Bank & Thrift Regulation & Enforcement

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Bank Vault

Markets like certainty.  On July 20, 2020, the Office of the Comptroller of the Currency (the “OCC”) proposed a new rule for national banks and federal savings associations that would solve the “true lender” question and help bring certainty to financial markets.  Under the proposed rule, a bank will be deemed the “true lender” in a bank partnership model if it is either (i) the named lender in the underlying loan agreement or (ii) the party that funds the loan.
Continue Reading OCC Proposal Would Bring Certainty to the Identity of the “True Lender”

CalculatorOn October 29, 2019, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation (the “Federal Banking Agencies”) issued a joint press release announcing a final rule which provides qualifying community banking organizations the ability to opt-in to a new community bank…

On October 16, 2019, the Financial Accounting Standards Board (“FASB”) extended the implementation deadline for the current expected credit loss standard (“CECL”) for qualifying entities.  The new implementation deadlines are as follows:
Continue Reading CECL Implementation Delayed for Qualifying Entities

On May 22, 2018, the House of Representatives passed the bipartisan Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) (the “Consumer Protection Act”), which had been previously passed by the Senate. The Consumer Protection Act will now be sent to President Trump who is expected to sign it into law in the coming weeks.

The Consumer Protection Act becomes the first legislatively enacted regulatory relief bill since the recession, and rolls back various Dodd-Frank Act provisions.  Below we provide a brief summary of some of the Consumer Protection Act’s major provisions.

Capital Simplification for Qualifying Community Banks. The federal banking agencies would be directed to initiate the rulemaking process to develop a “Community Bank Leverage Ratio” of not less than 8 percent and not more than 10 percent for community banks and their holding companies with total consolidated assets of $10 billion or less. Any qualifying community bank or holding company that exceeds the Community Bank Leverage Ratio will be considered well-capitalized.  Qualifying banks that meet this ratio would not even have to calculate the various other capital ratios currently employed by the federal banking regulators (e.g., Total Risk-Based Capital Ratio, Common Equity Tier-1 Capital Ratio, or Tier-1 Risk-Based Capital Ratio).
Continue Reading Update: Regulatory Relief Passed by Congress