Circular Letters

Circular letters announce news, policy, and guidance from the Board of Governors.

2013

May 15, 2013
Federal Reserve Offers 28-Day Term Deposits

On May 20, 2013, the Federal Reserve will conduct a fixed-rate offering of term deposits with full allotment of tenders through its Term Deposit Facility (TDF). The Federal Reserve will offer 28-day term deposits with an interest rate of 0.26000 percent and a maximum tender amount of $1,250,000,000. As noted in the Federal Reserve Board's April 26, 2013, release, this operation is part of ongoing small-value operations designed to provide eligible institutions with an opportunity to gain familiarity with term deposit operations. Additional information regarding the operation is listed below; the operation will be conducted as specified in this announcement, Regulation D, and the terms and conditions of the Term Deposit Facility (http://www.frbservices.org/centralbank/term_deposit_facility.html).

Description of Operation and Tender Parameters

All tenders that are complete and compliant with the operation parameters listed above will be automatically awarded in full at the interest rate shown above. The minimum tender amount is $10,000; the maximum amount is $1,250,000,000 and should be submitted in increments of $10,000. All tenders must be submitted between the opening and closing time on the operation date.

Submission of Tender
Participants must submit tenders by accessing the Term Deposit Facility application (https://www.federalreserve.org/arrow/ARROWWeb/home.do) between the opening time and the closing time on the operation date.

Notification
Participants will be able to view their awards by accessing the Term Deposit Facility application. Summary operation results will be published on the Board of Governors' website (http://www.federalreserve.gov/monetarypolicy/tdf.htm) at approximately 12:00 p.m. (noon) ET on the notification date. Soon after, summary results will be posted on the Term Deposit Facility Resource Center page of the Central Bank Central website (http://www.frbservices.org/centralbank/term_deposit_facility.html).

May 13, 2013
Fed Board: Results of Company-Run, Midyear Stress Tests Due on July 5

Eighteen large U.S. bank holding companies are required to submit the results of their company-run, midyear stress tests to the Federal Reserve on July 5, the Federal Reserve said in instructions to those firms Monday.

The Dodd-Frank Wall Street Reform and Consumer Protection Act required that large bank holding companies and non-bank financial institutions that are designated for Federal Reserve supervision by the Financial Stability Oversight Council conduct two stress tests each year. In the midyear test, which is being conducted for the first time in 2013, each firm develops its own baseline, adverse, and severely adverse scenarios to best reflect its individual operations and risks. In the annual Dodd-Frank Act test earlier in the year, the firms used scenarios developed by the Federal Reserve and the Federal Reserve also conducted its own supervisory stress tests of the institutions.

Each firm in the midyear test is required to release the results produced under its severely adverse scenario, helping promote market discipline and understanding of the financial conditions and risks of individual firms, between September 15 and September 30.

The midyear stress tests mark another important step in the Federal Reserve's work in ensuring that large financial firms have robust capital planning processes and adequate capital so that they can continue to lend to households and businesses even during adverse economic and financial circumstances. Federal Reserve supervisors will incorporate the midyear stress tests into their ongoing assessment of the firms, but will not be measuring the stress test results against specific capital regulatory minimums.

For media inquiries, call 202-452-2955

Attachment (165 KB PDF)

May 01, 2013
Citing Modest Improvements, FOMC Holds Steady on Monetary Policy

Information received since the Federal Open Market Committee met in March suggests that economic activity has been expanding at a moderate pace. Labor market conditions have shown some improvement in recent months, on balance, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth. Inflation has been running somewhat below the Committee's longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes. In determining the size, pace, and composition of its asset purchases, the Committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Charles L. Evans; Jerome H. Powell; Sarah Bloom Raskin; Eric S. Rosengren; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.

April 29, 2013
Payments to Goldman Sachs and Morgan Stanley Borrowers Covered by Foreclosure Agreement to Begin May 3

Payments to more than 220,000 borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley are scheduled to begin on Friday, May 3 following an agreement announced earlier this year by the Federal Reserve Board.

Under the agreement, $247 million will be made in direct payments to borrowers whose homes were at any stage of the foreclosure process in 2009 and 2010 with the former subsidiaries of Goldman Sachs (Litton Loan Servicing LP) and Morgan Stanley (Saxon Mortgage Services, Inc.).

Payments will range from $300 to more than $125,000. In most cases, borrowers will receive a letter with an enclosed check sent by the paying agent--Rust Consulting, Inc. Some borrowers may receive letters from Rust requesting additional information needed to process their payments. Previously, Rust sent postcards to borrowers notifying them of their eligibility to receive payment under the agreement.

The payments stem from agreements reached earlier this year between 13 servicers and two agencies—the Office of the Comptroller of the Currency and the Federal Reserve. The agreements provide for a total of $3.6 billion in cash payments to 4.2 million borrowers. Distribution of checks to borrowers whose mortgages were serviced by the other 11 servicers began April 12 and will continue through mid-July. As of April 26, approximately 1.2 million checks have been cashed or deposited totaling approximately $1.2 billion dollars.

As in the case of the other servicers, payment amounts for borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley were determined after categorizing borrowers according to the stage of the foreclosure process and the type of possible servicer error. In some cases, the payment amounts for Goldman Sachs and Morgan Stanley borrowers differ from those received by borrowers in the same categories with the other 11 servicers. The amounts differ because borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley were not able to request a review of their foreclosure file.

As is the case for borrowers whose mortgages were serviced by the other 11 firms, borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley who accept a payment will not be prevented from taking any action related to their foreclosure. Servicers are not permitted to ask borrowers, in connection with accepting these payments, to sign a waiver of any legal claims they may have against their servicer.

Borrowers with all 13 servicers can call Rust at 1-888-952-9105 to update their contact information, verify that they are covered by the agreement, or with further questions. Information provided to Rust will only be used for purposes related to the agreement. Borrowers should beware of scams and anyone asking them to call a different phone number or to pay a fee to receive payment under the agreement.

For media inquiries, call 202-452-2955.

Independent Foreclosure Review Payment Agreement for Goldman Sachs and Morgan Stanley (PDF)

April 26, 2013
Federal Reserve Announces Small-Value Fixed-Rate Term Deposit Operations

The Federal Reserve plans to conduct fixed-rate offerings of term deposits with full allotment of tenders under the Term Deposit Facility (TDF) as part of the ongoing program of small-value offerings announced on September 8, 2010. The Board had previously announced that it would consider various formats for the TDF as part of the development of the facility.

These small-value operations are designed to ensure the operational readiness of the TDF and to provide eligible institutions with an opportunity to gain familiarity with term deposit procedures. The development of the TDF and the ongoing small-value TDF operations are a matter of prudent planning and have no implications for the near-term conduct of monetary policy.

The Federal Reserve plans to use a fixed-rate, full-allotment format to offer 28-day term deposits on May 20 with settlement on May 23. Under this format, the Federal Reserve will announce the operation interest rate, and each participating institution may submit one tender that will be awarded in full at the pre-determined rate. Official operation terms, including the fixed-rate and maximum tender size, will be announced nearer to the time of the operation.

Additional information, including the steps that institutions must complete to be eligible to participate in term deposit operations are available at http://www.frbservices.org/centralbank/term_deposit_facility.html

For media inquiries, call 202-452-2955.

April 24, 2013
Federal Reserve Announces Issue Date of Redesigned $100 Note

The Federal Reserve Board on Wednesday announced that the redesigned $100 note will begin circulating on October 8, 2013. This note, which incorporates new security features such as a blue, 3-D security ribbon, will be easier for the public to authenticate but more difficult for counterfeiters to replicate.

The new design for the $100 note was unveiled in 2010, but its introduction was postponed following an unexpected production delay. To ensure a smooth transition to the redesigned note when it begins circulating in October, the U.S. Currency Education Program is reaching out to businesses and consumers around the world to raise awareness about the new design and inform them about how to use its security features. More information about the new design $100 note, as well as training and educational materials, can be found at www.newmoney.gov.

For media inquiries, call 202-452-2955

Related Information

Video
The New $100 Note

Current FAQs
When will the new $100 note begin circulating?

About the Fed
Currency

April 17, 2013
Fed Provides Information on Checks Sent under Independent Foreclosure Review Payment Agreement

The paying agent for checks being sent to borrowers under the Independent Foreclosure Review has assured the Federal Reserve Board that early problems with some checks have been corrected and that funds are available to cash all checks.

