Top Stories for January 2001

FRB and Treasury Issue Joint Final Rule Governing Merchant Banking Investments

As earlier reported by the FRB and Treasury, the final rule implements provisions of the Gramm-Leach-Bliley Act that permit financial holding companies to make investments as part of a bona fide securities underwriting or merchant or investment banking activity. 66FR8465 (1/31/01)

OTS Releases Enforcement Actions

The OTS Released October, November and December Enforcement Actions. (1/31/01)

FDIC Makes Public December 2000 Enforcement Actions

The FDIC released a list of orders of administrative enforcement actions taken against banks and individuals in December 2000. No administrative hearings are scheduled for February 2001. FDIC: PR-8-2001 (1/31/01)

FDIC Issues Alert on Stolen Cashier's Checks and Money Orders

The FDIC has been informed by the GreenPoint Bank, Brooklyn, New York, that a number of the bank's cashier's checks and money orders have been stolen from one of its branches. FDIC:FIL-8-2001 (1/31/01)

The OCC is proposing to amend its rules governing investment securities

The proposed revisions to the investment securities regulations incorporate the authority to underwrite, deal in, and purchase certain municipal bonds that is provided to well capitalized national banks by the Gramm-Leach-Bliley Act. 66FR8178 OCC 2001-5 (1/30/01)

FFIEC announces the publication of "A Guide to CRA Data Collection and Reporting

The CRA regulations generally require the annual reporting of data on small business, small farm, and community development lending by independent commercial banks and savings associations having assets of $250 million or more. The guide can be accesses at: http://www.ffiec.gov/cra. FFIEC Press Release (1/30/01)

The NCUA Board is modifying its security program requirements to include security of member information

The NCUA Board is issuing ``Guidelines for Safeguarding Member Information'' to implement certain provisions of the Gramm-Leach-Bliley Act. 66FR8152 (1/30/01)

OCC Proposes Updates and Revisions to Regulations

The OCC is proposing to amend 12 CFR parts 1, 7, and 23 to update and revise the OCC's regulations to keep pace with developments in the law and in the national banking system. OCC:NR 2001-10 (1/30/01)

FDIC Creates Privacy Rule Handbook to Assist Banks with Compliance

The Privacy Rule Handbook was produced by the FDIC to help financial institutions comply with the final rule governing the privacy of consumer financial information and implement effective consumer privacy policies. FDIC:FIL-3-2001 and PR-7-2001
(1/26/01)

A Day of Firsts at the NCUA

An historic event was witnessed by an overflow crowd in the Boardroom of the NCUA as Yolanda Townsend Wheat presided over the first NCUA monthly Board meeting of 2001. Not only was it the first NCUA Board meeting of the year, more significantly Wheat becomes the first woman and the first minority of African-American and Hispanic descent to hold the position of Chairwoman of the Board in the 20-year history of the NCUA. NCUA Press Release (1/26/01)

FRB Issues Interim Rule to Revise its Rule Regarding Equal Opportunity

The FRB has revised and reissued its Rules Regarding Equal Opportunity (rule) in order to continue its practice of conforming that rule as closely as possible to the ``Federal Sector Equal Employment Opportunity,'' regulation of the Equal Employment Opportunity Commission (Commission), which the Commission revised effective November 9, 1999. 66FR7703 (1/25/01)

OCC Releases CRA Evaluations for 24 National Banks

The OCC released a list of CRA performance evaluations that became public during the period of
December 15 through January 14. OCC:NR 2001-9 List of Evaulations (1/25/01)

OCC Announces New Electronic Interpretations and Actions

(1/25/01)

OCC Issues Advisory to Help Prepare Banks for the Implementation of the New Privacy Rules

The advisory is to help banks prepare for the implementation of the new Privacy of Consumer Financial
Information regulation, 12 CFR 40. The regulation becomes fully effective on July 1, 2001, and it affects all national banks, large and small, including most of their subsidiaries. OCC:AL 2001-2. The OCC also issued a Privacy Preparedness Questionnaire that assists banks in assessing their existing information practices. (1/24/01)

Basel Committee on Banking Supervision Proposes Revisions to 1988 Basel Capital Accord

The FRB, FDIC, and OCC offer summary and discussion issues on new Basel Capital Accord (1/24/01)

