Top Stories for December 2001

OFAC List Updated Again

OFAC has updated its list to add six new SDGTs to the list of terrorists whose assets must be blocked. Get the details on the BOL OFAC page.
12/31/01

FDIC Issues Warning on Entities That May Be Conducting Banking Operations Without Authorization

The Office of the Superintendent of Financial Institutions (OSFI) of Canada has published "Monthly Warning Advisory" (Issue No. 21), which contains the names of entities recently brought to OSFI's attention through an inquiry or complaint. FDIC:FIL-111-2001 12/31/01

FDIC Issues Interim Guidance Concerning Correspondent Accounts Established or Maintained for Certain Foreign Banking Institutions

These amendments are intended to make it easier to prevent, detect and prosecute international money laundering and the financing of terrorism. FDIC:FIL-110-2001 12/31/01

FDIC Considers New Factor in Bank Merger Act Transactions

Beginning January 1, 2002, the FDIC, in evaluating and acting on applications filed under section 18 (c) of the Federal Deposit Insurance Act (commonly known as the Bank Merger Act), will expressly consider the anti-money laundering record of each involved insured depository institution in determining the appropriateness of granting consent to the proposed transaction. FDIC:FIL-109-2001 12/31/01

OTS Announces 14 November CRA Ratings

The OTS announced savings associations' Community Reinvestment Act (CRA) performance evaluation ratings that became available in November 2001. OTS 01-88 12/31/01

FRB Issues Correction to the Regulatory Capital Standards Rule

This corrects the Federal Reserve's regulatory text of a final rule published in the Federal Register of November 29, 2001, regarding the capital treatment of recourse, direct credit substitutes, and residual interests in asset securitizations. 66FR67074 (text) 66FR67074 (pdf) 12/31/01

FDIC Makes Public November Enforcement Actions; No Administrative Hearings Scheduled

The FDIC released a list of orders of administrative enforcement actions taken against banks and individuals in November. No administrative hearings are scheduled for January 2002. FDIC:PR-95-2001 12/28/01

OFAC List Updated

SDGTs have now also been designated FTOs. BOL OFAC Page 12/27/01

Delays in Mail Delivery to FDIC Addressees in Washington, DC

Since October 22, 2001, mail service provided by the United States Postal Service (USPS) to FDIC addressees in Washington, DC, has been disrupted, causing delays in mail delivery to the FDIC. FDIC:FIL-107-2001 12/24/01

FDIC Issues Alert on Fictitious "Certified" Checks are in Circulation

The checks bear the name Sanborne Trust Company Bank, 2501 3rd Avenue South, Birmingham, AL. A telephone number, 205-250-7151, is printed on the checks as well as "Member FDIC." The Sanborne Trust Company Bank does not exist. FDIC:FIL-108-2001 12/24/01

OFAC List Updated

OFAC has added five new SDGTs to its listing of Specially Designated Nationals and Blocked Persons. BOL OFAC Page 12/21/01

FDIC Hold Line in 2002 Budget

The Board of Directors of the FDIC approved a 2002 budget of $1.1 billion, which is virtually the same level it approved for 2001. FDIC:PR-94-2001 12/21/01

OTS Announces Revised Lending Rule To Enhance Thrift Flexibility

OTS Director James E. Gilleran announced that OTS changed its lending and investment regulations to allow federal savings associations greater flexibility to provide low-cost credit to their customers and to invest in their communities while still operating safely and soundly. OTS 01-87 12/21/01

OCC Publishes the Treasury Guidance on the USA PATRIOT Act

The notice provides interim guidance to financial institutions on how to comply with the requirements of sections 313 and 319(b) of the USA PATRIOT Act of 2001. These anti-money laundering provisions concern the relationship between U.S. financial institutions and foreign banking institutions. OCC:AL 2001-12 12/21/01

FRB Issues Asset-Size Exemption Threshold for HMDA

The Federal Reserve Board announced that the asset-size exemption threshold for depository institutions under Regulation C (Home Mortgage Disclosure) has been increased from $31 million to $32 million. FRB Press Release 12/20/01