Some early recipients of checks informed the Federal Reserve's consumer helpline on Tuesday that they were told their checks could not be cashed. Members of the Board staff contacted the paying agent, Rust Consulting, Inc., and the paying bank, The Huntington National Bank. Rust subsequently corrected problems that led to some checks being rejected.

The Board will continue to monitor the payments closely and encourages borrowers who have concerns or experience difficulties cashing their checks to call Rust at 1-888-952-9105.

As previously announced, on April 12, payments began to 4.2 million borrowers following an agreement reached by federal bank regulatory agencies and 13 mortgage servicers. More than 50,000 people have already cashed or deposited checks.

For media inquiries, call 202-452-2955

April 16, 2013
Agencies Provide Additional Instructions for Submission of Some Resolution Plans

The Federal Reserve Board (Board) and the Federal Deposit Insurance Corporation (FDIC) on Monday announced the release of additional guidance, clarification and direction for the first group of institutions filing their resolutions plans pursuant to the Dodd-Frank Act.

These 11 institutions filed their initial resolution plans with the Federal Reserve Board and the FDIC in 2012. Plans were required generally from U.S. bank holding companies with $250 billion or more in total nonbank assets and foreign-based bank holding companies with $250 billion or more in total U.S. nonbank assets. Following review of the initial resolution plans, the agencies have developed instructions for the firms to detail what information should be included in their 2013 resolution plan submissions.

In particular, the revised instructions include requests for more detailed information on, and analysis of, obstacles to resolvability under the Bankruptcy Code including global issues, financial market utility interconnections, and funding and liquidity, as well as to provide analysis to support the strategies and assumptions contained in the firms' resolution plans.

The Board and the FDIC have also granted an extension to the filing date to give the firms additional time to develop resolution plan submissions that address the agencies' instructions. Accordingly, the 2013 resolution plan filing deadline will move from July 1, 2013, to October 1, 2013. The extension does not affect resolution plan submission dates for other banking organizations.

The agencies expect that the submission of increasingly comprehensive resolution plans will facilitate a more robust and effective resolution planning process. As in 2012, the Board and the FDIC will post the public sections of the resolution plans to their websites.

The additional guidance can be found on the Board website at:

Guidance for 2013§165(d) Annual Resolution Plan Submissions by Domestic Covered Companies that Submitted Initial Resolution Plans in 2012 (PDF)

Guidance for 2013§165(d) Annual Resolution Plan Submissions by Foreign-Based Covered Companies that Submitted Initial Resolution Plans in 2012 (PDF)

April 15, 2013
Federal Reserve Board Invites Comment on Proposal to Establish Annual Assessments

The Federal Reserve Board on Monday invited comment on a proposal to establish an annual assessment of bank holding companies and savings and loan holding companies with $50 billion or greater in total consolidated assets and for nonbank financial companies designated by the Financial Stability Oversight Council for supervision by the Federal Reserve.

The Dodd-Frank Wall Street Reform and Consumer Protection Act directs the Federal Reserve to collect assessments, fees, or other charges equal to the expenses the Board estimates are necessary and appropriate to carry out its supervisory and regulatory responsibilities for these large financial companies. The proposed rule outlines how the Federal Reserve Board would determine which companies are assessed, estimate the total expenses that are necessary or appropriate to carry out its supervisory and regulatory responsibilities for such companies, determine the amount of each company's assessment, and bill for and collect the assessments.

Under the proposal, each calendar year would be an assessment period. The Federal Reserve would notify each company of the amount of its assessment no later than July 15 of the year following the assessment period. Payments would be due by September 30.

Under the proposal, 2012 would be the first assessment period and payments would not be collected until the rule is finalized. Using the methodologies in the proposal, the Board estimates that for 2012 there would be approximately 70 companies assessed and the Board would collect a total of approximately $440 million. All assessments collected by the Federal Reserve would be transferred to the U.S. Treasury.

Comments on the proposed rule must be submitted by June 15.

For media inquiries, call 202-452-2955

Attachment (120 KB PDF)

Board Votes

April 10, 2013
Minutes of the Federal Open Market Committee, March 19-20, 2013

The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached minutes of the Committee meeting held on March 19-20, 2013. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the March 19-20, 2013 meeting is also included as an addendum to these minutes.

The minutes for each regularly scheduled meeting of the Committee ordinarily are made available three weeks after the day of the policy decision and subsequently are published in the Board's Annual Report. Summaries of economic projections are released on a quarterly schedule. The descriptions of economic and financial conditions contained in these minutes and in the Summary of Economic Projections are based solely on the information that was available to the Committee at the time of the meeting.

The FOMC minutes can be viewed on the Board's website at www.federalreserve.gov/monetarypolicy/fomccalendars.htm

Minutes of the Federal Open Market Committee
March 19-20, 2013: HTML | PDF

April 10, 2013
Payments to 4.2 Million Borrowers Covered by Foreclosure Agreement to Begin April 12

Payments to 4.2 million borrowers are scheduled to begin on April 12 following an agreement reached by the Office of the Comptroller of the Currency and the Federal Reserve Board with 13 mortgage servicers.

The agreement, which was reached earlier this year, provides $3.6 billion in cash payments to borrowers whose homes were in any stage of the foreclosure process in 2009 or 2010 and whose mortgages were serviced by one of the following companies, their affiliates, or subsidiaries: Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.

The payments will range from $300 to $125,000. For borrowers whose mortgages were serviced by 11 of the 13 servicers—all servicers but Goldman Sachs and Morgan Stanley—checks will be sent in several waves beginning with 1.4 million checks on April 12. The final wave is expected in mid-July 2013. More than 90 percent of the total payments to borrowers at those 11 servicers are expected to have been sent by the end of April. Information about payments to borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley will be announced in the near future.

In most cases, borrowers will receive a letter with an enclosed check sent by the Paying Agent—Rust Consulting, Inc. Some borrowers may receive letters from Rust requesting additional information needed to process their payments. Previously, Rust sent postcards to the 4.2 million borrowers notifying them of their eligibility to receive payment under the agreement.

Rust is sending all payments and correspondence regarding the foreclosure agreement at the direction of the OCC and the Federal Reserve.

Borrowers can call Rust at 1-888-952-9105 to update their contact information or to verify that they are covered by the agreement. Information provided to Rust will only be used for purposes related to the agreement. Borrowers should beware of scams and anyone asking them to call a different number or to pay a fee to receive payment under the agreement.

Accepting a payment will not prevent borrowers from taking any action they may wish to pursue related to their foreclosure. Servicers are not permitted to ask borrowers to sign a waiver of any legal claims they may have against their servicer in connection with accepting payment.

In determining the payment amounts, borrowers were categorized according to the stage of their foreclosure process and the type of possible servicer error. Regulators then determined amounts for each category using the financial remediation matrix published in June 2012 as a guide, incorporating input from various consumer groups. Regulators have published the payment amounts and number of people in each category on their web sites at www.occ.gov/independentforeclosurereview and www.federalreserve.gov/consumerinfo/independent-foreclosure-review-payment-agreement.htm.

While the agreement ended the Independent Foreclosure Review for the 13 companies identified above, the review continues for OneWest, Everbank, and GMAC Mortgage.

Regulators continue to monitor the servicers' actions to correct the unsafe and unsound mortgage servicing and foreclosure practices required by other parts of regulators' enforcement actions, which remain in effect.

Regulators have issued guidance to the servicers under foreclosure-related enforcement actions directing a review before foreclosure sales for all pending foreclosures. These reviews help prevent avoidable foreclosures by ensuring foreclosure-prevention alternatives are considered and foreclosure standards are met. Regulators encourage borrowers needing foreclosure prevention assistance to work directly with their servicer or to contact the Homeowner's HOPE Hotline at 888-995-HOPE (4673) (or at www.makinghomeaffordable.gov) to be put in touch with a U.S. Department of Housing and Urban Development-approved nonprofit organization that can provide free assistance.

