Top Stories for March 2003

Reg Z Commentary Changes Take Effect April 1

The Federal Reserve Board issued a final rule revising the official Reg Z commentary.The revisions cover credit card- related fees, replacement of cards, disclosure of private mortgage insurance premiums and the selection of Treasury security yields for determining whether a mortgage loan is covered by Reg Z. The revisions are effective April 1, 2003 and the date for mandatory compliance is October 1, 2003. FRB PR20030328 Final Rule 3/31/03

Access to Telecommunications in the Event of Disaster

Qualifying institutions may seek sponsorship for the Telecommunication Service Priority program. That program would give critical private-sector entities access to telephone service in the event of an emergency. OCC Bulletin 2003-13 3/31/03

Online Resource For Financial Research Announced

The Federal Reserve Board announced the launch of an online resource for researchers, educators, program directors, and others interested in advancing financial education programs. The Financial Education Research Center was developed to promote excellence in financial education by encouraging research and disseminating information. FRB PR20030328 Research Center. 3/31/03

Chinese Version Of FDIC's Money Smart Introduced

FDIC has announced the introduction of a Chinese version of its Money Smart program. Vice Chairman Reich also announced that the program will be available in Korean and Vietnamese later this year. Announcement 3/31/03

FFIEC Publishes Country Exposure Release

The E16 Country Exposure Statistical Release has been published on the FFIEC Web site.FFIEC E16 3/31/03

FRB Announces Fifth Third Agreement

The Federal Reserve Board announced the execution of a Written Agreement by and among Fifth Third Bancorp, Cincinnati, Ohio; the Fifth Third Bank, Cincinnati, Ohio; the Federal Reserve Bank of Cleveland; and the State of Ohio Department of Commerce, Division of Financial Institutions. Written Agreement 3/28/03

OCC Announces Decision and Agreements

The Office of the Comptroller of the Currency announced a Decision regarding a Notice of Change in Bank Control and entering into a Formal Agreement with Household Bank (SB), National Association, Las Vegas, Nevada and the Termination of a Formal Agreement accompanied by the entering into an Operating Agreement with Direct Merchants Credit Card Bank, N.A., Scottsdale, Arizona.Household Change in Control   Household Formal Agreement    Direct Merchants Termination    Direct Merchants Operating Agreement 3/28/03

OFAC Adds New Cali Cartel Leaders & Businesses

The Office of Foreign Assets Control added the names of two Cali Cartel leaders, twenty eight entities and twenty eight individuals to its list of Specially Designated Narcotics Traffickers. The drug cartel businesses added to the list of SDNTs today are all determined to be owned or controlled by Cali Cartel leaders. The information has been placed on the BOL OFAC page. Treasury JS-138 3/28/03

Treasury Official Highlights Iraqi Assets Actions

The keynote address of the Securities Industry Association's Anti-Money Laundering Compliance Conference was delivered by Treasury General Counsel David D. Aufhauser. He reported that, "To date, more than 1,669 countries have pledged to block terrorist assets and, importantly, have agreed to pursue the intermediaries who facilitate the transfer of terrorist funds" and regarding Iraqi assets, "Hundreds of millions of dollars of previously unknown illegal proceeds have been uncovered abroad in a matter of days, and are now subject to seizure." Address 3/28/03

Regulators Testify Before Subcommittee

The Financial Services Regulatory Relief Act of 2003 is in the works. Learn more about it from testimony delivered by Federal Reserve Board Governor Mark W. Olson and Federal Deposit Insurance Corporation General Counsel William F. Kroener, III before the House Subcommittee on Financial Institutions and Consumer Credit of the Committee on Financial Services. Olson's Testimony    Kroener's Testimony 3/28/03

OTS Urges Equal Thrift Security Law Treatment

Testifying before the House Financial Services Subcommittee on Financial Institutions, the Office of Thrift Supervision Chief Counsel Carolyn Buck recommended the elimination of disparate treatment between thrifts and banks under the Investment Advisers Act and the Securities Exchange Act of 1934.Counsel Buck's Testimony 3/28/03

NCUA Issues Business Lending Rules

The National Credit Union Administration Board has issued a proposed rule updating member business lending regulations for federally insured credit unions and a final rule revising federal credit union chartering and field of membership rules. Proposed Lending Rule     Revision To Membership Final Rule     Statement of Chairman Dollar    Statement of Vice Chairman Johnson     Statement of Board Member Matz 3/28/03

FDIC Announces 12 Enforcement Actions

The Federal Deposit Insurance Corporation has released a list of twelve enforcement actions taken against banks and individuals in February, 2003. They include two cease-and-desist orders, two removal-and-prohibition orders, five civil money penalty orders, two terminations of cease-and-desist orders, and one termination of a suspension-and-prohibition order.FDIC PR-28-2003 3/27/03

NCUA Announces Measures To Fight Brokered CD Fraud

The National Credit Union Administration announced a plan to increase the agency's oversight and better protect credit unions from brokered CD fraud. The plan involves requiring call report data to contain outstanding balances of brokered CDs, identification of credit unions with high concentrations of brokered CDs, additional guidance regarding due diligence reviews of brokers, the enhancement of AIRES investment work papers and additional training for examiners.NCUA NR03-0326 3/27/03