OTS Publishes Quarterly Loan Servicing Market Data Survey

(1/24/01)

Prior to leaving office, President Clinton issued an Executive Order that revised and expanded the sanctions applicable to Yugoslavia and the Republic of Serbia. The OFAC list has been changed accordingly. OFAC (1/23/01)

If your institution is subject to HMDA, you won't want to miss the opportunity to comment on the extensive revisions that have been proposed to Regulation C. Lucy Griffin provides guidance on how to
comment and specific issues for comment and offers a sample comment letter to serve as an example. Get all three by clicking here. (1/23/01)

Regulators Issued Guidance on Enhanced Scrutiny for Transactions That May Involve the Proceeds of Foreign Official Corruption

The FRB, OCC, FDIC, OTS and Treasury issue guidance to banks on accounts held by senior foreign officials and closely related persons or entities that may involve proceeds from corruption. (1/23/01)

Comptroller Hawke Given Treasury's Highest Honor

Comptroller of the Currency John D. Hawke, Jr. received Treasury’s highest honor, the Alexander Hamilton Award, in a ceremony Thursday at the Department of Treasury. The award was presented by Treasury
Secretary Lawrence H. Summers and honored Mr. Hawke for setting “an enduring standard of excellence.” OCC:NR 2001-8 (1/22/01)

FRB And Treasury Announce Final Rule on ALternative to Rated Debt Requirement

The FRB and Treasury announced their approval of a final rule establishing the alternative criteria that certain large banks may satisfy in order to control a financial subsidiary under the Gramm-Leach-Bliley Act. Joint Press Release (1/22/01)

FDIC Publishes Revisions to the 2001 Call Report from FFIEC

Most of these changes will take effect on the March 31, 2001, report date, the FFIEC has deferred the
implementation dates for the collection of new data on securitizations until June 30, 2001, and for the new trust activities schedule until December 31, 2001. FDIC:FIL-5-2001 (1/22/01)

FDIC, DOL Introduce Money Smart Program

The FDIC and the Department of Labor announced a joint initiative, called Money Smart, which offers basic financial education for the first time to people taking part in Welfare-to-Work and Workforce Investment Act programs nationwide. PR-6-2001 (1/22/01)

FDIC Proposed Capital Rule for Nonfinancial Equity Investments

The FDIC requested public comment on a proposed rule governing the regulatory capital treatment for equity investments in nonfinancial companies held by FDIC-supervised banks. FDIC:PR-5-2001 (1/22/01)

NCUA Issues Prohibition Orders

NCUA Press Release (1/19/01)

FRB Distributed $25.3 Billion to the Treasury During 2000

Preliminary figures indicate that the Federal Reserve Banks distributed approximately $25.3 billion of their $34.0 billion total income to the Treasury during 2000. In addition, $3.75 billion was transferred from surplus to the Treasury in May 2000, as required by statute. FRB Press Release (1/19/01)

Agencies Release Revised Capital Proposal for Nonfinancial Equity Investments

The FRB and OCC announced proposed new rules governing the regulatory capital treatment for equity investments in nonfinancial companies held by banks, bank holding companies and financial holding companies. (1/19/01)

OCC Issues Corporate Manual on Internet Banking

The booklet is the last of four booklets that consolidate policies, procedures, and practices applicable to organizations and institutions seeking entry into the national banking system. OCC:NR 2001-6. Corporate Manual on Internet Banking (1/19/01)

OTS Director Seidman Offers a Flexible Approach to Holding Company Supervision

Explaining to the Exchequer Club that holding company supervision “is
becoming increasingly important as we adapt our supervisory processes to meet new practical and legal
challenges arising from the evolution of the financial services industry,” Director Ellen Seidman of the OTS outlined the Agency’s five-part strategy for supervising thrift holding companies. OTS 01-03 (1/18/01)

Agencies Adopt Guidelines for Customer Information Security

The OCC, FDIC, FRB and OTS have sent to the Federal Register joint guidelines for safeguarding confidential customer information. The guidelines implement section 501(b) of the
Gramm-Leach-Bliley Act (GLBA), and will be effective on July 1, 2001. (1/18/01)

OCC Announces 14 New Enforcement Actions

The OCC announced 14 new enforcement actions taken against national banks and individuals
currently and formerly affiliated with national banks. OCC: NR 2001-2 (1/17/01)

