The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL RESERVE SYSTEM
No. 10931
[ Circular
March 20,1997
BOARD OF GOVERNORS’ SEMIANNUAL
REGULATORY FLEXIBILITY AGENDA
April 1,1997 - October 1,1997
The Semiannual Regulatory Flexibility Agenda provides information
on those regulatory matters that the Board now has under consideration or
anticipates considering over the next six months. It is divided into three
parts: (1) regulatory matters that the Board may consider for public com
ment during the next six months; (2) matters that have been proposed and
are under consideration; and (3) regulatory matters that the Board has
completed or is not expected to consider further.
The Agenda is published twice a year in the F e d e ra l R egister.
Comments regarding any of the Agenda items should be submitted
directly to the Board of Governors.
Public Information Department
FEDERAL RESERVE BANK OF NEW YORK
FEDERAL RESERVE SYSTEM
12 CFR Chap. II
Notice of Semiannual Regulatory Flexibility Agenda
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
Semiannual regulatory agenda.
SUMMARY:
The Board is issuing this Agenda under the Regulatory
Flexibility Act and the Board’s Statement of Policy Regarding
Expanded Rulemaking Procedures.
The Board anticipates having
under consideration regulatory matters as indicated below during
the period April 1 through October 1, 1997.
The next Semiannual
Agenda will be published in October 1997.
DATES:
Comments about the form or content of the Agenda may be
submitted any time during the next six months.
ADDRESSES:
Comments should be addressed to William W. Wiles,
Secretary of the Board, Board of Governors of the Federal Reserve
System, Washington, DC
20551.
FOR FURTHER INFORMATION CONTACT:
A staff contact for each item
is indicated with the regulatory description below.
SUPPLEMENTARY INFORMATION:
The Board is publishing its April
1997 Agenda as part of the April 1997 Unified Agenda of Federal
Regulatory and Deregulatory Actions, which is coordinated by the
Office of Management and Budget under Executive Order 12866.
Participation by the Board in the Unified Agenda is on a
voluntary basis.
The Board's Agenda is divided into three sections.
The
first, Proposed Rule Stage, reports on matters the Board may
consider for public comment during the next six .months.
Th<§
second section, Final Rule Stage, reports on matters that have
been proposed and are under Board consideration.
A third
section, Completed Actions, reports on regulatory matters the
Board has completed or is not expected to consider further.
Matters begun and completed between issues of the Agenda have not
been included.
A dot
(
4 ) preceding an entry indicates a new matter that
was not a part of the Board's previous Agenda and which the Board
has not completed.
(signed) Barbara R. Lowrey
Barbara R. Lowrey,
Associate Secretary of the Board.
- 2 -
Section 1
Proposed Rule Stage
-3-
TITLE:
Regulation: D -- Reserve Requirements of Depository Institutions;
and Regulation: I — Issue and Cancellation of Capital Stock of
Federal Reserve Banks
LEGAL AUTHORITY:
12
12
12
12
USC
USC
USC
USC
222
248 (i)
321
461 (c)
CFR CITATION:
12 CFR 204
12 CFR 209
ABSTRACT:
Within the next two months it is expected that the Board will
issue for public comment proposed amendments to define where a
depository institution is located for purposes of Federal Reserve
membership (Regulation I) and reserve account maintenance
(Regulation D. The proposed amendments are intended to facilitate
centralization of Federal Reserve accounts by banks with
interstate branches and banks that are part of a multistate
holding company family. The amendments would not have a
significant economic impact on a substantial number of small
entities.
TIMETABLE:
ACTION
Board is expected to request comment by
DATE
04/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Stephanie Martin
Senior Attorney
Legal Division
202 452-3198
FR CITE
2.
TITLE:
Regulation: H -- Membership of State Banking Institutions in the
Federal Reserve System; and Regulation: K -- International
Banking Operations
LEGAL AUTHORITY:
12 USC 1835a
CFR CITATION:
12 CFR 208
12 CFR 211
ABSTRACT:
Section 109 of the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 requires the federal banking agencies to
prescribe uniform regulations to prohibit an out-of-state bank
from using the authority provided by the act to engage in
interstate branching primarily for the purpose of deposit
production. Such regulations must also include guidelines to
ensure that interstate branches are reasonably helping to meet
the credit needs of the communities that the branches serve.
Within the next two months the Board is expected to issue for
public comment proposed amendments to Regulations H and K to
implement section 109.
It is not anticipated that regulations adopted under section 109
would have a significant economic impact on a substantial number
of small entities subject to regulation by the Board, as any
rules adopted pursuant to section 109 would apply only to banks
with interstate branches.
TIMETABLE:
ACTION
DATE
Board may request comment by
04/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Lawranne Stewart
Senior Attorney
Legal Division
202 452-3513
-5-
FR CITE
TITLE:
Regulation: H -- Membership of State Banking Institutions in the
Federal Reserve System; and Regulation: Y — Bank Holding
Companies and Change in Bank Control
LEGAL AUTHORITY:
12 USC 1831m
CFR CITATION:
12 CFR 208
12 CFR 225
ABSTRACT:
During 1992, the Board's staff consulted with the other federal
banking agencies regarding the implementation of section 112, the
bank auditing requirements, of the Federal Deposit Insurance
Corporation Improvement Act of 1991. The section includes
requirements for insured commercial banks to receive audits of
their annual reports by independent public accountants,
requirements for banks and their auditors to report certain
information to the Board, and requirements for independent audit
committees for banks. In some cases, these requirements can be
satisfied by comparable arrangements at the bank holding company
level. The Act generally exempts insured depository institutions
from these requirements when their total assets are less than
$150 million, unless a higher threshold is chosen by the Federal
Deposit Insurance Corporation (FDIC).
The FDIC, the agency with primary responsibility for implementing
this mandate through regulations, finalized its regulation in May
1993, which applied to all FDIC-insured banks and thrifts. The
FDIC's regulation applied these requirements to depository
institutions with total assets of $500 million or more.
Subsequently in February 1996, the FDIC approved amendments to
its rules implementing section 112 that were largely required by
the Riegle Community Development and Regulatory Improvement Act
of 1994. These amendments expand opportunities for holding
companies to file a single report covering multiple subsidiary
banking organizations, conform the rule's references to the
Federal Reserve's Regulation 0, and make other technical
revisions.
The Board has joint rulemaking authority with the other banking
agencies regarding the enforcement provisions of section 112. The
Board and the other agencies will issue a notice of proposed
rulemaking for public comment when interagency agreement is
reached.
TIMETABLE:
ACTION
DATE
Board may consider amendments to
Regulations H and Y by
10/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
-6-
FR CITE
TITLE:
Regulation: H -- Membership of State Banking Institutions in the
Federal Reserve System; and Regulation: Y -- Bank Holding
Companies and Change in Bank Control
AGENCY CONTACT:
Michael Starr
Senior Attorney
Division of Banking Supervision and Regulation
202 452-5874
RIN: 7100-AB39
-7-
TITLE:
Regulation: H -- Membership of State Banking Institutions in the
Federal Reserve System; and Regulation: Y -- Bank Holding
Companies and Change in Bank Control
LEGAL AUTHORITY:
12 USC 1831n
12 USC 1833d
CFR CITATION:
12 CFR 208
12 CFR 225
ABSTRACT:
During 1992 and 1993, the Board's staff consulted with the other
federal banking agencies regarding the implementation of section
121, the bank accounting requirements, of the Federal Deposit
Insurance Corporation Improvement Act of 1991 (FDICIA). These
requirements include the implementation of disclosures of the
fair-market value of assets, liabilities, and certain projects,
which may result in the revision of reporting requirements for
banks and bank holding companies. The accounting provisions of
the Act do not include exemptions for small institutions. Thus,
any changes to regulations and reporting requirements would
likely affect smaller state member banks.
The Federal Financial Institutions Examination Council (FFIEC)
requested public comment on proposed reporting requirements, and
the comment period expired on June 14, 1993. Furthermore, the
FFIEC proposed on March 9, 1994, new Call Report items for
derivative instruments, including new information on their market
values. The comment period for this proposal expired on May 9,
1994, and the FFIEC included new information about market values
of derivative instruments in its Call Report requirements for
March 1995. Market value information about on- and
off-balance-sheet financial instruments is also reported in
banks' annual financial statements filed with the Board and the
other federal banking agencies pursuant to FDICIA section 112.
Following final action by the FFIEC, the Board may consider
requesting public comment by year-end on changes to its
regulations in order to implement certain aspects of section 121.
TIMETABLE:
ACTION
DATE
Board may consider amendments to
Regulations H and Y by
12/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACT:
Gerald A. Edwards, Jr.