Independent Foreclosure Review Payment Agreement Details (PDF)

April 05, 2013
FOMC Announces Tentative Meeting Schedule for 2014

The Federal Open Market Committee on Friday announced its tentative meeting schedule for 2014:

January 28–29 (Tuesday–Wednesday)
March 18–19 (Tuesday–Wednesday)
April 29–30 (Tuesday–Wednesday)
June 17–18 (Tuesday–Wednesday)
July 29–30 (Tuesday–Wednesday)
September 16–17 (Tuesday–Wednesday)
October 28–29 (Tuesday–Wednesday)
December 16–17 (Tuesday–Wednesday)
January 27–28, 2015 (Tuesday–Wednesday)

The Chairman's quarterly news conferences will take place following the March, June, September, and December meetings.

April 04, 2013
Board Finalizes Standards for Fed-Regulated Banks Engaged in Certain Transactions with Retail Customers

The Federal Reserve Board on Thursday announced the finalization of standards for banking organizations regulated by the Federal Reserve that engage in certain types of foreign exchange transactions with retail customers.

The rule, issued pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, establishes requirements for risk disclosures to customers, recordkeeping, business conduct, and documentation for retail foreign exchange transactions. Regulated institutions engaging in such transactions will be required to notify the Federal Reserve and to be well capitalized. They will also be required to collect margin for retail foreign exchange transactions.

The types of transactions covered by the rule include foreign exchange transactions that are futures or options on futures, over-the-counter options on foreign currency, and so-called rolling spot transactions. The rule covers entities regulated by the Federal Reserve including state-chartered banks that are members of the Federal Reserve System, bank and savings and loan holding companies, Edge Act and agreement corporations, and uninsured, state-licensed branches and agencies of foreign banks.

The Federal Reserve consulted with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation in developing the rule. The agencies have engaged in separate rulemakings as specified by Dodd-Frank.

The rule will be effective on May 13, 2013.

For media inquiries, call 202-452-2955.

Attachment (PDF)

April 03, 2013
Board OKs Rule on Determining When a Company Is "Predominantly Engaged in Financial Activities"

The Federal Reserve Board on Wednesday announced approval of a final rule that establishes the requirements for determining when a company is "predominantly engaged in financial activities." The requirements will be used by the Financial Stability Oversight Council (FSOC) when it considers the potential designation of a nonbank financial company for consolidated supervision by the Federal Reserve.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, a nonbank financial company can be designated by the FSOC for supervision by the Federal Reserve only if it is "predominantly engaged in financial activities." A company is considered to be predominantly engaged in financial activities if 85 percent or more of the company's revenues or assets are related to activities that are defined as financial in nature under the Bank Holding Company Act. Additionally, the FSOC may issue recommendations for primary financial regulatory agencies to apply new or heightened standards to a financial activity or practice conducted by companies that are predominantly engaged in financial activities.

The final rule largely adopts the approach in the proposed rule, with a few exceptions. For example, the final rule states that engaging in physically settled derivatives transactions generally will not be considered a financial activity, a change from the proposal.

The final rule also defines the terms "significant nonbank financial company" and "significant bank holding company." Among the factors the FSOC must consider when determining whether to designate a nonbank financial company for consolidated supervision by the Federal Reserve is the extent and nature of the company's transactions and relationships with other significant nonbank financial companies and significant bank holding companies. If designated, those nonbank financial companies will be required to submit reports to the Federal Reserve, the FSOC, and the Federal Deposit Insurance Corporation on the company's credit exposure to other significant nonbank financial companies and significant bank holding companies as well as the credit exposure of such significant entities to the company. Consistent with the proposal, a firm will be considered significant if it has $50 billion or more in total consolidated assets or has been designated by the FSOC as systemically important.

The final rule will become effective on May 6, 2013.

For media inquiries, call 202-452-2955.

Attachment (PDF)

March 27, 2013
Fed Survey Provides Information on Mobile Financial Services

The use of mobile phones to access a bank account, credit card, or other financial account became more prevalent in the United States last year, according to the Federal Reserve Board's latest report on the use of mobile financial services. As of November 2012, 28 percent of all mobile phone users and 48 percent of smartphone users had used mobile banking in the past 12 months. This is a significant increase from 21 percent in December 2011 for mobile phone users and 42 percent for smartphone users. While relatively less common, the use of mobile phones to make payments at the point-of-sale increased threefold over the same period, with 6 percent of smartphone owners having used their phone to make a purchase.

The Federal Reserve Board completed its first Survey of Consumers' Use of Mobile Financial Services in December 2011, and released a summary report in March 2012. The Board conducted a second survey in late November 2012 to monitor trends in the use of mobile financial services, and to understand how the rapidly expanding use of this technology affects consumer decisionmaking and the overall economy.

Mobile devices have increasingly become tools that consumers use for banking, payments, budgeting, and shopping. The Board's report looks at how consumers access their bank's services using mobile phones ("mobile banking"), at their payment for goods and services using mobile phones ("mobile payments"), as well as their use of mobile phones to inform their shopping decisions.

The use of mobile financial services is particularly prevalent among the 10 percent of the population that is underbanked (people with bank accounts but who use check cashers, payday lenders, or payroll cards). Among the 90 percent of underbanked consumers with mobile phones, 49 percent had used mobile banking in the 12 months preceding November 2012, up from 29 percent in December 2011. Mobile phones may also allow for the extension of financial services to an additional 10 percent of the population that is unbanked (those without a bank account), as 59 percent of this group has a mobile phone, half of which are smartphones.

While the use of mobile banking increased 33 percent between 2011 and 2012, the report indicates that many consumers remain skeptical of the benefit of mobile banking and the level of security associated with the technology. More than half of mobile phone owners who do not currently use mobile banking say they have no interest in using this technology. Consumers are similarly skeptical of the benefits and security of mobile payments, or believe it is simply easier to use another method of payment. Less than one-fourth of all mobile phone owners expressed an interest in using their mobile phones to buy things at the point-of-sale.

The most common mobile banking activities continue to be reviewing account balances, monitoring recent transactions, or transferring money between accounts. Notably, the use of mobile phones to deposit checks has doubled between surveys, with 21 percent of mobile banking users having deposited a check with their phone in the 12 months prior to November 2012.

Mobile phones are also increasingly used to help make decisions while shopping. Among smartphone owners, 42 percent had used their phone to compare prices while shopping and 44 percent had used their phones to browse product reviews in store. Almost two-thirds of those who had used their phone to do price comparisons had changed where they made their purchase based on that information.

The survey was conducted on behalf of the Board by GfK (formerly Knowledge Networks), an online consumer research firm. Data collection began November 16, 2012, and concluded on November 27, 2012. Nearly 2,600 respondents completed the survey. A report summarizing the survey's mobile financial services findings may be found at: www.federalreserve.gov/econresdata/consumers-and-mobile-financial-services-report-201303.pdf (PDF)

For media inquiries, call 202-452-2955

March 27, 2013
Board Begins 2013 Survey of Consumer Finances

The Federal Reserve Board in April will begin a statistical study of household finances, the Survey of Consumer Finances, that will provide policymakers with important insight into the economic condition of all types of American families.

The survey has been undertaken every three years since 1983. It is being conducted for the Board by NORC, a social science research organization at the University of Chicago, through December of this year.

The data collected will provide a representative picture of what Americans own--from houses and cars to stocks and bonds--how and how much they borrow and how they bank. Past study results have been important in policy discussions regarding recovery of households from the Great Recession, changes in the use of credit, use of tax-preferred retirement savings accounts, and a broad range of other issues.

"This survey is one of the nation's primary sources of information on the financial condition of different types of households," Federal Reserve Board Chairman Ben S. Bernanke said in a letter to prospective survey participants. "Our previous surveys…have helped the Federal Reserve and other parts of the government make policy decisions and have also supported a wide variety of basic research, public discussion, and education."

Participants in the study are chosen at random from 127 areas, including metropolitan areas and rural counties across the United States, using a scientific sampling procedure. A representative of NORC contacts each potential participant personally to explain the study and request time for an interview.

"I assure you that we give the highest priority to guarding the privacy of all survey participants and the confidentiality of their answers," Chairman Bernanke said. NORC uses names and addresses only for the administration of the survey, and that identifying information will be destroyed at the close of the study. NORC is required never to give the names and addresses of participants to anyone at the Federal Reserve or anywhere else.

Summary results for the 2013 study will be published in early 2015 after all data from the survey have been assessed and analyzed.

The attached letter from Chairman Bernanke will be mailed in mid-April to approximately 13,000 households urging their participation in the study.

