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FEDERAL RESERV E SYSTEM
Sem iannual Regulatory Flexibility Agenda
April 1, 1994 - October 1, 1994
B O A R D O F G O V E R N O R S ’ S E M IA N N U A L
R E G U L A T O R Y F L E X IB IL IT Y A G E N D A
T h e S e m ia n n u a l R e g u la to ry F lex ib ility A g e n d a p ro v id e s in fo rm a tio n o n th o s e r e g u la to ry m a tte r s th a t
th e B o a rd n o w h a s u n d e r c o n s id e ra tio n o r a n tic ip a te s c o n s id e rin g o v e r th e n ex t six m o n th s . I f is d iv id e d in to
th r e e p a rts : (1 ) re g u la to r y m a tte r s th a t th e B o a rd m a y c o n s id e r fo r p u b lic c o m m e n t d u rin g th e n ex t six m o n th s ;
(2) m a tte r s th a t h av e b e e n p ro p o s e d a n d a re u n d e r c o n s id e ra tio n ; a n d (3) re g u la to ry m a tte r s th a t th e B o a rd h as
c o m p le te d o r is n o t e x p e c te d to c o n s id e r fu rth e r.
T h e A g e n d a is p u b lis h e d tw ice a y e a r in th e F ed era l Register. C o m m e n ts r e g a rd in g an y o f th e A g e n d a
ite m s s h o u ld b e s u b m itte d d ire c tly to th e B o a rd o f G o v e rn o rs .
C irc u la rs D iv isio n
FED ERA L R ESER V E BANK O F NEW YORK
M a rc h 1994
February 25, 1994
FEDERAL RESERVE SYSTEM
12 CFR Chap. II
Notice of Semiannual Regulatory Flexibility Agenda
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
Semiannual 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, 1994.
The next Semiannual
Agenda will be published in October 1994.
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
1994 Agenda as part of the April 1994 Unified Agenda of Federal
Regulations, 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.
The
(\4 Woo
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.
A dot (•) 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. Lowrev
Barbara R. Lowrey,
Associate Secretary of the Board.
- 2 -
Ai/oVOO
Section 1
Proposed Rule Stage
- 3 -
M
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1 .
TITLES
Regulation: C - Home Mortgage Disclosure
LEGAL AUTHORITY:
12 USC 2804
CFR CITATIONS
12 CFR 203
ABSTRACT:
Regulation C implements the Home Mortgage Disclosure Act, which
requires certain lenders to report information in connection with
applications they receive for mortgage and other housing-related
loans. One piece of data reported is the race or national origin
of the applicant, according to certain categories specified in
the regulation. The categories in Regulation C differ somewhat
from those used by the U.S. Office of Management and Budget and
other federal entities. Lenders submit the data to the federal
banking regulators and, in the case of mortgage bankers, the U.S.
Department of Housing and Urban Development. During the next two
months the Board is expected to issue for public comment
amendments to Regulation C that conform the racial categories to
the federal standard.
The Board also may consider whether to propose technical
revisions to the instructions that Regulation C provides to
lenders for completing reporting form (HMDA-LAR), in order to
facilitate the processing of the data by the Federal Financial
Institutions Examination Council.
The revisions, if proposed and adopted, would be expected to have
an economic impact on some portion of small lenders. (Only
lenders with assets under $10 million or that make fewer than 100
home purchase loans and mortgage refinancings are exempt from the
reporting requirements of Regulation C.)
TIMETABLES
ACTION
Board is expected to consider
requesting comment by
DATE
04/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACTS
John Wood
Senior Attorney
Division of Consumer and Community Affairs
202-452-2412
RINS 7100-AB63
- 4 -
FR CITE
M
TITLES
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 will apply to all FDIC-insured banks and thrifts. The
FDIC, as well as the Board, issued implementing examiner
guidelines in October 1993 and January 1994, respectively.
The Board has joint rulemaking authority with the other banking
agencies regarding the enforcement provisions of section 112. It
is expected that the Board and the other agencies will request
public comment by mid-year on proposed regulations on these
enforcement matters.
TIMETABLE:
ACTION
Board may consider amendments to
Regulations H and Y by
DATE
06/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Gerald A. Edwards, Jr.
Assistant Director
Division of Banking Supervision and Regulation
202 452-2741
RIN: 7100-AB39
-5-
FR CITE
/0 7 0 0
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TITLES
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 CITATIONS
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 121, the
bank accounting requirements, of the Federal Deposit Insurance
Corporation Improvement Act of 1991. 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)
has requested public comment on proposed reporting requirements,
and the comment period expired on June 14, 1993. Following final
action by the FFIEC, the Board is expected to consider requesting
comment on certain changes to its regulations in order to
implement section 121.
TIMETABLES
ACTION
Board may consider amendments to
Regulations H and Y by
DATE
06/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACTS
Gerald A. Edwards, Jr.
Assistant Director
Division of Banking Supervision and Regulation
202 452-2741
RIN: 7100-AB41
- 6 -
FR CITE
/7-f
4.
TITLES
Regulation: H - Membership of State Banking Institutions in the
Federal Reserve System; and Regulation: Y - Bank Holding
Companies and Change in Bank Control
LEGAL
12
12
12
AUTHORITY:
USC 221 et seq
USC 1841 et seq
USC 3901 et seq
CFR CITATIONS
12 CFR 208
12 CFR 225
ABSTRACT:
On December 16, 1993, acting upon a recommendation from the
Federal Financial Institutions Examination Council, the Board
approved issuing for public comment proposals on the capital
treatment of recourse arrangements and direct credit substitutes.
The 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. The proposals are expected to be issued
for public comment on a joint interagency basis in the first
quarter of 1994.
The proposal would seek preliminary 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 of the exposure. The capital charge that
banking organizations would incur on first loss positions would
be dollar-for-dollar up to the position's effective risk-based
capital requirement. Second loss positions that are rated
investment grade would be assessed capital against the amount of
the position, rather than against the amount of assets for which
the position is providing credit protection. Senior securities
that receive the highest investment rating would be assigned to
the 20 percent risk category.
Small entities would be affected only to the extent that they
engage in extending recourse arrangements or direct credit
substitutes; it is not expected that the proposal would have a
significant economic impact. Following review of the public
comments, the Board is expected to take further action by
year-end.
TIMETABLES
ACTION
Board approved requesting comment
Further Board action by
DATE
12/16/93
12/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
-7-
FR CITE
iO
M lo
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TITLES
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:
Thomas R. Boemio
Supervisory Financial Analyst
Division of Banking Supervision and Regulation
2 02-452-2982
- 8 -
f H
5.
TITLES
Regulation: K - International Banking Operations
LEGAL AUTHORITY:
12 USC 3105
CFR CITATIONS
12 CFR 211
ABSTRACT:
Within the next five months, the Board, in consultation with the
Secretary of the Treasury, will consider action to implement a
portion of section 202(a) of the Federal Deposit Insurance
Corporation Improvement Act of 1991 with respect to the criteria
to be used in evaluating the operations of foreign banks that the
Board has determined are not subject to comprehensive supervision
or regulation on a consolidated basis. It is undetermined what
economic impact this proposal would have on small institutions.
