This section provides an overview of recently released regulations and supervisory guidance, arranged in reverse chronological order. Press Release or Financial Institution Letter designations are included so the reader may obtain more information.
Subject |
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Summary |
New Anti-Money-Laundering Guidance on Customer Identification
Programs (FIL-34-2005 , April 28, 2005) |
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The Federal banking, thrift and credit union regulatory agencies,
the Financial Crimes Enforcement Network, and the Department of Treasury
jointly issued additional interpretive guidance, in the form of Frequently
Asked Questions, on the application of the "Customer Identification
Programs for Banks, Savings Associations, and Credit Unions" regulation.
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Guidance and Advisory on Banking Services for Money Services
Businesses Operating in the United States (FIL-32-2005 and PR-36-2005,
April 26, 2005) |
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The Federal banking, thrift, and credit union regulatory agencies
and the Financial Crimes Enforcement Network (FinCEN) issued interpretive
guidance designed to clarify the requirements for, and assist banking
organizations in, appropriately assessing and minimizing risks posed
by providing banking services to money services businesses. FinCEN
also issued a concurrent advisory to money services businesses to
emphasize their Bank Secrecy Act regulatory obligations and to notify
them of the types of information they will be expected to provide
to a banking organization in the course of opening or maintaining
account relationships. |
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Final Technical Amendments to Community Reinvestment Act
Regulations (FIL-29-2005 , April 20, 2005) |
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The Federal banking and thrift regulatory agencies adopted the joint
interim rule making technical changes to the Community Reinvestment
Act (CRA) regulations published for comment in the Federal Register
on July 8, 2004. The joint final rule took effect March 28, 2005,
and conforms the CRA regulations to recent changes in the Standards
for Defining Metropolitan and Micropolitan Statistical Areas published
by the U.S. Office of Management and Budget, census tracts designated
by the U.S. Census Bureau, and the Federal Reserve Board's Regulation
C, which implements the Home Mortgage Disclosure Act . |
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Guidance on the Use of Internal Risk Ratings for Assigning
Risk-Based Capital on Exposures to Asset-Backed Commercial Paper (ABCP)
Programs (FIL-26-2005 , March 31, 2005) |
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The guidance, issued by the Federal banking and thrift regulatory
agencies, generally applies to large banks extending credit enhancements
to ABCP programs, explains the qualifying criteria for using an internal
risk-rating system for assigning risk-based capital on exposures to
ABCP programs, and supplements the "Securitization Capital Rule" (referenced
in FIL-99-2001 ). The guidance provides implementing standards to be
used in evaluating whether the bank's internal risk-rating system
for ABCP exposures reasonably corresponds to the methodologies used
by the ratings agencies in assigning external credit ratings and provides
a framework for supervisors to determine the appropriate risk-based
capital treatment for unrated direct credit substitutes provided to
ABCP programs, using a "weakest link" method. |
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Answers to Frequently Asked Questions About New HMDA Data
(PR-30-2005 , March 31, 2005) |
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The Federal banking, thrift, and credit union regulatory agencies,
along with the Department of Housing and Urban Development, released
a set of "Answers to Frequently Asked Questions" that addresses the
new home loan pricing data disclosed for the first time under the
Home Mortgage Disclosure Act (HMDA). The new loan pricing data are
intended to advance enforcement of consumer protection and antidiscrimination
laws and improve mortgage market efficiency. |
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Proposed Revision to the Classification System for Commercial
Credit Exposures (FIL-22-2005 and PR-28-2005 , March 28, 2005) |
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The Federal banking and thrift regulatory agencies issued proposed
guidance that would replace the current commercial loan classification
system categories of "special mention," "substandard," and "doubtful"
with a two-dimensional framework. The new rating system has one dimension
that measures the risk of the borrower defaulting (borrower rating)
and a second dimension that focuses on the loss severity the institution
would likely incur in the event of the borrower's default (facility
rating). Comments are due June 30, 2005. |
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Guidance on Response Programs for Security Breaches (PR-26-2005 ,
March 23, 2005 and FIL-27-2005 , April 1, 2005) |
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The Federal banking and thrift regulatory agencies issued guidance
that interprets the agencies' customer information security standards
and states that financial institutions should implement a response
program to address security breaches involving customer information.