For media inquiries, call 202-452-2955

Chairman Bernanke's Letter

Survey of Consumer Finances

March 22, 2013
Increase in Required Electronic Loan Data Fields

Federal and state bank supervisors today announced an increase in the number of required loan data fields in the Interagency Loan Data Request (ILDR). The federal agencies making today's announcement were the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. They were joined by the Conference of State Bank Supervisors (CSBS).

The ILDR is a voluntary, standardized data request that banks can use to electronically submit loan information for safety and soundness examinations. The electronic collection of this loan level data reduces the time that examiners spend compiling the information, giving them more time to verify and analyze the data. In turn, banks benefit from a more efficient examination process.

While participation in the ILDR is voluntary, certain data fields are mandatory for those who choose to electronically submit the information. The federal agencies and the CSBS are now increasing the number of required fields from five to 30 to facilitate greater consistency in the data submission process. There are 82 fields in total.

The attachment provides a list of the data fields and highlights the required fields. Other than the change in the number of required fields, the ILDR format and layout remain unchanged. Financial institutions using the ILDR should provide the new required loan data fields for examinations starting on September 30, 2013.

Table of Data Fields for Interagency Loan Data Request (ILDR) (PDF)

March 21, 2013
Agencies Issue Updated Leveraged Lending Guidance

Federal bank regulatory agencies today released updated supervisory guidance on leveraged lending, which has been increasing since 2009 after declining during the financial crisis.

The guidance from the Federal Reserve Board, the Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency (the agencies) covers transactions characterized by a borrower with a degree of financial leverage that significantly exceeds industry norms. The guidance replaces guidance issued in April 2001.

Before the financial crisis, the volume of leveraged credit transactions grew tremendously and participation by non-regulated investors willing to accept looser terms increased. While leveraged lending declined during the crisis, volumes have since increased and prudent underwriting practices have deteriorated. For example, some debt agreements have included features that weaken lender protection by excluding meaningful maintenance covenants and including other features that can limit lenders' recourse in the event of weakened borrower performance. In addition, capital and repayment structures for some transactions, whether originated to hold or to distribute, have been aggressive. Management information systems at some institutions have proven less than satisfactory in accurately aggregating exposures on a timely basis.

It is important that banks provide leveraged financing to creditworthy borrowers in a safe and sound manner.

The guidance issued today focuses attention on the following key areas:

• Establishing a sound risk-management framework: The agencies expect that management and the board of directors identify the institution's risk appetite for leveraged finance, establish appropriate credit limits, and ensure prudent oversight and approval processes.
  
• Underwriting standards: An institution's underwriting standards should clearly define expectations for cash flow capacity, amortization, covenant protection, collateral controls, and the underlying business premise for each transaction, and should consider whether the borrower's capital structure is sustainable, regardless of whether the transaction is underwritten to hold or to distribute.
  
• Valuation standards: An institution's standards should concentrate on the importance of sound methods in the determination and periodic revalidation of enterprise value.
  
• Pipeline management: An institution should be able to accurately measure exposure on a timely basis; establish policies and procedures that address failed transactions and general market disruptions; and ensure periodic stress tests of exposures to loans not yet distributed to buyers.
  
• Reporting and analytics: An institution should ensure that management information systems accurately capture key obligor characteristics and aggregates them across business lines and legal entities on a timely basis, with periodic reporting to the institution's board of directors.
  
• Risk rating leveraged loans: An institution's risk rating standards should consider the use of realistic repayment assumptions to determine a borrower's ability to de-lever to a sustainable level within a reasonable period of time.
  
• Participants: An institution that participates in leveraged loans should establish underwriting and monitoring standards similar to loans underwritten internally.
  
• Stress testing: An institution should perform stress testing on leveraged loans held in portfolio as well as those planned for distribution, in accordance with existing interagency issuances.

This guidance applies to financial institutions supervised by the agencies that engage in leveraged lending activities. The number of community banks with substantial involvement in leveraged lending is small and they should be largely unaffected by this guidance.

Attachment (237 KB PDF)

March 20, 2013
FOMC Releases Statement

Information received since the Federal Open Market Committee met in January suggests a return to moderate economic growth following a pause late last year. Labor market conditions have shown signs of improvement in recent months but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy has become somewhat more restrictive. Inflation has been running somewhat below the Committee's longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Charles L. Evans; Jerome H. Powell; Sarah Bloom Raskin; Eric S. Rosengren; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.

March 20, 2013
Fed Board and FOMC Release Economic Projections From the March 19-20 Meeting

The attached table and charts released on Wednesday summarize the economic projections and the target federal funds rate projections made by Federal Reserve Board members and Federal Reserve Bank presidents for the March 19–20 meeting of the Federal Open Market Committee.

The table will be incorporated into a summary of economic projections released with the minutes of the March 19–20 meeting. Summaries of economic projections are released quarterly.

Projections (PDF) | Accessible Materials

March 18, 2013
Proposed Revisions to Interagency Questions and Answers Regarding Community Reinvestment

The federal bank regulatory agencies today requested comment on proposed revisions to "Interagency Questions and Answers Regarding Community Reinvestment." The Questions and Answers document provides additional guidance to financial institutions and the public on the agencies' Community Reinvestment Act (CRA) regulations.

The proposed revisions focus primarily on community development. Community development activities are considered as part of the CRA performance tests for large institutions, intermediate small institutions, and wholesale and limited purpose institutions. Small institutions may use community development activity to receive consideration toward an outstanding CRA rating. Among other things, the proposed amendments would:

• Clarify how the agencies consider community development activities that benefit a broader statewide or regional area that includes an institution's assessment area.
• Provide guidance related to CRA consideration of, and documentation associated with, investments in nationwide funds.
• Clarify the consideration of certain community development services.
• Address the treatment of qualified investments to organizations that use only a portion of the investment to support a community development purpose.
• Clarify that community development lending should be evaluated in such a way that it may have a positive, neutral, or negative impact on the large institution lending test rating.

The proposed revisions are being issued by the Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency. The notice that will be published in the Federal Register is attached. Comments will be due 60 days after that publication, which is expected shortly.

For more information on the CRA, including these Questions and Answers and the agencies' CRA regulations, visit the Federal Financial Institutions Examination Council website at: http://www.ffiec.gov/cra.

Attachment (161 KB PDF)

March 15, 2013
Federal Reserve System Publishes Annual Financial Statements

The Federal Reserve System on Friday released the 2012 combined annual financial statements for the Federal Reserve Banks, as well as for the 12 individual Federal Reserve Banks, the consolidated variable interest entities (VIEs) that were created to respond to strains in financial markets, and the Board of Governors. These financial statements are audited annually by an independent auditing firm.

The Federal Reserve Banks' 2012 net income before providing for remittances to the U.S. Treasury was $90.6 billion. The Reserve Banks provided for remittances to the U.S. Treasury of $88.4 billion.

The Reserve Banks' net income was derived primarily from $80.5 billion in interest income on securities acquired through open market operations--U.S. Treasury securities, government-sponsored enterprise (GSE) debt securities, and federal agency and GSE mortgage-backed securities (MBS). Realized gains on sales of Treasury securities during the year were $13.3 billion, and net earnings attributable to the consolidated VIEs totaled $6.0 billion.

Total Reserve Bank assets as of December 31, 2012, were $2.9 trillion, which is approximately the same as at the end of the previous year. Holdings of U.S. Treasury securities increased by $58.9 billion, and federal agency and GSE MBS holdings increased by $102.1 billion. GSE debt securities holdings decreased by $28.3 billion, and balances held under central bank liquidity swap arrangements decreased by $90.9 billion.

Investments held by the consolidated VIEs decreased from $35.7 billion to $2.8 billion as a result of the sale of investments during the year. Proceeds from the sale of investments were used to repay, in full, loans extended by the Federal Reserve Bank of New York to Maiden Lane LLC, Maiden Lane II LLC, and Maiden Lane III LLC.

Loans outstanding under the Term Asset-Backed Securities Lending Facility decreased from $9.1 billion to $0.6 billion in 2012 as a result of principal payments and loan prepayments.

The Federal Reserve System financial statements are available on the Federal Reserve Board's website at www.federalreserve.gov/monetarypolicy/bst_fedfinancials.htm.

For media inquiries, call 202-452-2955.