FDIC Warns of Counterfeit Official Check Scam

The Federal Deposit Insurance Corporation has issued a Special Alert which provides a general outline of a nationwide scam involving counterfeit official checks. Customers and financial institutions have sustained losses from the fraudulent transactions. The scam involves unsuspecting sellers of high dollar items who receive counterfeit official checks as payments for the sale items. The counterfeit checks are payable in amounts that exceed the sale price and the seller is asked to deposit the counterfeit item and remit the excess funds by wire or cashier's check.FDIC SA-17-2003 3/27/03

FDIC Chairman Discusses Access To Capital in Emerging Markets

Federal Deposit Insurance Corporation Chairman Powell spoke to participants at the National Community Investment Fund Annual Network Conference, Washington, D.C. The Chairman noted, " Banks that reach out to establish relationships with consumers participating in fringe financial services may be able to reap the rewards of cultivating new, full-service customers; building relationships that will improve with their economic circumstances." FDIC PR-2003-27 3/27/03

FDIC and CSBS Join Forces on Money Smart Program

The Federal Deposit Insurance Corporation and the Conference of State Bank Supervisors announced that CSBS will promote and distribute the Money Smart financial education curriculum to each of the nation's state banking departments. FDIC MSPR-0006-2003 3/27/03

FDIC Issues FYI Regarding Derivatives Risk

The Federal Deposit Insurance Corporation has issued an electronic bulletin which summarizes the FDIC's analysis of the derivatives risk in commercial banking.FDIC FYI-032603 3/27/03

FRB Releases Household Debt-Service Burden Data

The Federal Reserve Board has issued a statistical release of the household debt-service burden, which is an estimate of the ratio of debt payments to disposable personal income. Federal Reserve 3/27/03

Secretary Snow Reacts to Budget Resolution Action

Treasury Secretary Snow commended the passage of a budget resolution by the Senate, but noted the President's plan is still the best way to create jobs, provide economic security to American workers and families, and grow the economy for our future.Treasury JS135 3/27/03

OCC Issues Notice Of Issuance 314a Information Request Guidance

The Office of the Comptroller has given notice to all national banks of the issuance of a FinCEN guidance regarding 314a Information Requests. The FinCEN notice was previously posted on Top Stories.OCC Alert 2003-6 3/26/03

FTC Announces Calendar for Implementation of the National Do Not Call Registry

The Federal Trade Commission released its schedule for creating and implementing the national do not call registry, which will give consumers a choice about whether to receive most telemarketing calls. Beginning in July, consumers will be able to put their telephone numbers on the national registry, which telemarketers subsequently will be required to access. As of October, it will be illegal for most telemarketers to call a number listed on the registry.FTC News Release 3/26/03

FED Releases Quarterly Fedwire Data

The Federal Reserve Board has released the 4th Quarter 2002 Fedwire and National settlement Services data. Federal Reserve Report 3/26/03

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

The OSFI of Canada has published "Monthly Warning Advisory" (Issue No. 40 and 41), which contains the names of entities recently brought to OSFI's attention through an inquiry or complaint. FDIC:SA-16-2003 3/26/03

FDIC FIL about OFAC Change

The Department of the Treasury's Office of Foreign Assets Control has amended its list of Specially Designated Nationals and Blocked Persons by adding the names of certain members of the Government of Zimbabwe and other related persons. [This was previously announced on BOL] FDIC:FIL-22-2003 3/26/03

FDIC and America's Community Bankers to Promote Financial Education Through ACB Member Banks Nationwide

The FDIC and America's Community Bankers (ACB) announced that the two organizations will promote financial education through ACB's member banks across the country. The announcement was made by Don Powell, Chairman of the FDIC, and Diana Casey Landry, President and CEO of ACB, at a signing ceremony held at the FDIC's headquarters in Washington, DC. FDIC:MS-005-2003 3/26/03

FRB Governor Kohn Says Inflation Targeting Is Not Necessary

In a speech at the National Bureau of Economic Research Conference on Inflation Targeting, Bal Harbour, Florida, Federal Reserve Board Governor Kohn took issue with comments made at the same conference by Marvin Goodfriend, Senior Vice President, Federal Reserve Bank of Richmond, who suggested that the United States would benefit from the adoption of an inflation targeting policy. Kohn stated "the success of U.S. monetary policy has in large part derived from its ability to adapt to changing conditions--a flexibility that likely has benefited from the absence of an inflation target". Kohn's Speech     Goodfriend's Presentation 3/25/03

OCC Names Deputy Comptroller For Credit Risk

The Office of the Comptroller of the Currency announced that Barbara J. Grunkemeyer has been named Deputy Comptroller for Credit Risk. She will serve as the Comptroller's principal advisor on credit risk facing the national banking system. OCC NR2003-25 3/25/03