TIMETABLES
ACTION
Board will consider requesting
comment by
DATE
07/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Undetermined
AGENCY CONTACTS
Ann Misback
Senior Attorney
Legal Division
202 452-3788
RINS
7100-AB58
-9-
FR CITE
toy
M loVOo
6.
TITLES
Regulation: M - Consumer Leasing (Docket Number: R-0815)
LEGAL AUTHORITY:
15 USC 1604
CFR CITATIONS
12 CFR 213
ABSTRACT:
The Board is proposing to undertake a complete review of
Regulation M, under the Board*s Regulatory Planning and Review
Program. The Program calls for the periodic review of Board
regulations to determine whether a regulation should be
eliminated, simplified, updated, or otherwise revised. To gather
information needed for this review, and to ensure the
participation of interested parties at the beginning of the
process, the Board in November 1993, approved issuing for public
comment an advance notice of the proposed rulemaking, soliciting
comment, generally, on revisions to the regulation, while also
soliciting comment on specific issues dealing with early
termination penalties, advertising, and segregation of disclosure
terms from other information (58 FR 61035, November 19, 1993).
The comment period, originally scheduled to end on January 24,
has been extended to February 24, 1994. Following review of the
public comments, the Board will decide by mid-year whether to
pursue proposed revisions to the regulation.
TIMETABLES
ACTION
Board approved requesting comment
Further Board action by
DATE
11/19/93
06/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Adrienne D. Hurt
Managing Counsel - Financial Services Section
Division of Consumer and Community Affairs
202-452-2412
- 1 0 -
FR CITE
58 FR 61035
M lovoo
TITLES
Regulation: T - Credit by Brokers and Dealers (Docket Number:
R-0772)
LEGAL AUTHORITY:
15 USC 78g Securities Exchange Act of 1934, as amended
15 USC 78h Securities Exchange Act of 1934, as amended
15 USC 78w Securities Exchange Act of 1934, as amended
CFR CITATION:
12 CFR 220
ABSTRACT:
The Board is conducting a review of Regulation T, which regulates
extensions of credit by and to brokers and dealers. The review
will consider whether any provisions of the regulation are in
need of updating and whether any substantive changes are
necessary because of developments in the securities markets,
including the development of new products and services and the
expansion of global markets. In August 1992, the Board approved a
general request for comments to aid in its review (57 FR 37109,
August 18, 1992). Following evaluation of the public comments,
the Board will again seek comment on any regulatory proposals
that may be developed. It is not anticipated that the revisions
would have a significant economic impact on the overall lending
activities of a substantial number of small brokerage firms.
TIMETABLE:
ACTION
Board approved requesting comment
Further Board action expected by
DATE
08/18/92
06/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Laura Homer
Assistant Director
Division of Banking Supervision and Regulation
202 452-2781
RIN: 7100-AB28
- 1 1 -
FR CITE
57 FR 37109
M
10 l
TITLE:
Regulation: U - Credit by Banks for the Purpose of Purchasing or
Carrying Margin Stocks
LEGAL
15
15
15
AUTHORITY:
USC
78g Securities Exchange Act of 1934, as amended
USC 78h Securities Exchange Act of 1934, as amended
USC 78w Securities Exchange Act of 1934, as amended
CFR CITATION:
12 CFR 221
ABSTRACT:
During the first half of 1994, the Board plans to begin a review
of Regulation U, which generally regulates bank extensions of
credit that are secured by publicly-traded stock. The review will
consider whether any provisions of the regulation are in need of
updating and whether any substantive changes are necessary
because of developments in the banking and securities markets.
Public comment will be requested for any regulatory proposals
that may be developed following the 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.
TIMETABLE:
ACTION
Board may issue advanced notice of
proposed rulemaking and request for
comment by
DATE
07/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Laura Homer
Assistant Director
Division of Banking Supervision and Regulation
•202 452-2781
RIN: 7100-AB65
- 1 2 -
FR CITE
M loioo
9.
TITLES
Regulation: Y - Bank Holding Companies and Change in Bank Control
LEGAL AUTHORITY:
12 USC 1834a
12 USC 1834b
CFR CITATIONS
12 CFR 225
ABSTRACT:
Sections 233 and 234 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 require the Board and other regulatory
agencies to become involved in an effort to get banks to
participate in certain types of lending activities in designated
distressed communities. Banks that do the appropriate type of
lending in the appropriate "distressed communities" will receive
assessment credits for their FDIC insurance premiums. The law
requires the Board to receive notice of the banks* intent to
involve themselves in these activities, to assist the banks to
define and locate the appropriate communities, and to define
certain terms by regulation. To accomplish the mandates of the
statute, it may be necessary to amend Regulation Y for purposes
of receiving notice of the banks* and holding companies* intent
to form the types of entities discussed in the law and to do the
type of lending intended by the law. It may also be necessary to
amend the regulation to provide the definitions of "nonprofit
organization" and "small business" called for by the statute. It
is not expected that any proposed regulation would have a
significant economic impact on small institutions.
These provisions only take effect if, and when, Congress
appropriates funds to cover the impact they may have on the Bank
Insurance Fund. Consequently, the timing is somewhat uncertain.
TIMETABLES
ACTION
Date of action undetermined
DATE
00/00/00
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Glenn E. Loney
Assistant Director
Division of Consumer and Community Affairs
202 452-3585
RIN: 7100-AB29
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FR CITE
M
lo to o
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TITLES
Regulation: Y - Bank Holding Companies and Change in Bank Control
LEGAL AUTHORITY:
12 USC 1972(1)
CFR CITATIONS
12 CFR 225
ABSTRACT:
Section 106(b) of the Bank Holding Company Act Amendments of 1970
generally prohibits banks from fixing or varying the
consideration for a product or service on condition that the
customer purchases another product or service offered by the bank
or any of its affiliates. Section 106 provides an exemption to
this tying prohibition if the customer also obtains a loan,
discount, deposit, or trust service ("traditional bank products”)
from that bank (but not an affiliate of that bank). The statute
further provides that the Board may, by regulation or order,
permit exceptions from the antitying prohibition where the Board
determines that an exception will not be contrary to the purposes
of the section. The Board recently approved an exemption for a
brokerage subsidiary of the First Union bank to offer discounts
on commissions for brokerage services to customers who maintain a
minimum balance in accounts at any First Union bank. First Union
Corporation. 80 Federal Reserve Bulletin 166 (1994). Within the
next three months, the Board will consider issuing for public
comment a proposed rule to make this exemption available to all
bank holding companies. The proposed regulation will not have a
significant economic impact on a substantial number of small
entities that would be subject to the proposed rule.
TIMETABLES
ACTION
Board is expected to request
comment by
DATE
05/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Robert Frierson
Managing Senior Counsel
Legal Division
202-452-3711
FR CITE
11.
