Top Stories for June 2001

Banking Agencies Issue Host State Loan-to-Deposit Ratios

The FRB, FDIC and OCC issued the host state loan-to-deposit ratios that the banking agencies will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. FRB Joint Press Release, OCC 2001-29, FDIC-PR-47-2001 FDIC:FIL-56-2001 6/29/01

OFAC CORRECTS ERRORS IN DOWNLOADABLE FILES

At 1:30 p.m. yesterday, OFAC corrected errors in the downloadable delimited .zip and .exe files it makes available on its Web site. Earlier yesterday, as noted in yesterday's special BOL OFAC alert, the Office of Foreign Assets Control updated the OFAC list to add 35 new specially designated nationals who are believed to threaten stabilization efforts in the Western Balkans. The errors in the downloadable files related to those earlier changes and affect only those people who downloaded the files within the few hours between when the list changed and when the delimited file errors were discovered and corrected by OFAC.6/28/01

Comptroller Views Underwriting Tightening Rational Response to Previous Lending Excesses

The OCC's seventh annual Survey of Credit Underwriting Practices found that underwriting standards for commercial and retail loans tightened during the 12-month period ending March 31, 2001. OCC:NR 2001-59 6/28/01

FOMC Lowers Target for Federal Funds by 25 Basis Points

The FOMC at its meeting decided to lower its target for the federal funds rate by 25 basis points to 3-3/4 percent. In a related action, the Board of Governors approved a 25 basis point reduction in the discount rate to 3-1/4 percent. FRB Press Release 6/28/01

OFAC List Updated with New SDNs

The Office of Foreign Assets Control has updated its SDN list June 27, 2001, in light of a new Executive Order from President Bush blocking property of persons "who threaten international stabilization efforts in the Western Balkans." The names of 35 new Specially Designated Nationals (SDNs) have been added to the list. Get the details. 6/27/01

Douglas W. Roeder Appointed Senior Deputy Comptroller for Large Banks

Comptroller of the Currency John D. Hawke, Jr. announced that Douglas W. Roeder has been appointed Senior Deputy Comptroller for Large Banks. In this newly established position, Mr. Roeder will be responsible for examinations and supervision activities in the largest national banks and for overseeing operations in the OCC's London office. OCC:NR 2001-58 6/26/01

FDIC Press Briefing on Wednesday, June 27, at 9:30 a.m.

At a press briefing on Wednesday, June 27, at 9:30 a.m., FDIC staff analysts will provide details on first-quarter 2001 earnings for the commercial banking and thrift industries. 6/26/01

FRB Issues Correction to Proposed Regulation W Rule

This Proposed Rule seeks comment on whether the Board should exempt extensions of credit by a bank to any person that are secured by shares of a mutual fund for which the bank or an affiliate of the bank acts as investment adviser. 66FR33649 (text) 66FR33649 (pdf) 6/25/01

FDIC Reports On Banking Industry Readiness

U.S. banks generally are well positioned to deal with difficulties if the economy continues to slow, the
FDIC reported. FDIC:PR-46-2001 6/25/01

Regulators Mail Second Quarter Call Report Information

Reports of Condition and Income (Call Report) for Second Quarter 2001 aree due by July 30, 2001. FDIC:FIL-55-2001 6/25/01

NCUA amends Truth in Savings Act (TISA)

NCUA is amending the Truth in Savings Act (TISA) to address electronic
advertisements. These amendments conform to the Electronic Signatures
in Global and National Commerce Act (E-Sign Act). This rule is effective
June 21, 2001, however the mandatory compliance date is October 1, 2001
to allow time for any necessary operational changes. NCUA: 66FR33159 6/21/01

NCUA proposes amendments to various rules

The NCUA Board is proposing amendments to various rules to make technical corrections and add and revise certain definitions. Comments must be received on or before August 20, 2001. NCUA: 66FR33211 6/21/01

OTS increases costs of supervising 3-, 4-, and 5-rated institutions

The Office of Thrift Supervision (OTS) is amending its assessments rule to more accurately reflect the increased costs of
supervising 3-, 4-, and 5-rated institutions. As amended, OTS will compute the condition component of a savings association's assessment at 50 percent of the size component for 3-rated institutions, and 100 percent of the size component for 4- and 5-rated institutions. The new rates will be effective July 23, 2001. OTS: 66FR33157 6/21/01

OTS Issued Two Enforcement Orders In April

The OTS reported that it issued a cease and desist order and civil money penalty both dated April 17, to Dennis M. Ware, former employee of Banco Popular, Newark, New Jersey. OTS 01-40 6/21/01

OTS and Thrifts Strong and Prepared, Director Seidman Tells Senate

The nation's thrift industry and its primary regulator, the Office of Thrift Supervision, are “strong and prepared to meet the challenges ahead,” OTS Director Ellen Seidman testified at a Senate Banking Committee oversight hearing on the condition of the U.S. financial system. OTS 01-39 6/21/01