FinCEN Clarifies Section 314(a) Search Issues

FinCEN has issued a notice to financial institutions regarding the 314(a) search requests that comes as a great relief. The notice states that if a search request extends beyond the general search requirements, an institution is not required to conduct the expanded search at this time if it can not be conducted electronically. It also notes that the programming problem which prohibited the inclusion of all aliases on the consolidated index has been corrected. Future indexes should include all subjects and aliases requested in the individual subject information forms. FinCEN Notice OCC: ALERT 2003-6 3/24/03

President Bush Vests Seized Iraqi Assets

President Bush has issued on Executive Order which vests in the United States all assets of the Iraqi Government previously seized and held by financial institutions. The Secretary of the Treasury is directed to develop rules and regulations to carry out the provisions of the Executive Order. A link to the text of the Executive Order has been placed on the BOL OFAC Page. Executive Order 3/24/03

Treasury Adds Cali Cartel Entities to OFAC List

The Treasury Department's Office of Foreign Assets Control added the names of nine businesses owned or controlled by Cali Cartel leaders and eight individuals to its list of Specially Designated Narcotics Traffickers. The information has been placed on the BOL OFAC page. 3/24/03

SEC Proposes Amendment to Sarbanes-Oxley CEO Certification

The Securities and Exchange Commission has proposed amendments to its rules and forms which require companies provide corporate officer certifications under the Sarbanes-Oxley Act of 2002 as exhibits to periodic reports. SEC NR 2003-39 Proposed Amendments 3/24/03

San Francisco Fed and Barnes Banking Company Enter Written Agreement

The Federal Reserve Bank of San Francisco announced the entering into a written agreement with Barnes Banking Company, Kaysville, Utah. The Bank has agreed to enhance and improve its policies and procedures regarding the Currency and Foreign Transaction Reporting Act, the Bank Secrecy Act and Regulation H.Federal Reserve PR20030321 Written Agreement 3/24/03

OCC Unveils Online Applications

The Office of the Comptroller of the Currency announced a new service utilizing the e-Corp system which will allow national banks to electronically complete and submit branch and relocation applications.OCC NR 2003-24 3/24/03

OCC March 2003 Corporate Applications Released

The Office of the Comptroller of the Currency has released the March 2003 edition of actions taken on corporate applications received by the OCC.OCC Corporate Applications 3/24/03

Counterfeit Checks Alert Issued by FDIC

The Federal Deposit Insurance Corporation has learned that counterfeit trust checks drawn on McAllen National Bank, McAllen, Texas and counterfeit official checks drawn on Astoria Federal Savings and Loan Association, New York, New York are currently in circulation. The information has been added to the BOL Alerts & Counterfeits page FDIC SA-15-2003 3/24/03

OFAC Issues Interim Rule to Amend the Cuban Assets Control Regulations

The Office of Foreign Assets Control of the U.S. Department of the Treasury is amending the Cuban Assets Control Regulations, part 515 of chapter V of 31 CFR, to implement the President's Initiative for a New Cuba and to make certain technical changes and clarifications. 68FR14141 (txt) 68FR14141 (pdf) 3/24/03

FTC Halts Internet Mortgage Scam

The Federal Trade Commission filed charges against 30 Minute Mortgage, Inc. alleging the company utilized a spamming operation that conned consumers into sharing personal financial data. The complaint contends there were violations of the FTC Act, the Truth in Lending Act, the Gramm-Leach-Bliley Act, and the FTC's Privacy Rule. The court is asked to bar the illegal practices permanently and order the return of ill-gotten gains. The assets of the company have been frozen, and it has agreed to halt the alleged deceptive practices until the court issues a final ruling on the FTC's allegations. 3/21/03

Six Enforcement Actions Announced By OCC

The Office of the Comptroller of the Currency announced enforcement actions against Bank of Communications, New York Branch, New York, New York; Surety Bank, National Association, Fort Worth, Texas; Cumberland Valley National Bank & Trust Company, East Bernstadt, Kentucky; First National Bank of Northern Kentucky, Fort Mitchell, Kentucky; First National Bank of Littlefield, Littlefield, Texas; and James T. Lee, Littlefield, Texas. OCC NR2003-22 FTC Press Release Complaint Order 3/21/03

U.S. Confiscates $1.74B in Iraqi Assets

There's nothing about it yet on the OFAC page, but on 3/20/03 President Bush issued an Executive Order confiscating non-diplomatic Iraqi government assets in the United States. The Order authorizes Treasury to marshal the assets, and to use the funds for the benefit and welfare of the Iraqi people. We expect institutions which have blocked assets under the Iraq sanctions program to be ordered to transmit those blocked assets to the federal government. Treasury Press Release 3/21/03

OCC Releases 33 CRA Evaluations

The Office of the Comptroller of the Currency released Community Reinvestment Act evaluations of 33 national banks. Of the 33 evaluations, 4 were outstanding, 28 were satisfactory and 1 was needs to improve. OCC NR2003-23 Evaluations 3/21/03

