, 2009. See http://www.fdic.gov/news/news/financial/2009/fil09037.html.
Joint Agency Release of Interim Final Rule for Mortgage Loans Modified Under the "Making Home Affordable" Program (PR-100-209, June 26, 2009; FIL 36-2009, June 26, 2009) In March 2009, the Treasury announced guidelines under the Making Home Affordable Program (MHAP) to promote sustainable loan modifications for homeowners at risk of losing their homes to foreclosure. The interim final rule would provide a common interagency capital treatment for loans modified under the MHAP. See http://www.fdic.gov/news/news/financial/2009/fil09036.html.
Joint Agency Request for Comment on Proposed Revisions to CRA Regulations (PR-98-2009, June 24, 2009; FIL- 35-2009, June 24, 2009) The federal bank and thrift regulatory agencies issued proposed revisions to regulations implementing the Community Reinvestment Act to require agencies to consider low-cost education loans provided to low-income borrowers when assessing a financial institution's record of meeting community credit needs. Comments were due by July 24, 2009. See http://www.fdic.gov/news/news/financial/2009/fil09035.html.
Notice of Proposed Extension of the Transaction Account Guarantee Program (FIL-34-2009, June 23, 2009) This FIL solicits comment on all aspects of proposed rulemaking addressing two alternatives for the conclusion of the Transaction Account Guarantee program. Comments were due July 23, 2009. See http://www.fdic.gov/news/news/financial/2009/fil09034.html.
Release of Final Amendments to Part 363: Annual Audit and Reporting Requirements (FIL-33-2009, June 23, 2009) This release describes amendments to Part 363 of the FDIC Rules and Regulations, which sets forth annual independent audit and reporting requirements for insured institutions with at least $500 million in total assets. See http://www.fdic.gov/news/news/financial/2009/fil09033.html.
FDIC Statement on Third-Party Referrals Promising Above-Market Rates on Certificates of Deposit (FIL-32-2009, June 19, 2009) This Statement alerts FDIC-insured institutions to be aware of any unsolicited deposits through third-party referrals. Certain insurance companies and other financial firms (third parties) are advertising above-market rates to attract customers while misrepresenting the presence of FDIC insurance coverage. See http://www.fdic.gov/news/news/financial/2009/fil09032.html.
Joint Agency Release of Frequently Asked Questions on Identity Theft Red Flags, Address Discrepancies, and Change of Address Regulations (PR-88-2009, June 11, 2009; FIL-30-2009, June 11, 2009) The federal financial institution regulatory agencies and the Federal Trade Commission are issuing frequently asked questions to help financial institutions, creditors, users of consumer reports, and issuers of credit cards and debit cards comply with federal regulations on identity theft and discrepancies in change of address. See http://www.fdic.gov/news/news/financial/2009/fil09030.html.
FDIC Statement on the Status of the Legacy Loan Program (PR-84-2009, June 3, 2009) The FDIC formally announces that development of the Legacy Loan Program will continue, but that a previously planned pilot sale of assets by open banks will be postponed. See http://www.fdic.gov/news/news/press/2009/pr09084.html.
Joint Notice of Proposed Rulemaking on Secure and Fair Enforcement for the Mortgage Licensing Act of 2008 (SAFE Act) (FIL-28-2009, June 3, 2009) The federal financial institution regulatory agencies and the Farm Credit Administration seek comment on the proposed rule regarding the SAFE Act designed to improve accountability and tracking of mortgage loan originators, enhance consumer protection, and reduce fraud. Comments were due July 3, 2009. See http://www.fdic.gov/news/news/financial/2009/fil09028.html.
Joint Agency Release on Proposed Rule Implementing SAFE Act Mortgage Loan Originator Registration Requirements (PR-83-2009, June 1, 2009) This proposed rule would establish the registration requirements for mortgage loan originators employed by the agency-related institutions, including national and state banks, savings associations, credit unions, Farm Credit System institutions, and certain subsidiaries. The proposed rule also sets forth certain requirements for these institutions, including the adoption of policies and procedures to ensure compliance with the SAFE Act. Comments were due July 1, 2009. See http://www.fdic.gov/news/news/press/2009/pr09083.html.