Assistant Director
Division of Banking Supervision and Regulation
202 452-2741
RIN: 7100-AB41
-8-
FR CITE
5.
TITLE:
Regulation: H -- Membership of State Banking Institutions in the
Federal Reserve System; and Regulation: Y -- Bank Holding
Companies and Change in Bank Control (Docket Number: R-0835)
LEGAL AUTHORITY:
12
12
12
12
12
12
12
12
12
12
12
12
12
12
12
u se
u se
u se
u se
u se
u se
u se
u se
u se
u se
u se
u se
u se
u se
u se
36
248(a)
248 (c)
321-338
37 Id
461
481-486
601
611
1814
1817 (j) (13
1818
1823 (j)
1828(o)
1831o
CFR CITATION:
12 CFR 208 app A
12 CFR 225 app A
ABSTRACT:
In May 1994, the Board issued for public comment two proposals on
the capital treatment of recourse arrangements and direct credit
substitutes. The first proposal (1) formally defines recourse and
direct credit substitutes, (2) reduces the risk-based capital
charge for low-level recourse arrangements to the maximum amount
of possible loss under the recourse obligation up to the
effective capital charge, and (3) requires the same risk-based
capital charge for first-loss direct credit substitutes as is
currently applied to recourse transactions (59 FR 27115, May 25,
1994) .
Subsequent to the issuance of this proposal, the Congress
mandated, under section 350 of the Riegle Community Development
and Regulatory Improvement Act of 1994, that the Board issue
regulations limiting, as of March 22, 1995, the amount of riskbased capital an insured depository institution is required to
hold for assets transferred with recourse to the maximum amount
of recourse for which the institution is contractually liable.
The portion of the Board's proposal dealing with low-level
recourse transactions satisfies the minimum requirements of
section 350, and, accordingly, in February 1995, the Board
adopted that portion of the proposal (60 FR 8177, February 13,
1995) .
The second proposal, an advance notice of proposed rulemaking,
sought public comment on an approach to assessing risk-based
capital on banking organizations' risk exposures associated with
certain asset securitizations. Under this approach, the capital
charge would be based upon the relative risk of loss. The Board
will continue to consider the advanced notice of proposed
rulemaking, as well as the outstanding issues addressed in the
-9-
TITLE:
Regulation: H — Membership of State Banking Institutions in the
Federal Reserve System; and Regulation: Y — Bank Holding
Companies and Change in Bank Control (Docket Number: R-0835)
ABSTRACT CONT:
first proposal and is expected to take further action within the
next two months. Small entities would be affected by the final
rule and the two proposals only to the extent that they engage in
extending recourse arrangements and direct credit substitutes or
purchasing asset-backed securities; it is not expected that the
proposals will have a significant economic impact.
TIMETABLE:
ACTION
Board requested comment
Board adopted one aspect of the proposal
Further Board action within the next
two months
DATE
FR CITE
05/25/94
02/13/95
04/00/97
59 FR 27115
60 FR 8177
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Thomas R. Boemio
Supervisory Financial Analyst
Division of Banking Supervision and Regulation
202 452-2982
RIN: 7100-AB77
- 1 0 -
6.
TITLE:
Regulation: H -- Membership of State Banking Institutions in the
Federal Reserve System; and Regulation: Y -- Bank Holding
Companies and Change in Bank Control
LEGAL AUTHORITY:
12
12
12
12
12
12
12
12
12
12
12
12
12
12
12
u se
u se
u se
u se
u se
u se
u se
u se
u se
u se
u se
u se
u se
u se
u se
36
248 (a)
248(c)
321 to 338a
371d
461
481 to 486
601
611
1814
1816
1818
1823 (j)
1828(o)
1831o
CFR CITATION:
12
12
12
12
CFR
CFR
CFR
CFR
208
208
225
225
app
app
app
app
A
B
A
D
ABSTRACT:
Within the next two months it is expected that the Board will
issue for public comment proposals to revise the Federal
Reserve's risk-based capital treatment for junior liens on 1- to
4-family residential properties and for investments in mutual
funds. The proposals also simplify the Federal Reserve's leverage
capital guidelines for banks and make the leverage capital
guidelines for bank holding companies consistent with a recently
approved definition of a well-capitalized bank holding company.
The proposals are being developed on an interagency basis as part
of the efforts under Section 303 of the Riegle Community
Development and Regulatory Improvement Act of 1994 to make
interagency guidelines uniform. After the other agencies have
completed their approval processes, the proposals will be issued
for public comment. It is not anticipated that the proposals will
have a significant economic impact on a substantial number of
small entities subject to the Board's regulation.
TIMETABLE:
ACTION
DATE
Board is expected to request comment by
04/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Barbara Bouchard
Supervisory Financial Analyst
Division of Banking Supervision and Regulation
202 452-3072
- 1 1 -
FR CITE
7.
TITLE:
Regulation: Z -- Truth in Lending (Docket Number: R-0954)
LEGAL AUTHORITY:
15 USC 1601
CFR CITATION:
12 CFR 226
ABSTRACT:
The Economic Growth and Regulatory Paperwork Reduction Act of
1996 (Title II of the Omnibus Consolidated Appropriations Act,
1997) (the 1996 Act) requires the Board and the Department of
Housing and Urban Development (HUD) to simplify and improve the
disclosures given in a mortgage transaction subject to the Truth
in Lending Act and the Real Estate Settlement Procedures Act. In
December 1996, the Board issued jointly with HUD an Advanced
Notice of Proposed Rulemaking soliciting comment on how to
simplify these disclosures (61 FR 69055, December 31, 1996). The
1996 Act requires that any proposed regulatory changes be
published by March 31, 1997. If legislation is necessary to
streamline the requirements of the two statutes, the Board and
HUD are required to submit legislative recommendations to the
Congress.
Following review of the public comments, the Board is expected to
take further action within the next two months. The proposed
rulemaking is not expected to have a significant economic impact
on small entities.
TIMETABLE:
ACTION
Board requested comment
Further Board action by
DATE
FR CITE
12/31/96
04/00/97
61 FR 69055
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Sheilah Goodman
Staff Attorney
Division of Consumer and Community Affairs
202 452-3667
- 1 2 -
8.
TITLE:
Regulation: DD -- Truth in Savings
LEGAL AUTHORITY:
12 USC 4301 et seq
CFR CITATION:
12 CFR 230
ABSTRACT:
Sections 261 to 275 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 require depository institutions to
provide a schedule of terms, rates, and fees for deposit accounts
offered by the institution. The law also sets forth rules for
advertisements for deposit accounts.
In September 1996, the Congress amended the Truth in Savings Act
as a part of the Economic Growth and Regulatory Paperwork
Reduction Act of 1996. The amendments repeal the definition of
"indoor lobby sign, " eliminate any disclosure requirements for
nonrenewing time accounts with terms less than 30 days, and
exempt certain credit unions from coverage. Within the next two
months the Board is expected to consider proposing for public
comment amendments to implement the statutory changes. It is not
expected that there will be a significant economic impact on
small institutions.
TIMETABLE:
ACTION
DATE
Board is expected to request comment by
04/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Jane Ahrens
Senior Attorney
Division of Consumer and Community Affairs
202 452-3667
-13-
FR CITE
9.
TITLE:
Section 303 Regulatory Review
LEGAL AUTHORITY:
12 USC 4803 (a) (1)
CFR CITATION:
12 CFR ch II
ABSTRACT:
In response to the requirements of section 303 of the Riegle
Community Development and Regulatory Improvement Act of 1994, the
Board is reviewing its regulations for purposes of streamlining,
improving efficiency, reducing unnecessary costs, and removing
inconsistencies and outmoded/duplicative requirements. The Board
is also working jointly with the other banking agencies to make
uniform regulations and guidelines implementing common statutory
and supervisory policies. A regulatory review timetable was
published in the Federal Register in October 1995 (60 FR 53546,
October 16, 1995) . A progress report was sent to the Congress in
September 1996.
Within the next six months, it is expected that the Board will
seek public comment during the course of the reviews of the
following regulations/policy statements/other regulatory
guidance. Reviews already proposed for public comment appear
elsewhere in the Agenda.
Regulation B, Equal Credit Opportunity.
Regulation C, Home Mortgage Disclosure.
Regulation H, Membership of State Banking Institutions in the
Federal Reserve System.
Regulations H and Y, Appendices, Capital Adequacy Guidelines.
Regulation I, Issue and Cancellation of Capital Stock of
Federal Reserve Banks.
Regulation K, International Banking Operations (Overall
Comprehensive Review).
TIMETABLE:
ACTION
DATE
Board action expected during the next
six months
10/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Undetermined
AGENCY CONTACT:
Thomas A. Durkin
Regulatory Planning and Review Director
Office of the Secretary
202 452-3236
RIN: 7100-AC09
-14-
FR CITE
Section 2
Final Rule Stage
-15-
10.