OCC Issues Alert on Fictitious Offshore Bank

The Office of the Comptroller of the Currency has been notified by the Government of Montserrat and the State of Florida that LionHeart Bank and Trust Company Limited, Fort Lauderdale, Florida has not been issued a license or been authorized to conduct banking business. OCC Alert 3/20/03

OTS Guidance on Third Party Arrangements Released

The Office of Thrift Supervision has issued a Thrift Bulletin on outsourcing relationships. The Bulletin cautions institutions to exercise due diligence prior to entering into third party arrangements and to maintain effective oversight and controls throughout the arrangement. OTS Release 03-10 Thrift Bulletin TB82 3/20/03

Proposed OTS Form Reduces Regulatory Burden

The Office of Thrift Supervision has requested comments on its proposal to replace the current Schedule Consolidated Maturity/Rate with a new form known as a Schedule Risk Exposure Data. The change is intended to reduce the data collection burden on institutions while improving the flexibility and utility of the data collected. Comments are due May 19, 2003.OTS Release 03-11 Proposed RED Form Comment Request 3/20/03

FDIC Announces Reorganization of Publications

The Federal Deposit Insurance Corporation announced that its publications are now organized into three categories - public research, risk analysis and data sources. The FDIC Banking Review, FDIC Outlook and FDIC Quarterly Banking Profile are the featured publications and are available electronically and in hard copy.FDIC PR 26-2003 FDIC Banking Review FDIC Outlook FDIC Quarterly Banking Profile 3/20/03

FDIC 2003 Economic Projections Released

The FDIC Spring 2003 Outlook indicates that banks are recognizing loan losses promptly, taking advantage of the development of an active secondary loan market, and increasing the use of derivative instruments to manage risk in the commercial loan portfolio. FDIC Chairman Powell noted "Strong earnings and capital positions have helped to insulate the banking industry from the more severe effects of corporate sector restructuring."FDIC PR 25-2003 FDIC Spring 2003 Outlook 3/20/03

Household International Agrees To SEC Cease-and- Desist Order

The Securities and Exchange Commission entered a cease-and-desist order finding that Household International Inc. violated the antifraud and reporting provisions of the Securities Exchange Act of 1934 by misrepresenting policies that permitted the restructuring of delinquent loans and resetting the loans to "current".SEC PR2003-35 Order 3/20/03

Treasury Reveals Plans to Protect Financial Markets During Hostilities With Iraq

The Treasury Department has outlined the steps that have been taken to protect the critical financial infrastructure of the United States including: the government's ability to borrow; the government's ability to make payments - including social security payments; the government's ability to raise revenue through the Internal Revenue Service.Treasury Press Release JS-114 3/20/03

Fed Funds Rate Remains Unchanged

The Federal Reserve Board Federal Open Market Committee announced that it had decided to keep the target for the federal funds rate unchanged at 1 ¼ percent.FRB PR2003030318 3/19/03

Current Regulatory Issues Discussed in OCC Briefing Paper

OCC First Senior Deputy Comptroller and Chief Counsel Julie L. Williams presented a briefing paper to Congressional staffers at the Financial Services Regulatory Conference held in Washington, D.C. The paper discussed the history of the Office of the Comptroller of the Currency and the national banking system, as well as a number of current issues in bank regulation, including privacy, national bank preemption and the USA Patriot Act.OCC NR 2003-21   Briefing Paper 3/19/03

FDIC 2003 Annual Performance Plan Released

The Federal Deposit Insurance Corporation issued its 2003 Annual Performance Plan, which implements its strategic goals and objectives by establishing annual performance goals. Annual Performance Plan 3/19/03

Improvements Made to 314(a) Request Process

Financial institutions, and the trade associations that represent them, complained to FinCEN and the Treasury Department about the format in which names were being transmitted from FinCEN for 314(a) search requests. In order to reduce the burdensome nature of the requests, FinCEN has now begun to make the subject names available in a tab-delimited text format that will facilitate electronic searches. Progress! 3/18/03

Final Reg B Published in Federal Register

The final rule amending Regulation B has now been published in the Federal Register. The revisions address when a preapproval must be treated as an application, how to determine when an application is truly joint, how to describe the reasons for adverse action, and more. Text   PDF  3/25/03 correction 3/18/03

Regulators Issue Updated Internal Auditing Guidance

The Federal Reserve, the FDIC, the OCC, and OTS issued revised guidance on the independence of accountants who provide institutions with both external and internal audit services to reflect the provisions of the Sarbanes-Oxley Act. [The policy statement encourages non-public institutions not subject to Section 36, which includes non-public depository institutions with less than $500 million in assets, to refrain from outsourcing internal audit activities to their external auditor. If such an institution decides to use the same firm for both internal and external audit work, however, the audit committee should document its consideration of the independence issues associated with this arrangement.] The InterAgency Policy Statement indicates the need for institutions to maintain strong systems of internal control, including internal controls over financial and regulatory reporting, and high quality internal audit programs. Expanded guidance has been provided on the use of independent reviews of significant internal controls by small institutions that do not have a formal internal audit manager or staff. Joint Agency Press Release     Other agency press releases: OCC; OTS; FDIC; InterAgency Policy Statement