March 14, 2013
Fed Announces Results of Comprehensive Capital Analysis and Review

The Federal Reserve on Thursday announced it has approved the capital plans of 14 financial institutions in the Comprehensive Capital Analysis and Review (CCAR). Two other institutions received conditional approval, while the Federal Reserve objected to the plans of two firms.

Strong capital levels help ensure that banking organizations have the ability to lend to households and businesses and to continue to meet their financial obligations, even in times of economic difficulty. The Federal Reserve in CCAR evaluates the capital planning processes and capital adequacy of the largest bank holding companies, including the firms' proposed capital actions such as dividend payments and share buybacks and issuances.

When considering an institution's capital plan, the Federal Reserve considers both qualitative and quantitative factors. These include a firm's capital ratios under severe economic and financial market stress, the strength of the firm's capital planning process, and the institution's plans to meet new Basel 3 capital requirements as they would be implemented in the United States. After the Federal Reserve objects to a capital plan, the institution may only make capital distributions with prior written approval from the Federal Reserve.

"Now in its third year, the Federal Reserve's review of capital plans provides a regular, structured, and comparative way to promote and assess the capacity of large bank holding companies to understand and manage their capital positions, with particular emphasis on risk-measurement practices," Federal Reserve Gov. Daniel Tarullo said. "The financial crisis showed not only that regulators needed to increase capital requirements and conduct regular stress tests, but also that firms need strong internal processes to evaluate their own capital needs based on their individual risks and circumstances."

The Federal Reserve can object to a capital plan based on qualitative or quantitative concerns, or both. The Federal Reserve can require new capital plans from an institution at any time to require improvements in the capital planning process, or if there is a change in condition of an individual institution or in the economy that could potentially lead to a change in a firm's capital position.

The Federal Reserve did not object to the capital plans for American Express Company; Bank of America Corporation; The Bank of New York Mellon Corporation; Capital One Financial Corporation; Citigroup, Inc.; Fifth Third Bancorp; KeyCorp; Morgan Stanley; The PNC Financial Services Group, Inc.; Regions Financial Corporation; State Street Corporation; SunTrust Banks, Inc.; U.S. Bancorp; and Wells Fargo & Company.

The Federal Reserve did not object to the capital plans for The Goldman Sachs Group, Inc., and JP Morgan Chase & Co., but required the two institutions to submit new capital plans by the end of the third quarter to address weaknesses in their capital planning processes. The Federal Reserve objected to the capital plans of Ally Financial, Inc., and BB&T Corporation.

U.S. firms have substantially increased their capital since the first set of government stress tests in 2009. The weighted tier 1 common equity ratio, which compares high-quality capital to risk-weighted assets, of the 18 bank holding companies in the 2013 CCAR has more than doubled from 5.6 percent at the end of 2008 to 11.3 percent in the fourth quarter of 2012, reflecting an increase in tier 1 common equity from $393 billion to $792 billion during the same period. The 18 institutions hold more than 70 percent of the total assets of all U.S. bank holding company assets.

The stronger capital position is due in part to substantially lower capital distributions by bank holding companies than before the financial crisis. The 18 institutions paid out 19 percent of net income in common dividends in 2012, half of what they paid out as a percentage of net income before the financial crisis in 2006.

For media inquiries, call 202-452-2955.

Comprehensive Capital Analysis and Review 2013: Assessment Framework and Results (1.42 MB PDF)

Stress Test Methodology and Results (1.97 MB PDF)

March 13, 2013
Fed Changes Timing of FOMC Statements and News Conferences

The Federal Reserve announced on Wednesday that, to better facilitate the release of information in conjunction with the Chairman's quarterly news conferences, the time between the release of the Federal Open Market Committee's statement and the beginning of the news conference is being reduced.

Committee policy statements for all regularly scheduled meetings will now be released at 2 p.m. Eastern Time. For meetings with news conferences, the Committee's current economic projections will also be released at 2 p.m. Eastern Time, and the Chairman's news conference will begin at approximately 2:30 p.m. Eastern Time.

For media inquiries, call 202-452-2955.

March 12, 2013
Fed Announces Results of Auction of $3 Billion in 28-day Term Deposits

On March 11, 2013, the Federal Reserve conducted an auction of $3 billion in 28-day term deposits through its Term Deposit Facility. Following are the results of the auction:

Bids at the stop-out rate were pro-rated at 53.037 percent. Resulting awards were rounded to the nearest $10,000 except that all awards below $10,000 were rounded up to $10,000.

The awarded deposits will settle on March 14, 2013, and will mature on April 11, 2013. The stop-out rate shown above will apply to all awarded deposits.

March 07, 2013
Federal Reserve Releases Summary Results of Bank Stress Tests

The nation's largest bank holding companies have continued to improve their ability to withstand an extremely adverse hypothetical economic scenario and are collectively in a much stronger capital position than before the financial crisis, according to the summary results of bank stress tests announced by the Federal Reserve on Thursday.

Reflecting the severity of the stress scenario--which includes a peak unemployment rate of 12.1 percent, a drop in equity prices of more than 50 percent, a decline in housing prices of more than 20 percent, and a sharp market shock for the largest trading firms--projected losses at the 18 bank holding companies would total $462 billion during the nine quarters of the hypothetical stress scenario. The aggregate tier 1 common capital ratio, which compares high-quality capital to risk-weighted assets, would fall from an actual 11.1 percent in the third quarter of 2012 to 7.7 percent in the fourth quarter of 2014 in the hypothetical stress scenario.

The Federal Reserve's stress scenario estimates are the outcome of deliberately stringent and conservative assessments under hypothetical, adverse economic conditions and the results are not forecasts or expected outcomes.

Despite the large hypothetical declines, the aggregate post-stress capital ratio exceeds the actual aggregate tier 1 common ratio for the 18 firms of approximately 5.6 percent at the end of 2008, prior to the government stress tests conducted in the midst of the financial crisis in early 2009. This is the third round of stress tests led by the Federal Reserve since the tests in 2009, but is the first year that the Federal Reserve has conducted stress tests pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Federal Reserve's implementing regulations.

"The stress tests are a tool to gauge the resiliency of the financial sector," Federal Reserve Governor Daniel K. Tarullo said. "Significant increases in both the quality and quantity of bank capital during the past four years help ensure that banks can continue to lend to consumers and businesses, even in times of economic difficulty."

For media inquiries, call 202-452-2955

Stress Test Methodology and Results (1.97 MB PDF)

March 06, 2013
Federal Reserve Offers $3 Billion in 28-day Term Deposits through Its Term Deposit Facility

On Monday, March 11, 2013, the Federal Reserve will offer $3 billion in 28-day term deposits through its Term Deposit Facility. As noted in the Federal Reserve Board's September 8, 2010 release, this offering is part of ongoing small-value operations designed to provide eligible institutions with an opportunity to become familiar with term deposit operations. Additional information regarding the auction is listed below; the auction will be conducted as specified in this announcement, Regulation D, and the terms and conditions of the Term Deposit Facility (http://www.frbservices.org/centralbank/term_deposit_facility.html ).

Description of Offering and Competitive Auction Parameters

Competitive bids submitted at the stop-out rate will be pro-rated and will be rounded to multiples of $10,000. Normal rounding convention will be used, except that awards under $10,000 will be rounded to $10,000.

Non-Competitive bids are allowed in this auction. All non-competitive bids will be automatically awarded in full at the stop-out rate of the competitive auction. The minimum amount for a non-competitive bid is $10,000; the maximum amount is $5,000,000 and should be submitted in increments of $10,000. Non-Competitive bids must be submitted between 10:00 a.m. ET and 2:00 p.m. ET on the auction date.

Submission of Bid
Participants must submit bids by accessing the Term Deposit Facility application (https://www.federalreserve.org/arrow/ARROWWeb/home.do ) between the opening time and the closing time on the auction date.

Notification
Summary auction results will be published on the Board of Governors' website (http://www.federalreserve.gov/monetarypolicy/tdf.htm ) at approximately 12:00 p.m. (noon) ET on the notification date. Soon after, results will be posted on the Term Deposit Facility Resource Center page of the Central Bank Central website (http://www.frbservices.org/centralbank/term_deposit_facility.html ). Participant awards will be posted to the Term Deposit Facility application at approximately 12:00 p.m. ET on the notification date, and participants will be able to view their awards by accessing the Term Deposit Facility application.