IRS Announces Retirement Plan limits that are effective on 1/1/02

The IRS announced the dollar limitations applicable to pension plans that become effective January 1, 2002 under the
Economic Growth and Tax Relief Act of 2001 (EGTRRA), and cost-of-living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2002. IRS:Release No: IR-2001-115 12/20/01

FDIC Issues Proposed Rule Regarding the Payment of Post-Insolvency Interest

The purpose of the rule is to establish a single uniform interest rate, calculation method, and payment priority for
post-insolvency interest. 66FR65144 (text) 66FR65144 (pdf) 12/18/01

Uniform Bank Performance Reports Available to Public

The September 30, 2001 Uniform Bank Performance Report (UBPR) now being distributed to all insured commercial banks and Federal Deposit Insurance Corporation - Insured Savings Banks (FDIC-ISB) is now available for sale to the public. FFIEC Press Release 12/18/01

FDIC Issues Warning on Entities That May Be Conducting Banking Operations Without Authorization

The Central Bank of Belize has issued a warning concerning an entity that is not licensed to provide banking and/or financial business in or from within Belize. Any proposed transactions involving Caribbean Building Society should be viewed with extreme caution. FDIC:FIL-105-2001 12/18/01

TWO OFAC CHANGES ON DECEMBER 14

On December 14, 2001, OFAC updated its sanctions list twice, adding new entities whose assets and records are to be blocked each time. The second change was made late in the business day. Full details are available on the BOL OFAC page. 12/17/01

Regulators Distribute Call Report for Fourth Quarter 2001

Banks should complete your fourth quarter Call Report, review it for accuracy, and submit the report electronically as soon as possible. Except for certain banks with foreign offices, your completed report must be received by January 30, 2002. FDIC:FIL-104-2001 12/17/01

OCC Issues Semiannual Assessment

As earlier reported in the Federal Register, the OCC has established a minimum base amount for the semiannual assessment that is due to be paid by January 31, 2001. OCC 2001-52 Final Rule Correction 12/17/01

OCC Announces 6 New Enforcement Actions and 2 Terminations

The OCC announced 6 new enforcement actions taken against national banks and individuals currently and formerly affiliated with national banks and 2 terminations of existing enforcement actions. OCC:NR 2001- 103 12/17/01

OCC Releases CRA Evaluations For 19 National Banks

The OCC released a list of Community Reinvestment Act (CRA) performance evaluations that became public during the period of November 15 through December 14, 2001. OCC:NR 2001-104 12/17/01

FRB Announces New Members of its Thrift Institutions Advisory Council

The Council is an advisory group made up of twelve representatives from thrift institutions. The Council meets three times each year with the Board of Governors to discuss developments relating to thrift institutions, the housing industry, mortgage
finance, and certain regulatory issues. FRB Press Release 12/17/01

OCC Offers New Guidance on Merchant Processing

The OCC issued new guidance to help examiners and banks understand and manage the risks associated with the merchant processing business. OCC:NR 2001-102 12/14/01

New Interagency Privacy Guidance

The federal regulatory agencies just issued new staff guidance which is a series of Frequently Asked Questions covering various aspects of the privacy rules, from when financial institutions must delivery notices to how to comply with the exception for disclosures under a joint marketing arrangement with an unrelated financial institution. FRB Press Release,
OCC:NR 2001-101, OCC 2001-51 FDIC-PR-93-2001, FDIC:FIL-106-2001
NCUA Press Release, FTC Press Release, OTS 01-86 12/13/01

FRB Issues Proposed Rule to Reg Z Commentary

As earlier reported, the proposed update would clarify how creditors that place Truth in Lending Act disclosures on the same document with the credit contract may satisfy the requirement for providing the disclosures in a form the consumer may keep before consummation. 66FR64381 12/13/01

FRB Issues a Final Rule that Amends its Regulations Aimed at Curbing Predatory Lending

The amendments to Regulation Z broaden the scope of loans subject to the protections of the Home Ownership and Equity Protection Act (HOEPA) of 1994 by adjusting the price triggers that determine coverage under the act. FRB Press Release 66FR65604 (text) 66FR65604 (pdf) 12/13/01

