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Zayne Tweed

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Zayne Tweed is counsel in the firm’s financial institutions practice. He focuses on corporate and regulatory representation of commercial banks, holding companies and other financial institutions.

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On December 7, the Office of the Comptroller of the Currency (OCC) published the fall edition of its Semiannual Risk Perspective, which discusses key issues facing banks. From the OCC’s perspective, the overall strength of the banking system remains sound and recessionary pressures appear to be easing. The OCC notes that, while many economists had predicted a decline, gross domestic product increased at an annual rate of 2.1% in the second quarter of 2023, slowing just slightly from the first quarter’s 2.2% pace. However, the OCC also emphasized that inflation remains elevated and a slowing labor market, declining savings, and higher interest rates could cause financial stress to borrowers.

On October 24, the Federal Reserve Board (Fed), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (collectively, the agencies) finally issued their long-awaited final rule modernizing how they assess lenders’ compliance under the Community Reinvestment Act (CRA). The CRA was enacted in 1977 to address systemic inequities in access to credit and encourages banks to meet the credit needs of the entire community, including low- and moderate-income (LMI) communities, consistent with safety and soundness principles. The last meaningful, comprehensive revision to the CRA regulations occurred in 1995.

On August 29, at a Board Meeting for the Federal Deposit Insurance Corporation (FDIC), Comptroller of the Currency Michael J. Hsu issued a statement supporting the insured depository institution (IDI) Resolution Plan Rule, which would require covered banks to develop and submit detailed plans demonstrating how they could be resolved in an orderly fashion in the event of receivership. Describing the impetus for this rule, Comptroller Hsu stated, “as the large bank failures of this spring have shown, banks and regulators cannot afford to be complacent when it comes to resolution.”

On August 29, the Board of Governors of the Federal Reserve System (Federal Reserve), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (collectively, the agencies) issued a notice of proposed rulemaking with request for public comment on a proposal that would require banks with total assets of $100 billion or more to maintain a layer of long-term debt. The stated objective of the proposed rule is to “improve the resolvability of these banking organizations in case of failure, reduce costs to the Deposit Insurance Fund, and mitigate financial stability and contagion risks by reducing the risk of loss to uninsured depositors.” This proposal follows an advance notice of proposed rulemaking issued in October 2022 by the Federal Reserve and the FDIC that looked at several possible changes, including a long-term debt requirement to promote more orderly resolutions for large banks.

On August 8, the Office of the Comptroller of the Currency (OCC) issued guidance on the applicability of the legal lending limit (LLL) to purchased loans. This guidance applies to community banks’ purchases of loans. In short, unless an exception applies, all loans and extensions of credit made by banks are subject to the LLL.

On July 28, the Board of Governors of the Federal Reserve System (Federal Reserve), Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and the National Credit Union Administration (NCUA) (collectively, the agencies) issued an addendum to the agencies’ joint policy statement on funding and liquidity risk management, which advises depository institutions to assess and maintain a broad range of funding sources that can be accessed in adverse circumstances. Specifically, the agencies advised depository institutions to regularly test any contingency borrowing lines to ensure the institution’s staff are well versed in how to access them and that they function as envisioned.

On July 27, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) issued a joint notice of proposed rulemaking that would revise the capital requirements applicable to large banking organizations (those with $100 billion or more in total…

Today, the Federal Deposit Insurance Corporation (FDIC) issued a letter to financial institutions (FIL-37-2023) regarding the proper way to report estimated uninsured deposits in accordance with the instructions to the Consolidated Reports of Condition and Income (Call Report). FIL-37-2023 does not impact institutions with less than $1 billion in total assets that do not report estimated uninsured deposits.

On July 18, Office of the Comptroller of the Currency (OCC) Senior Deputy Comptroller for Large Bank Supervision Greg Coleman testified on OCC supervision of climate-related financial risks before the U.S. House of Representatives’ Committee on Financial Services’ Subcommittee on Financial Institutions and Monetary Policy.

At a Peterson Institute for International Economics event on June 22, Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg announced that the FDIC — along with the Board of Governors of the Federal Reserve System (Federal Reserve) and the Office of the Comptroller of the Currency (OCC) — will issue an interagency notice of proposed…