Regulation Z (Truth in Lending); Early Disclosure Requirements (FIL-26-2009, June 1, 2009) Revisions to Regulation Z closed-end mortgage early disclosure requirements were superseded by the enactment of the Mortgage Disclosure Improvement Act (MDIA). As a result, the Federal Reserve has revised Regulation Z to incorporate the MDIA amendments. See http://www.fdic.gov/news/news/financial/2009/fil09026.html.
FDIC Tightens and Clarifies Interest Rate Restrictions on Institutions That Are Less Than Well Capitalized (PR-82-2009, May 29, 2009; FIL-25-2009, May 29, 2009) This release describes a final rule changing the way the FDIC administers its statutory restrictions on the deposit interest rates paid by banks that are less than well capitalized. The new rule is designed to eliminate any subjectivity in the establishment of maximum deposit rates. See http://www.fdic.gov/news/news/financial/2009/fil09025.html.
Consideration of the Special Assessment When Analyzing and Rating Financial Institutions (FIL-24-2009, May 22, 2009) The FDIC issues this guidance to alert insured financial institutions that the special assessment (as described in FIL-23-2009) is not expected to affect the supervisory component or composite ratings that FDIC examiners assign to institutions. See http://www.fdic.gov/news/news/financial/2009/fil09024.html.
FDIC Adopts Final Rule Imposing a Special Assessment on Insured Depository Institutions (PR-74-2009, May 22, 2009; FIL-23-2009, May 22, 2009) The FDIC Board voted to levy a special assessment on insured institutions as part of the agency's efforts to rebuild the Deposit Insurance Fund and maintain public confidence in the banking system. The special assessment of 5 basis points on each institution's assets, minus its Tier 1 capital as of June 30, 2009, will be collected September 30, 2009. See http://www.fdic.gov/news/news/financial/2009/fil09023.html.
FDIC Insurance Coverage: Extension of Temporary Increase in Standard Maximum Deposit Insurance Amount (FIL-22-2009, May 22, 2009) On May 20, 2009, President Obama signed the Helping Families Save Their Homes Act, which extended the temporary increase in the standard maximum deposit insurance amount to $250,000 per depositor through December 31, 2013. See http://www.fdic.gov/news/news/financial/2009/fil09022.html.
Participants in Debt Guarantee Component of FDICs Temporary Liquidity Guarantee Program: Inclusion of Minority- and Women-Owned Businesses for Contracting and Underwriting Needs (FIL-21-2009, May 7, 2009) The FDIC encourages participants in the debt guarantee component of the FDIC's Temporary Liquidity Guarantee Program to consider using qualified minority- and women-owned businesses to support their contracting and underwriting needs. See http://www.fdic.gov/news/news/financial/2009/fil09021.html.
FDIC Announces Expansion of Ombudsmans Office to Assist Customers with Loans at Failed Banks (PR-65- 2009, May 5, 2009) The FDIC announces the creation of a new unit within the Office of the Ombudsman to assist customers with loans at failed banks. The unit will complement the FDICs efforts to address questions or concerns of borrowers of failed banks. See http://www.fdic.gov/news/news/press/2009/pr09065.html.
Statement on Risk Management of Investments in Structured Credit Products (FIL-20-2009, April 30, 2009) This FIL reiterates and clarifies existing supervisory guidance on the purchase and holding of complex structured credit products and focuses on supervisory concerns related to these securities. See http://www.fdic.gov/news/news/financial/2009/fil09020.html.
Statement on Classification Treatment for High Loan-to-Value (LTV) Residential Refinance Loans (FIL-19-2009, April 30, 2009) This Statement establishes that retail loan classifications should be based on the borrower's payment performance, not the value of the collateral, which can rise and fall as market conditions change. See http://www.fdic.gov/news/news/financial/2009/fil09019.html.

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Last Updated 01/05/2010 SupervisoryJournal@fdic.gov