Regulators Propose Common Form for Charter and Federal Deposit Insurance Applications

To promote consistency and reduce regulatory burden, the OCC, OTS and FDIC have proposed a uniform charter and federal deposit insurance application form. OCC:NR 2001-100, FDIC PR-92-2001 12/13/01

Governor Edward W. Kelley, Jr., resigns from FRB<

Kelley, who has been a member of the Board since May 26, 1987, submitted his letter of resignation to President Bush. In view of his impending departure and in keeping with Board practice, he did not attend the December 11 meeting of the FOMC. FRB Press Release 12/13/01

FRB Issues Proposed Revisions Regarding Consumer Credit Disclosures

The proposed revisions clarify how creditors that place Truth in Lending Act disclosures on the
same document with the credit contract may satisfy the requirement for providing the disclosures in
a form the consumer may keep before consummation. FRB Press Release 12/12/01

OCC Issues CRA Interagency Examination Procedures

The Gramm-Leach-Bliley Act imposes disclosure and reporting requirements on national banks and other insured depository institutions with respect to certain agreements related to the Community Reinvestment Act. The OCC's implementing regulation is 12 CFR 35, Disclosure and Reporting of CRA-Related Agreements (CRA Sunshine Regulation). OCC 2001-50 12/12/01

Michael J. Zamorski Named FDIC Director of Division of Supervision

FDIC Chairman Donald E. Powell announced that veteran FDIC official Michael J. Zamorski has been named Director of the Division of Supervision. In this position, he is responsible for overseeing the FDIC's bank supervisory activities and eight Regional Offices.
FDIC:PR-91-2001 12/12/01

FDIC FIL about OFAC Changes

The FDIC has published FIL-103-2001 to notify banks of the most recent OFAC change where OFAC designated three entities as Specially Designated Global Terrorists. [The OFAC change itself was previously covered on BOL.]
FDIC:FIL-103-2001 12/12/01

FDIC Publishes Call and Thrift Financial Reports

The September 30, 2001 Call Reports and Thrift Financial Reports are now available. 12/12/01

FRB announced that it has revised its Policy Statement on Payments System Risk

This policy allows certain depository institutions to pledge collateral to the Federal Reserve in order to access additional daylight overdraft capacity above their net debit caps. The revised policy also modifies the net debit cap calculation for U.S.
branches and agencies of foreign banks. These changes should alleviate liquidity pressures identified during a broad review of the PSR policy. FRB Press Release
12/12/01

FRB eliminate five reprints from the Federal Reserve Bulletin

The FRB announced that five documents that have regularly been reprinted in the Federal Reserve Bulletin will not appear in the Bulletin after the December 2001 issue. FRB Press Release 12/12/01

Fed Lowers Discount Rate

The Federal Open Market Committee decided to lower its target for the federal funds rate by 25 basis points to 1-3/4 percent. In a related action, the Board of Governors approved a 25 basis point reduction in the discount rate to 1-1/4 percent. FRB Press Release 12/12/01

Latest FDIC Consumer News Focuses on FDIC Insurance

If your bank were to fail, would all your deposits be covered by the FDIC? Here's what you need to know and do to "insure" your money is safe. FDIC Consumer News 12/11/01

FDIC, OTS Announce Agreement with Holding Companies of Superior Bank

Under the terms of the agreement, the Superior holding companies and their owners (the Pritzker and Dworman interests) admit no liability and agree to pay the FDIC $460 million and other consideration. FDIC:PR- 90-2001, OTS 01-84 12/11/01

U.S. Banks Generally Well Positioned Entering Recession, According to FDIC Report

Despite the continuing contraction in the U.S. economy, FDIC-insured institutions remain in generally strong financial shape and will continue to provide credit to finance economic recovery. According to a report released by the FDIC, banks are likely to face
significantly more difficult economic conditions in the months ahead. FDIC:PR- 89-2001 12/11/01

FDIC Reports Third Quarter 2001 Financial Results For Bank and Thrift Insurance Funds