TITLES
Lifeline Accounts
LEGAL AUTHORITY:
12 USC 1817
12 USC 1834
CFR CITATIONS
00 CFR None
ABSTRACT:
Section 232 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 requires the Board with the FDIC to
establish minimum requirements for "lifeline" transaction
accounts. An insured depository institution that chooses to offer
accounts that meet these requirements will be assessed deposit
insurance premiums on those deposits at a rate of 1/2 the maximum
assessment rate. The Act sets forth factors that the Board and
the FDIC must consider in setting the account requirements, such
as whether the amount of the fee, if any, that is charged for
routine transactions does not exceed a minimal level.
It is expected that the Board will seek public comment by
year-end on a proposal to implement section 232.
It is not anticipated that implementation of the law, due to its
voluntary character, will have a significant impact on a
substantial number of small institutions.
TIMETABLES
ACTION
Board action expected by
DATE
12/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Michael S. Bylsma
Senior Attorney
Division of Consumer and Community Affairs
202 452-3667
RIN: 7100-AB40
-15-
FR CITE
f t t lOVOO
Section 2
Final Rule Stage
-16-
12.
TITLES
Regulation: E - Electronic Fund Transfers
LEGAL AUTHORITY:
15 USC 1693 et seq "Electronic Fund Transfer Act"
CFR CITATIONS
12 CFR 205
ABSTRACT:
The Board is conducting a review of Regulation E, which
implements the Electronic Fund Transfer Act, and establishes the
basic rights, liabilities, and responsibilities of consumers who
use electronic fund transfer services and of financial
institutions that offer these services (whether or not these
institutions hold the consumer*s account). The review is part of
the Board's Regulatory Planning and Review Program which provides
for the periodic review of Board regulations to determine whether
a regulation should be eliminated, simplified, updated or
otherwise revised.
On February 16, 1994, the Board approved issuing for public
comment a revised Regulation E that includes, among other things,
simplified language and format (Federal Register cite
unavailable). As part of the proposal, the scope of several
exemptions would be expanded. A small institution exemption would
apply to institutions with assets under $100,000; currently the
exemption applies to institutions with assets under $25,000. Also
under the proposal, the staff commentary to Regulation E would be
significantly improved to facilitate compliance. As a whole, the
proposed changes to Regulation E would likely reduce regulatory
burden within the limits of a very specific statute, without
sacrificing consumer benefits. The proposals are not expected to
have a significant economic impact on small institutions.
Following review of the public comments, the Board is expected to
take further action by year-end.
TIMETABLES
ACTION
Board approved requesting comment
Further Board action by
DATE
02/16/94
12/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Adrienne D . Hurt
Managing Counsel - Financial Services Section
Division of Consumer and Community Affairs
202 452-2412
RINS 7100-AA77
-17-
FR CITE
jfWio^/oo
13.
TITLES
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-0803)
LEGAL AUTHORITY:
12 USC 3331 et seq
CFR CITATIONS
12 CFR 225, Subpart G
ABSTRACT:
In June 1993, the Board and other federal financial regulatory
agencies issued for public comment proposed amendments to their
real estate appraisal regulations that would (1) increase the
threshold level at or below which appraisals are not required
from $100,000 to $250,000; (2) expand and clarify other existing
exemptions to the appraisal regulations; and (3) identify
additional exemptions. In addition, the proposal would amend or
delete existing requirements governing appraisal standards and
appraiser independence.
In November 1993, the agencies made available supplemental
information on the proposed rule and extended the comment period
for thirty days in order to allow commenters to consider and
comment on the information (58 FR 59688, November 10, 1993). The
supplemental information related primarily to the proposed
increase in the threshold.
Previously, in November and December 1990, the Board had issued
for public comment proposed amendments to the appraisal
regulation to lower the threshold to conform to the level at that
time of the other agencies (55 FR 49057, November 26, 1990) and
to adopt a final rule requiring compliance with the Uniform
Standards of Professional Appraisal Practice (USPAP) (55 FR
53609, December 31, 1990; RIN: 7100-AB27). As a result of the
other agencies conforming their thresholds to the Board's level,
the Board took no further action on the November 1990 proposed
•amendments; the Board will take final action on the December 1990
USPAP proposal when the current proposal is finalized.
The current proposal is not expected to have a significant
economic impact on a substantial number of small entities and, if
adopted, is expected to result in reduced regulatory burden for
some small entities. Following review of the public comments and
coordination with the other agencies, the Board is expected to
take further action within the next two months.
TIMETABLE:
ACTION
Board requested comment
Board requested comment on a revised
proposal
Further Board action expected by
SMALL ENTITIES AFFECTED: Yes
-18-
DATE
11/26/90
06/04/93
04/00/94
FR CITE
55 FR 49057
58 FR 31878
M- io*rob
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-0803)
AGENCY CONTACT:
Virginia Gibbs
Supervisory Financial Analyst
Division of Banking Supervision and Regulation
202 452-2521
RIN: 7100-AB20
-19-
(O'TOO
14.
TITLES
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-0773)
LEGAL AUTHORITY:
12 USC 248(i)
12 USC 1844(b)
CFR CITATIONS
12 CFR Part 208
12 CFR Part 225
12 CFR Part 265
ABSTRACT:
In August 1992, the Board approved several proposals to reduce
burden that is associated with the process for seeking Board
approval for a variety of transactions (57 FR 39641, September 1,
1992). In particular, the Board agreed to (1) establish certain
procedures to limit extension of the pre-acceptance period for
applications; (2) permit prospective applicants the opportunity
to submit a pre-filing notice of intent to file an application;
(3) eliminate the stock redemption notice requirement for bank
holding companies that are and would remain well capitalized on a
consolidated basis and in generally satisfactory condition
following the redemption; (4) expand the authority of Reserve
Banks to process all delegable applications without Board staff
review; (5) modify the Board's delegation rules that pertain to
competition and market concentration; (6) reduce redundant
post-acceptance processing of Board action cases; and (7)
increase monitoring of cases that require extended processing.
In addition, the Board determined to invite comment on a proposal
to establish a general consent procedure for investments in bank
premises by state member banks. Section 24A of the Federal
Reserve Act requires state member banks to obtain the Board's
approval prior to making investments in bank premises that would
result in the bank's aggregate level of investments in bank
premises to exceed the bank's capital stock account.
Finally, the Board determined to invite public comment on any
other ways in which the burdens on applicants under the current
regulation may be reduced in a manner consistent with the Board's
responsibilities under applicable law.
These proposals are part of the Board's ongoing efforts to reduce
regulatory burdens on financial institutions regulated by the
Board and should not have a significant economic impact on small
entities. Following review of the public comments, the Board is
expected to take further action within the next six months.
