Federal Banking Agencies Seek Comment on Call Report Proposal for Small Financial Institutions

On August 5, the FFIEC announced that the OCC, the FDIC, and the Federal Reserve are seeking public comment on a proposal for a new Consolidated Reports of Condition and Income for Eligible Small Institutions (FFIEC 051/Call Report). The proposed Call Report is a streamlined version of the Consolidated Reports of Condition and Income for a Bank with Domestic Offices Only (FFIEC 041), and would be applicable to financial institutions with domestic offices only and total assets of less than $1 billion. Intended to ease the reporting requirements for smaller institutions, the proposed Call Report would remove approximately 40% of about 2,400 data items in FFIEC 041. FFIEC 041 would remain applicable to institutions with domestic offices only that do not file the proposed Call Report. The banking agencies are also seeking public comment on proposed revisions to the FFIEC 041 and the Consolidated Reports of Condition and Income for a Bank with Domestic and Foreign Offices (FFIEC 031). Comments are due 60 days after Federal Register publication, which has not yet occurred.

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OCC to Host Workshop for Bank Directors

From September 19 through September 21, the OCC will host a “Building Blocks for Directors” workshop in St. Louis for directors of national community banks and federal savings associations supervised by the OCC. OCC supervision staff will lead the workshop, which will focus on directors’ duties and responsibilities, relevant laws and regulations, and increasing understanding of the examination process. The OCC is limiting the workshop’s capacity to the first 35 registrants.

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OCC Updates Comptroller’s Handbook to Include New Corporate and Risk Governance Booklet

On July 29, the OCC released the “Corporate and Risk Governance” booklet to update, consolidate, and rescind various booklets in the Comptroller’s Handbook. The new booklet is intended to provide examiners with a summary of corporate and risk governance, related risks, the board’s and management’s respective roles and responsibilities in corporate and risk governance, and examination procedures. The new booklet identifies the following as the primary risk categories associated with corporate and risk governance: (i) strategic; (ii) reputation; (iii) compliance; and (iv) operational. The booklet advises banks to maintain corporate and risk governance structures and practices that align with their changes in size, risk profile, and complexity. According to the booklet, an effective corporate and risk governance framework is key to the safe and sound operation of a financial institution and stimulates public confidence in the financial system.

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Federal Banking Agencies Urge Financial Institutions to Conduct Diversity Self-Assessments

On August 2, the Federal Reserve, OCC, and FDIC released FAQs regarding their standards for assessing the diversity policies and practices of regulated entities. Following the June 10, 2015 Federal Register publication titled “Final Interagency Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies” (Policy Statement), the FAQs seek to clarify the agencies’ standards for entities conducting self-assessments of their diversity policies. Although self-assessments are voluntary, the banking agencies strongly encourage financial institutions to disclose their diversity policies, diversity practices, and self-assessment information on their websites and provide the same to their primary federal financial regulator.

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Agencies Propose Method for Adjusting Small-Loan-Exemption Threshold under HPML Appraisal Rules

On July 22, the CFPB, the Federal Reserve, and the OCC issued a joint proposal “detailing the method that will be used to make annual inflation adjustments to the threshold for exempting small loans from higher-priced mortgage loan appraisal requirements.” The Dodd-Frank Act amended TILA to establish special appraisal requirements for higher-priced mortgage loans (HPMLs). To implement these requirements, the OCC, NCUA, CFPB, Federal Reserve, FDIC, and FHFA issued final rules that became effective on January 18, 2014. The rules exempt transactions of $25,000 or less and require that the $25,000 threshold be adjusted annually to reflect any percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The recently-issued joint proposal would memorialize the calculation method for determining such adjustments and further clarify that, if there is no annual percentage increase in the CPI-W, the exemption threshold from the prior year will not be adjusted. Comments on the proposal are due within 30 days of publication in the Federal Register.

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