: FRB; OCC; ; OTS; FDIC; OCC Bulletin; FDIC FIL 3/18/03

FRB Publishes List of Financial Holding Companies

The Federal Reserve Board has released an alphabetical list of bank holding companies that have elected as of March 15, 2003, to become or be treated as financial holding companies under the provisions of the Bank Holding Company Act.List of Financial Holding Companies 3/18/03

FRB Issues 2002 Monetary Report to Congress

The report indicates the most likely economic outlook to be that fundamentals will support a strengthening of economic growth, and inflation pressures are anticipated to remain well contained.2002 Monetary Report 3/18/03

FRB Issues March 2003 Statistical Release of Assets

The Federal Reserve Board has released the March 2003 Table of U. S. Reserve Assets and the Foreign Official Assets held at Federal Reserve Banks.FRB Bulletin 3/18/03

NCUA Announces CUs Eligible For Reduced Regulatory Requirements

The National Credit Union Administration announced 3,650 federal credit unions have been determined to be eligible for RegFlex, a designation created to reduce regulatory burden on strongly-capitalized, well-managed federal credit unions and provides for exemptions from all or part of specific regulations not required by statute and unnecessary for safety and soundness purposes. NCUA NR03-0317 3/18/03

NCUA Board Member Encourages Services for Non-Home Owners

National Credit Union Association Board Member Deborah Matz told the attendees at the Annual Conference of the American Credit Union Mortgage Association that minority members who do not own a home represent marketing opportunities for credit union mortgages. She urged credit unions to provide financial literacy training and affordable mortgage programs to entice new membership.NCUA NR03-0317-2 3/18/03

Merrill Lynch Pays SEC $80 Million Enron Settlement

The SEC announced the charging of Merrill Lynch & Co., Inc. and four former senior executives with fraud which had the purpose and effect of overstating Enron's reported financial results. Simultaneous with the filing of the complaint in U. S. District Court, Houston, Texas, the SEC accepted Merrill Lynch's $80 Million settlement offer. The funds will be paid into a court account and ultimately distributed to Enron fraud victims.SEC NR2003-32   SEC Complaint 3/18/03

FRB/Treasury Report on Global Counterfeiting

The Federal Reserve Board and the Treasury Department issued a joint report to Congress, "The Use and Counterfeiting of United States Currency Abroad, Part II" that details how the combined efforts of the Treasury, United States Secret Service, and Federal Reserve have held the incidence of counterfeiting at relatively low nominal levels. Joint FRB/Treasury Press Release 3/17/03

NCUA Chairman Remarkrs on Move Toward CU Taxation

In a speech before the Utah Credit Union League'
s annual meeting, NCUA Chairman Dennis Dollar said a nationwide move to tax the retained earnings of credit unions would, if successful, result in reductions in credit union net worth sufficient to require Congress to make significant changes in the federal prompt corrective action (PCA) law. NCUA News Release 3/17/03

Philippines Remains on FATF NCCT List

The Financial Action Task Force against money laundering has decided not to impose further counter-measures to the Philippines. Recently, the country enacted new amendments to its Philippine Anti-MoneyLaundering Act of 2001. The Philippines will remain on the list of non-cooperative countries and territories(NCCTs) until it has effectively implemented its new anti-money laundering legislation. FATF Announcement 3/17/03

Cease and Desist Order Announced

The Federal Reserve Board has issued an Order to Cease and Desist and of Prohibition against Terry Frierson, a former chief executive officer, president, and institution-affiliated party of MSB Shares, Inc., and the Midsouth Bank, Jonesboro, Arkansas. Frierson had allegedly violated Regulation O, engaged in unsafe and unsound practices, and misapplied bank funds. FRB Enforcement 2003)313    Order 3/14/03

Substantial Penalty Imposed for Flood Violations

The Federal Reserve Board announced the issuance of a Civil Money Penalty of $17,150 against First Bank, Creve Coeur, Missouri regarding alleged violations of the National Flood Insurance Act. FRB PR-200303132    Order 3/14/03

Reg Y Modification Published in Federal Register

The Federal Reserve Board requests comment on a proposal to modify Regulation Y to allow bank holding companies engaged in permissible derivatives activities to transfer title to commodities underlying derivative contracts on an instantaneous, pass-through basis. [This was previously announced on BOL] 67FR12316 (txt) 67FR12316 (pdf) 3/14/03

Counterfeit Checks Alert Issued by FDIC

The Federal Deposit Insurance Corporation has learned that counterfeit cashier's checks drawn on Fifth Third Bank, Kentucky, Inc., Louisville, Kentucky and counterfeit checks drawn on Delta Bank, Vidalia, Louisiana, for the account of Community Credit Center, Inc. are currently in circulation. The information has been added to the BOL Alerts & Counterfeits page. FDIC SA-14-2003 3/14/03