TIMETABLE:
ACTION
Board requested public comment
Further Board action by
DATE
09/01/92
08/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
- 2 0 -
FR CITE
57 FR 39641
P r \ - 10 * / 0 0
TITLES
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:
Patrick J. McDivitt
Attorney
Legal Division
202 452-3818
RINS 7100-AB55
- 2 1 -
IW- \ CPtDO
15.
TITLES
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-0795)
LEGAL AUTHORITY:
12 USC 1844(b)
12 USC 3909
CFR CITATIONS
12 CFR 208
12 CFR 225
ABSTRACT:
In February 1993, the Board issued for public comment a proposed
limitation on deferred tax assets for risk-based and leverage
capital purposes (58 FR 8007, February 11, 1993). This proposal
is in response to the adoption, by the Financial Accounting
Standards Board, of Statement No. 109 (FASB 109) which provides
new accounting guidance on deferred tax assets. This proposal
will affect the treatment of these assets for capital purposes
for all state member banks and bank holding companies regardless
of size. However, it is not expected that the proposal will have
a significant economic impact on a substantial number of small
banking organizations, as the vast majority of small banking
organizations currently have very limited amounts of net deferred
tax assets as a component of their capital structures.
Following review of the public comments and comments received by
the other federal banking agencies on their proposals, the Board
is expected to take further action within the next two months.
TIMETABLES
ACTION
Board requested public comment
Further Board action by
DATE
02/11/93
05/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Charles Holm
Project Manager
Division of Banking Supervision and Regulation
202 452-3502
RINs 7100-AB57
- 2 2 -
FR CITE
58 FR 8007
M
lOVDO
•
16.
TITLES
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-0823)
LEGAL
12
12
12
AUTHORITY:
USC 221 et seq
USC 1841 et seq
USC 3901 et seq
CFR CITATIONS
12 CFR Part 208
12 CFR Part 225
ABSTRACT:
On May 31, 1993, the Financial Accounting Standards Board issued
a new accounting standard, FASB Statement Number 115, "Accounting
for Certain Investments in Debt and Equity Securities,” which, in
essence, adds a new component to common stockholders' equity,
"net unrealized holding gains and losses on securities available
for sale." In August 1993, the Board approved the adoption of
FASB 115 for reporting purposes. In December 1993, the Board
approved issuing for public comment a proposal to amend its
risk-based and leverage capital guidelines (Regulations H and Y)
to include "net unrealized gains and losses on securities
available for sale" in Tier 1 capital (58 FR 68563, December 28,
1993). The amendment to the risk-based capital and leverage
guidelines will affect bank holding companies with total
consolidated assets of $150 million or more and all State member
banks. The proposal 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 four months.
TIMETABLES
ACTION
Board requested public comment
Further Board action expected by
DATE
12/28/93
06/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Arleen Lustig
Supervisory Financial Analyst
Division of Banking Supervision and Regulation
202-452-2987
-23-
FR CITE
58 FR 68563
/W -/O YO O
17.
TITLES
Regulation: J - Collection of Checks and Other Items by Federal
Reserve Banks and Funds Transfers Through Fedwire (Docket Number:
R-0821
LEGAL
12
12
12
12
12
12
12
AUTHORITY:
USC 248 (i)
USC 248 (j)
USC 248 (o)
USC 342
USC 360
USC 464
USC 4001 to 4010
CFR CITATIONS
12 CFR 210
ABSTRACT:
In December 1993, the Board approved issuing for public comment
proposed amendments to Regulation J to conform the warranties and
various other provisions of Regulation J to recent amendments to
Regulation CC (Availability of Funds and Collection of Checks)
and the Uniform Commercial Code (58 FR 68566, December 28, 1993).
Following review of the public comments, the Board is expected to
take further action within the next two months.
It is not expected that the proposed amendments would impose any
substantial economic burden on small entities.
TIMETABLES
ACTION
Board requested comment
Further Board action by
DATE
12/28/83
04/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
.Stephanie Martin
Senior Attorney
Legal Division
202 452-3198
RINS 7100-AB66
-24-
FR CITE
58 FR 68566
4 i
IO Y O O
18.
TITLES
Regulation: K - International Banking Operations (Docket Number:
R-0754)
LEGAL AUTHORITY:
12 USC 3105
12 USC 3108
CFR CITATIONS
12 CFR 211
ABSTRACT:
In January 1993, following review of the public comments, the
Board issued a final rule implementing sections 202-204 and 206
of Title II of the Federal Deposit Insurance Corporation
Improvement Act of 1991 which, among other things, require prior
approval of the Board for the establishment of branches,
agencies, commercial lending companies and representative offices
by foreign banks in the United States (58 FR 6348, January 28,
1993). It is not expected that the final rule will have a
significant economic impact on small institutions.
The Board also requested additional public comment on those
portions of the final rule that deal with representative offices
of foreign banks. Comments were sought on the definition of
representative office and on the standards that should govern the.
activities that a representative office may conduct. Following
review of the public comments, the Board is expected to take
further action within the next five months.
TIMETABLES
ACTION
Board issued an interim rule
Board issued a final rule and
request for comment
Further Board action by
DATE
04/15/92
01/28/93
07/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Ann Misback
Senior Attorney
Legal Division
202 452-3788
RIN: 7100-AB31
-25-
FR CITE
57 FR 12992
58 FR 6348
/ l+ lo v o o
19.
TITLES
Regulation: K - International Banking Operations (Docket Number:
R-0793)
LEGAL AUTHORITY:
12 USC 3105
12 USC 3108
CFR CITATIONS
12 CFR 211
ABSTRACT:
In January 1993, the Board issued for public comment proposed
amendments to Regulation K implementing section 202(a) of the
Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA) with respect to the limitation on the powers of state
branches and agencies of foreign banks (58 FR 513, January 6,
1993). Following review of the public comments and in
consultation with the FDIC, the Board is expected to take further
action by midyear. It is not expected that a final rule would
have a significant economic impact on small institutions.
TIMETABLES
ACTION
Board requested public comment
Further Board action by
DATE
01/06/93
07/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Ann Misback
Senior Attorney
Legal Division
202 452-3788
RINS 7100-AB4 6
-26-
FR CITE
58 FR 513
/ f f /1
20.
TITLE:
Regulation: K - International Banking Operations (Docker Number:
R-0820)
LEGAL AUTHORITY:
PL 102-242
CFR CITATION:
12 CFR 211, subpart B
ABSTRACT:
Section 203(a) of the Foreign Bank Supervision Enhancement Act of
1991 provides that the cost of examinations of branches,
agencies, and representative offices of foreign banks in the
United States shall be assessed against the foreign bank or its
parent. In October 1993, the Board approved issuing for public
comment a proposed methodology for assessing such examination
costs (58 FR 65560, December 15, 1993). Foreign banks with
branches, agencies, or representative offices in the United
States will be affected by the proposal.
The proposal is not expected to have a significant economic
impact on a substantial number of small business entities.
Following review of the public comments, the Board is expected to
take further action by year-end.
