Top Stories for January 2002

FRB Explains Antiterrorism Initiatives

In testimony before a committee of Congress, Richard Spillenkothen, Director of the Federal Reserve's Division of Banking Supervision and Regulation, provided information about the Federal Reserve's work on implementing the USA Patriot Act. Spillenkothen noted that the Treasury Department recently proposed rules on the prohibition of correspondent accounts with shell banks; the recordkeeping requirements on foreign bank ownership and designation of agents for service of legal process for correspondent accounts; and the broker-dealer suspicious activity reporting requirements all reflect consultation with the Federal Reserve. In addition, Treasury is expected to issue additional proposed rules soon to set forth minimum standards for financial institutions to verify the identification of their customers and to require financial institutions to conduct due diligence to identify suspicious activities involving correspondent and private banking accounts. 1/31/02

Fed Leaves Interest Rate Unchanged

The FOMC decided to keep its target for the federal funds rate unchanged at 1-3/4 percent. FRB Press Release 1/31/02

OTS Releases December Enforcement Statistics

The OTS reported that it issued ten enforcement orders to five individuals and five institutions during the month of December, 2001. OTS also terminated three orders previously issued to two individuals and one institution. OTS 02-04 1/31/02

OCC Issues Interim Rule Amending its Regulation Regarding the Capital Equivalency Deposits

This interim rule revises certain requirements regarding CED deposit arrangements to increase flexibility for and reduce burden on certain Federal branches and agencies, based on a supervisory assessment of the risks presented by the particular institution. The OCC is issuing this rule on an interim basis effective January 30, 2002. 67FR4325 (text) 67FR4325 (pdf) 1/30/02

FDIC Publishes an International Visitors Training Program

In response to the many training requests from our foreign visitors and in order to make more efficient and uniform use of resources, the FDIC has developed a three-day International Visitors Training Program designed specifically for officials of foreign banking, deposit insurance and resolution authorities serving in mid-level management or above. 1/30/02

Chairman Powell's Statement on FDIC Board Approval of Special Examination Activities

The agreement establishes a better process for determining when the FDIC will use its authority to examine any insured institution.FDIC:PR-6-2002 1/30/02

OCC Publishes the December 2001 Bank Accounting Advisory Series

The Bank Accounting Advisory Series expresses the OCC's current views on accounting topics of interest to national banks. 1/28/02

Regulators Issue Final Rule to Amend their Capital Requirements

The new capital requirements, which will apply symmetrically to equity investments of banks and bank holding companies, impose a series of marginal capital charges on covered equity investments that increase with the level of a banking organization's overall exposure to equity investments relative to the organization's Tier 1 capital. 67FR3783 (text) 67FR3783 (pdf) FDIC:FIL-6-2002 1/25/02

Department of the Treasury's Notice of Funds Availability Invites Applications for the First Accounts Program

The FDIC Published FIL-5-2002 to announce that the NOFA invites insured depository institutions, and other eligible entities, to apply for grants to provide low-cost electronic, checking or other types of accounts to low- and moderate-income individuals who currently do not have an account with an insured depository institution or an insured credit union. FDIC:FIL-5-2002 1/25/02

NCUA Chairman Dennis Dollar's Statement Regarding the President's Recess Appointment of JoAnn Johnson and Deborah Matz

President George W. Bush announced that he has appointed JoAnn Johnson and Deborah Matz as Members of the National Credit Union Administration Board as recess appointments. NCUA Press Release 1/25/02

Statement By NCUA Chairman Dennis Dollar

NCUA Chairman Dennis Dollar released a statement regarding the National Community Reinvestment Coalition's legal actions concerning the Community Action Plan (CAP). NCUA Press Release 1/25/02

FRB Approves Regulatory Changes to HMDA

The changes to Regulation C will facilitate fair lending analysis and enhance understanding of the home mortgage market generally and the subprime market in particular. FRB Press Release Proposed amendments to Regulation C based on a review of the regulationSupplemental recommendations regarding Regulation C. 1/24/02

Identity Theft Is the Top Consumer Fraud Complaint

The Federal Trade Commission has announced the Top 10 Consumer Fraud Complaints for 2001 and identity theft heads the list, with 42% of the 204,000 complaints entered into the FTC's Consumer Sentinel database last year. Number 5 on the list, with 5%, is "Advance Fee Loans and Credit Protection" fraud. Number 8 is "Foreign Money Offers". FTC has also released a list of tips to help consumers who want to protect themselves from fraud and deception. You may want to consider posting them in your institution or including them in a mailing to customers. 1/24/02

Proposed National "Do Not Call" Registry

The Federal Trade Commission is soliciting comments on a proposal to amend the Telemarketing Sales Rule (TSR) by, among other things, creating a national "do not call" registry. 1/23/02