Comptroller Cites Industry Trends that Give Cause for Concern

Comptroller of the Currency John D. Hawke, Jr. told a Senate panel that while banks are far better prepared to deal with a slowing economy than they were at the onset of the last economic downturn in 1990, there are trends in the industry that give cause for concern. OCC: NR 2001-57, Speech 6/21/01

OCC Announces New Enforcement Actions

The OCC announced 9 new enforcement actions taken against national banks and individuals currently and formerly affiliated with national banks and 1 termination of an existing enforcement action. OCC:NR 2001- 56 6/21/01

Identity Theft Highlighted in SAR Activity Review

There has been a dramatic increase in the number of incidents of identity theft reported by banks on suspicious activity reports (SARs). This finding is reported in the second issue of the SAR Activity Review – Trends, Tips and Issues, a collaborative report being released today which provides feedback to the financial, law enforcement and regulatory communities based on analysis of the SAR data. FinCEN News 6/19/01

FDIC Takes Steps to Help Rebuild Areas Affected by Tropical Storm Allison

The FDIC has announced a series of steps intended to facilitate the process of rebuilding in Houston and surrounding communities damaged by the storm. The FDIC has issued guidelines encouraging banks to work constructively with borrowers who are experiencing difficulties due to conditions beyond their control. FDIC:FIL-54-2001 6/19/01

OCC Reports Record Derivatives Trading Revenue for Banks

U.S. commercial banks earned a record $4 billion from cash instruments and derivatives activities in the first quarter of 2001, an increase of $1.2 billion over the fourth quarter of 2000. The notional amount of derivatives in insured commercial bank portfolios increased by $3.4 trillion in the first quarter, to $43.9 trillion. OCC:NR 2001-54 6/19/01

OCC Releases CRA Evaluations for 18 National Banks

The OCC released a list of Community Reinvestment Act (CRA) performance evaluations that became public during the period of May 15 through June 14. The list contains only national banks and insured federal branches of foreign banks that have received ratings. The possible ratings are outstanding, satisfactory, needs to improve, and substantial noncompliance. OCC:NR 2001-55 6/19/01

FDIC Circulates Fictitious Regulatory Agency Issuances

The OCC has asked the FDIC to circulate information to FDIC-supervised institutions about fictitious documents that contain
proposals suggesting that individuals can claim certain international payments reportedly being held by the OCC. FDIC:FIL-52-2001 6/14/01

Donna Tanoue Announces her Resignation as Chairman of the FDIC

Donna Tanoue announced that she has submitted her resignation as Chairman of the FDIC, effective July 11, 2001.FDIC:PR-45-2001, OTS 01-38 6/13/01

OCC Encourages National Banks to Work with Customers Affected by Floods in Houston Area

The OCC has outlined measures to assist national banks and their customers affected by the floods in the Houston area.
The OCC recognizes that the effects of natural disasters on individuals and businesses are often temporary, and that prudent efforts to adjust or alter terms on existing loans in areas affected by the disasters and related problems should not be subject to bank examiner criticism. OCC:NR 2001- 53 6/12/01

FRB Announces New Appointments

Appointments of Donald Kohn as Advisor to the Board for Monetary Policy in the Office of Board Members, Vincent Reinhart as Director of the Division of Monetary Affairs, and Brian Madigan as Deputy Director of the Division of Monetary Affairs, all
effective July 2, 2001. FRB Press Release 6/12/01

NACHA Approves E-Sign For ACH Debits

The Electronic Payments Association has approved an E-Sign provision for the NACHA Operating Rules that govern the Automated Clearing House Network. Under the new rule, any electronic signature that complies with the Electronic Signatures in Global and National Commerce Act will be deemed to comply with NACHA's requirements for "similarly authenticating" a consumer ACH debit authorization. NACHA News Release 6/12/01

OTS Requests Comment on Study of Banking Regulations Regarding the Online Delivery of Financial Services

Pursuant to section 729 of the Gramm-Leach-Bliley Act (GLBA), OTS and the other federal banking agencies are studying their
regulations on the delivery of financial services. The purpose of the study is to report findings and conclusions to Congress, together with recommendations for appropriate legislative or regulatory action to adapt existing requirements to online banking and lending. 64FR31186 (text), 64FR31186 (pdf) 6/11/01

OCC Issues Final Rule to Amend the Percentage of Capital and Surplus a Bank may Loan

This final rule establishes a three-year pilot program that creates new special lending limits for 1-4 family residential real estate loans and loans to small businesses. Eligible national banks with main offices located in states that have a lending limit available for residential real estate, small business or unsecured loans that is higher than the current Federal limit may apply to take part in the pilot program. OCC:NR 2001-52 Final Rule 6/11/01

OTS Reports Highest Quarterly Earnings Since March 2000; 1-4 Family Mortgage Originations Near Record Level

Earnings for the nation’s thrift industry jumped 12 percent in the first quarter of 2001 to $2.16 billion, the OTS reported. In its First Quarter 2001 Thrift Industry Data Report, OTS said that earnings were the highest since the first quarter of 2000 when they stood at $2.23 billion. OTS 01-37 6/8/01

