Title I

The Federal Reserve is primarily attributing a year-over-year dip in total net income recorded collectively by the nation’s Reserve Banks to a drop in certain interest income tied to securities combined with an uptick in certain security-related interest expenses on securities.

The Reserve Banks have seen a drop in net income in each of the last four years.

Read on for information.

Having avoided joining with two of its regulatory counterparts in endorsing plans to revamp Community Reinvestment Act (CRA) regulations, the Federal Reserve’s ideas regarding CRA reform became clearer in a recent speech by Fed Governor Lael Brainard.

Amid her nuanced account of what changes the Fed has determined might be appropriate in reforming CRA standards, her main point on the matter was quite succinct, asserting that the focus should be getting it “right” rather than getting it done quickly.

Learn more about the key takeaways from her speech. 

In a move intended to stem growing risk of potential market disruptions, federal banking regulators outlined plans to offer relief to banks extending credit to fund complex-controlled portfolio companies.

The agencies stated that they would not take action against banks that lend to such entities that violate Regulation O, provided they meet certain criteria.

Learn more about the new relief measure.

The Federal Reserve recently finalized new modifications to its National Settlement Service (NSS) and Fedwire Funds Service to support system enhancements and to reduce processing and settlement delays.

The Fed also announced it will extend its operating hours to promote adoption of the same-day automated clearinghouse system.

Find out more details about the changes.

The Government Accountability Office (GAO) recently published a report highlighting numerous instances in which financial institutions curtailed banking services to legitimate businesses as they attempted to alleviate compliance risks associated with money transfers.

Many of the “de-risking” efforts were initiated to comply with Bank Secrecy Act/anti-money laundering (BSA/AML) requirements.

Find out more details about the report.

In light of the Trump administration’s push to revamp Community Reinvestment Act (CRA) regulations, several banking trade groups are pushing for the federal regulators to push pause on certain changes to Call Report data requirements and data collection requirements related to small business lending.

Any changes to the CRA framework could alter regulations implementing Section 1071 with regard to the reporting and tracking of small business and farm loans, the trades noted.

Get more details about the letter.

Agency officials offered insight about their new proposal to clarify and modernize Community Reinvestment Act requirements during a press conference hosted by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. prior to releasing a joint advance notice of proposed rulemaking on the matter.

In addition to addressing what activities qualify for CRA credit and they are quantified, the agencies have proposed new criteria encompassing banks that conduct most of their deposit business online.

Learn more details about the agencies’ proposal.

Credit unions will have an extra two years to work toward compliance with the National Credit Union Administration’s risk-based capital (RBC) rule following a recent vote to delay its implementation to Jan. 1, 2022.

Credit union advocacy groups pushed for the delay in implementation, the third since the rule was adopted in 2015 to modernize the credit union capital regime.

Learn more about the delay and what industry advocates are saying.

A plan to modernize the regulatory framework governing brokered deposits proposed by the Federal Deposit Insurance Corp. (FDIC) seeks to account for nearly three decades worth of changes in the banking landscape.

The proposal would establish a new framework for analyzing whether deposits placed through deposit placement arrangements qualify as brokered deposits.

Learn more about the new brokered deposits proposal.

The five federal financial regulatory agencies recently issued a joint statement on the use of alternative data in underwriting by banks, credit unions and non-bank financial firms. The agencies sought to call out the consumer benefits of using alternative data in terms of credit availability.

The agencies described how a well-designed compliance management program can enable companies to account for relevant consumer protection laws and regulations to ensure all opportunities, risks and compliance requirements when using alternative date in credit decisions.

Get more details about the statement.