Title I

In a move that may reinvigorate discussion about the separation between commercial and investment banking, Rep. Marcy Kaptur (D-Ohio) and 25 of her Democratic colleagues recently introduced legislation to reinstate and expand provisions of the Glass-Steagall Act of 1933.

The bill proposes to restrict affiliations between commercial and investment banks, in a manner described in the Banking Act of 1933. It also would make technical and conforming revisions to the Gramm-Leach-Bliley Act, which repealed key provisions of Glass-Steagall in 1999.

Find out more details about the legislation.

It wasn’t long after the federal banking agencies announced its intent to set the minimum leverage ratio for community banks at 9 percent that industry advocates began voicing their disapproval. 

Senate Banking Committee Chairman Mike Crapo (R-Idaho) and fellow committee member Sen. Jerry Moran (R-Kan.) have urged the agencies to set the ratio at 8 percent, as community banks have advocated.

Find out more details about their reasoning.

The Federal Reserve recently proposed several changes to its resolution planning framework for large banking companies that would reduce the frequency with which certain banks would be required to submit “living wills.” Institutions now required to file full living wills every year would have to do so only once every four or six years under the proposal.

The Fed also has proposed new regulatory capital requirements for U.S. subsidiaries of foreign banking organizations.

Find out more details about the proposal.

Top of mind for a large portion of attendees at the Consumer Bankers Association’s (CBA) 2019 annual conference in Washington D.C. was if and when federal regulators will take action to modernize Community Reinvestment Act (CRA) requirements, as well as the importance of investing in technology and how to open lines of communication between regulators and banks.

Attendees heard from industry insiders about their views on pertinent issues ahead of interviews with Comptroller of the Currency Joseph Otting and Federal Deposit Insurance Corp. Chairwoman Jelena McWilliams, both of whom have power to act on many of the topics discussed.

Get a detailed account of key insights revealed about those issues. 

The Financial Stability Oversight Council (FSOC) recently voted unanimously to propose new interpretive guidance implementing an activities-based approach to designating non-bank entity as a systemically-important financial institution (SIFI).

The new approach would require the council to assess the potential risks an entity posed to the financial marketplace, conduct a cost-benefit analysis of such a designation and assess the likelihood that a non-bank entity would fail prior to finalizing a non-bank SIFI designation. 

Find out more details about proposed guidance.

Beginning in the 2019 cycle, the Federal Reserve plans to limit its use of the “qualitative objection” in its Comprehensive Capital Analysis and Review (CCAR) process.

The Fed also voted to hold the countercyclical capital buffer for banking organizations using the Basel III advanced approaches at zero percent and released instructions for the 2019 CCAR exercise.

Find out what the industry is saying about the Fed’s announcements.

The banking industry rounded out its most profitable year in history with $59.1 billion in fourth quarter profits, owing at least some of that increased revenue to tax law changes that have taken effect since 2017.

Fourth quarter profit totals indicate a $33.8 billion increase from the previous year and bring total 2018 banking revenue to $236.7 billion, according to the Federal Deposit Insurance Corp.’s latest Quarterly Banking Profile.

Find out what factors allowed the industry to continue to post record profitability numbers in 2018.

Recognizing the ever-growing risk cyberattacks pose to the financial sector and the ever-increasing sophistication of such attacks, the federal Office of the Inspector General indicated that the Federal Deposit Insurance Corp. (FDIC) should make cybersecurity oversight a top priority in a recent report.

OIG describes the various elements of cybersecurity risk banks should account for and offers recommendations for how FDIC examiners can take a “nimble” regulatory approach designed to facilitate the implementation of better security protocols at institutions it oversees. 

Find out more about what areas the FDIC has been urged to improve.

The Senate Banking Committee recently heard testimony from two nominees to join the National Credit Union Administration (NCUA) Board of Directors – Rodney Hood and Todd Harper. Both expressed interest in aligning NCUA’s regulatory approach with that of other federal agencies.

The committee also considered Trump’s nominees to become the Treasury Department’s assistant secretary of financial institutions – Bimal Patel – and head up the Federal Housing Finance Agency – Mark Calabria – during the hearing.

Find out what they had to say during the hearing.

In what would be the largest bank merger by asset and deposit volume since the financial crisis, SunTrust Banks, Inc. and BB&T Corp. recently announced they’d agreed to a $66 billion deal that would combine both companies to form the sixth-largest bank by asset size in the country.

The merger was announced two days after the Federal Reserve informed both banks they would not be required to comply with certain stress testing requirements, invoking its ability to do so for banks with less than $250 billion in assets under S. 2155.

Find out more details about the deal and what congressional hurdles could slow the closing process.