TITLE:
Regulation: B -- Equal Credit Opportunity (Docket Number: R-0955)
LEGAL AUTHORITY:
15 USC 1691 to 1691f
CFR CITATION:
12 CFR 202
ABSTRACT:
On September 30, 1996, the President signed into law amendments
to the Equal Credit Opportunity Act (ECOA) as part of the
Economic Growth and Regulatory Paperwork Reduction Act of 1996
(1996 Act). Section 2302 of the 1996 Act creates a legal
privilege for information developed by creditors through
"self-tests" conducted to determine the level or effectiveness of
creditor compliance with the ECOA, provided that appropriate
corrective action is taken to address any possible violations
that may be discovered. Privileged information may not be
obtained by a government agency for use in an examination or
investigation relating to fair lending compliance or by a
government agency or credit applicant in any civil proceeding in
which a violation of the ECOA is alleged. The 1996 Act also
provides that a challenge to a creditor's claim of privilege may
be filed in any court or administrative law proceeding with
appropriate jurisdiction.
In January 1997, the Board issued for public comment regulations,
including a definition of what constitutes a "self-test" (62 FR
56, January 2, 1997). The proposed regulations would define a
"self-test" as any program, practice, or study that creates data
or factual information about the creditor's compliance with the
ECOA that is not available or derived from loan files or other
records related to credit transactions. This includes but is not
limited to the practice of using fictitious loan applicants
(testers).
Following review of the public comments, the Board is expected to
take action within the next two months. The proposal is not
expected to have a significant economic impact on small
institutions.
TIMETABLE:
ACTION
DATE
Board requested comment
Further Board action by
01/02/97
04/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
James A < Michaels
Senior Attorney
Division of Consumer and Community Affairs
202 452-3667
-16-
FR CITE
62 FR 56
11.
TITLE:
Regulation: C -- Home Mortgage Disclosure (Docket Number: R-0951)
LEGAL AUTHORITY:
12 USC 2801 to 2810
CFR CITATION:
12 CFR 203
ABSTRACT:
In December 1996, the Board approved issuing for public comment a
proposal to amend Regulation C to implement statutory changes to
the Home Mortgage Disclosure Act (61 FR 68168, December 27,
1996). The proposal ties the asset-size exemption threshold for
depository institutions to changes in the consumer price index,
modifies the disclosure requirements, and makes certain other
technical changes. In January 1997, the Board issued an interim
rule increasing the asset-size exemption threshold for depository
institutions based on the increases in the consumer price index
since 1975 (62 FR 3603, January 24, 1997). Institutions with
asset sizes below the threshold, which has been raised from $10
million to $28 million, are now exempt from 1997 data collection.
The rule also provides for future increases in that exemption
threshold if the consumer price index increases. Both the
proposal and the interim rule are the result of recent statutory
changes.
Following review of the public comments, the Board is expected to
take further action within the next two months on both the
proposal and the interim rule. The final rule is expected to
reduce burden on small depository institutions.
TIMETABLE:
ACTION
Board requested comment
Further Board action by
DATE
FR CITE
12/27/96
04/00/97
61 FR 68168
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Manley Williams
Staff Attorney
Division of Consumer and Community Affairs
202 736-5565
-17-
12.
TITLE:
Regulation: D -- Reserve Requirements of Depository Institutions
(Docket Numbers: R-0929 and R-0956)
LEGAL AUTHORITY:
12
12
12
12
12
12
12
USC
USC
USC
USC
USC
USC
USC
248 (a)
248(c)
371a
461
601
611
3105
CFR CITATION:
12 CFR 208
ABSTRACT:
In June 1996, as part of its regulatory review process mandated
by section 303 of the Riegle Community Development and Regulatory
Improvement Act of 1994, the Board approved issuing for public
comment a proposal to amend Regulation D in order to reduce
burden and simplify and update regulatory requirements (61 FR
30545, June 17, 1996). In general, the proposal would delete
transitional rules relating to the expansion of reserve
requirements to nonmember depository institutions, the
authorization of NOW accounts nationwide, and other matters that
no longer have a significant effect.
In December 1996, following review of the public comments, the
Board adopted the revisions substantially as proposed (61 FR
69020, December 31, 1996).
At the same time, the Board issued for public comment a proposed
rule that would revise and clarify the definition of "savings
deposit" consistent with comments received in connection with the
Board's June proposal and would make conforming changes to the
definition of "transaction account" (61 FR 96054, December 31,
1996). It is not expected that the proposal will have a
significant adverse impact upon a substantial number of small
entities.
Following review of the public comments, the Board is
expected to take further action by year-end.
TIMETABLE:
ACTION
Board requested comment
Board adopted June 1996 proposal
Board requested comment on additional
proposal
Further Board action by
DATE
FR CITE
06/17/96
12/31/96
12/31/96
61 FR 30545
61 FR 69020
61 FR 69054
12/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Rick Heyke
Staff Attorney
Legal Division
202 452-3688
RIN: 7100-AC11
-18-
13.
TITLE:
Regulation: E -- Electronic Fund Transfers (Docket Number:
R-0919)
LEGAL AUTHORITY:
15 USC 1693 et seq
CFR CITATION:
12 CFR 205
ABSTRACT:
In 1994, the Board issued a proposed comprehensive revision to
Regulation E. In the proposal, the Board requested comment on
whether Regulation E should apply to stored-value cards. In
response to comment, the Board in May 1996 published further
proposed amendments to Regulation E imposing modified Regulation
E requirements on stored-value products in systems that track
individual transactions, cards, or consumers; providing an
exemption for cards on which a maximum value of $100 can be
stored; and providing that other stored-value cards are not
covered by Regulation E (61 FR 19696, May 2, 1996).
The Economic Growth and Regulatory Paperwork Reduction Act of
1996 requires the Board to conduct a study of stored-value
products--evaluating the impact of Regulation E on the cost,
development, and operation of such products— and to submit a
report to the Congress by March 30, 1997. The Act also prohibits
the Board from finalizing the proposed amendments relating to
stored-value products until three months after the report is
submitted to the Congress or nine months after enactment of the
Act, whichever is later.
Also in response to comment on the 1994 proposed revision, the
Board in its May 1996 proposal published further proposed
amendments that would permit electronic communications to
substitute generally for oral or written disclosures,
documentation, and notices required under Regulation E.
Finally, in response to other comments, the Board in its May 1996
proposal published further proposed amendments that would extend
the error-resolution time limits for new accounts.
The proposals are part of the Board's overall review of its
regulations as required by section 303 of the Riegle Community
Development and Regulatory Improvement Act of 1994. It is not
expected that the proposals would have a significant economic
impact on small institutions. Following review of the public
comments, the Board is expected to take further action on the
proposed amendments relating to electronic communications and
error resolution time limits within the next two months and on
the proposed amendments relating to stored-value cards within the
next five months.
TIMETABLE:
ACTION
Board requested comment
Further Board action by
DATE
FR CITE
05/02/96
04/00/97
61 FR 19696
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
-19-
TITLE:
Regulation: E —
R-0919)
Electronic Fund Transfers (Docket Number:
AGENCY CONTACT:
John C. Wood
Senior Attorney
Division of Consumer and Community Affairs
202 452-2412
RIN: 7100-AC0 6
- 2 0 -
14 .
TITLE:
Regulation: E -- Electronic Fund Transfers (Docket Number:
R-0959)
LEGAL AUTHORITY:
15 USC 1693
CFR CITATION:
12 CFR 205
ABSTRACT:
In January 1997, the Board issued for public comment proposed
amendments to Regulation E, which implement the Electronic Fund
Transfer Act (EFTA) (62 FR 3242, January 22, 1997). The proposed
revisions implement an amendment to the EFTA, contained in the
Personal Responsibility and Work Opportunity Reconciliation Act
of 1996, that exempts certain electronic benefit transfer (EBT)
programs from the EFTA. Generally, EBT programs involve the
issuance of access cards and personal identification numbers to
recipients of government benefits so that they can obtain their
benefits through automated teller machines and point-of-sale
terminals. The Board's proposal exempts from Regulation E
needs-tested EBT programs established or administered by state or
local government agencies. Federally administered EBT programs
and state and local employment-related EBT programs (such as
state pension programs) would continue to be subject to modified
requirements that recognize the special characteristics of EBT
programs. Regulation E applies to all types of institutions that
offer EFT services, not just state member banks. The proposed
amendments are not expected to have a significant economic impact
on state member banks or other institutions.
Following review of the public comments, the Board is expected to
take further action within the next two months.