FDIC Reports Commercial Banks Report Record Quarterly Earnings

Commercial banking industry profits rebounded in the first quarter of 2001 to a record $19.9 billion, up from $17.7 billion in the fourth quarter of 2000, the Federal Deposit Insurance Corporation announced. FDIC:PR-44-2001 6/8/01

FDIC Spotlights OFAC Change

FDIC has issued its FIL-51-2001 to notify nonmember banks of the May 16, 2001 changes to the OFAC list. FDIC:FIL-51-2001 6/7/01

FinCEN Issues Bulletin on Suspicious Activity Related to Phone Card Businesses

A review of SARs filed with the Treasury Department's Financial Crimes Enforcement Network identified over 160 reports indicating suspicious financial activity related to businesses involved in phone card sales. SAR Bulletin 6/7/01

OTS Announces 48 CRA Exams Scheduled for 3rd Quarter 2001

The OTS announced that 48 savings associations are scheduled for Community Reinvestment Act examinations during the third quarter of 2001. OTS 01-36 6/6/01

OCC Issues Third Quarter 2001 CRA Examination Schedule

The OCC today released its schedule of Community Reinvestment Act examinations to be conducted in the third quarter of 2001. OCC:NR 2001- 51 6/6/01

FDIC Issues June 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 March 2001. FDIC:PR-43-2001 6/6/01

Disclosing Account Numbers

Regulators issue a Privacy rule: Interagency letter, concerning sharing of account numbers for use in marketing. 6/5/01

OFAC Changes

Weeks with no activity, then four changes to the OFAC list in under three weeks. We show you where to find the complete list of changes in Top Stories, including the changes on May 16, 23, 31 and June 1. You can always get the information for the last change at http://www.treas.gov/ofac/bulletin.txt. To get a list of updates for the entire click here: http://www.treas.gov/ofac/t11edit.html 6/5/01

FDIC Publishes Bank Technology Bulletin

The FDIC Bank Technology Bulletin introduces three short documents containing practical ideas for banks to consider when they engage in technology outsourcing. FDIC:FIL-50-2001 6/5/01

Governor Edward W. Kelley, Jr., announces intention to resign from the Board of Governors

The FRB released a statement from Governor Edward W. Kelley, Jr., announcing his plans to resign from the Board after at least one of the current vacancies is filled. Kelley said he will submit a formal letter of resignation to the President when an additional Governor has been nominated and confirmed, and is at work at the Board. FRB Press Release 6/5/01

GE Bank Subsidiary Granted Federal Thrift Charter

GE Capital Consumer Card Co., Mason, Ohio, received approval from the OTS May 31 to switch from a state bank charter to a federal savings bank charter. Upon adopting the new charter, the savings bank will change its name to GE Financial Corp. OTS 01-35 6/4/01

OCC Publishes Amended Year 2001 Fee Schedule

This Bulletin supersedes material contained in Bulletin OCC 2000-30 concerning semiannual assessments for independent credit card banks and the assessment surcharge for problem banks. Fees OCC:2001-27
6/4/01

Former FDIC Employee Sentenced in Identity Fraud Scheme

FDIC Inspector General Gaston L. Gianni, Jr., announced that former FDIC employee Theresa A. Hill of Seat Pleasant, MD, was sentenced on May 29, 2001, to five years of probation, including six months of home confinement, in connection with an identity fraud scheme. FDIC:PR-41-2001 6/4/01

Former Illinois Bank President Indicted

FDIC Inspector General Gaston L. Gianni, Jr., announced that Clark K. Bush, former president of the Murphy-Wall State Bank in Pinckneyville, Illinois, has been indicted on eight criminal charges relating to alleged misconduct while serving as the bank's president. FDIC:PR-42-2001 6/4/01

FDIC Issues Third 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 third quarter of 2001. FDIC:PR-39-2001 6/4/01

The Federal Reserve Board has just issued guidance for examiners to follow in examining banks for compliance with the guidelines for safeguarding customer information security.

The new guidance, which includes an Examination Questionnaire, should give bankers insight into what the examiners will focus on. FRB:SR 01-15 6/1/01

The OFAC list was updated today to include the names of twelve new Specially Designated Nationals and Blocked Persons. OFAC 6/1/01

Risk-Based Examination Program May Require Call Reports For All Credit Unions

NCUA Acting Chairman Dennis Dollar told a group of Pennsylvania and New Jersey credit union leaders today that a proposed flexible examination schedule which seeks to extend the exam cycle from 12 to 18 months for certain credit unions with strong CAMEL ratings and make NCUA examinations more risk-focused will carry “great benefits to both credit unions and the NCUA while maintaining the highest standards of safety and soundness. NCUA Press Release 6/1/01

OCC Issues Final Rule to Assessment Rule

The OCC is changing the way they assess "independent credit card banks." They are also raising the surcharge for all institutions with composite ratings of 3, 4, or 5 under the CAMEL Rating. 66FR29889 (text) 66FR29889 (pdf) 6/1/01