OCC Issues Advisory on Financial Literacy

This advisory highlights the range of financial literacy activities in which banks have participated that have been effective in enhancing consumer financial skills and extending the reach of banks' products and services to underserved or unbanked markets. OCC: AL 2001-1 (1/17/01)

Agencies To Accept Comments on Basel Proposal To Amend Capital Adequacy Framework

The FRB, OCC and FDIC will accept public comments on a major proposal by the Basel
Committee on Banking Supervision to amend the 1988 international capital adequacy framework. (1/17/01)

FRB Issues Guidance on Enhanced Scrutiny for Transactions That May Involve the Proceeds of Foreign Official Corruption

The Money Laundering and Financial Crimes Strategy Act of 1998 requires the federal
government to develop a national strategy to combat money laundering. Under the Act, the strategy is
to be developed through consultation with various federal and state law enforcement and bank
regulatory agencies, including the Board. In addition, the law requires that annual reports be submitted to Congress detailing the steps the government proposes to take with regard to its anti-money
laundering efforts. FRB Press Release (1/17/01)

FRB Changes its Career Enhancement Programs

The FRB is instituting changes to its career enhancement programs for
examination and supervisory staff to provide more opportunities for continuing professional growth and
development. While the System has a well established training program, the rapid pace of change in the financial services industry calls for offering continuous education and career development that go beyond the traditional classroom-based instruction. FRB Press Release (1/17/01)

FRB Modifies its Capital Adequacy Standards

The Federal Reserve has had a longstanding practice of applying its capital adequacy standards to the top tier U.S. bank holding company (BHC) owned by a foreign banking organization. The Federal Reserve is modifying this practice in light of provisions in the Gramm-Leach-Bliley Act that permit a foreign bank to be a financial holding company (FHC). FRB Press Release (1/17/01)

FRB Makes Revisions to the Fiduciary Education Program for Banking Supervision Staff

The FRB is adopting a new fiduciary education program for supervision staff. The program recognizes that, with the integration of specialty examinations into the overall assessment of financial institutions, all examiners need a broad understanding of specialty areas. FRB Press Release
(1/17/01)

OTS Publishes Info Security Guidelines

The Office of Thrift Supervision's version of the final information security guidelines has now been published on its site. OTS:73112 (1/16/01)

FDIC Publicizes BSA Q&A from FinCEN

The FDIC has published guidance to make insured banks aware of FinCEN's recently published answers to frequently asked Bank Secrecy Act questions. FDIC: FIL-4-2001 (1/16/01)

Agencies Release Recommendations of Working Group on Public Disclosure

A private-sector working group recommended enhanced and more frequent public
disclosure of financial information by banking and securities organizations. Joint Press Release from FRB, OCC, and SEC (1/12/01)

FRB Amends Reg A to Reflect a Decrease in the Basic Discount Rate

The Board of Governors has amended its Regulation A on Extensions of Credit by Federal Reserve Banks to reflect its approval of a decrease in the basic discount rate at each Federal Reserve Bank.
66FR2211 (1/11/01)

FRB and Treasury Announce Final Rule on Merchant Banking Activities

The rule, effective February 15, 2001, implements provisions of the Gramm-Leach-Bliley Act. The FRB and Secretary believe it permits a "two-way street" between securities firms and banking organizations while, at the same time, giving effect to the statutory limitations and framework adopted by Congress to help maintain the separation of banking and commerce and ensure the safety and soundness of depository institutions. Joint Press Release (1/11/01)

FDIC Simplifies Examination Report for Well-Managed Small Banks

The FDIC began using a streamlined format for reporting examination findings at well-managed
small banks supervised by the agency. The new system will reduce paperwork and help the FDIC allocate
more resources toward institutions that pose the highest risks. FDIC:PR-2-2001 and FDIC:FIL-2-2001 (1/11/01)

OTS Publishes Applications for New Thrift Charters Detail Report

(1/11/01)

Regulators Publish Final Rule to Implement the CRA Sunshine Provisions

These provisions require NGEPs, insured depository institutions, and affiliates of insured depository institutions that are parties to certain agreements that are in fulfillment of the Community Reinvestment Act of 1977 to make the agreements available to the public and the appropriate agency and file annual reports concerning the agreements with the appropriate agency. These provisions
were contained in section 711 of the Gramm-Leach-Bliley Act. 66FR2051 (1/10/01)

President Clinton Appoints Yolanda Townsend Wheat Chairman of the NCUA Board

NCUA Press Release (1/10/01)

The OTS published the Thrift Financial Report Instruction Manual.