FDIC Chairman Suggests Organizational Changes

In remarks made before the "Federal Deposit Insurance Corporation Symposium on The Future of Financial Regulation: Structural Reform or Status Quo?", Chairman Powell supported consideration of regulatory changes to promote efficiency, reduce costs and to better protect public confidence in the financial sector. FDIC PR-22-2003 Remarks 3/14/03

FRB International Finance Discussion Papers Released

The Federal Reserve Board has released the staff working papers regarding the International Finance Discussion Papers series.Working Papers 3/14/03

Comptroller Hawke Discusses Basel II Concerns

In remarks before the Centre for the Study of Financial Innovation, London, England, the Comptroller reviewed his concerns with Basel II and the agreement of the U.S. bank regulators to take steps to simplify the implementation in the United States. The Basel II, approach would be built on three "pillars"- a set of formulas for determining regulatory capital; a set of principles for the exercise of supervisory oversight; and a set of disclosure requirements intended to enhance market discipline. OCC NR 2003-19 Speech 3/14/03

Chairman Powell Reacts to Deposit Insurance Reform Legislation Action

Federal Deposit Insurance Chairman Powell expressed his pleasure at the passage of deposit insurance reform legislation by the House Financial Services Committee. FDIC PR-23-2003 3/14/03

OCC Reports Derivatives Volume Grows $2.9 Trillion

Derivatives held by U. S. commercial banks increased $2.9 trillion in the fourth quarter, to $56.1 trillion, the Office of the Comptroller of the Currency reported today in its quarterly Bank Derivatives Report. OCC:NR 2003-18 Bank Derivatives Report 3/13/03

FDIC Announces Money Smart Alliance Partnership with Women in Housing & Finance Foundation

The FDIC announced that the Women in Housing & Finance Foundation (WHF Foundation) has become the Corporation's newest partner in the Money Smart Alliance Program. FDIC:MS-003-2003 3/13/03

OFAC Adds New Provisions to the Iraqi Sanctions Regulations

These new regulations provide for the establishment of a registration program that would authorize nongovernmental organizations to engage in humanitarian activities in the areas of Iraq not controlled by the Government of Iraq. 68FR11741 (txt) 68FR11741 (pdf) 3/13/03

The Latest Word from FinCEN

Readers can gain clues into what's happening with the CIP rules and how FinCEN views the 314(a) information request process by reading FinCEN Director Sloan's testimony before the Subcommittee on Oversight Investigation of the Committee on Financial Services. He discussed the role of the Financial Crimes Enforcement Network plays in combating money laundering and fighting terrorism financing.Statement 3/12/03

Reg Y Modification Proposed

The Federal Reserve Board requests comment on a proposal to modify Regulation Y to allow bank holding companies engaged in permissible derivatives activities to transfer title to commodities underlying derivative contracts on an instantaneous, pass-through basisComments are requested by April 21, 2003. FRB Press Release 20030311 Proposed Rule 3/12/03

OFAC Violations to be Made Public

Under a new Final Rule published by the U. S. Treasury Department's Office of Foreign Assets Control disclosures of civil money penalties imposed for OFAC violations will be made weekly. The name of the entity involved, the sanctions program involved, a brief description of the violation or alleged violation, a clear indication whether the proceeding resulted in an informal settlement or in the imposition of a penalty, and the amount of the penalty imposed or the amount of the agreed settlement will be disclosed. The rule was published previously in the Federal Register and took effect February 22. 2003. This is the OCC's announcement to national banks of the new rule. OCC Bulletin 2003-10 Final Rule 3/12/03

FFIEC Call Report Changes

The Federal Financial Institutions Examination Council has given notice of a number of revisions to the Reports of Condition and Income (Call Report). The changes are effective March 31, 2003. This FIL from the FDIC, which incorporates the FFIEC issuance, provides a summary of the changes. FIL-18-2003 3/12/03

FDIC Issues Counterfeit Checks Check Alert

The Federal Deposit Insurance Corporation (FDIC) has learned that counterfeit cashier's checks drawn on Center Bank, Los Angeles, California, are currently in circulation. The information has been added to the BOL Alerts & Counterfeit page. FDIC SA-13-2003 3/12/03

FinCEN IVTS Advisory Issued

The Financial Crimes Enforcement Network has issued its Advisory Issue 33 which provides financial institutions information on Informal Value Transfer Systems. FinCEN Advisory 33 3/12/03

FFIEC Publishes Draft Call Report Forms

The FFIEC has published a new draft FFIEC-031 Call Report for banks with foreign and domestic offices and FFIEC-041 for banks with domestic offices only.FFIEC-031      FFIEC- 041 3/11/03

NCUA Issues Prohibition Orders

The National Credit Union Administration has issued Orders of Prohibition against Janice Torricer, Theresa M. Corpuz and Ivy J. Sanchez, former employees of HC&S Federal Credit Union (now Valley Isle Community Federal Credit Union) of Kahului, Hawaii.NCUA News Release NR03-0307 3/11/03

NCUA Board Member Reiterates Support for Dual Charters

National Credit Union Administration Board Member Deborah Matz, addressing the 25th Annual NCUA/National Association of State Credit Union Supervisors State Regulatory Conference, reiterated her support for the dual chartering system.NCUA News Release NR03-0310 3/11/03