March 05, 2013
Board Publishes Report on Debit Card Transactions in 2011

The Federal Reserve Board on Tuesday published a report containing summary information on the volume and value, interchange fee revenue, certain debit card issuer costs, and fraud losses related to debit card transactions in 2011. The report is the second in a series to be published every two years pursuant to section 920 of the Electronic Fund Transfer Act (EFTA).

The Board's Regulation II (Debit Card Interchange Fees and Routing), which implements this provision of the EFTA, provides that a debit card issuer subject to the interchange fee standard (a covered issuer) may not receive an interchange fee that exceeds 21 cents plus 5 basis points multiplied by the value of the transaction, plus a 1-cent fraud-prevention adjustment, if eligible. The regulation does not apply to debit card issuers with consolidated assets of less than $10 billion, certain government-administered debit cards, and certain prepaid cards. The interchange fee standard became effective on October 1, 2011.

Covered issuers' costs of authorizing, clearing, and settling (ACS) debit card transactions, excluding fraud losses, varied greatly across respondents in 2011, with the median issuer having an average ACS cost of 11 cents and the issuer at the 75th percentile having an average ACS cost of 36 cents. Issuers with the highest debit card transaction volume generally had the lowest ACS costs per transaction as reflected in an overall average of 5 cents per transaction. Conversely, issuers with the smallest debit card programs generally had the highest ACS costs per transaction.

The Board estimated debit-card fraud losses to all parties (merchants, cardholders, and issuers) to be $1.38 billion in 2011, with an average loss of approximately 8 basis points per debit card transaction, down slightly from 2009. The median covered issuer's average fraud loss per transaction was nearly 5 basis points, the same as in 2009. The median covered issuer had average fraud prevention and data security costs of slightly less than 1.5 cents per transaction.

The Board does not plan to propose revisions to the Regulation II interchange fee standard or the fraud-prevention adjustment based on these survey data. Sixty-seven percent of covered issuers had average ACS costs below 21 cents (the base component of the interchange fee standard) in 2011. This proportion is lower than the 80 percent of covered issuers with average ACS costs below 21 cents in 2009 due to the addition of first-time survey respondents, most of whom are foreign banking organizations or other covered issuers with very small debit card programs and high ACS costs per transaction. Issuers that responded to both the 2009 and 2011 data collections typically reported ACS costs per transaction that were lower in 2011 than in 2009. Covered issuers that had average ACS costs below 21 cents in 2011 processed well over 99 percent of all reported covered transactions, the same proportion as in 2009.

The median issuer fraud loss, which serves as the basis for the ad valorem portion of the interchange fee standard, is essentially unchanged from 2009 (5 basis points). Further, when rounded to the nearest cent, the median fraud-prevention and data security costs remained at

1 cent per transaction (the current fraud-prevention adjustment).

2011 Interchange Fee Revenue, Covered Issuer Costs, and Covered Issuer and Merchant Fraud Losses Related to Debit Card Transactions (PDF)

For media inquiries, call 202-452-2955.

February 28, 2013
Amendments to Consent Orders Memorialize $9.3 Billion Foreclosure Agreement

WASHINGTON--The Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board today released amendments to their enforcement actions against 13 mortgage servicers for deficient practices in mortgage loan servicing and foreclosure processing. The amendments require the servicers to provide $9.3 billion in payments and other assistance to borrowers.

The amendments memorialize agreements in principle announced in January with Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. The amount includes $3.6 billion in cash payments and $5.7 billion in other assistance to borrowers such as loan modifications and forgiveness of deficiency judgments.

Borrowers covered by the amendments include 4.2 million people whose homes were in any stage of the foreclosure process in 2009 or 2010 and whose mortgages were serviced by one of the companies listed above. These borrowers are expected to be contacted by the Paying Agent--Rust Consulting, Inc.--by the end of March 2013 with payment details. The Paying Agent will send payments and correspondence.

Borrowers covered by the amendments are expected to receive compensation ranging from hundreds of dollars up to $125,000. Borrowers are not required to take any additional steps to receive the payments. In addition, borrowers will not be required to execute a waiver of any legal claims they may have against their servicer as a condition for receiving payment.

Borrowers can call the Paying Agent at 1-888-952-9105 to update their contact information or to verify that they are covered by the amendments.

In providing the $5.7 billion in assistance, the 13 servicers are expected to undertake well-structured loss mitigation efforts focused on foreclosure prevention, with preference given to activities designed to keep borrowers in their homes through affordable, sustainable, and meaningful home preservation actions.

Borrowers seeking assistance should work directly with their servicer or a counselor approved by the U.S. Department of Housing and Urban Development (HUD). Borrowers can reach HUD-approved counselors by calling 888-995-HOPE (4673).

OCC and Federal Reserve examiners continue to monitor the servicers’ implementation of corrective actions required by the original enforcement actions to address unsafe and unsound mortgage servicing and foreclosure practices.

For the 13 servicers, these amendments to the enforcement actions replace the requirements related to the Independent Foreclosure Review. For GMAC Mortgage, Everbank, and OneWest, which did not enter agreements in principle with federal regulators, the Independent Foreclosure Review process continues. Regulators expect the reviews for these servicers to be completed over the course of the coming year. These companies service 457,000 mortgages that were in some stage of foreclosure in 2009 or 2010.

Related Links:

Amendments to the Consent Orders issued by the OCC
Aurora Bank FSB (PDF)
Bank of America, N.A. (PDF)
Citibank, N.A. (PDF)
HSBC Bank USA, N.A. (PDF)
JP Morgan Chase Bank, N.A. (PDF)
MetLife Bank, N.A. (PDF)
PNC Bank, N.A. (PDF)
Sovereign Bank, National Association (PDF)
U.S. Bank National Association and U.S. Bank National Association ND (PDF)
Wells Fargo Bank, N.A. (PDF)

Amendments to the Consent Orders issued by the Federal Reserve
Bank of America Corporation (PDF)
Citigroup Inc., and Citifinancial Credit Company (PDF)
The Goldman Sachs Group, Inc., and Goldman Sachs Bank U.S.A. (PDF)
HSBC North America Holdings, Inc., and HSBC Finance Corporation (PDF)
JPMorgan Chase & Co. and EMC Mortgage Corporation (PDF)
Morgan Stanley (PDF)
The PNC Financial Services Group, Inc. (PDF)
SunTrust Banks, Inc., SunTrust Bank, and SunTrust Mortgage, Inc. (PDF)
U.S. Bancorp (PDF)
Wells Fargo & Company (PDF)

February 26, 2013
Federal Reserve Board Announces Proposed Rule Regarding Federal Reserve Bank Accounts and Services for Financial Market Utilities Designated as Systemically Important

The Federal Reserve Board on Tuesday requested comment on a proposed rule to amend Regulation HH to set out the conditions and requirements for a Federal Reserve Bank to open and maintain accounts for and provide financial services to financial market utilities designated as systemically important by the Financial Stability Oversight Council.

In addition, the proposed rule, which implements provisions of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, would authorize a Reserve Bank to pay interest on the balances maintained by a designated financial market utility in accordance with the title and other terms and conditions as the Board may prescribe.

The Board is requesting public comment on all aspects of the proposed amendments to Regulation HH contained in the attached Federal Register notice. Comments on the proposal will be due 60 days after the rule is published in the Federal Register, which is expected shortly.

For media inquiries, call 202-452-2955.

Attachment (295 KB PDF)

February 22, 2013
Federal Reserve Board Extends Comment Period on Proposed Rule to Implement Enhanced Prudential Standards and Early Remediation Requirements Until April 30, 2013

The Federal Reserve Board has extended until April 30, 2013, the comment period on a proposed rule to implement the enhanced prudential standards and early remediation requirements established under sections 165 and 166 of the Dodd-Frank Wall Street Reform and Consumer Protection Act for foreign banking organizations and foreign nonbank financial companies supervised by the Board. The enhanced prudential standards include risk-based capital and leverage requirements, liquidity standards, risk management and risk committee requirements, single-counterparty credit limits, and stress test requirements.

The Board extended the comment period to allow interested persons more time to analyze the issues and prepare their comments. Originally, comments were due by March 31, 2013.

Attachment (11 KB PDF)

February 20, 2013
Minutes of the Federal Open Market Committee, January 29–30, 2013

The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached minutes of the Committee meeting held on January 29–30, 2013.