The guidance describes the appropriate elements of a response program,
including customer notification procedures, and states that a financial
institution should notify its primary Federal regulator of a security
breach involving sensitive customer information, whether or not the
institution notifies its customers. |
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Proposed Revisions to Community Reinvestment Act Regulations
(FIL-21-2005 , March 22, 2005) |
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The Federal banking agencies issued proposed revisions that would
raise the threshold for a "small bank" in the Community Reinvestment
Act (CRA) regulations from $250 million to under $1 billion in assets,
regardless of any holding company size or affiliation. A new "Community
Development Test" would be added for banks with at least $250 million
and less than $1 billion in assets ("intermediate small banks") that
would be separately rated in CRA examinations. The proposal would
expand the definition of community development to include activities
such as affordable housing in underserved rural areas and designated
disaster areas. The proposal also would address the adverse effect
of discriminatory or other illegal activities on bank CRA ratings.
Comments were due May 10, 2005. |
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Frequently Asked Questions and Statement on Independent
Appraisal and Evaluation Functions (FIL-20-2005 , March 22, 2005) |
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The Federal banking, thrift, and credit union regulatory agencies
issued a statement that clarifies and serves as a reminder of the
existing standards for independence within the appraisal and real
estate lending regulations. This document was developed in response
to questions from financial institutions about these regulations,
including questions about selecting an appraiser, ordering an appraisal,
accepting a transferred appraisal, reviewing appraisals, and evaluation
and other appraisal topics. |
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Revised Payday Lending Examination Guidance (FIL-14-2005 ,
March 1, 2005, and PR-19-2005 , March 2, 2005) |
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The Federal Deposit Insurance Corporation (FDIC) issued revised
examination guidance on payday lending programs. The revisions provide
more specific guidance to FDIC-supervised institutions to ensure that
this high-cost, short-term credit product is not provided repeatedly
to customers with longer-term credit needs. |
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Advisory on Confidentiality of Supervisory Ratings (FIL-13-2005
and PR-18-2005 , February 28, 2005) |
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The Federal banking and thrift regulatory agencies issued an advisory
that reminds financial institutions they are prohibited by law from
disclosing CAMELS rating and other nonpublic supervisory information
without permission from the appropriate Federal banking agency. |
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Final Guidance on Overdraft Protection Programs (FIL-11-2005
and PR-11-2005 , February 18, 2005) |
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The Federal banking, thrift and credit union regulatory agencies
issued final joint guidance to assist insured depository institutions
in the disclosure and administration of overdraft protection programs.
The guidance details safety and soundness considerations, outlines
pertinent Federal regulations, and lists industry best practices. |
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Recommendations Sought for Reducing Regulatory Burden (FIL-8-2005 ,
February 3, 2005) |
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The Federal banking and thrift regulatory agencies asked for recommendations
on how to reduce the regulatory burden in 28 rules relating to Money
Laundering, Safety and Soundness and Securities. Comments were due
by May 4, 2005.