TIMETABLE:
ACTION
DATE
Board requested comment
Further Board action by
01/22/97
04/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Jane Jensen Gell
Staff Attorney
Division of Consumer and Community Affairs
202 452-3667
-21-
FR CITE
62 FR 3242
15.
TITLE:
Regulation: G -- Securities Credit by Persons Other than Banks,
Brokers, or Dealers; Regulation: T -- Credit by Brokers and
Dealers; Regulation: U -- Credit by Banks (Docket Number: R-0923)
LEGAL AUTHORITY:
15 USC 78g Securities Exchange Act of 1934, as amended
15 USC 78w Securities Exchange Act of 1934, as amended
CFR CITATION:
12 CFR 207
12 CFR 220
12 CFR 221
ABSTRACT:
The Board is conducting a periodic review of its margin
regulations. The first regulation to be reviewed was Regulation
T, which regulates extensions of credit by and to brokers and
dealers (see Docket Numbers R-0772, RIN 7100-AB28 and R-0840, RIN
7100-AB78). In May 1996, at the same time the Board adopted a
revised Regulation T, it requested public comment on additional
amendments to Regulations G, T, and U (61 FR 20399, May 6, 1996).
The proposed amendments would allow broker-dealers to extend
good-faith credit on any non-equity security; allow transactions
involving non-equity securities to be effected in an account not
subject to the restrictions of Regulation T's margin account;
remove restrictions on the ability of broker-dealers to calculate
required margin for non-equity securities on a "portfolio" basis;
relax the Board's collateral requirements for the borrowing and
lending of securities; and exempt from Regulation T any credit
extended abroad by a U.S. broker-dealer on foreign securities to
foreign persons. The proposal also seeks comment on whether the
Board should expand the number of equity securities eligible for
loan value under Regulation T and whether the Board should amend
Regulations G and U to modify their method for determining which
equity securities qualify as margin stock.
It is not anticipated that the revisions would have a significant
economic impact on the overall lending activities of a
substantial number of small lenders. Following review of the
public comments, the Board is expected to take further action
within the next four months. The proposals are a part of the
Board's overall review of its regulations as required by section
303 of the Riegle Community Development and Regulatory
Improvement Act of‘1994.
TIMETABLE:
ACTION
Board requested comment
Further Board action by
DATE
FR CITE
05/06/96
06/00/97
61 FR 20399
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
-22-
TITLE:
Regulation: G -- Securities Credit by Persons Other than Banks,
Brokers, or Dealers; Regulation: T — Credit by Brokers and
Dealers; Regulation: LJ — Credit by Banks (Docket Number: R-0923)
AGENCY CONTACT:
Scott Holz
Senior Attorney
Legal Division
202 452-2966
RIN: 7100-AC12
-23-
•
16.
TITLE:
Regulation: G — Securities Credit by Persons Other than Banks,
Brokers, or Dealers; Regulation: T — Credit by Brokers and
Dealers; Regulation: U -- Credit by Banks (Docket Number: R-0944)
LEGAL AUTHORITY:
15 USC 78g Securities Exchange Act of 1934, as amended
15 USC 78w Securities Exchange Act of 1934, as amended
CFR CITATION:
12 CFR 207
12 CFR 220
12 CFR 221
ABSTRACT:
On October 11, 1996, the President signed the National Securities
Markets Improvement Act of 1996 (the Markets Improvement Act).
Under the Markets Improvement Act, the Board no longer has the
authority to regulate certain loans to registered broker-dealers
unless it finds that such rules are necessary or appropriate in
the public interest or for the protection of investors. The
Markets Improvement Act also repeals section 8 (a) of the
Securities Exchange Act of 1934, which limited the sources of
credit for broker-dealers who pledge exchange-traded equity
securities to certain banks and other broker-dealers. In November
1996, the Board solicited comment on amendments to its margin
regulations (Regulations G, T, and U) to implement the statutory
amendments in the Markets Improvement Act and further the
policies behind their adoption (61 FR 60168, November 26, 1996).
It is not anticipated that the proposal will have a significant
economic impact on a substantial number of small banks. Following
review of the public comments, the Board is expected to take
further action by mid-year.
TIMETABLE:
ACTION
Board requested comment
Further Board action by
DATE
FR CITE
11/26/96
06/00/97
61 FR 60168
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Scott Holz
Senior Attorney
Legal Division
202 452-2966
-24-
17.
TITLE:
Regulation: H -- Membership of State Banking Institutions in the
Federal Reserve System (Docket Number: R-0909)
LEGAL AUTHORITY:
12
12
12
12
12
12
12
12
12
12
12
12
12
12
12
use
use
use
use
use
use
use
use
use
use
use
use
use
use
use
36
248 (a)
248(c)
32l-338a
37 Id
461
481-486
601
611
1814
1823 (j)
1828 (o)
1831o
1831p-l
3105
CFR CITATION:
12 CFR Part 208
ABSTRACT:
In December 1995, the Board issued for public comment proposed
amendments to Regulation H pertaining to the recordkeeping and
confirmation disclosures for certain securities transactions
effected by state member banks (60 FR 66759, December 26, 1995).
These disclosures cover transactions effected for customers
involving debt and asset-backed securities and generally require
three-day settlement for these transactions.
It is not expected that the revisions will have a significant
economic impact on a substantial number of small institutions.
Following review of the public comments, the Board is expected to
take further action within the next two months. The proposal is
part of the Board's overall review of its regulations as required
by section 303 of the Riegle Community Development and Regulatory
Improvement Act of 1994.
TIMETABLE:
ACTION
Board requested comment
Further Board action expected by
DATE
FR CITE
12/26/95
04/00/97
60 FR 66759
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Susan S. Meyers
Senior Securities Regulation Analyst
Division of Banking Supervision and Regulation
202 452-2781
RIN: 7100-AC07
-25-
18.
TITLE:
Regulation: H — Membership of State Banking Institutions in the
Federal Reserve System (Docket Number: R-0950)
LEGAL AUTHORITY:
12
12
12
12
12
12
12
12
12
12
12
12
12
12
12
use
use
use
use
use
use
use
use
use
use
use
use
use
use
use
36
248(a)
248(c)
321-338a
37 I d
461
481-486
601
611
1814
1818
1823 ( j )
1828(o)
1831o
1831p-l
CFR CITATION:
12 CFR 208
ABSTRACT:
In December 1996, the Board, the Federal Deposit Insurance
Corporation, and the Office of the Comptroller of the Currency
jointly published for comment a proposed regulation establishing
a professional qualification program for banks that engage in
retail recommendations and sales of certain securities using
their own employees (61 FR 68824, December 30, 1996). The
proposed regulation will establish qualification testing,
registration, and continuing education requirements for bank
employees that act in the capacity of bank securities
representatives. The proposed requirements will be based on the
professional qualification rules of the securities
self-regulatory organizations. It is not anticipated that the
proposal will have a significant economic impact on a substantial
number of small banks.
Following review of the public comments, the Board is expected to
take further action within the next two months.
TIMETABLE:
ACTION
Board requested comment
Further Board action by
DATE
FR CITE
12/30/96
04/00/97
61 FR 68824
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Angela Desmond
Senior Counsel
Division of Banking Supervision and Regulation
202 452-2781
RIN: 7100-AC14
-26-
TITLE:
Regulation: H -- Membership of State Banking Institutions in the
Federal Reserve System; and Regulation: K -- International
Banking Operations (Docket Number: R-0921)
LEGAL AUTHORITY:
15 USC 78o-5
CFR CITATION:
12 CFR 208
12 CFR 211
ABSTRACT:
In April 1996, the Board, the Office of the Comptroller of the
Currency, and the Federal Deposit Insurance Corporation jointly
published for comment a proposed rule regarding the
responsibilities of banks that are government securities brokers
or dealers with respect to sales practices concerning government
securities (61 FR 18470, April 25, 1996). The proposed rule would
establish standards concerning the recommendations to customers
and the conduct of business by a bank that is a government
securities broker or dealer. The agencies also proposed adopting
an interpretation concerning recommendations to institutional
customers with respect to government securities transactions. The
agencies requested comment generally on the need for and
desirability of the proposed rule and interpretation. The
proposed rule is not expected to have a significant economic
impact on a substantial number of small banks.
Following review of the public comments, the Board is expected to
take further action within the next two months.
TIMETABLE:
ACTION
Board requested comment
Further Board action by
DATE
FR CITE
04/25/96
04/00/97
61 FR 18470
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Oliver Ireland
Associate General Counsel
Legal Division
202 452-3625
RIN: 7100-AC15
-27-
20.