The FDIC announced that the Bank Insurance Fund (BIF) reported comprehensive income (net income plus current period unrealized gains/losses on available-for-sale securities) of $859 million for the first nine months of 2001, compared to $1.1 billion for
the same period last year. FDIC:PR-88-2001 12/11/01

FDIC Publishes the latest Regional Outlook

12/11/01

Susan Schmidt Bies and Mark W. Olson sworn in as members of the Board of Governors

Susan Schmidt Bies and Mark W. Olson on Friday took the oath of office as members of the Board of Governors of the Federal Reserve System. The oath was administered by Chairman Alan Greenspan in the Chairman's office. FRB Press Release 12/10/01

James E. Gilleran Sworn in as OTS Director

James E. Gilleran was sworn in as the Director of the Office of Thrift Supervision (OTS), the federal agency that oversees
the regulation and examination of savings associations. OTS 01-83 12/10/01

OCC Reports Derivatives Volume Increases to $51.3 Trillion

Derivatives held by U.S. commercial banks increased by $3.5 trillion in the third quarter of 2001, to $51.3 trillion, the Office of
the Comptroller of the Currency reported in its quarterly Bank Derivatives Report. OCC:NR 2001-99 12/10/01

Anthrax tests at the FRB

A preliminary test of mail delivered to a secure, closed mail-handling facility outside the main
FRB building tested positive for anthrax exposure late Thursday (12/6) afternoon. FRB Press Release 12/10/01

OTS Extends Comment Deadline on Authority for Certain Savings and Loan Holding Companies To
Engage in Financial Activities

The OTS is extending the comment period for the proposed rule published on November 8, 2001. The proposed rule would clarify what financial activities are authorized for certain savings and loan holding companies after the Gramm-Leach-Bliley Act. This extension will allow interested persons until January 10, 2002 to provide comments on the proposed rule. 66FR63517 12/7/01

FDIC Makes Public October Enforcement Actions; No Administrative Hearings Scheduled

The FDIC released a list of orders of administrative enforcement actions taken against banks and individuals in October. No administrative hearings are scheduled for December. FDIC:PR-87-2001 12/7/01

FDIC Issues December List of Banks Examined for CRA Compliance

The FDIC issued its monthly list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). The list covers evaluation ratings that the FDIC assigned to institutions in September 2001. FDIC:PR-86-2001 12/7/01

Thrift Industry 3rd Quarter Earnings Set Record

Thrift industry earnings rose by $100 million in the third quarter to a record $2.6 billion, the Office of Thrift Supervision reported. Earnings for the year through the quarter total $7.3 billion and are on pace to break the record earnings of $8.2 billion set in 1999. "This has been the fourth consecutive quarter of earnings growth," said Scott Albinson, OTS's managing director for supervision. "Low interest rates and the strong housing market have been the driving force of the thrift industry over the last year." OTS 01-82 12/7/01

OCC Settles Case Against First National Bank of Marin

The OCC has settled a case against First National Bank of Marin, Las Vegas, in which the bank agreed to cease practices that the OCC alleged are unlawful or unsafe and unsound, and to pay restitution to customers harmed by those practices. Consent Order, Fact Sheet 12/5/01

New Harris Poll on Privacy

There will undoubtedly be a lot of media attention to the new Harris survey on privacy notices. The Harris news release is titled "Privacy Notices Miss the Mark with Consumers" and one of its key findings is that most people find privacy notices too long and complicated. Arm yourself with the facts: l) this survey dealt with privacy notices in general, not financial institution privacy notices specifically; and 2) 70% of respondents agreed that companies "should use the same summary or checklist for their privacy policies". Financial institutions already utilize standardized content. 12/5/01

FDIC Issues Guidance on Terrorist Info Requests

The FDIC has issued a Special Alert to provide guidance for institutions on dealing with the list of FBI's suspected terrorists, as well as with the OFAC list. The guidance helps banks understand the different compliance responsibilities attendant to the two sets of lists. FIL-102-2001 12/5/01