Considering The Unintended Audience

The National Infrastructure Protection Committee (NIPC) has issued Advisory 02-001 to urge those putting content on the Internet to carefully consider the ramifications of information being accessed by an unintended audience and to encourage Internet content providers to review the data they make available online.1/23/02

Obtaining EINs from IRS

Taxpayers can now call a single toll-free telephone number (866)816-2065 to get an Employer Identification Number (EIN). IRS customer service representatives in three IRS Service Centers will respond to taxpayer calls Monday through Friday from 7:30 a.m.- 5:30 p.m. local time. Taxpayers also can fax requests for an EIN 24 hours a day/7 days a week by dialing the fax number at the location accepting applications from your state. The instructions on the revised Form SS-4 indicate which location will accept your faxed request. For detailed information on Employer Identification Numbers, the IRS has a special page on its Web site. 1/22/02

FRB Issues Revisions to Bank Holding Company Supervision Procedures

To further enhance its risk-focused supervision program, on January 1, 2002, the FRB implemented revised procedures for the supervision of bank holding companies1 with total consolidated assets of $5 billion or less. FRB:SR 02-01 1/22/02

OCC and People's Bank of China Assess Money Penalties Against Bank of China

The OCC and the People's Bank of China announced they have entered into separate actions against Bank of China and its U.S.-based federal branches for misconduct engaged in by prior management. OCC:NR 2002-07 Statement of Comptroller Hawke Statement of People's Bank Statement of Chairman Liu Consent Order1/22/02

FDIC Approves the Assumption of the Insured Deposits of Bank of Sierra Blanca, Sierra Blanca, Texas

The Board of Directors of the FDIC approved the assumption of the insured deposits of the Bank of Sierra Blanca, Sierra Blanca, Texas, by The Security State Bank of Pecos, Pecos, Texas. FDIC:PR-5-2002 1/22/02

Change of Address for HMDA and CRA Data

The OCC is informing all national banks, federal branches and agencies, and District of Columbia banks of the change of mailing address for CRA and HMDA data submissions, which are due March 1, 2002. OCC 2002-4 1/18/02

OCC Releases Third Quarter Edition of Quarterly Journal

The December 2001 issue of the Quarterly Journal, Vol. 20, No. 4 (for third quarter 2001), is now available on-line . This issue features the latest "Condition and Performance of Commercial Banks" and congressional testimony of the agency's executives, including the white paper attachment to Comptroller Hawke's testimony on "Reforming the Funding of Bank Supervision." 1/18/02

Consumer Confidential: The Privacy Story

The Federal Trade Commission has announced that February 3 - 9, 2002 has been designated National Consumer Protection Week ("NCPW") to highlight consumer protection and education efforts around the country. The subject of this year's NCPW is privacy. On the special site they've created for the NCPW, there are noncopyrighted materials freely available for you to use as part of your own NCPW campaign. No reprint permission is required. 1/18/02

Fact Sheet on International ACH

This month, Federal Reserve Financial Services has made available a Fact Sheet on its FedACH International ACH service. 1/18/02

Borrower's Loan Number on Recorded Documents

In case you missed it, there is an interagency opinion letter on the permissibility, under the GLB privacy regs, of putting a borrower's loan number on recorded mortgage documents. 1/18/02

OCC Publishes Interpretive Letters

OCC has now posted on its Web site the Interpretive Letters, CRA decisions, and conditional approvals it issued in December. The ILs are available in both Word and PDF format. 1/18/02

OCC Releases CRA Evaluations For 28 National Banks

The OCC released a list of Community Reinvestment Act (CRA) performance evaluations that became public during the period of December 15 through January 14, 2002. OCC:NR 2002-5 1/16/02

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:News Release 2002-6 1/16/02

OCC Publishes Inter-Agency Examiner Guidance On Settlement Service Mark-Ups Under RESPA

The Court of Appeals for the Seventh Circuit held that Section 8(b) of the Real Estate Settlement Procedures Act (RESPA) was not violated when a title company marked-up a fee of a third-party settlement servicer without performing any additional services. OCC 2002-3, Inter-Agency Guidance 1/16/02

OCC Issues Guidance on ACH Transactions Involving the Internet

This bulletin highlights the risks associated with automated clearing house (ACH) transactions that involve the use of the Internet and provides guidance for managing those risks. OCC 2002-2 1/15/02

FDIC to Market Hamilton Bank, N.A., Assets

The FDIC announced that it will market a $1 billion loan portfolio from the failed Hamilton Bank, N.A., Miami, Florida, within the next 60 days. FDIC:PR-4-2002 1/15/02

Governor Laurence H. Meyer resigns from FRB

Laurence H. Meyer submitted his resignation as a member of the Board of Governors of the Federal Reserve System, effective the last day of his term, January 31, 2002. FRB Press Release 1/15/02

