Federal Reserve Board

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The Board of Governors of the Federal Reserve (FRB) is holding an open meeting on October 25, 2023 to discuss proposed revisions to the Board’s debit interchange fee cap contained in Regulation II, which implemented the Durbin Amendment.  For large issuers (with $10 billion or more in assets), Section 235.3(a) of Regulation II requires an issuer to charge interchange fees that are “reasonable and proportional to the cost incurred by the issuer with respect to the electronic debit transaction” and Section 235.3(b) of Regulation II caps such fees at 21 cents plus 0.05% of the transaction.… Continue Reading

At its open Board meeting scheduled for October 24, 2023, the Federal Reserve Board is expected to approve its final rule amending its current regulation implementing the Community Reinvestment Act.  The Federal Deposit Insurance Corporation is expected to approve its final CRA rule at the meeting of its Board of Directors also scheduled for October 24.… Continue Reading

Last Friday, the U.S. Supreme Court agreed to decide when a right of action first accrues for an Administrative Procedure Act (APA) challenge to a final rule issued by a federal agency—when the final rule is issued or when the rule first causes injury.

In April 2021, the North Dakota Retail Association, North Dakota Petroleum Marketers Association and Corner Post, Inc.… Continue Reading

Earlier this month, the Federal Reserve Board (FRB) released two supervision and regulation letters regarding the agency’s program to supervise “novel” banking activities.

The release of these letters follows a January policy statement indicating the FRB’s interest in leveling the playing field in terms of subjecting uninsured and insured banks to the same limitations on activities, including novel banking activities. … Continue Reading

The Federal Reserve, FDIC, and OCC have released final interagency guidance for their respective supervised banking organizations on managing risks associated with third-party relationships, including relationships with financial technology-focused entities such as bank/fintech sponsorship arrangements.  The guidance is intended to provide principles for effective third-party risk management for all  types of third-party relationships, regardless of how they may be structured.  … Continue Reading

Last week, the CFPB, together with the Federal Reserve Board (Board), FDIC, OCC, and NCUA, issued a “Joint Statement on Completing the LIBOR Transition.”  The agencies issued the statement to remind supervised institutions that LIBOR will be discontinued on June 30, 2023 and to reiterate their expectations that institutions with LIBOR exposure should complete their transition of remaining LIBOR contracts as soon as possible. … Continue Reading

In light of ongoing events concerning the recent bank failures and the response of regulators, we are releasing this week’s podcast episode earlier than our regular Thursday release date. 

After reviewing the circumstances leading to the failure of SVB and historic parallels, we discuss the merits of the regulators’ decision to invoke the Systemic Risk Exception and protect all SVB deposit accounts, notwithstanding the $250,000 FDIC insurance limitation, alternate approaches that regulators might have considered for protecting uninsured funds, and the Fed’s creation of the Bank Term Funding Program to make available additional funding to eligible depository institutions. … Continue Reading

The final rule issued by the Federal Reserve Board to implement the LIBOR Act by establishing default rules for benchmark replacements in certain contracts that use LIBOR as a reference rate was published in today’s Federal Register and will become effective on February 27, 2023.

Yesterday, Fannie Mae and Freddie Mac issued instructions to servicers on replacement indices for their legacy single-family mortgage loans with 1-month, 6-month, and 1-year LIBOR indices. … Continue Reading

The Federal Reserve Board, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency have issued a joint statement on crypto-asset risks to banking organizations.  The term “crypto-asset” refers to any digital asset implemented using cryptographic techniques.

The statement begins with the agencies’ observations that “[t]he events of the past year have been marked by significant volatility and the exposure of vulnerabilities in the crypto-asset sector” and that “[t]hese events highlight a number of key risks associated with crypto-assets and crypto-asset sector participants that banking organizations should be aware of.”… Continue Reading

The Federal Reserve Board issued a final rule last week that establishes default rules for benchmark replacements in certain contracts that use the London Interbank Offered Rate (LIBOR) as a reference rate.  LIBOR will be discontinued in June 2023.  The rule implements the Adjustable Interest Rate (LIBOR) Act, which was enacted in March 2022. … Continue Reading