TIMETABLE:
ACTION
Board requested public comment
Further Board action by
DATE
12/15/93
12/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Sandy Richardson
Senior Attorney
Legal Division
202 452-6406
RIN: 7100-AB67
-27-
FR CITE
58 FR 65560
M + io t d o
2 1 .
TITLES
Regulation: L - Depository Institution Management Interlocks
(Docket Number: R-0825)
LEGAL AUTHORITY:
12 USC 3207
CFR CITATIONS
12 CFR 212
ABSTRACT:
Regulation L implements provisions of the Depository Institution
Management Interlock Act ("DIMIA"), which regulates management
interlocks among depository institutions. Among DIMIA*s
prohibitions are provisions barring management interlocks between
depository organizations with offices in the same community or
metropolitan statistical area ("MSA"). In November 1993, the
Board approved soliciting comment on an amendment to Regulation L
that would permit interlocks otherwise prohibited under the
community or MSA provisions if the institutions involved hold in
the aggregate less than 20 percent of the deposits in the
community or MSA (59 FR 7909, February 17, 1994). The amendment
should benefit smaller organizations by giving them access to a
larger pool of potential management officials. It is not expected
that the proposal will have a significant economic impact on a
substantial number of depository institutions.
Following review of the public comments, the Board is expected to
take further action within the next six months.
TIMETABLES
ACTION
Board requested public comment
Further Board action by
DATE
02/17/94
08/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACTS
Thomas M. Corsi
Senior Attorney
Legal Division
202-452-3275
-28-
FR CITE
59 FR 7909
fl-f/0 /O D
2 2 .
TITLES
Regulation: S - Reimbursement for Providing Financial Records;
Recordkeeping Requirements for Certain Financial Records (Docket
Number: R-0807)
LEGAL AUTHORITY:
PL 102-550
CFR CITATIONS
12 CFR 219, Subpart B
ABSTRACT:
On August 18, 1993, the Board approved issuing for public comment
a proposed joint regulation, promulgated by the Board and the
Treasury Department pursuant to section 21(b) of the Federal
Deposit Insurance Act, as amended by the Annunzio-Wylie AntiMoney Laundering Act of 1992 (58 FR 46024, August 31, 1993). The
proposed regulation would establish recordkeeping requirements
for wire transfers by all financial institutions— including
nonbank financial institutions, such as broker/dealers in
securities, check-cashing businesses, money transmitting
businesses, and businesses that issue or redeem money orders or
travelers' checks.
This proposal may have a significant economic impact on a
substantial number of small businesses that provide check-cashing
services, money-transmitting services, and services concerning
the issuance or redemption of money orders and travelers' checks,
because such businesses may not currently collect or maintain the
information required.
Following review of the public comments and review by the
Department of the Treasury's Bank Secrecy Act Advisory Group, the
Board is expected to take further action during the second half
of 1994.
TIMETABLES
ACTION
Board approved requesting comment
Further Board action by
DATE
08/31/93
12/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACTS
Elaine Boutilier
Senior Attorney
Legal Division
202 452-2418
RINs 7100-AB64
-29-
FR CITE
58 FR 46024
vH W O O
23.
TITLES
Regulation: Y - Bank Holding Companies and Change in Bank Control
(Docket Number: R-0686)
LEGAL AUTHORITY:
PL 101-73, 103 Stat 183
CFR CITATIONS
12 CFR Part 225, Subpart H
ABSTRACT:
In February 1990, the Board approved issuing for public comment a
proposed regulation, which implements section 914 of the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989, requiring banks and bank holding companies to provide
notice to the Federal Reserve System 30 days before adding any
individual to the institutions board of directors or employing
any individual as a senior executive officer under certain
circumstances (55 FR 6787, February 27, 1990). Notice would be
required if the institution is failing to meet minimum capital
standards or is otherwise in a troubled condition, has undergone
a change in control within the past two years, or has received a
bank charter within the past two years. The regulation defines
"senior executive officer," "troubled condition," and "change in
control."
The proposal is not expected to have a significant economic
impact on a substantial number of small business entities. State
member banks and bank holding companies will be affected if they
meet one of the criteria that triggers the notice requirements.
Following review of public comments, the Board is expected to
take further action within the next six months.
TIMETABLES
ACTION
Board approved proposal for comment
Further Board action by
DATE
02/27/90
08/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Robert Frierson
Managing Senior Counsel
Legal Division
202 452-3711
RINS 7100-AB07
-30-
FR CITE
55 FR 6787
24.
TITLE:
Regulation: BB - Community Reinvestment (Docker Number: R-0822)
LEGAL
12
12
12
12
12
AUTHORITY:
USC 321
USC 325
USC 1814
USC 1816
USC 1828
CFR CITATION:
12 CFR 228
ABSTRACT:
In December 1993, the Board and the other financial supervisory
agencies proposed for public comment amendments to the
regulations implementing the Community Reinvestment Act (CRA) (58
FR 67465, December 21, 1993). The proposed regulations would
replace the existing regulations. The purpose of the proposal is
to develop more objective and enforceable regulatory requirements
while reducing regulatory burden. To do this, the proposal calls
for a new set of tests of banks' CRA related performance based on
their lending, services, and investments in low- and
moderate-income communities. It would also require the collection
of new data for larger banks but would provide for a streamlined
assessment of the performance of smaller banks.
All insured depositories would be subject to the proposed
regulation. It is the purpose of the proposal to reduce
regulatory burden, particularly on smaller institutions, and it
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 six months.
TIMETABLE:
ACTION
Board requested public comment
Further Board action within the
next six months
DATE
12/21/93
08/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACT:
Glenn E. Loney
Associate Director
Division of Consumer and Community Affairs
202-452-3585
-31-
FR CITE
58 FR 67465
/U- ( 0 * 7 0 0
25.
TITLES
Regulation: DD - Truth in Savings (Docket Number: R-0812)
LEGAL AUTHORITY:
12 USC 4301 et seq
CFR CITATIONS
12 CFR 230
ABSTRACTS
Sections 261-275 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 July 1993, the Board approved issuing for public comment
proposed amendments to Regulation DD regarding the calculation of
the annual percentage yield (APY) (58 FR 64190, December 6,
1993). The proposal would require institutions to use a new
formula to calculate the APY for accounts where consumers receive
interest payments (by check or transfer to another account) more
frequently than interest is compounded. The formula would also be
used if interest is not compounded but the consumer receives
interest periodically during the term of the account.
The amendments will apply to both large and small institutions.
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.
Following review of the public comments, the Board is expected to
take further action within the next three months.
TIMETABLES
ACTION
Board requested comment
Board is expected to take further
action by
DATE
12/06/93
05/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACTS
Leonard Chanin
Managing Counsel
Division of Consumer and Community Affairs
202 452-3667
RINS 7100-AB68
-32-
FR CITE
58 FR 64190
M t o v o o
26.