The minutes for each regularly scheduled meeting of the Committee ordinarily are made available three weeks after the day of the policy decision and subsequently are published in the Board's Annual Report. The descriptions of economic and financial conditions contained in these minutes are based solely on the information that was available to the Committee at the time of the meeting.

FOMC minutes can be viewed on the Board's website at http://www.federalreserve.gov/monetarypolicy/fomccalendars.htm

For media inquiries, call 202-452-2955.

Minutes of the Federal Open Market Committee
January 29-30, 2013: HTML | PDF

January 30, 2013
FOMC to Maintain Current Monetary Policy

Information received since the Federal Open Market Committee met in December suggests that growth in economic activity paused in recent months, in large part because of weather-related disruptions and other transitory factors. Employment has continued to expand at a moderate pace but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has shown further improvement. Inflation has been running somewhat below the Committee's longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. Although strains in global financial markets have eased somewhat, the Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Charles L. Evans; Jerome H. Powell; Sarah Bloom Raskin; Eric S. Rosengren; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.

January 28, 2013
Federal Reserve Board Announces Release Dates For Results from Supervisory Stress Tests and From the Comprehensive Capital Analysis and Review (CCAR)

The Federal Reserve Board on Monday announced that results from the supervisory stress tests conducted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act will be released on Thursday, March 7, and the related results from the Comprehensive Capital Analysis and Review, or CCAR, will be released on Thursday, March 14. Results will be released for both exercises at 4:30 p.m. Eastern Time.

The Dodd-Frank Act stress tests are forward-looking exercises conducted by the Federal Reserve and large financial companies supervised by the Federal Reserve to help assess whether institutions have sufficient capital to absorb losses and support operations during adverse economic conditions. The Dodd-Frank Act supervisory stress test results will include data such as capital ratios, revenue, and loss estimates under a severely adverse scenario and assuming a common set of capital actions that is used in the analysis of all of the firms. The standardized capital actions used in the Dodd-Frank Act stress test results provide for comparability across the firms as they assume no changes in recent levels of dividend payments and no common stock repurchases.

CCAR is an annual exercise by the Federal Reserve to help assess whether the largest bank holding companies have sufficient capital to continue operations during the upcoming two-year period assuming economic and financial stress and have robust, forward-looking capital planning processes that account for their unique risks and are supported by the firms' risk-measurement and -management practices. As part of the CCAR, the Federal Reserve evaluates each company's plans to make capital distributions, such as dividend payments, stock repurchases, or planned acquisitions. CCAR results include capital ratios under a severely adverse scenario provided by the Federal Reserve, and reflect the capital actions the companies plan to undertake.

Also on Monday, the Federal Reserve Board released the global market shock component of the adverse and severely adverse scenarios used in the latest Dodd-Frank Act stress tests and the CCAR to evaluate the capital positions of the six bank holding companies with significant trading operations. The Federal Reserve Board previously had issued publicly the macroeconomic scenarios for the current stress test cycle.

To see the global market shock data and some of the templates for the results to be issued in March, and for more general information on the Dodd-Frank Act stress tests and the CCAR, go to www.federalreserve.gov/bankinforeg/stress-tests-capital-planning.htm.

For media inquiries, call 202-452-2955.

January 18, 2013
Agencies Issue Final Rule on Appraisals for Higher-Priced Mortgage Loans

WASHINGTON--Six federal financial regulatory agencies today issued the final rule that establishes new appraisal requirements for "higher-priced mortgage loans." The rule implements amendments to the Truth in Lending Act made by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). Under the Dodd-Frank Act, mortgage loans are higher-priced if they are secured by a consumer's home and have interest rates above certain thresholds.

For higher-priced mortgage loans, the rule requires creditors to use a licensed or certified appraiser who prepares a written appraisal report based on a physical visit of the interior of the property. The rule also requires creditors to disclose to applicants information about the purpose of the appraisal and provide consumers with a free copy of any appraisal report.

If the seller acquired the property for a lower price during the prior six months and the price difference exceeds certain thresholds, creditors will have to obtain a second appraisal at no cost to the consumer. This requirement for higher-priced home-purchase mortgage loans is intended to address fraudulent property flipping by seeking to ensure that the value of the property legitimately increased.

The rule exempts several types of loans, such as qualified mortgages, temporary bridge loans and construction loans, loans for new manufactured homes, and loans for mobile homes, trailers and boats that are dwellings. The rule also has exemptions from the second appraisal requirement to facilitate loans in rural areas and other transactions.

The rule is being issued by the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the National Credit Union Administration, and the Office of the Comptroller of the Currency. The Federal Register notice is attached. The rule will become effective on January 18, 2014.

In response to public comments, the agencies intend to publish a supplemental proposal to request additional comment on possible exemptions for "streamlined" refinance programs and small dollar loans, as well as to seek clarification on whether the rule should apply to loans secured by existing manufactured homes and certain other property types.

Attachment (1.1 MB PDF)

January 17, 2013
Federal Reserve Banks Announce New Study to Examine Nation's Payments Usage

The Federal Reserve's Retail Payments Office (RPO), located at the Federal Reserve Bank in Atlanta, today announced plans to conduct a new study to determine the current volume and composition of electronic and check payments in the United States. This triennial study continues the research conducted by the Federal Reserve in 2001, 2004, 2007, and 2010.

"While the Federal Reserve's 2013 Payments Study will continue to build upon trend information gathered in previous studies, this year's study casts a broader net across the evolving payments landscape," said Jim McKee, RPO senior vice president and the study's executive sponsor. "The 2013 study will provide additional data on electronic payment methods, cash deposit and withdrawal information and, for the first time, limited third-party fraud information, in an effort to provide the industry with further insight on emerging trends."

The 2013 Federal Reserve Payments Study consists of three survey efforts commissioned to estimate the annual number, dollar value and composition of retail noncash payments in the United States. Together, the survey efforts will provide aggregate estimates and current trends in the use of payment instruments by U.S. consumers and businesses. Previous studies have revealed significant changes in the U.S. payments system over time, including a continuing decline in the use of checks and growing use of electronic payments, such as automated clearinghouse, electronic banking transactions, credit cards, debit cards and stored value cards. The Federal Reserve will work with the Global Concepts office of McKinsey & Company and Blueflame Consulting, LLC to conduct this research study. Preliminary results should be released by late 2013.

"The industry-wide participation in past studies has been extensive, appreciated and necessary in allowing us to continue to offer meaningful results," McKee said. "We hope to continue to garner robust industry support in this mutually beneficial effort."

More information about Federal Reserve Financial Services can be found at www.frbservices.org This site also contains links to the four previous Payments Studies.

* * *

The Financial Services Policy Committee (FSPC) is responsible for the overall direction of financial services and related support functions for the Federal Reserve Banks, as well as for providing Federal Reserve leadership in dealing with the evolving U.S. payments system. The FSPC is composed of three Reserve Bank presidents and two Reserve Bank first vice presidents.

Under FSPC oversight, the Retail Payments Office was established to direct the retail payments activities of the Federal Reserve Banks. With its main focus on the Check and Automated Clearing House functions, the RPO works with Reserve Banks to undertake comprehensive and far-reaching initiatives to improve the payments system.

January 15, 2013
Federal Reserve Board Announces Agreement with Treasury Department Regarding Credit Protection for the Term Asset-Backed Securities Loan Facility (TALF)

The Federal Reserve Board on Tuesday announced that it agreed with the Treasury Department that the credit protection Treasury has provided for the Term Asset-Backed Securities Loan Facility (TALF) is no longer necessary because the accumulated fees collected through TALF exceed the amount of TALF loans outstanding. The TALF remains a joint Treasury-Federal Reserve program, and the Treasury and Federal Reserve will continue to consult on the administration of the program.

During the financial crisis, after asset-backed securities markets seized up, the Federal Reserve Bank of New York lent $71 billion under the TALF to investors in highly rated asset-backed securities (ABS) and commercial mortgage-backed securities (CMBS). By encouraging issuance of ABS and CMBS, the TALF supported the economy by increasing credit availability to American households and businesses. Nearly all TALF loans have been repaid or matured. As of January 9, 2013, TALF loans outstanding totaled $556 million. Accumulated fees collected through TALF totaled $743 million through January 9, 2013.