OFAC Update

OFAC issued a bulletin regarding a presidential executive order relating to "Persons Undermining Democratic Processes or Institutions in Zimbabwe". As a result, 77 new designations were added to OFAC's SDN list. See the BOL OFAC page for details. 3/11/03

Enforcement Actions Terminated

The Federal Reserve Board announced the termination of eleven enforcement actions. Federal Reserve Press Release 3/10/03

FedACH Participation Forms Online

The Federal Reserve Board has posted its ACH participation agreement and instructions online. Before a financial institution begins to originate or receive FedACH items through the Federal Reserve, an ACH agreement must be completed and signed by an authorized individual at the institution. ACH Agreement Instructions 3/10/03

January Consumer Credit Report Released

The G.19 Consumer Credit Report for January 2003 was released by the Federal Reserve Board. Total consumer credit rose 9 per cent at an annual rate. Federal Reserve Release (pdf) Text 3/10/03

Chairman Greenspan Discusses Global Finance

The Federal Reserve Board Chairman's remarks were presented to attendees at the Banque de France International Symposium on Monetary Policy, Economic Cycle, and Financial Dynamics, Paris, France. Greenspan's Speech 3/10/03

FRB Issues Proposed Rule on Transition Rules for Reg C

In 2002, the FRB revised Regulation C and imposed new data collection requirements with an effective date of January 1, 2004. This proposal would revise the official staff commentary to Regulation C to provide transition rules for applications received before January 1, 2004, on which final action is taken on or after January 1, 2004. 68FR11010 (text) 68FR11010 (pdf) 3/7/03

Notice of expiration of exception to BSA requirement published in Federal Register

FinCEN's notice of the expiration of a conditional exception to a BSA requirement on May 31, 2003 (the so-called Travel Rule) was published in today's Federal Register. The exception permits financial institutions to substitute coded information for the true name and address of a customer in a funds transmittal order. 68FR10965 (text) 68FR10965 (pdf)3/7/03

Three Million CMP for BSA Violations Announced

The Financial Crimes Enforcement Network has announced the assessment of a Three Million civil money penalty against Western Union Financial Services, Inc. Among other violations, it was determined that the company willfully failed to file 662 SARs over a ten month period. FinCEN Assessment 3/7/03

Large Commercial Bank Quarterly Reports

The Federal Reserve Board has released the Fourth Quarter 2002 data on commercial banks having consolidated assets of $100 million or more. The information is complied from the consolidated reports of condition and income filed by the banks.FRB Release      Text 3/7/03

Fourth Quarter Z.1 Released

The Flow of Funds Accounts of the United States for the Fourth Quarter of 2002 has been released by the Federal Reserve Board. The report contains summaries of various financial indicators. FRB Release Z.1 3/7/03

Regulatory Restructuring Symposium Announced

The Federal Deposit Insurance Corporation will sponsor a symposium on the future of financial regulation on Tuesday, March 13, at the National Press Club in Washington, DC. Key experts on financial regulation will discuss how the present system evolved and examine ways in which the complex web of agencies with specialized areas of authority and overlapping jurisdictions might be restructured.FDIC Press Release PR-21-2003 3/7/03

Reg B Final Rule Published

The Federal Reserve Board published on its Web site the text of a final rule amending Regulation B. The final rule makes numerous changes to Regulation B and the Official Staff Commentary, including the well-publicized ones regarding collection of applicants' personal characteristics in connection with nonmortgage credit and record retention for prescreened solicitations. The final rule is effective April 15, 2003, but to allow time for any necessary operational changes, the mandatory compliance date is April 15, 2004. [Previously announced on BOL] FRB Press Release    Final Rule 3/6/03

FDIC Issues CRA Exam Report

The Federal Deposit Insurance Corporation issued its monthly list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act. The list covers evaluation ratings that the FDIC assigned to institutions in December 2002.FDIC PR-20-2003       List of Banks Examined 3/6/03

Sarbanes-Oxley Guidance Issued

The FDIC has provided guidance to institutions about selected provisions of the Sarbanes-Oxley Act, including the actions the FDIC encourages institutions to take to ensure sound corporate governance. The Act applies to publicly traded institutions.FDIC FIL 17-2003 3/6/03

Beige Book Update Published

The Federal Reserve Board has published the March 2003 edition of the Beige Book which summarizes the current economic conditions in each of the Federal Reserve Districts.Beige Book      March Summary 3/6/03

FRB Governor Testifies

Governor Donald L. Kohn testified regarding the Business Checking Freedom Act of 2003 before the Subcommittee on Financial Institutions and Consumer Credit of the House Committee on financial Services.Testimony 3/6/03

FDIC Chairman Optimistic on the Economy

Chairman Donald E. Powell indicated he was optimistic about the economy and expressed his views on corporate governance at the annual conference of the Independent Community Bankers of America in Orlando, Florida.FDIC PR-19-2003 3/6/03

