Regulatory Roundup: Loan-Loss Reserves
OPEN FOR COMMENT
Predatory Lending I
A proposal by the Federal Reserve Board to toughen measures against abusive lending practices. The plan would lower the annual percentage rate on mortgages that are covered by the Home Mortgage and Equity Protection Act, to eight percentage points above the rate for Treasury securities. The current threshold is 10 points. The proposal also would include the cost of single-premium credit life insurance as part of the points and fees test for HOEPA. To be published shortly, with comments due March 16.
New Bank Powers
A proposal by the Fed that would grant financial holding companies the right to act as real estate brokers and managers. The proposals would be among the first set of new powers authorized as "financial in nature" under the Gramm-Leach-Bliley Act of 1999. Comments due 45 days after publication in the Federal Register, which is expected soon.
A proposal by the Office of the Comptroller of the Currency that would let the agency raise exam fees for banks that strike partnerships with payday or title lenders. Expected to be published shortly.
A proposal by the banking and thrift agencies to change capital requirements on loans to securities firms. Capital requirements would drop to 20%, from 100%, for loans to brokerage borrowers with good credit ratings and solid management. Published Dec. 6. Comments due Jan. 22.
Credit Union Incidental Powers
A proposal by the National Credit Union Administration that would expand the products federally chartered credit unions may offer directly to members to include Internet banking services, individual retirement accounts, and stored value products such as prepaid phone cards. Published Nov. 24. Comments due Feb. 22.
A preliminary proposal by the banking and thrift agencies that would simplify capital requirements for community banks. The proposal includes three options for calculating capital: a standard capital-to-assets leverage ratio, a simplified risk-based ratio, and a modified leverage ratio that includes risk-based elements. Most banks in the country would probably be eligible. Federal Deposit Insurance Corp. officials said they expect to hold public meetings on the proposal by early next year. Published Nov. 3. Comments due Feb. 1.
A proposal by the OTS to streamline applications processing. The proposal would require a pre-filing meeting among agency officials and a new thrift applicant, or a company seeking to acquire an existing thrift, to identify any legal or policy issues. Published Nov. 2. Comments due Jan. 2.
A proposal by the Office of Thrift Supervision to create optional bylaws that savings associations could adopt without regulatory approval. Published Nov. 2. Comments due Jan. 2.
A proposal by the Office of Federal Housing Enterprise Oversight to study the financial risks Fannie Mae and Freddie Mac would pose if either government-sponsored enterprise failed or significantly cut back its activities. Published Oct. 30. Comments due Dec. 29.
Thrift Holding Companies
A proposal by the OTS to require some thrift holding companies to notify the agency 30 days before significantly increasing debt, reducing capital substantially, or acquiring certain assets. The proposal also would establish criteria the agency would use to evaluate holding company capital. Published Oct. 27. Comment deadline extended to Feb. 9.
A proposal by the banking and thrift agencies that would require banks to keep $1 of capital for every $1 of subprime residuals. The proposal also would limit the concentration of residuals to 25% of Tier 1 capital. A residual, also known as a retained interest, is the interest a bank keeps when it securitizes and sells pools of high-risk loans. …