(1/9/01)

OTS Releases December National CRA Ratings

The OTS issued savings associations' Community Reinvestment Act performance evaluation ratings that became available in December 2000. OTS 01-01
(1/9/01)

FRB Names New Members to its Consumer Advisory Council

The FRB named ten new members to its Consumer Advisory Council for three-year terms and designated a new Chair and Vice Chair of the Council for 2001. FRB Press Release (1/9/01)

FDIC Issues Final Rule to Implement provisions of GLB Governing Investments

As reported Jan. 5th in the Federal Register The FDIC adopts a streamlined certification process for insured state nonmember banks to follow before they may conduct activities as principal through a financial subsidiary. State nonmember banks will self-certify that they meet the requirements to carry out these activities, which will allow
the banks to conduct the new activities immediately. FDIC: FIL-1-2001 (1/9/01)

FDIC Issues January List of Banks Examined for CRA Compliance

The FDIC issued its monthly list of state nonmember banks recently evaluated for compliance with CRA. The list covers evaluation ratings that the FDIC assigned to institutions in October 2000.
PR-1-2001 (1/8/01)

OCC Proposes to Amend its Regulation to Codify OCC Interpretations on National Bank Multi-State Trust Operations

As previously reported in the Federal Register the OCC, is proposing to amend its regulations to codify OCC interpretations on national bank multi-state trust operations. The purpose of these changes is to provide enhanced guidance to national banks engaging in fiduciary activities. OCC 2001-1 (1/8/01)

HOT NEWS!

The regulators have reached agreement on the final version of the information security guidelines, an important component of the G-L-B privacy protections. They should be published in the near future in the Federal Register. You can access the prepublication version by clicking here. [NOTE: works best if you are using Internet Explorer as your browser.](1/5/01)

OCC updates the Reverse Stock Split Procedures to include Texas and New York

This guidance describes expedited review procedures for national banks to effect reverse stock splits.
AL 2000-4 (1/5/01)

FDIC Issues Final Rule to Implement provisions of GLB Governing Investments

Under the final rule, the FDIC adopts a streamlined certification process for insured state nonmember banks to follow before they may conduct activities as principal through a financial subsidiary. State nonmember banks will self-certify that they meet the requirements to carry out these activities, which will allow the banks to conduct the new activities immediately. 66FR1018 (1/5/01)

FOMC Lowers its Target for Federal Funds Rate

The Federal Open Market Committee decided to lower its target for the federal funds rate by 50 basis points to 6 percent. FRB Press Release (1/4/01)

FRB adopts final rule that implements the financial holding company provisions of GLBA

This final rule replaces the interim rules governing financial holding companies that the FRB adopted previously. The final rule describes the procedures a domestic bank holding company and a foreign banking organization must follow and the capital, management, and Community Reinvestment Act requirements they must meet in order to qualify as a financial holding company. 66FR399 (1/3/01)

FRB and Treasury are soliciting comment on interim rules

The FRB and Treasury are soliciting comment on interim rules that would implement section 4(k)(5) of the Bank Holding Company Act and section 5136A(b)(3) of the Revised Statutes, as enacted by the Gramm-Leach-Bliley Act. The interim rules find three general types of activities to be financial in nature, and create a mechanism by which financial holding companies, financial subsidiaries of
national banks, or others may request that the Board or the Secretary, respectively, define particular activities within one of the three categories. 66FR257 (1/3/01)

FRB and Treasury issued joint proposal on RE Brokerage Activity

The FRB and Treasury jointly propose to seek comment on whether to determine by rule that real estate brokerage is an activity that is financial in nature or incidental to a financial activity and therefore
permissible for financial holding companies and financial subsidiaries of national banks. 66FR307 (1/3/01)

President Clinton Appoints Geoff Bacino to the NCUA Board

President Bill Clinton has named Geoff Bacino to the NCUA Board in a recess appointment effective December 29, 2000, filling the seat held by Chairman Norman E. D'Amours, whose term expired August 2, 1999. NCUA Press Release
(1/3/01)