TALF, which began operating in March 2009, was originally authorized to lend up to $200 billion, with the Treasury's Troubled Asset Relief Program (TARP) providing $20 billion in credit protection. When the program closed on June 30, 2010, $43 billion in loans, with initial maturities of three or five years, were outstanding and the Board agreed at that time to a reduction in TARP credit protection to $4.3 billion. By June 20, 2012, loans outstanding totaled $5.3 billion and the Board then agreed to a reduction in TARP credit protection to $1.4 billion. Borrowers have continued to repay their loans early at a rapid pace, in part because interest rates on TALF loans were designed to be higher than market rates in more-normal conditions. Additionally, most three-year TALF loans have matured. All remaining loans are well collateralized and current in payments of interest and principal.

TALF supported the origination of nearly 3 million auto loans, more than 1 million student loans, nearly 900,000 loans to small businesses, 150,000 other business loans, and millions of credit card loans.

For media inquiries, call 202-452-2955.

January 15, 2013
Federal Reserve Announces Results of Auction of $3 Billion in 28-day Term Deposits Held on January 14, 2013

On January 14, 2013, the Federal Reserve conducted an auction of $3 billion in 28-day term deposits through its Term Deposit Facility. Following are the results of the auction:

Bids at the stop-out rate were pro-rated at 45.575 percent. Resulting awards were rounded to the nearest $10,000 except that all awards below $10,000 were rounded up to $10,000.

The awarded deposits will settle on January 17, 2013, and will mature on February 14, 2013. The stop-out rate shown above will apply to all awarded deposits.

January 10, 2013
Reserve Bank Income and Expense Data and Transfers to the Treasury for 2012

The Federal Reserve Board on Thursday announced preliminary unaudited results indicating that the Reserve Banks provided for payments of approximately $88.9 billion of their estimated 2012 net income to the U.S. Treasury. Under the Board's policy, the residual earnings of each Federal Reserve Bank are distributed to the U.S. Treasury, after providing for the costs of operations, payment of dividends, and the amount necessary to equate surplus with capital paid-in.

The Federal Reserve Banks' 2012 estimated net income of $91.0 billion was derived primarily from $80.5 billion in interest income on securities acquired through open market operations (U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities). Additional earnings were derived primarily from net realized gains on the sale of U.S. Treasury securities of $13.3 billion, net income of $6.1 billion attributable to the consolidated limited liability companies that were created in response to the financial crisis, and income from services of $450 million, offset by losses of $1.1 billion that result from the daily revaluation of foreign currency denominated asset holdings at current exchange rates. The Reserve Banks had interest expense of $3.9 billion on depository institutions' reserve balances.

Operating expenses of the Reserve Banks, net of amounts reimbursed by the U.S. Treasury and other entities for services the Reserve Banks provided as fiscal agents, totaled $3.7 billion in 2012. In addition, the Reserve Banks were assessed $1.2 billion for the cost of new currency and Board expenditures, and $387 million to fund the operations of the Bureau of Consumer Financial Protection and Office of Financial Research. In 2012, statutory dividends totaled $1.6 billion and $461 million of net income was used to equate surplus to capital paid-in.

The preliminary unaudited results include valuation adjustments as of September 30 for Term Asset-Backed Securities Loan Facility (TALF) loans and the consolidated limited liability companies. The final results, which will be presented in the Reserve Banks' annual audited financial statements and the Board of Governors' Annual Report, will reflect valuation adjustments as of December 31.

The attached chart illustrates the amount of Federal Reserve Banks' residual earnings distributed to the U.S. Treasury from 2003 through 2012 (estimated).

For media inquiries, call 202-452-2955

Attachment (72 KB PDF)

January 09, 2013
Federal Reserve Offers $3 Billion in 28-day Term Deposits through its Term Deposit Facility

On Monday, January 14, 2013, the Federal Reserve will offer $3 billion in 28-day term deposits through its Term Deposit Facility. As noted in the Federal Reserve Board's September 8, 2010 release, this offering is part of ongoing small-value operations designed to provide eligible institutions with an opportunity to become familiar with term deposit operations. Additional information regarding the auction is listed below; the auction will be conducted as specified in this announcement, Regulation D, and the terms and conditions of the Term Deposit Facility (http://www.frbservices.org/centralbank/term_deposit_facility.html).

Description of Offering and Competitive Auction Parameters

Competitive bids submitted at the stop-out rate will be pro-rated and will be rounded to multiples of $10,000. Normal rounding convention will be used, except that awards under $10,000 will be rounded to $10,000.

Non-Competitive bids are allowed in this auction. All non-competitive bids will be automatically awarded in full at the stop-out rate of the competitive auction. The minimum amount for a non-competitive bid is $10,000; the maximum amount is $5,000,000 and should be submitted in increments of $10,000. Non-Competitive bids must be submitted between 10:00 a.m. ET and 2:00 p.m. ET on the auction date.

Submission of Bids
Participants must submit bids by accessing the Term Deposit Facility application (https://www.federalreserve.org/arrow/ARROWWeb/home.do) between the opening time and the closing time on the auction date.

Notification
Summary auction results will be published on the Board of Governors' website (http://www.federalreserve.gov/monetarypolicy/tdf.htm) at approximately 12:00 p.m. (noon) ET on the notification date. Soon after, results will be posted on the Term Deposit Facility Resource Center page of the Central Bank Central website (http://www.frbservices.org/centralbank/term_deposit_facility.html) Participant awards will be posted to the Term Deposit Facility application at approximately 12:00 p.m. ET on the notification date, and participants will be able to view their awards by accessing the Term Deposit Facility application.

January 07, 2013
Independent Foreclosure Review to Provide $3.3 Billion in Payments, $5.2 Billion in Mortgage Assistance

WASHINGTON--Ten mortgage servicing companies subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing have reached an agreement in principle with the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board to pay more than $8.5 billion in cash payments and other assistance to help borrowers.

The sum includes $3.3 billion in direct payments to eligible borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. The payments involve mortgage servicers operating under enforcement actions issued in April 2011 by the OCC, the Federal Reserve, and the Office of Thrift Supervision. The agreement ensures that more than 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010 with the participating servicers will receive cash compensation in a timely manner.

Eligible borrowers are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error.

This agreement includes Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. For these participating servicers, fulfillment of the agreement would meet the requirements of the enforcement actions that mandated that the servicers retain independent consultants to conduct an Independent Foreclosure Review.

As a result of this agreement, the participating servicers would cease the Independent Foreclosure Review, which involved case-by-case reviews, and replace it with a broader framework allowing eligible borrowers to receive compensation significantly more quickly. The OCC and the Federal Reserve accepted this agreement because it provides the greatest benefit to consumers subject to unsafe and unsound mortgage servicing and foreclosure practices during the relevant period in a more timely manner than would have occurred under the review process. Eligible borrowers will receive compensation whether or not they filed a request for review form, and borrowers do not need to take further action to be eligible for compensation.

A payment agent will be appointed to administer payments to borrowers on behalf of the servicers. Eligible borrowers are expected to be contacted by the payment agent by the end of March with payment details. Borrowers will not be required to execute a waiver of any legal claims they may have against their servicer as a condition for receiving payment. In addition, the servicers' internal complaint process will remain available to borrowers.

The agencies continue to work to reach similar agreements in principle with other servicers that are not parties to the agreement announced today, but that are also subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing.

OCC and Federal Reserve examiners are continuing to closely monitor the servicers' implementation of plans required by the enforcement actions issued in April 2011 to correct the unsafe and unsound mortgage servicing and foreclosure practices.

January 03, 2013
Minutes of the Federal Open Market Committee, December 11–12, 2012

The Federal Reserve Board and the Federal Open Market Committee on Thursday released the attached minutes of the Committee meeting held on December 11–12, 2012. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the December 11–12, 2012 meeting is also included as an addendum to these minutes.

The minutes for each regularly scheduled meeting of the Committee ordinarily are made available three weeks after the day of the policy decision and subsequently are published in the Board's Annual Report. Summaries of economic projections are released on a quarterly schedule. The descriptions of economic and financial conditions contained in these minutes and in the Summary of Economic Projections are based solely on the information that was available to the Committee at the time of the meeting.

The FOMC minutes can be viewed on the Board's website at http://www.federalreserve.gov/monetarypolicy/fomccalendars.htm

Minutes of the Federal Open Market Committee
December 11-12, 2012: HTML | PDF

Archives | 2009 | 2010 | 2011 | 2012 | 2013