FFIEC Uniform Bank Performance Report Online

The December 31, 2002 Uniform Bank Performance Report (UBPR) is now available on line. The online version of the UBPR includes 5 years of continuous financial history that is restated quarterly to reflect call report amendments and new analytical tools. FFIEC Press Release     UBPR 3/6/03

Chairman Greenspan Discusses Home Mortgage Market

The Federal Reserve Board Chairman's remarks were presented to attendees at the annual convention of the Independent Community Bankers of America in Orlando, Florida. Greenspan's speech 3/5/03

Federal Reserve Posts Cash FAQ

The Cash Section of the Federal Reserve has posted on Federal Reserve Financial Services Web Site a list of Frequently Asked Questions and Answers regarding currency and coin. It addresses such issues as replacing mutilated currency, what portrait appears on various denominations, and where to get uncut sheets of printed bills. Federal Reserve Financial Services 3/5/03

Comptroller Hawke Calls for Less Burdensome Disclosures

In a presentation before the annual convention of the Independent Community Bankers of America, the Comptroller noted that consumers are ill-served by the current system of compliance regulation. He called for the development of a new approach that would be more effective for consumers and less burdensome for banks.OCC News Release     Speech 3/5/03

2002 Earnings Data Released

Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation earned a combined $105.4 billion during 2002, the first time annual earnings of the industries topped $100 billion. Return on Assets reached a new high of 1.31 percent, surpassing the old record of 1.25 percent reached in 1999.FDIC PR-17-2003 3/5/03

FDIC 2001 Annual Report Submitted

As required by the FDIC Act, the 2001 annual report was submitted to the President and the Speaker of the House of Representatives.FDIC 2001 Annual Report 3/5/03

FDIC 4th Quarter 2002 Banking Profile Released

The Quarterly Banking Profile contains a new combined banking and thrift coverage format.FDIC QBP 3/5/03

FinCEN Notice on Expiration of Exception to Travel Rule

The CIF Exception to the Travel Rule is scheduled to expire on May 31, 2003. FinCEN intends to permit the expiration, but is soliciting comments before it does so. FinCEN Notice 3/5/03

Treasury Forms Executive Office for Terrorist Financing and Financial Crimes

Treasury has announced the formation of a new office to combat domestic and foreign terrorist financing and other financial crimes. The Executive Office for Terrorist Financing and Financial Crimes (EOTF/FC) will focus on reducing the risk that financial systems are being misused by criminals and terrorists. It will also provide policy guidance to both FinCEN and OFAC and will participate in the department's development and implementation of U.S. government policies and regulations in support of the PATRIOT Act.Treasury Press Release 3/4/03

Federal Reserve Publishes Reg C Transition Rules

The FRB is proposing amendments to the official staff commentary of Reg C to provide transition guidance. Comments are requested by April 8, 2003. The transition rules would provide guidance to lenders who are required to collect and report new information under the revision to Reg C on what action to take prior to the January 1, 2004 Reg C effective date. Federal Reserve Release     Proposed Rule and staff comments 3/4/03

Second Quarter CRA Examination Schedule Released By OCC

The OCC has released its schedule of CRA examinations to be conducted in the second quarter of 2003.OCC News Release 3/4/03

OTS Releases Second Quarter CRA Examination Schedule

114 savings associations have been scheduled by the OTS for CRA Examinations during the second Quarter of 2003.OTS Press Release    Exam Schedule 3/4/03

FDIC Issues Alert on Counterfeit Official Checks

FDIC Issues Alert on Counterfeits Counterfeit official checks drawn on First Republic Bank, Los Angeles, California, and payable through Bank of America, Chicago, Illinois; and counterfeit cashier's checks drawn on City Bank, Hawaii, Honolulu, Hawaii; and Frost National Bank, San Antonio, Texas are in circulation. Get the details on the BOL Alerts & Counterfeits page, or in the FDIC Special Alert 3/4/03

About Those Tax Protester Arguments

The IRS has published a document which addresses some of the more common false "legal" arguments made by individuals and groups who oppose compliance with the federal tax laws. Read "The Truth About Frivolous Tax Arguments" to get the scoop. 3/4/03

FRB Publishes List of Foreign Margin Stocks

The List of Foreign Margin Stocks (Foreign List) is composed of certain foreign equity securities that qualify as margin securities under Regulation T. The Foreign List is published twice a year by the Board. 68FR8993 (txt) 68FR8993 (pdf) 3/3/03

Approval of proposal of The Daiwa Bank, Limited

The Federal Reserve Board announced the approval of the application of The Daiwa Bank, Limited, Osaka, Japan, to establish a representative office in New York, New York. FRB Press Release 3/3/03

Director's Corner

The FDIC has created a special new area on its Web site containing information of interest to bank directors. The .Director.s Corner. includes items such as Interagency Policy Statements, Supervisory Guidance, and Financial Institution Letters on the topics of Corporate Governance Practices, Auditing and Internal Controls, Accounting Practices and the Allowance for Loan and Lease Losses. Director's Corner 3/3/03