TITLES
Federal Reserve Bank Services (Docket Number: R-0817)
LEGAL
12
12
12
12
12
AUTHORITY:
USC 248(i)
USC 248 (j)
USC 248(0)
USC 342
USC 464
CFR CITATIONS
00 CFR None
ABSTRACT:
In December 1993, the Board requested public comment on a
proposal to expand the Fedwire funds transfer format and to adopt
a more comprehensive set of data elements, to be implemented in
late 1996 (58 FR 63366, December 1, 1993). The proposal would
improve payments system efficiency by reducing the need for
manual intervention in transfer processing and posting and would
minimize the truncation of information when payment orders are
forwarded to Fedwire from other large-value transfer systems. The
proposal also would permit inclusion of information on all
parties to a transfer, as would be required under proposed
Treasury regulations.
Although the proposal would affect all Fedwire users, the Board
expects that only relatively large entities using in-house or
vendor-supplied systems will need to make significant automation
changes. The proposal should not have a significant economic
impact on a substantial number of small entities. Small entities
generally use software provided by the Federal Reserve and would
likely experience increased costs only in the areas of training
and back office interface. Following review of the public
comments, the Board is expected to take further action by
mid-1994.
TIMETABLES
ACTION
Board requested public comment
Further Board action by
DATE
12/01/93
06/00/94
FR CITE
58 FR 63366
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Gayle Brett
Manager
Division of Reserve Bank Operations and Payment Systems
202-452-2934
-33-
f\[ (o
m
27.
TITLES
Risk-Based Capital Standards (Docket Number: R-0802)
LEGAL AUTHORITY:
PL 102-242
CFR CITATIONS
12 CFR 208
12 CFR 225
ABSTRACT:
Section 305 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 requires each federal banking agency to
revise its risk-based capital standards for the depository
institutions it regulates in order to ensure that those standards
take adequate account of interest rate risk (IRR), concentration
of credit risk, and the risks of nontraditional activities.
In March 1993, following a review of comments received from an
advanced notice of proposed rulemaking issued in 1992, and after
staff discussions with the other agencies, the Board approved for
public comment a notice of proposed rulemaking for IRR (58 FR
48206, September 14, 1993). This proposal would allow
institutions to use internal risk models to measure IRR (if the
models are acceptable to examiners) and would require additional
capital of institutions identified as having excess IRR. Also, in
an effort to reduce the burden on small institutions, the
proposal would exempt an estimated 8,000 institutions from any
additional reporting.
The Board also approved for comment proposals regarding
nontraditional and concentration risks that provide bankers and
examiners substantial flexibility to evaluate these risks.
Following review of the public comments, the Board and the other
banking agencies are expected to take further action within the
next four months.
TIMETABLES
ACTION
Board requested public comment
on an ANPR
Board approved requesting comment on
proposed rulemaking
Final Board action expected by
DATE
08/10/92
FR CITE
57 FR 35507
09/14/93
06/00/94
58 FR 48206
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACTS
James Embersit
Manager
Division of Banking Supervision and Regulation
202 452-5249
RINS 7100-AB50
-34-
/ 0^
28.
TITLES
Standards for Safety and Soundness (Docket Number: R-0766)
LEGAL AUTHORITY:
PL 102-242
CFR CITATIONS
12 CFR Chapter II
ABSTRACT:
Section 132 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 directs each Federal banking agency to
prescribe standards regarding operations, management, asset
quality, earnings, stock valuation (to the extent feasible), and
employee compensation. In July 1992, the Board requested public
comment on an interagency advance notice of proposed rulemaking
(57 FR 31336, July 15, 1992). After considering the public's
comments, a notice of proposed rulemaking was developed that
contains broad principle-based standards that leave the method
for meeting such standards largely in the province of management.
The proposed standards are specific enough to identify emerging
safety and soundness problems and require submission of a
compliance plan before those problems become serious; however,
the standards do not specify each operational and managerial
procedure an institution must have in place. The Board believes
that well-managed institutions generally should not find it
necessary to amend their operations in order to comply with the
operational and managerial standards.
A draft notice of proposed rulemaking was approved by the Board
in April 1993, and a similar version was approved by the Federal
Deposit Insurance Corporation in early June. An interagency
notice was published, after the Office of Thrift Supervision and
the Office of the Comptroller of the Currency completed their
approval processes (58 FR 60802, November 18, 1993). The proposal
is not expected to impose a significant economic hardship on
small institutions.
Following review of the public comments, the Board is expected to
take further action by mid-year.
TIMETABLES
ACTION
DATE
Board requested public comment
07/15/92
Board issued notice of proposed rulemaking 11/18/93
Further Board action by
06/00/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Roger T. Cole
Deputy Associate Director
Division of Banking Supervision and Regulation
202 452-2618
RIN: 7100-AB52
-35-
FR CITE
57 FR 31336
58 FR 60802
4-f/o^oo
Section 3
Completed Section
-36-
t H i o Y O o
29.
TITLES
Regulation: A - Extensions of Credit by Federal Reserve Banks
(Docket Number: R-0808)
LEGAL AUTHORITY:
12 USC 347
12 USC 248
CFR CITATION:
12 CFR 201
ABSTRACT:
Section 142 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (Federal Reserve Discount Window
Advances) modified the Federal Reserve Act by placing limitations
on Federal Reserve Bank liquidity lending to undercapitalized and
critically undercapitalized depository institutions. In August
1993, the Board approved issuing for public comment revisions to
Regulation A to reflect these changes. In December 1993,
following review of the public comments, the Board adopted final
revisions to Regulation A in substantially the form proposed (58
FR 68509, December 28, 1993). The regulation applies to
extensions of credit to all depository institutions (both large
and small). The regulation limits credit to certain
undercapitalized and critically undercapitalized insured
depository institutions, including small depository institutions.
TIMETABLE:
ACTION
Board approved requesting comment
Board adopted proposal
DATE
08/31/93
12/28/93
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACT:
Manley Williams
Attorney
Legal Division
202 736-5565
RIN: 7100-AB56
-37-
FR CITE
58 FR 45851
58 FR 68509
PA \onoo
30.
TITLES
Regulation: B - Equal Credit Opportunity (Docket Number: R-0782)
LEGAL AUTHORITY:
15 USC 1691b
CFR CITATIONS
12 CFR 202
ABSTRACT:
Section 223 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 amended the Equal Credit Opportunity Act
(ECOA) to require that upon written request a creditor must
provide a credit applicant with a copy of the appraisal report
used in connection with an application for a loan secured by a
lien on residential real property. In addition, the enforcement
provisions of the ECOA are amended to require the federal
financial supervisory agencies responsible for enforcing the ECOA
to refer certain matters involving credit discrimination to the
Department of Justice or the Department of Housing and Urban
Development.
In December 1992, the Board issued for public comment proposed
revisions to Regulation B that would implement the ECOA
amendments. The proposal is not expected to have a substantial
economic impact on small banks. Following review of the public
comments, the Board adopted final amendments to the regulation in
December 1993 (58 FR 65657, December 16, 1993).
