FEDERAL GOVERNMENT RELATIONS
Senators demand FDIC withdraw proposed board governance rule
In a letter, a group of 11 Republican senators demanded that the Federal Deposit Insurance Corp. withdraw its proposed board governance rule, saying it would harm the safety and soundness of the U.S. financial system.
Agencies issue second request for comments under EGRPRA review
Federal banking regulators formally issued their second request for comment under the latest Economic Growth and Regulatory Paperwork Reduction Act regulatory review. The latest request seeks comments on regulations concerning consumer protection; directors, officers and employees; and money laundering. Comments are due Oct. 30 and may be submitted on the agencies’ EGRPRA site. EGRPRA requires the agencies to review their regulations every 10 years to identify outdated, unnecessary or unduly burdensome regulations applicable to insured depository institutions. The agencies will publish two more Federal Register notices over the next two years.
Hsu assures Rep. Gottheimer OCC will defend preemption
Acting Comptroller of the Currency Michael Hsu sent a letter responding to concerns raised by Rep. Josh Gottheimer, D-N.J., about new state laws that seek to undermine the principle of federal preemption and affect national banks’ ability to comply with anti-money laundering risk, among other things.
FOMC holds interest rates steady
The Federal Open Market Committee will hold the federal funds rate steady at 5.25-5.5%. The committee noted that economic activity has continued to expand at a solid pace, but that job gains have moderated, and the unemployment rate has moved up – though it remains low overall.
FDIC proposes stricter standards on industrial loan companies
The Federal Deposit Insurance Corp. board of directors advanced a proposed rule to enhance the agency’s framework to supervise industrial loan companies (ILCs). The proposed amendments to part 354 of the FDIC rules and regulations would:
- Set forth additional criteria the FDIC would consider when assessing the risks presented to an ILC by its parent organization and evaluating the ILC’s ability to function independently of the parent organization.
- Clarify the relationship between written commitments and the FDIC’s evaluation of the statutory factors applicable to an industrial bank filing.
- Include conversions involving a proposed ILC under section 5 of the Home Owners’ Loan Act.
- Apply part 354 to ILC parent companies if there is a change of control or merger involving the parent company.
- Provide the FDIC authority to apply part 354 when an ILC would become a subsidiary of a company that is not subject to federal consolidated supervision.
The FDIC said the reforms are designed to mitigate risks to the Deposit Insurance Fund and to provide necessary transparency for market participants. Public comments on the proposal are due 60 days after publication in the Federal Register.
FDIC seeks more oversight over change in bank control requests
The Federal Deposit Insurance Corp. board voted to move ahead with a proposed rule to require parties acquiring FDIC-insured institutions to give advanced notice to the agency even if the Federal Reserve plans to review the change in control requests.
Federal court issues stay on fiduciary rule enforcement
A Texas court ordered a nationwide stay of a Department of Labor final rule that expands fiduciary status to nearly all financial professionals, ruling that the plaintiffs in a lawsuit seeking to overturn the rule are likely to succeed on the merits.