TITLE:
Regulation: H -- Membership of State Banking Institutions in the
Federal Reserve System; and Regulation: Y — Bank Holding
Companies and Change in Bank Control (Docket Number: R-0930)
LEGAL AUTHORITY:
12
12
12
12
12
12
12
12
12
12
12
12
12
12
12
use
use
use
use
use
use
use
use
use
use
use
use
use
use
use
36
248(a)
248(c)
321-338a
371d
461
481-486
601
611
1814
1823 (j)
1828(o)
1831(o)
1831p-l
3105
CFR CITATION:
12 CFR 208 app A
ABSTRACT:
In August 1996, the Board issued for public comment a proposal to
revise the risk-based capital treatment for certain
collateralized transactions (61 FR 42565, August 16, 1996). Under
the Board's existing risk-based capital treatment, the portion of
a transaction that is supported by qualifying collateral (that
is, cash or OECD government securities) is risk-weighted at 20
percent. Transactions that are fully supported by collateral with
a positive margin may be eligible for a zero percent risk weight.
Generally, the proposal would permit a portion of a transaction
that is fully supported with a positive margin of collateral to
be eligible for a zero percent risk weight. The portion that is
to be continuously collateralized must be specified by the
parties.
This proposal was developed on an interagency basis and, if
adopted, would eliminate one of the substantive differences among
the agencies with regard to the risk-based capital treatment for
collateralized transactions. It would implement part of the
Riegle Community Development and Regulatory Improvement Act of
1994, which requires the agencies to make uniform regulations and
guidelines implementing common supervisory policies. The effect
of the proposal would be to allow institutions to hold less
capital for certain collateralized transactions. It is not
expected to have a significant economic impact on a substantial
number of small entities.
Following review of the public comments, the Board is expected to
take further action by mid-year.
-28-
TITLE:
Regulation: H -- Membership of State Banking Institutions in the
Federal Reserve System; and Regulation: Y -- Bank Holding
Companies and Change in Bank Control (Docket Number: R-0930)
TIMETABLE:
ACTION
Board requested comment
Further Board action by
DATE
FR CITE
08/16/96
06/00/97
61 FR 42565
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Barbara Bouchard
Supervisory Financial Analyst
Division of Banking Supervision and Regulation
202 452-3072
RIN: 7100-AC13
-29-
21.
TITLE:
Regulation: M -- Consumer Leasing (Docket Number: R-0952)
LEGAL AUTHORITY:
15 USC 1667 et seq
CFR CITATION:
12 CFR 213
ABSTRACT:
In December 1996, the Board approved issuing for public comment a
proposal to implement amendments made to the Consumer Leasing Act
(CLA) by the Economic Growth and Regulatory Paperwork Reduction
Act of 1996 (62 FR 62, January 2, 1997). The CLA required lessors
to provide consumers with uniform cost and other disclosures
about consumer lease transactions. The proposed revisions
streamline the advertising disclosures for lease transactions. In
addition, the proposal contains several technical amendments that
would be made to the regulation.
It is not anticipated that the proposal will have a significant
economic impact on a substantial number of small entities subject
to the Board's regulation. Following review of the public
comments, the Board is expected to take further action within the
next two months.
TIMETABLE:
ACTION
DATE
Board requested comment
Further Board action by
01/02/97
04/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Kyung Cho-Miller
Attorney
Division of Consumer and Community Affairs
202 452-2341
-30-
FR CITE
62 FR 62
22.
TITLE:
Regulation: 0 -- Loans to Executive Officers, Directors, and
Principal Shareholders of Member Banks (Docket Numbers: R-0924,
R-0939, and R-0940)
LEGAL AUTHORITY:
12 USC 375b
PL 102-242
CFR CITATION:
12 CFR 215
ABSTRACT:
The Economic Growth and Regulatory Paperwork Reduction Act of
1996 (the "Regulatory Relief Act") generally expanded the
authority of the Board to allow banks to exempt directors and
executive officers of affiliates from the general insider lending
restrictions in section 2 2 (h) of the Federal Reserve Act and
Regulation 0. The Regulatory Relief Act also narrowed the
authority of the Board by prohibiting exemptions for insiders of
certain larger affiliates. These statutory changes required the
Board to supplement the proposed rule (Docket Number R-0924)
published in May 1996 with a revised proposal published in
November 1996 (Docket Number R-0940, 61 FR 57797, November 8,
1996).
Under the revised proposal, a bank may exempt the directors and
executive officers of affiliates (other than the bank's top-tier
holding company and any intermediate holding company for the
bank) from all insider lending restrictions. As required by the
Regulatory Relief Act, directors and executive officers of
affiliates that constitute more than 10 percent of the
consolidated assets of the top-tier holding company may not be
exempted.
The Regulatory Relief Act also permitted directors and executive
officers to participate in employee benefit programs that extend
credit at below-market terms, if the plans are widely available
and do not give preference to directors and executive officers. A
final rule implementing this change was adopted and became
effective November 8, 1996 (Docket Number R-0939, 61 FR 57769,
November 8, 1996). The final rule also implemented the provision
in the proposed rule of May 1996 to simplify the actions the
board of directors of a bank must take in order to exempt
eligible insiders of affiliates.
Under the Regulatory Relief Act, executive officers of the larger
affiliates of a bank, who previously could be exempted from the
insider lending restrictions, no longer may be. The proposed rule
does not increase the possible adverse economic impact of this
prohibition on any class of financial institutions. Following
review of the public comments, the Board is expected to take
further action within the next two months.
-31-
TITLE:
Regulation: 0 -- Loans to Executive Officers, Directors, and
Principal Shareholders of Member Banks (Docket Numbers: R-0924,
R-0939, and R-0940)
TIMETABLE:
ACTION
Board requested comment
Board requested comment on supplemental
proposal
Further Board action by
DATE
FR CITE
05/03/96
11/08/96
61 FR 19863
61 FR 57797
04/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Gordon Miller
Attorney
Legal Division
202 452-2534
RIN: 7100-AC16
-32-
TITLE:
Regulation: U -- Credit by Banks for the Purpose of Purchasing or
Carrying Margin Stocks (Docket Number: R-0905)
LEGAL AUTHORITY:
15 USC 78g Securities Exchange Act of 1934, as amended
15 USC 78w Securities Exchange Act of 1934, as amended
CFR CITATION:
12 CFR 221
ABSTRACT:
The Board is conducting a periodic review of Regulation U, which
generally regulates bank extensions of credit that are secured by
publicly traded stock. In December 1995, the Board proposed
amendments for public comment that would (1) reduce the
regulatory burden associated with loans secured by margin stock
and other collateral and (2) clarify the circumstances under
which a bank may finance the purchase of customer securities
bought on a cash basis at a broker-dealer (60 FR 63660, December
12, 1995). Comment was also invited on all other areas of the
regulation. The proposals satisfy requirements under section 303
of the Riegle Community Development and Regulatory Improvement
Act of 1994.
In May 1996, the Board requested comment on Regulations G, T, and
U (Docket Number R-0923, 61 FR 20399, May 6, 1996). The proposal
includes a request for comment on the appropriate scope of
Regulation U by soliciting views on the definition of "margin
stock."
In October 1996, the Board requested comment on Regulations G, T,
and U (Docket Number R-0944, 61 FR 60168, November 26, 1996). The
proposal seeks comment on amendments to implement the National
Securities Markets Improvement Act of 1996, which limits the
Board's authority to regulate extensions of credit to certain
broker-dealers. Responses to both the May 1996 and the October
1996 requests are also being considered as part of the Regulation
U review.
It is not anticipated that the revisions will have a significant
economic impact on the overall lending activities of a
substantial number of small banks. Following review of the public
comments, the Board is expected to take further action within the
next four months.
TIMETABLE:
ACTION
Board requested comment
Further Board action by
DATE
FR CITE
12/12/95
06/00/97
60 FR 63660
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Scott J. Holz
Senior Attorney
Legal Division
202 452-2966
RIN: 7100-AB65
-33-
# 24 .
TITLE:
Regulation: Y -- Bank Holding Companies and Change in Bank
Control (Docket Number: R-0936)
LEGAL AUTHORITY:
12 USC 1843 (j)
CFR CITATION:
12 CFR 225
ABSTRACT:
Section 2208 of the Economic Growth and Regulatory Paperwork
Reduction Act of 1996 amended the Bank Holding Company Act to
eliminate the requirement that bank holding companies seek Board
approval before engaging de novo in permissible nonbanking
activities listed in Regulation Y if the bank holding company is
well-capitalized and meets certain other criteria specified in
the statute. Section 2208 also established an expedited procedure
for well-capitalized bank holding companies that meet these
criteria to obtain Board approval to acquire smaller companies
that engage in any permissible nonbanking activities listed in
Regulation Y, as well as to engage in nonbanking activities that
the Board has approved only by order. These changes were
effective immediately.