TIMETABLES
ACTION
Board requested comment
Board adopted revisions
DATE
12/07/92
12/16/93
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Leonard Chanin
Managing Counsel
Division of Consumer and Community Affairs
202 452-3667
RIN: 7100-AB34
-38-
FR CITE
57 FR 57697
58 FR 65657
M l o i o o
31.
TITLES
Regulation: E - Electronic Fund Transfers (Docket Number: R-0796)
LEGAL AUTHORITY:
15 USC 1693 et seq. "Electronic Fund Transfer Act"
CFR CITATIONS
12 CFR 205
ABSTRACTS
Regulation E implements the Electronic Fund Transfer Act, which
establishes the basic rights, liabilities, and responsibilities
of consumers who use electronic fund transfer services and of the
institutions (including traditional depository institutions and
other entities, whether or not they hold the consumer*s account)
that offer these services. In February 1993, the Board issued for
public comment a proposal that would apply Regulation E to
electronic benefit transfer (EBT) programs established by
federal, state, and local agencies to automate the delivery of
government benefits to recipients. EBT programs involve such
benefits as Aid to Families with Dependent Children, food stamps,
and Supplemental Security Income. (The Board's consideration of
other revisions to the existing regulation, under its Regulatory
Improvement Program, is discussed in RIN: 7100-AA77.)
This proposal would affect primarily government agencies that
administer EBT programs, and would affect only indirectly most
depository institutions and other private-sector entities. It is
not anticipated that the proposed revisions would have a
significant economic impact on small banks.
On February 16, 1994, following review of the public comments,
the Board adopted a final rule to cover EBT systems (Federal
Register cite unavailable). Except for periodic statements, EBT
systems must be in full compliance with all applicable Regulation
E rules, including the rules on consumer liability for
unauthorized transactions and error resolution. The amendments to
Regulation E are effective immediately upon publication in the
Federal Register: however, mandatory compliance is deferred until
March 1, 1997.
TIMETABLES
ACTION
Board requested public comment
Board adopted proposal
DATE
02/17/93
02/16/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Adrienne D. Hurt
Managing Counsel - Financial Services Section
Division of Consumer and Community Affairs
202 451-2412
RINs 7100-AB47
-39-
FR CITE
58 FR 8714
$+■ 10*700
32.
TITLES
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-0756)
LEGAL AUTHORITY:
PL 102-233, Sec 618(b) "Resolution Trust Corporation Refinancing,
Restructuring, and Improvement Act of 1991"
CFR CITATIONS
12 CFR 208, Appendix A
12 CFR 225, Appendix A
ABSTRACT:
In April 1992, the Board issued for public comment proposed
modifications to its risk-based capital guidelines. The first
proposed modification implements section 618(b) of the RTC
Refunding Act of 1991 requiring the Federal banking agencies to
lower the risk weight for multifamily housing loans from 100
percent to 50 percent. The second proposed modification, adopted
in December 1992, lowers the risk weight for certain
collateralized transactions from 20 percent to 0 percent in order
to better reflect the risk of such transactions. The latter
proposal places U.S. banking organizations on a more equal
footing with foreign banks subject to the Basle Accord with
regard to capital requirements for certain low-risk
collateralized transactions.
It is not anticipated that the revisions will have a significant
impact on a substantial number of small institutions. A lower
risk category for multifamily housing loans and certain
collateralized transactions may help some small organizations
with their capital ratios, but the impact will be small.
In December 1993, following review of the public comments, the
Board adopted the modification regarding multifamily housing
loans in substantially the form proposed (58 FR 68735, December
29, 1993).
TIMETABLES
ACTION
Board requested comment
Board adopted one of two modifications
Board adopted the second modification
DATE
04/20/92
12/30/92
12/29/93
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Robert Motyka
Supervisory Financial Analyst
Division of Banking Supervision and Regulation
202 452-3621
RINS 7100-AB53
-40-
FR CITE
57 FR 14362
57 FR 62180
58 FR 68735
/o
33.
TITLES
Regulation: O - Loans to Executive Officers, Directors, and
Principal Shareholders of Member Banks (Docket Number: R-0800)
LEGAL AUTHORITY:
PL 102-242, sec 306(d)
CFR CITATION:
12 CFR 215
ABSTRACT:
In May 1992, the Board amended Regulation O to implement
provisions of the Federal Deposit Insurance Corporation Act to
permit smaller banks (deposits under $100 million) to increase
their aggregate insider lending limit from 100 percent to 200
percent of unimpaired capital and unimpaired surplus, for the one
year period ending May 18, 1993. In May 1993, the Board approved
extending the provision for six months, through November 18,
1993, and requesting additional comments on making the provision
permanent, modifying or permitting it to expire. In November
1993, the Board again extended the interim rule, through February
18, 1994.
In January 1994, following review of the public comments, the
Board adopted the provision with three modifications: to qualify
for the higher lending limit, a bank must be in satisfactory
overall condition as determined in the most recent report of
examination of the bank, as well as being adequately capitalized;
a bank operating above the 100 percent limit that subsequently
becomes ineligible for the higher limit may retain its existing
insider loans but may not extend additional credit in excess of
the 100 percent; and banks will no longer be required to file the
required resolutions with their primary regulator or the Board.
The resolutions are to be made available for inspection during
the examination process (59 FR 8831, February 24, 1994).
Although the rulemaking will apply to all banks with deposits
under $100 million, it should not have a significant economic
impact on smaller banks.
TIMETABLE:
ACTION
Board extended provisions of
Regulation O
Board adopted provisions
DATE
05/14/93
FR CITE
58 FR 28492
02/24/94
59 FR 8831
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACT:
Gordon L. Miller
Attorney
Legal Division
202 452-2534
RIN: 7100-AB69
-41-
M
to*loo
34.
TITLES
Regulation: O - Loans to Executive Officers, Directors, and
Principal Shareholders of Member Banks (Docket Number: R-0809)
LEGAL AUTHORITY:
PL 102-242, sec 306 (2)
CFR CITATIONS
12 CFR 215
ABSTRACT:
The Housing and Community Development Act of 1992 authorized the
Board to adopt exceptions to the definition of "extension of
credit" in section 22(h) of the Federal Reserve Act for
transactions that pose minimal risk to the lending bank. In
August 1993, the Board approved requesting public comment on
proposed amendments to Regulation 0 under this new authority. The
proposed amendments would: (1) create an exception to the
aggregate lending limit for the purchase of certain consumer
installment paper; (2) modify the definition of "extension of
credit" by (a) clarifying that the provision defining any
transaction that has a "tangible economic benefit" to an insider
as an extension of credit to the insider does not cover bona fide
extensions of credit to third parties to finance acquisitions of
property, goods, or services from insiders, (b) excluding from
the definition the discount of obligations sold by an insider to
the bank without recourse, and (c) increasing from $5,000 to
$15,000 the threshold for considering credit card plan debt to be
an extension of credit. The proposed amendments also modified the
recordkeeping requirements of Regulation 0 to allow banks greater
latitude in devising procedures to ensure compliance with the
regulation, and made technical amendments designed to make the
regulation shorter and more understandable.