Hamilton Bank, N.A. Closed by the OCC and FDIC Appointed Receiver

The OCC acted after finding that the bank, which had assets of $1.3 billion at the time of its closing, was undercapitalized and suffered from deteriorating asset quality, poor earnings, a high level of nonperforming loans and sharply declining capital levels. OCC:NR 2002- 04, FDIC:PR-3-2002 1/14/02

FRB Makes Revisions to Bank Holding Company Supervision Procedures

The FRB implemented revised procedures for the supervision of bank holding companies1 with total consolidated assets of $5 billion or less. FRB:SR 02-01 1/11/02

OCC Proposes Interagency Bank Merger Act Application

The OCC is soliciting comments on proposed revisions to the information collection titled: "‘Interagency Bank Merger Act". 1/11/02

NCUA Chairman Dennis Dollar Announces Resumption Of Share Insurance Fund Updates At NCUA Board Meetings

A once standard practice at NCUA Board meetings dropped in 1997 is making a comeback. NCUA Chairman Dennis Dollar announced today that a quarterly update on the status of the National Credit Union Share Insurance Fund (NCUSIF) will become a part of the official NCUA Board meeting agenda in 2002. NCUA Press Release 1/11/02

OTS Withdraws Proposed Holding Company Rule

The OTS announced that it is withdrawing a proposed rule it published in the November 8 Federal Register covering the authority of some thrift holding companies to engage in the same list of financial activities as the Federal Reserve Board permits financial holding companies under the Gramm-Leach-Bliley Act of 1999. OTS 02-03
1/10/02

FDIC Publishes "Your Insured Deposit" Booklet Available in Chinese and Korean

The FDIC is pleased to announce that in addition to English and Spanish versions, its "Your Insured Deposit" booklet is now available in Chinese (traditional and simplified) and Korean. FDIC:FIL-4-2002 1/10/02

Agencies Adopt Final Rules Concerning the Regulatory Capital Treatment of Nonfinancial Equity Investments

The FRB, FDIC and OCC, announced the adoption of final rules governing the regulatory capital treatment of equity investments in nonfinancial companies held by banks, bank holding companies and financial holding companies. OCC:NR 2002-03 FDIC-PR-2-2002, FRB Press Release 1/09/02

OTS Announces 12 December CRA Ratings

The OTS announced savings associations' Community Reinvestment Act (CRA) performance evaluation ratings that became available in December 2001. OTS 02-02 1/09/02

FRB Publishes Income and Expense Data and Transfers to the Treasury

Preliminary figures indicate that the Federal Reserve Banks distributed approximately $27.14 billion of their $31.87 billion total income to the U.S. Treasury during 2001. FRB Press Release 1/09/02

OCC Issues Examiner Handbook on Custody Services

The custody business is a bank asset management activity that involves the settlement, safekeeping and reporting of customer marketable securities and cash. The level of assets under custody has increased significantly, as has competition among financial institutions for this business. OCC:NR 2002- 02 "Custody Services" booklet 1/09/02

FDIC Seeks Comment on Proposed Policy Statement on Minority-Owned Depository Institutions

As previously reported in the Federal Register, the FDIC is requesting public comment on the proposed Policy Statement Regarding Minority-Owned Depository Institutions. FDIC:FIL-3-2002 1/09/02

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 the Community Reinvestment Act (CRA). The list covers evaluation ratings that the FDIC assigned to institutions in October 2001. FDIC:PR-1-2002 1/08/02

FRB Announces New Consumer Advisory Council Members

The Council advises the FRB on the exercise of its responsibilities under the Consumer Credit Protection Act and on other matters in the area of consumer financial services. FRB Press Release 1/07/02

OTS Releases November Enforcement Statistics

The OTS reported that it took six enforcement actions against two individuals and four institutions during the month of November 2001. OTS 02-01 1/07/02

The OCC announced that Eagle National Bank has signed a Consent Order directing it to cease all payday lending activities. Eagle has been engaged in payday lending through arrangements with Dollar Financial Group. The OCC acted after finding that Eagle was in material noncompliance with an earlier Memorandum of Understanding entered into with the OCC and was engaged in numerous unsafe and unsound activities. OCC: NR 2002-01 1/04/02

FDIC Issues FILs Relating to OFAC

The FDIC has issued FIL-01-2002 and FIL-02-2002 to alert bankers to OFAC updates that were previously reported on by BOL. Details of all recent OFAC changes are available on the BOL OFAC page.1/03/02

FinCEN Proposes SAR Reporting Rule for Brokers and Dealers

FinCEN is proposing to amend the Bank Secrecy Act regulations to require brokers or dealers in securities to report suspicious transactions to the Department of the Treasury. (text) 1/03/02

FedACH Fees Lowered

The Federal Reserve has announced lower FedACH fees for items
originated, items received, and for all addenda records, effective February 1, 2002. 1/03/02