Section 2208 provides that a bank holding company shall be
considered "well-capitalized" if it meets the capital levels
required by the Board. In November 1996, the Board adopted an
interim rule for determining the capital levels at which a bank
holding company shall be considered "well-capitalized" under
section 2208 and Regulation Y. The interim rule establishes the
same risk-based capital thresholds as those set for determining
that a state member bank is well-capitalized under the provisions
established under section 38 of the Federal Deposit Insurance Act
and a modified leverage ratio (61 FR 56404, November 1, 1996).
The Board requested public comment on the definition of
"well-capitalized," including how the provision in section 2208
applies to foreign banking organizations.
The interim rule is not expected to have a significant adverse
economic impact on a substantial number of small bank holding
companies. Streamlining or eliminating certain procedures will
improve the ability of all bank holding companies to conduct
business on a more cost-efficient basis.
Following review of the public comments, the Board is expected to
take further action within the next two months.
TIMETABLE:
ACTION
Board requested comment
Further Board action by
-34-
DATE
FR CITE
11/01/96
04/00/97
61 FR 56404
TITLE:
Regulation: Y — Bank Holding Companies and Change in Bank
Control (Docket Number: R-0936)
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Deborah M. Awai
Senior Attorney
Legal Division
202 452-3594
-35-
25.
TITLE:
Regulation: Y -- Bank Holding Companies and Change in Bank
Control; Review of Restrictions in the Board's Section 20 Orders
(Docket Number: R-0958)
LEGAL AUTHORITY:
12 USC 1843(c) (8)
CFR CITATION:
12 CFR 225
ABSTRACT:
Section 20 of the Glass-Steagall Act prohibits a member bank from
being affiliated with a company that is "engaged principally" in
underwriting and dealing in securities that the member bank may
not underwrite and deal in directly ("ineligible securities").
Beginning in 1987, the Board has issued a series of orders
authorizing bank holding companies to establish "section 20
subsidiaries" to engage in underwriting and dealing in ineligible
securities. In those orders, the Board established a series of
prudential restrictions as conditions for approval under the Bank
Holding Company Act. The restrictions are designed to prevent
securities underwriting and dealing risk from being passed from a
section 20 subsidiary to an affiliated insured depository
institution, and thus to the federal safety net, and to mitigate
the potential for conflicts of interest, unfair competition, and
other adverse effects that may arise from the conduct of
ineligible securities activities.
In January 1997,the Board issued for public comment a proposal to
remove most of the prudential restrictions that apply to section
20 subsidiaries (62 FR 2622, January 17, 1997). The Board noted
that the prudential restrictions were adopted when the Board had
little experience supervising investment banks in the United
States and before the existence of a number of significant
protections currently in place. In view of these factors and the
fact that the prudential restrictions prevent bank holding
companies from reaping possible synergy gains from the operation
of an investment bank, the Board proposed removing most of the
prudential restrictions and retaining only those that address
bank safety and soundness, significant conflicts of interest, or
other concerns that are not addressed by other statutes or
regulations.
It is not anticipated that the proposal will have a significant
economic impact on a substantial number of small entities subject
to the Board's regulation. Following review of the public
comments, the Board is expected to take further action within the
next six months.
TIMETABLE:
ACTION
Board requested comment
Further Board action by
-36-
DATE
FR CITE
01/17/97
10/00/97
62 FR 2622
TITLE:
Regulation: Y --- Bank Holding Companies and Change in Bank
Control; Review of Restrictions in the Board's Section 20 Orders
(Docket Number: R-0958)
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Greg Baer
Managing Senior Counsel
Legal Division
202 452-3236
-37-
26.
TITLE:
Regulation: Z -- Truth in Lending (Docket Number: R-0960)
LEGAL AUTHORITY:
12 USC 1601 et seq
CFR CITATION:
12 CFR 226
ABSTRACT:
In January 1997, the Board approved issuing for public comment a
proposal to revise the variable-rate disclosure provisions in
Regulation Z (62 FR 5183, February 4, 1997). The revisions
implement an amendment to the Truth in Lending Act (TILA)
contained in the Economic Growth and Regulatory Paperwork
Reduction Act of 1996. The TILA requires creditors to provide
consumers with uniform cost and other disclosures about consumer
credit transactions. The amendment applies to variable-rate loans
with a term exceeding one year and secured by the consumer's
principal dwelling. The amendment allows creditors either (1) to
disclose an historical example of how rates tied to a particular
index or formula moved over a fifteen-year period and how rate
changes affected loan payments based on a $10,000 loan or (2) to
give a statement that the periodic payment may substantially
increase or decrease together with a maximum interest rate and
payment based on a $10,000 loan.
It is not anticipated that the proposal will have a significant
economic impact on a substantial number of small entities subject
to the Board's regulation. Following review of the public
comments, the Board is expected to take further action within the
next two months.
TIMETABLE:
ACTION
Board requested comment
Further Board action by
DATE
FR CITE
02/04/97
04/00/97
62 FR 5183
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Kyung Cho-Miller
Attorney
Division of Consumer and Community Affairs
202 452-2412
-38-
27.
TITLE:
Regulation: DD —
R-0869)
Truth in Savings (Docket Numbers: R-0836 and
LEGAL AUTHORITY:
12 USC 4301 et seq
CFR CITATION:
12 CFR 230
ABSTRACT:
Sections 261 to 275 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 require depository institutions to
provide a schedule of terms, rates, and fees for deposit accounts
offered by the institution. The law also sets forth rules for
advertisements for deposit accounts.
In January 1995, the Board issued for public comment proposed
amendments to Regulation DD that would produce an annual
percentage yield (APY) that reflects the timing of interest
payments as well as the timing of compounding. The proposal also
solicits comment on an alternative method of calculating the APY
(an internal rate of return formula) (60 FR 5142, January 26,
1995). The January 1995 proposal is an outgrowth of a May 1994
proposal that would have affected institutions' compounding and
crediting practices in addition to changing the APY (59 FR 24378,
May 11, 1994). The Board also adopted in January 1995 an interim
rule that permits institutions and deposit brokers advertising
noncompounding multi-year time accounts that require interest
payouts at least annually to disclose an APY equal to the
interest rate (60 FR 5128, January 26, 1995, Docket Number
R-0836). Public comment on the approach was solicited in a July
1994 notice extending the comment period for the May 1994
proposal (59 FR 35271, July 11, 1994). The economic impact on
small institutions will depend upon the variety of deposit
products offered, the extent of the disclosures, and the options
for compliance offered by the final rule.
Staff has reviewed the public comments and is expected to forward
the matter to the Board within the next two months.
TIMETABLE:
DATE
ACTION
Board requested comment
Board extended comment period
Board adopted an interim rule
Board requested further comment
Further Board action by
05/11/94
07/11/94
01/26/95
01/26/95
04/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
-39-
FR CITE
59
59
60
60
FR
FR
FR
FR
24378
35271
5128
5142
TITLE:
Regulation: DD —
R-0869)
Truth in Savings (Docket Numbers: R-0836 and
AGENCY CONTACT:
Jane Ahrens
Senior Attorney
Division of Consumer and Community Affairs
202 452-3667
RIN:
7100-AB80
-40-
28.
TITLE:
Rules Regarding Availability of Information (Docket Number:
R-0917)
LEGAL AUTHORITY:
5
12
12
12
12
12
12
12
12
12
12
12
12
12
12
use
use
use
use
use
use
use
use
use
use
use
use
use
use
use
552
248(i)
248(k)
321 et seq
611 et seq
1442
1817(a) (2) (A)
1817 (a) (8)
1818(u)
1818(v)
1821(o)
1821 (t)
1830
1844
1951 et seq
CFR CITATION:
12 CFR 261
ABSTRACT:
In February 1996, the Board issued for public comment proposed
amendments to its Rules Regarding Availability of Information (61
FR 7436, February 28, 1996). The proposed amendments, although
primarily technical in nature, are intended to improve the
Board's efficiency in processing requests for the disclosure of
publicly available information as well as confidential
supervisory information. It is not anticipated that the proposed
amendments will have a significant economic impact on a
substantial number of small entities subject to the regulation.
In light of the passage of The Electronic Freedom of Information
Act Amendments of 1996 and the passage of time since the Board's
proposal was issued for public comment, the Board will consider
revising the regulation further, as necessary, and will again
issue the proposed amendments for public comment. The amendments
are part of the Board's overall review of its regulations as
required by section 303 of the Riegle Community Development and
Regulatory Improvement Act of 1994. Further Board action is
expected within the next two months.
TIMETABLE:
ACTION
DATE
Board requested comment
Further Board action by
02/28/96
04/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Karen Appelbaum
Attorney
Legal Division
202 452-3389
RIN: 7100-AC22
-41-
FR CITE
61 FR 7436
Section 3
Completed Actions
-42-
29.