This was the fourth in a series of requests that are part of the agencies'
effort to identify and eliminate regulatory requirements that are
outdated, unnecessary, or unduly burdensome pursuant to the Economic
Growth and Regulatory Paperwork Reduction Act of 1996. For more information,
visit www.EGRPRA.gov. |
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Implementation of Web-Based Central Data Repository for
Bank Financial Data (PR-4-2005 , January 28, 2005) |
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The Federal banking agencies announced a new implementation plan
for the Central Data Repository (CDR)an Internet-based system created
to modernize and streamline how the agencies collect, validate, manage,
and distribute financial data submitted by banks in quarterly Call
Reports. While banks will not be required to submit Call Report data
to the CDR until October 2005, the agencies plan to make the CDR available
for testing by banks and software vendors early this summer. |
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Video Seminar on Deposit Insurance Coverage for Bank Employees
(FIL-1-2005 , January 14, 2005) |
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The video, targeted for bank employees, explains the FDIC's deposit
insurance coverage rules and requirements for all account ownership
categories. |
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Disposal of Consumer Information (PR-128-2004 , December
21, 2004, and FIL-7-2005 , February 2, 2005) |
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The Federal banking and thrift regulatory agencies issued interagency
rules to require financial institutions to adopt measures for properly
disposing of consumer information derived from credit reports. These
rules, which take effect July 1, 2005, implement Section 216 of the
Fair and Accurate Credit Transactions Act of 2003 by amending the
Interagency Guidelines Establishing Standards for Safeguarding Customer
Information. |
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Study on "Account Hijacking" Identity Theft and Suggestions
for Reducing Online Fraud (FIL-132-2004 , and PR-125-2004 , December
14, 2004) |
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This FDIC study outlines the problem and suggests steps to reduce
online fraud, including upgrading existing password-based single-factor
customer authentication to two-factor customer authentication; using
scanning software to identify and defend against phishing attacks;
strengthening consumer educational programs; and continuing to emphasize
information-sharing among the financial services industry, government
agencies, and technology providers. |
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Fair and Accurate Credit Transactions Act Effective Dates
(FIL-130-2004 , December 13, 2004) |
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The Fair and Accurate Credit Transactions Act of 2003 (FACT Act)
amended the Fair Credit Reporting Act (FCRA ) in December 2003 and
includes new provisions that impact the credit reporting system and
the prevention of identity theft. These provisions will be implemented
through regulations and other self-executing provisions, and this
letter explains the FDIC's compliance expectations for both. |
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Guidance for the Purchase and Risk Management of Life Insurance
(FIL-127-2004 , December 7, 2004) |
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The Federal banking and thrift regulatory agencies issued a statement
that details the risk management practices institutions should use
when purchasing and holding bank-owned life insurance (BOLI), including
prepurchase analysis, senior management and board oversight, guidance
on split-dollar arrangements, and the use of life insurance as security
for loans. An appendix describes the types of life insurance commonly
purchased and contains a glossary of BOLI-related terms. |
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Performing Due Diligence When Selecting Computer Software
or a Service Provider (FIL-121-2004 , November 16, 2004) |
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This FDIC guidance states that financial institutions are expected
to ensure the software or service providers they select comply with
provisions of the Bank Secrecy Act, including the USA PATRIOT Act,
and other applicable laws and regulations. Management should perform
adequate due diligence before commercial off-the-shelf software or
vendor-supplied software products are purchased and on an ongoing
basis afterward. |
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New Guidance on Evaluating Operations and Wholesale Payment
Systems (FIL-119-2004 , November 10, 2004) |
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The Federal Financial Institutions Examination Council (FFIEC)
issued booklets with guidance on evaluating financial institutions'
technology operations and assessing the risks applicable to wholesale
payment systems activities. These two booklets are the last in a series
of updates to the 1996 FFIEC Information Systems Examination Handbook,
which is now retired. The entire series of booklets is available at
www.ffiec.gov. |
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Guidance on the Risk Management of Free and Open Source
Software (FOSS) (FIL-114-2004 , October 21, 2004) |
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The Federal Financial Institutions Examination Council (FFIEC)
issued guidance to help institutions identify and implement appropriate
risk management practices when they acquire and use FOSS, which refers
to software that users are allowed to run, study, modify, and redistribute
without paying a licensing fee. The Federal banking agencies believe
the risks associated with using FOSS are not fundamentally different
from the risks presented by proprietary or self-developed software. |
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Consumer Information on Avoiding Overdraft and Bounced-Check
Fees (PR-107-2004 , October 14, 2004) |
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The Federal banking, thrift, and credit union regulatory agencies
announced the publication of a new consumer resource, Protecting
Yourself from Overdraft and Bounced-Check Fees. The brochure's
key message to consumers is that the best way to avoid overdraft and
bounced-check fees is to manage accounts wisely. That means keeping
an up-to-date check register, recording all electronic transactions
and automatic bill payments, and monitoring account balances carefully.
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