Vulnerabilities in I.E. Prompt NIPC Assessment

The National Infrastructure Protection Center has issued Assessment 01-028 to address vulnerabilities in Microsoft Internet Explorer that are primary means through which several generations of recent mass-mailer computer worms (i.e., LoveLetter, Nimda, Klez, Badtrans.B) propagate. Under certain conditions, any e-mail or Web page with scripting that includes the command "GetObject()" as well as an ActiveX html file can view any file on the user's hard drive. The Assessment contains recommendations on guarding against the vulnerabilities. ASSESSMENT 01-028 12/4/01

Regulatory Privacy Workshop Being Held Today

The Interagency Public Workshop: "Get Noticed: Effective Financial Privacy Notices" is being held today in Washington, D.C. Due to the large volume of registrations, the Workshop had to be moved to a bigger location, and we're told they have a capacity crowd. The agenda includes regulators, representatives of academia and financial institutions, privacy specialists, communications experts, and consumer advocates. Information from the workshop will be available at a later point in time through the FTC Web site in audio, video, transcripts, and a CD-ROM. 12/4/01

MORE COMPLIANCE HUMOR

The latest addition to the BankersOnline.com e-card exchange is a new virtual greeting starring David Dickinson. Drawn straight from a Bankers' Thread post about flood insurance, it features humor only a compliance person could love -- or understand! Check it out now in the Office Humor category of the e-card exchange. And don't miss the "Rambo examiner" card while you're there. 12/4/01

America’s Credit Unions Are Adopting Underserved Communities With A Record-Setting 12.5 Million Potential New Members In 2001

Chairman Dollar Credits NCUA’s Streamlined Process and Regulatory Flexibility Approach With 2001 Numbers Surpassing Year 2000 Numbers By Over 10 Million NCUA Press Release 12/4/01

OCC Publishes Its Fees for year 2002

The purpose of this issuance is to inform all national banks, federal branches and agencies, and District of Columbia banks of fees charged by the OCC for year 2002. Changes are effective January 1, 2002.

• OCC Assessments 2002
• OCC Fees 2002
• OCC Publications
• Assessment Calculator
• Assessment Return
• Independent Trust Bank Fees
• Independent Credit Card Bank Fees
• OCC 2001-48 12/3/01

FDIC Publishes Stats at a Glance

FDIC-Stats at a Glance provides the latest quarterly and historical data on FDIC-insured institutions, the
BIF and SAIF insurance funds, and the number of FDIC employees. FDIC Historical Trends, Industry Historical Trends 12/3/01

OCC Issues First Quarter 2002 CRA Examination Schedule

The OCC released its schedule of Community Reinvestment Act (CRA) examinations to be conducted in the first quarter of 2002. OCC:NR 2001-98 12/3/01

FDIC Reminds Institutions about HMDA and CRA Data Collection Deadlines

The FDIC would like to remind institutions that Calendar Year 2001 (CY2001) Home Mortgage Disclosure Act (HMDA) and Community Reinvestment Act (CRA) data must be submitted by March 1, 2002. FIL-101-2001 12/3/01

FDIC Issues Alert on Counterfeit Cashier's Checks

The FDIC has learned that additional counterfeit cashier's checks drawn on the Exchange Bank, Santa Rosa, California, are in circulation. The latest items bear the routing number of the Valley Bank of Kalispell, Kalispell, Montana. FDIC:FIL-100-2001 12/3/01

FDIC Issues First Quarter CRA Examination Schedule

The FDIC has issued the public list of institutions that it has scheduled for a Community Reinvestment Act (CRA) examination during the first quarter of 2002. FDIC:PR-84-2001 12/3/01

Comptroller Underscores National Bank Efforts to Meet the Financial Services Needs of Native Americans

Comptroller of the Currency John D. Hawke, Jr. highlighted the accomplishments of national banks in overcoming many of the barriers that have historically limited Native Americans' access to credit and financial services in Indian country. OCC:NR 2001-97 12/3/01

NCUA Issues Order of Prohibition

The NCUA has issued an Order of Prohibition against John Humpage, a former collection manager at Santa Fe Credit Union, Topeka, Kansas. NCUA Press Release 12/3/01