TITLE:
Regulation: B -- Equal Credit Opportunity (Docket Number: R-0876)
LEGAL AUTHORITY:
15 USC 1691
CFR CITATION:
12 CFR 202
ABSTRACT:
In April 1995, the Board issued for public comment a proposed
amendment to Regulation B to eliminate the general prohibition on
collecting data relating to an applicant's race, color, sex,
religion, and national origin, giving creditors the option to ask
applicants to provide the information on a voluntary basis (60 FR
20436, April 26, 1995). This amendment would allow data
collection only; creditors still would be prohibited from
considering an applicant's race, color, sex, religion, and
national origin in their credit decisions.
In December 1996, following review of the public comments, the
Board considered the proposed amendment. Given the significant
policy issues involved in removing the prohibition, the Board
voted to withdraw the proposed amendment pending further
congressional guidance (61 FR 68688, December 30, 1996).
TIMETABLE:
ACTION
Board requested comment
Board withdrew the proposal
DATE
FR CITE
04/26/95
12/30/96
60 FR 20436
61 FR 68688
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Sheilah Goodman
Staff Attorney
Division of Consumer and Community Affairs
202 452-3667
RIN: 7100-AB99
-43-
30.
TITLE:
Regulation: H -- Membership of State Banking Institutions in the
Federal Reserve System; and Regulation: Y -- Bank Holding
Companies and Change in Bank Control
LEGAL AUTHORITY:
12
12
12
12
12
USC
USC
USC
USC
USC
36
321
1828
1831u
1842
CFR CITATION:
12 CFR 208
12 CFR 225
ABSTRACT:
Sections 101, 102, and 103 of the Riegle-Neal Interstate Banking
and Branching Efficiency Act of 1994 establish conditions under
which bank holding companies and national banks will be permitted
to engage in interstate banking and branching through
acquisitions, mergers, and establishment of de novo branches.
Under section 9 of the Federal Reserve Act, the limitations and
conditions on branching by national banks also are applicable to
state member banks. Section 101 of the Riegle-Neal Act also
permits a bank to receive deposits and provide certain other
services as agent for any affiliated depository institution
without the bank being considered to be a branch of the
affiliated depository institution.
Amendments to Regulation Y reflecting the statutory changes were
adopted in February 1997 as part of the Board's overall review of
Regulation Y under section 303 of the Riegle Community
Development and Regulatory Improvement Act of 1994 (Docket Number
R-0935). Similar amendments to Regulation H will be proposed by
the Board in its overall review of that regulation in March 1997.
The statutory changes reduce restrictions currently applicable to
bank holding companies and state member banks of all sizes,
including small institutions, and will not significantly increase
regulatory burden on small banks.
TIMETABLE:
ACTION
Board requested comment on Regulation Y
Proposal incorporated in final
Regulation Y
Proposal to be incorporated in proposed
Regulation H
DATE
FR CITE
09/06/96
02/19/97
61 FR 47241
03/00/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
J. Ericson Heyke
Staff Attorney
Legal Division
202 452-3688
RIN: 7100-AB87
-44-
31.
T IT L E :
Regulation: R -- Relations with Dealers in Securities Under
Section 32, Banking Act of 1933 (Docker Number: R-0931)
LEGAL AUTHORITY:
12 USC 32
CFR CITATION:
12 CFR 218
ABSTRACT:
In June 1996, the Board approved issuing for public comment a
proposal to remove Regulation R from the Code of Federal
Regulations and to rescind a Board interpretation that applies
the interlocks prohibitions of section 32 of the Glass-Steagall
Act to bank holding companies (61 FR 34749, July 3, 1996).
Section 32 prohibits officer, director, and employee interlocks
between member banks and firms "primarily engaged" in
underwriting and dealing in securities. Because Regulation R
merely restates the statutory provisions of section 32 (and
because the only exemption included in the regulation is now
considered unnecessary), the Board proposed to rescind the
regulation. In addition, because section 32 does not, by its
terms, apply to bank holding companies, the Board proposed
rescinding the interpretation applying section 32 to these
companies. The Board believes that allowing bank holding
companies access to a larger pool of persons from which to choose
officers, directors, and employees will provide some measure of
regulatory relief. In October 1996, following review of the
public comments, the Board rescinded Regulation R (61 FR 57287,
November 6, 1996). It is not anticipated that the proposal will
have a significant economic impact on a substantial number of
small entities. The review of Regulation R is part of the Board's
overall review of its regulations, as required by section 303 of
the Riegle Community Development and Regulatory Improvement Act
of 1994.
TIMETABLE:
ACTION
Board requested comment
Board adopted proposal
DATE
FR CITE
07/03/96
11/06/96
61 FR 34749
61 FR 57287
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Thomas Corsi
Senior Attorney
Legal Division
202 452-3275
RIN: 7100-AC17
-45-
32.
TITLE:
Regulation: V -- Loan Guarantees for Defense Production (Docket
Number: R-0928)
LEGAL AUTHORITY:
50 USC app, Sec 2061 et seq
EO 12919
EO 10789
CFR CITATION:
12 CFR 245
ABSTRACT:
In May 1996, as part of its regulatory review process mandated by
section 303 of the Riegle Community Development and Regulatory
Improvement Act of 1994, the Board approved issuing for public
comment a proposal to abolish its Regulation V as obsolete (61 FR
26471, May 28, 1996). Regulation V implements the loan guarantee
provisions of Title III of the Defense Production Act of 1950, as
amended (the Act), by setting forth applicable procedures, forms,
fees, charges, and rates of interest for such loan guarantees. In
1975, amendments to the Act made the guarantee provisions
obsolete for most practical purposes, but the loan guarantee
provisions were not deleted. No loan guarantees are currently
outstanding and no applications for loan guarantees have been
filed for several years. The proposal seeks to eliminate an
obsolete regulatory provision and does not impose any substantial
economic burden on small entities.
In October 1996, following review of the public comments, the
Board approved a final rule repealing Regulation V (61 FR 52875,
October 9, 1996).
TIMETABLE:
ACTION
Board requested comment
Board repealed the regulation
DATE
FR CITE
05/28/96
10/09/96
61 FR 26471
61 FR 52875
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Heatherun Allison
Attorney
Legal Division
202 452-3565
RIN: 7100-AC18
-46-
33.
TITLE:
Regulation: Y — Bank Holding Companies and Change in Bank
Control (Docket Number: R-0935)
LEGAL AUTHORITY:
12
12
12
12
12
USC
USC
USC
USC
USC
1841 et seq
3106
3108
1817 (j) (13)
1818(b)
CFR CITATION:
12 CFR 225
ABSTRACT:
In August 1996, the Board approved issuing for public comment a
comprehensive revision of Regulation Y that is intended to
improve the competitiveness of bank holding companies by
eliminating unnecessary regulatory burden and operating
restrictions and by streamlining the application/notice process
(61 FR 47241, September 6, 1996). The proposal is also part of
the Board's overall review of its regulations as required by
section 303 of the Riegle Community Development and Regulatory
Improvement Act of 1994. Among other revisions, the Board
proposed to establish a streamlined and expedited review process
for bank and nonbanking proposals by well-run bank holding
companies. The Board also proposed to reorganize and expand the
regulatory list of nonbanking activities and to remove a number
of restrictions on those activities that are outmoded, have been
superseded by Board order, or do not apply to insured banks that
conduct the same activity. In addition, the Board proposed
several amendments to the tying restrictions, including removal
of the regulatory extension of those restrictions to bank holding
companies and their nonbank subsidiaries. A number of other
changes have also been proposed to eliminate unnecessary
regulatory burden and to streamline and modernize Regulation Y.
It is expected that the proposals will result in a significant
reduction in regulatory filings, in the paperwork burden and
processing time associated with regulatory filings, and in the
costs associated with complying with the regulation, thereby
improving the ability of all bank holding companies, including
small organizations, to conduct business on a more cost-efficient
basis.
On February 19, 1997, following review of the public comments,
the Board adopted a final rule that largely incorporated the
initiatives contained in the proposed rule (Federal Register Cite
unavailable) . The Board did make a number of revisions in
response to concerns, suggestions, and information provided by
commenters, including changing in several respects the
streamlined procedure governing bank acquisitions and the
adoption of several measures designed to improve the public
notice given of acquisition proposals.
-47-
TITLE:
Regulation:
Y -- Bank Holding Companies and Change in Bank
Control (Docket Number: R-0935)
TIMETABLE:
ACTION
Board requested comment
Board adopted proposals
DATE
FR CITE
09/06/96
02/19/97
61 FR 47241
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Diane A. Koonjy
Senior Attorney
Legal Division
202 452-3274
RIN: 7100-AC19
-48-
34 .