In January 1994, following review of the public comments, the
Board adopted the amendments in substantially the form proposed
(59 FR 8831, February 24, 1994). Because the proposal will reduce
.regulatory and recordkeeping burdens on all banks, it is not
expected to have an adverse economic impact on small banks.
TIMETABLES
ACTION
Board requested public comment
Board adopted amendments
DATE
09/09/93
02/24/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACTS
Gordon L. Miller
Attorney
Legal Division
202 452-2534
RINs 7100-AB62
-42-
FR CITE
58 FR 47400
59 FR 8831
M lO V d O
35.
TITLES
Regulation: EE - Netting Eligibility for Financial Institutions
(Docket Number: R-0801)
LEGAL AUTHORITY:
12 USC 4402(1)(B)
12 USC 4402(9)
CFR CITATIONS
12 CFR 231
ABSTRACT:
Section 401 et seq of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (FDICIA) contains provisions to validate
netting contracts between and among financial institutions for
the purpose of improving efficiency and reducing systemic risk in
the banking system and financial markets. The FDICIA defines
"financial institution" to include securities brokers or dealers,
depository institutions, futures commission merchants, and any
other institution as determined by the Board, such as
broker-dealer affiliates that engage in netting.
In May 1993, the Board requested public comment on the expansion
of the "financial institution" definition to include entities not
covered by FDICIA. In February 1994, following review of the
public comments, the Board approved a final rule to expand the
definition to institutions that meet certain market activity
thresholds (59 FR 4780, February 2, 1994). Small entities will be
affected only to the extent that they engage in netting
activities in the financial markets and would benefit by being
considered financial institutions for purposes of the FDICIA
netting provisions.
TIMETABLES
ACTION
Board requested comment
Board adopted final rule
DATE
05/19/93
02/02/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: Yes
AGENCY CONTACTS
Stephanie Martin
Senior Attorney
Legal Division
202 452-3198
RIN: 7100-AB35
-43-
FR CITE
58 FR 29149
59 FR 4780
-frllO^OO
36.
TITLES
Federal Reserve Bank Services (Docket Number: R-0778)
LEGAL
12
12
12
12
12
AUTHORITY:
USC 248(i)
USC 240(j)
USC 248(0)
USC 342
USC 464
CFR CITATION:
00 CFR None
ABSTRACT:
In October 1992, the Board requested comment on a proposal to
change the opening time for the Fedwire funds transfer service
from 8:30 a.m. Eastern Time (ET) to 6:30 a.m. ET. The earlier
opening time would reduce settlement risk for futures, options,
and foreign exchange transactions.
The Board also requested comment on whether the Fedwire
securities transfer service should open concurrently with the
funds service at 6:30 a.m. ET and on the costs and benefits of
extended Fedwire hours for depository institutions, their
customers, and the financial markets.
In July 1993, the Board announced a delay in final action on the
proposal pending a staff study further analyzing the complex
issues raised by commenters. On February 9, 1994, following
review of the public comments, the Board announced that the
operating hours for the Fedwire funds transfer service will be
expanded to 18 hours per day (12:30 a.m. to 6:30 p.m. ET) in
early 1997, and that it will seek further comment on expansion of
the securities service hours after implementation of new service
capabilities (Federal Register cite unavailable).
Small entities should not be affected by this action, because
they would be unlikely to choose to open their Fedwire operations
earlier in the morning and would not incur increased costs.
TIMETABLE:
ACTION
Board requested public comment
Board announced delay pending study
Board adopted proposal
DATE
10/14/92
07/28/93
02/09/94
FR CITE
57 FR 47080
58 FR 40430
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACT:
Gayle Brett
Manager
Division of Reserve Bank Operations and Payment Systems
202 452-2934
RIN: 7100-AB61
-44-
/H iovoo
37.
TITLES
Payments System Risk Reduction Program - Policy Statement
(Docket Number: R-0806)
LEGAL AUTHORITY:
12 USC 221 et seq
CFR CITATIONS
None
ABSTRACT:
The Board's payments system risk policy requires depository
institutions to establish a maximum limit, or net debit cap, on
daylight overdrafts in their Federal Reserve accounts.
Institutions that incur a significant amount of daylight
overdrafts must use a self-assessment process to establish their
caps. In August 1993, the Board requested public comment on
revisions to the self-assessment procedures, as they are set out
in the Board's "Guide to the Payments System Risk Policy," to
reduce the burden of conducting a self-assessment and to expand
the assessment to cover operating controls and contingency
procedures. In January 1994, following review of the public
comments, the Board approved the policy statement revisions
substantially as proposed (59 FR 3104, January 20, 1994).
These revisions would not have a significant economic impact on
small depository institutions, because those institutions
generally do not incur significant daylight overdrafts or perform
self-assessments.
TIMETABLES
ACTION
Board approved requesting comment
Board approved policy statement revisions
DATE
FR CITE
08/24/93
01/20/94
58 FR 44677
59 FR 3104
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Paul Bettge
Manager
Division of Reserve Bank Operations
and Payment Systems
202 452-3174
RINS 7100-AB70
-45-
M
io
V
c o
38.
TITLES
Proposals to Modify the Payments System Risk Reduction Program
(Docket Number: R-0693)
LEGAL AUTHORITY:
12 USC 221 et seq
CFR CITATIONS
000 CFR None
ABSTRACT:
In May 1990, the Board requested comment on a proposed change to
its policy on payments system risk to assess a penalty fee on the
maximum daily daylight overdraft incurred by certain institutions
without regular discount window access. The Board proposed that
the penalty rate be the same as the current penalty rate for
overnight overdrafts.
In August 1993, following review of the public comments, the
Board approved a structure under which Reserve Banks will assess
a penalty fee for the average daily daylight overdrafts incurred
by institutions without regular discount window access,
specifically bankers' banks that do not maintain reserves, Edge
and agreement corporations, and limited-purpose trust companies.
The Board requested further comment on the size of the daylight
overdraft penalty rate.
On February 16, 1994, following review of the public comments,
the Board adopted a daylight overdraft penalty rate equal to the
regular daylight overdraft rate plus 100 basis points, adjusted
for the length of the Fedwire day (Federal Register cite
unavailable). The penalty fee is effective April 14, 1994.
It is not expected that this action will have a significant
economic impact on a substantial number of small entities. The
action will affect only a small subset of payments system
participants, who are generally large entities.
TIMETABLES
ACTION
Board requested comment
Board adopted proposal in part and
requested public comment
Board adopted penalty rate
DATE
05/31/90
08/24/93
02/16/94
EFFECTS ON SMALL BUSINESS AND OTHER ENTITIES: None
AGENCY CONTACTS
Stephanie Martin
Senior Attorney
Legal Division
202 452-3198
RINS
7100-AB17
-46-
FR CITE
55 FR 22086
58 FR 44672
@FedFRASER