TITLE:
Regulation: CC -- Availability of Funds and Collection of Checks
(Docket Number: R-0926)
LEGAL AUTHORITY:
12 USC 4001 et seq
CFR CITATION:
12 CFR 229
ABSTRACT:
As part of its regulatory review process mandated by section 303
of the Riegle Community Development and Regulatory Improvement
Act of 1994, the Board proposed clarifying and technical
amendments to its Regulation CC in June 1996 (61 FR 27802, June
3, 1996). On February 26, 1997, following review of the public
comments, the Board adopted final amendments with minor revisions
(Federal Register cite unavailable). The amendments, which do not
represent any major policy changes, address a variety of check
collection issues, including the treatment of deposits received
at "contractual" branches (such as affiliate banks). Many of the
amendments are designed to reduce the regulatory compliance
burden on banks. The amendments would apply to all depository
institutions and are not expected to have a significant economic
impact on small institutions.
TIMETABLE:
ACTION
DATE
Board requested comment
Board adopted amendments
06/03/96
02/26/97
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Stephanie Martin
Senior Attorney
Legal Division
202 452-3198
RIN: 7100-AC20
-49-
FR CITE
61 FR 27802
35.
TITLE:
Federal Reserve Bank Book-Entry Securities Transfer Services
(Docket Number: R-0866)
LEGAL AUTHORITY:
12 USC 221 et seq
CFR CITATION:
None
ABSTRACT:
In January 1995, the Board requested public comment on the
effects of opening the Fedwire on-line book-entry securities
transfer service earlier in the day, on new service capabilities
related to earlier opening, and on establishment of a firm
closing time for the service (60 FR 123, January 3, 1995). An
earlier opening time could benefit the financial markets by
facilitating international transactions, providing increased
liquidity, and reducing risk. Participation in the proposed
early-hour service would be voluntary; therefore, the service
should not have a significant economic effect on a substantial
number of small entities.
In August 1995, following review of the public comments, the
Board adopted a firm closing time of 3:15 pm (ET) for transfer
originations and 3:30 pm (ET) for reversals, effective January 2,
1996 (60 FR 42410, August 15, 1995).
Following further review of the public comments, the Board is
expected to take further action regarding earlier opening and new
service capabilities.
This proposal is being removed from the Board's Semiannual
Regulatory Agenda, because it pertains to a service provided by
the Board rather than a regulatory matter. Any further action on
this proposal will be made public in the Federal Register.
TIMETABLE:
ACTION
Board requested comment
Board adopted firm closing time
Proposal removed from Agenda
DATE
FR CITE
01/03/95
08/15/95
02/28/97
60 FR 123
60 FR 42410
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Lisa Hoskins
Project Leader
Division of Reserve Bank Operations and Payment Systems
202 452-3437
RIN: 7100-AB97
-50-
36.
TITLE:
Federal Reserve Payments System Risk Policy (Docket Number:
R-0889)
LEGAL AUTHORITY:
12 USC 221 et seq
CFR CITATION:
None
ABSTRACT:
In August 1995, the Board requested public comment on a policy to
control access to Federal Reserve Bank automated clearing house
(ACH) services by entities other than the depository institutions
whose Federal Reserve accounts will be debited (60 FR 42413,
August 15, 1995). The proposed policy is intended to help ensure
the safety and soundness of the ACH system.
The proposed policy could have a significant economic impact on a
substantial number of small depository institutions that use
Federal Reserve ACH services or third-party ACH service
providers. The proposal would require those institutions to
perform credit assessments of their corporate customers who
originate ACH credit transfers, set credit limits for those
customers, and transmit those limits to a monitoring facility
operated by either the Federal Reserve or the third-party service
provider.
Following review of the public comments, the Board is expected to
take further action.
This proposal is being removed from the Board's Semiannual
Regulatory Agenda, because it pertains to a service provided by
the Board rather than a regulatory matter. Any further action on
this proposal will be made public in the Federal Register.
TIMETABLE:
ACTION
Board requested comment
Proposal removed from Agenda
DATE
FR CITE
08/15/95
02/28/97
60 FR 42413
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACT:
Scott E. Knudson
Senior Financial Services Analyst
Division of Reserve Bank Operations and Payment Systems
202 452-3959
RIN: 7100-AC04
-51-
37.
TITLE:
Revenue Limit on Bank-Ineligible Activities of Subsidiaries of
Bank Holding Companies Engaged in Underwriting and Dealing in
Securities (Docket Number: R-0841)
LEGAL AUTHORITY:
12 USC 377
CFR CITATION:
None
ABSTRACT:
Section 20 of the Glass-Steagall Act prohibits a member bank from
being affiliated with a company that is "engaged principally" in
underwriting and dealing in securities that a bank may not
underwrite and deal in directly ("ineligible securities"). In
July 1994, the Board issued for public comment a proposal to
provide an alternative to the current indexed revenue test used
to measure compliance with the "engaged principally" standard for
subsidiaries of bank holding companies engaged, to a limited
extent, in underwriting and dealing in ineligible securities
("section 20 subsidiaries") (59 FR 35516, July 12, 1994). The
current test limits to 10 percent of the total revenue of a
section 20 subsidiary the revenue earned by the subsidiary from
ineligible securities activities. Comments were solicited on
whether asset values or sales volume data, or a combination of
both measures, should be used as a new alternative test.
In July 1996, the Board again sought public comment on this
docket item proposing to retain a test based on revenue but raise
from 10 percent to 25 percent the limit on revenue earned by a
section 20 subsidiary from ineligible securities activities (61
FR 40643, August 5, 1996). The proposal would allow section 20
subsidiaries additional flexibility in the conduct of their
securities operations and arises due to (1) the Board's increased
experience in reviewing and monitoring the activities and
operations of section 20 subsidiaries and (2) the Board's belief
that changes in the product mix that section 20 subsidiaries are
permitted to offer and developments in the securities markets
have affected the relationship between revenue and activity. The
proposal is not expected to have a significant economic impact on
small entities nor on a substantial number of small bank holding
companies.
In December 1996, following review of the public comments, the
Board adopted the matter substantially as proposed (61 FR 68750,
December 30, 1996) . In addition, the Board determined to
eliminate its indexed revenue test.
TIMETABLE:
ACTION
Board requested comment
Board requested further comment
Board adopted proposal
DATE
FR CITE
07/12/94
08/05/96
12/30/96
59 FR 35516
61 FR 40643
61 FR 68750
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
-52-
TITLE:
Revenue Limit on Bank-Ineligible Activities of Subsidiaries of
Bank Holding Companies Engaged in Underwriting and Dealing in
Securities (Docket Number: R-0841)
AGENCY CONTACT:
Thomas Corsi
Senior Attorney
Legal Division
202 452-3275
RIN:
7100-AB82
-53-
38.
TITLE:
Review of Restrictions on Director and Employee Interlocks,
Cross-Marketing Activities and the Purchase and Sale of Financial
Assets (Docket Number: R-0701)
LEGAL AUTHORITY:
12 USC 1843(c)(8)
CFR CITATION:
None
ABSTRACT:
The Board is providing a second opportunity for public comment on
proposed revisions to three of the prudential limitations
established in its orders under section 4(c)(8) of the Bank
Holding Company Act and section 20 of the Glass-Steagall Act that
permit a nonbank subsidiary of a bank holding company to
underwrite and deal in securities.
In August 1996, the Board proposed to ease or eliminate the
following restrictions on these so-called section 20
subsidiaries: the prohibition on director, officer, and employee
interlocks between a section 20 subsidiary and its affiliated
banks or thrifts (the interlocks restriction); the restriction on
a bank or thrift acting as agent for, or engaging in marketing
activities on behalf of, an affiliated section 20 subsidiary (the
cross-marketing restriction); and the restriction on the purchase
and sale of financial assets between a section 20 subsidiary and
its affiliated bank or thrift (the financial assets
restriction) (61 FR 40640, August 5, 1996).
The amendments are not likely to have a significant economic
impact on a substantial number of small entities. Section 20
subsidiaries are generally established by the largest bank
holding companies. However, it is expected that the proposed
revisions will reduce cost barriers for smaller bank holding
companies considering establishment of a section 20 subsidiary.
Following review of the public comments, the Board repealed the
cross-marketing restrictions as proposed and amended the
interlocks and financial assets restrictions in ways similar to
those proposed (61 FR 57679, November 7, 1996).
TIMETABLE:
ACTION
Board requested comment
Board adopted proposals
DATE
FR CITE
08/05/96
11/07/96
61 FR 40640
61 FR 57679
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Gregory Baer
Managing Senior Counsel
Legal Division
202 452-3236
RIN: 7100-AC21
-54-
@FedFRASER