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Circular Letters


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

2011

December 23, 2011
Federal Reserve Board Issues Final Notice for a Two-Year Phase-In Period for Most Savings and Loan Holding Companies to File Federal Reserve Regulatory Reports

The Federal Reserve Board on Friday issued a final notice for a two-year phase-in period for most savings and loan holding companies (SLHCs) to file Federal Reserve regulatory reports and an exemption for some SLHCs from initially filing Federal Reserve regulatory reports.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, supervisory and rulemaking authority for SLHCs and their nondepository subsidiaries transferred from the Office of Thrift Supervision (OTS) to the Board on July 21, 2011. Earlier this year, the Board requested comment on proposals to require SLHCs to submit the same reports as bank holding companies, beginning with the March 31, 2012, reporting period.

After consideration of comments, the Board is finalizing the proposed collections of information from SLHCs with modifications. The final notice exempts a limited number of SLHCs from most regulatory reporting using the Board's existing regulatory reports and provides a two-year phase-in period for regulatory reporting for all other SLHCs. Exempt SLHCs would continue to submit Schedule HC, which is currently a part of the Thrift Financial Report, and the OTS H-(b)11 Annual/Current Report. Exempt firms will also file the Federal Reserve's FR Y-6, Annual Report for Bank Holding Companies, or the FR Y-7, Annual Report for Foreign Banking Organizations.

For media inquiries, call 202-452-2955.

Attachment (62 KB PDF) offsite icon


December 20, 2011
Federal Reserve Board Proposes Steps to Strengthen Regulation and Supervision of Large Bank Holding Companies and Systemically Important Nonbank Financial Firms

The Federal Reserve Board on Tuesday proposed steps to strengthen regulation and supervision of large bank holding companies and systemically important nonbank financial firms. The proposal, which includes a wide range of measures addressing issues such as capital, liquidity, credit exposure, stress testing, risk management, and early remediation requirements, is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The proposal generally applies to all U.S. bank holding companies with consolidated assets of $50 billion or more and any nonbank financial firms that may be designated by the Financial Stability Oversight Council as systemically important companies. The Board will issue a proposal regarding foreign banking organizations shortly. In general, savings and loan holding companies (SLHCs) would not be subject to the requirements in this proposal, except certain stress test requirements. The Board plans to issue a separate proposal later to address the applicability of the enhanced standards to SLHCs.

The Board is proposing a number of measures, including:

  • Risk-based capital and leverage requirements. These requirements would be implemented in two phases. In the first phase, the institutions would be subject to the Board's capital plan rule, which was issued in November 2011. That rule requires firms to develop annual capital plans, conduct stress tests, and maintain adequate capital, including a tier one common risk-based capital ratio greater than 5 percent, under both expected and stressed conditions. In the second phase, the Board would issue a proposal to implement a risk-based capital surcharge based on the framework and methodology developed by the Basel Committee on Banking Supervision.
  • Liquidity requirements. These measures would also be implemented in multiple phases. First, institutions would be subject to qualitative liquidity risk-management standards generally based on the interagency liquidity risk-management guidance issued in March 2010. These standards would require companies to conduct internal liquidity stress tests and set internal quantitative limits to manage liquidity risk. In the second phase, the Board would issue one or more proposals to implement quantitative liquidity requirements based on the Basel III liquidity rules.
  • Stress tests. Stress tests of the companies would be conducted annually by the Board using three economic and financial market scenarios. A summary of the results, including company-specific information, would be made public. In addition, the proposal requires companies to conduct one or more company-run stress tests each year and to make a summary of their results public.
  • Single-counterparty credit limits. These requirements would limit credit exposure of a covered financial firm to a single counterparty as a percentage of the firm's regulatory capital. Credit exposure between the largest financial companies would be subject to a tighter limit.
  • Early remediation requirements. These measures would be put in place for all firms subject to the proposal so that financial weaknesses are addressed at an early stage. The Board is proposing a number of triggers for remediation--such as capital levels, stress test results, and risk-management weaknesses--in some cases calibrated to be forward-looking. Required actions would vary based on the severity of the situation, but could include restrictions on growth, capital distributions, and executive compensation, as well as capital raising or asset sales.

The Board is proposing that firms would need to comply with many of the enhanced standards a year after they are finalized. The requirements related to stress testing for bank holding companies, however, would take effect shortly after the rule is finalized.

The Federal Reserve consulted with other members of the Financial Stability Oversight Council in developing the proposal. Comments on the proposal are requested by March 31, 2012.

For media inquiries, call 202-452-2955.

Attachment (546 KB PDF)


December 19, 2011
Agencies Release Annual CRA Asset-size Threshold Adjustments for Small and Intermediate Small Institutions

The federal bank regulatory agencies today announced the annual adjustment to the asset-size thresholds used to define small bank, small savings association, intermediate small bank, and intermediate small savings association under the Community Reinvestment Act (CRA) regulations. The annual adjustments are required by the CRA rules. Financial institutions are evaluated under different CRA examinations procedures based upon their asset-size classification. Those meeting the small and intermediate small asset-size threshold are not subjected to the reporting requirements applicable to large banks.

Annual adjustments to these asset-size thresholds are based on the change in the average of the Consumer Price Index (CPI) for urban wage earners and clerical workers, not seasonally adjusted, for each 12-month period ending in November, with rounding to the nearest million.

As a result of the 3.43 percent increase in the CPI index for the period ending in November 2011, the definitions of small and intermediate small institutions for CRA examinations will change as follows:

  • "Small bank" or "small savings association" means an institution that, as of December 31 of either of the prior two calendar years, had assets of less than $1.160 billion.
  • "Intermediate small bank" or "intermediate small savings association" means a small institution with assets of at least $290 million as of December 31 of both of the prior two calendar years, and less than $1.160 billion as of December 31 of either of the prior two calendar years.

These asset-size threshold adjustments are effective January 1, 2012. The agencies will publish the adjustments in the Federal Register. In addition, the agencies will post a list of the current and historical asset-size thresholds on the website of the Federal Financial Institutions Examination Council.

Attachment (26 KB PDF)

Media Contacts:
Federal Reserve Board Susan Stawick 202-452-2955
FDIC Greg Hernandez 202-898-6984
OCC Dean DeBuck 202-874-5770

December 13, 2011
Federal Reserve Issues FOMC Statement

Information received since the Federal Open Market Committee met in November suggests that the economy has been expanding moderately, notwithstanding some apparent slowing in global growth. While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but business fixed investment appears to be increasing less rapidly and the housing sector remains depressed. Inflation has moderated since earlier in the year, and longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee's dual mandate. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies 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. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.

The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools to promote a stronger economic recovery in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Charles L. Evans, who supported additional policy accommodation at this time.


December 07, 2011
Agencies Seek Comment on Additional Revisions to the Market Risk Capital Rules

The federal bank regulatory agencies today announced they are seeking comment on a notice of proposed rulemaking (NPR) that would amend an earlier NPR announced in December 2010. The initial NPR proposed modifications to the agencies' market risk capital rules for banking organizations with significant trading activities.

The amended NPR includes alternative standards of creditworthiness to be used in place of credit ratings to determine the capital requirements for certain debt and securitization positions covered by the market risk capital rules. The proposed creditworthiness standards include the use of country risk classifications published by the Organization for Economic Cooperation and Development for sovereign positions, company-specific financial information and stock market volatility for corporate debt positions, and a supervisory formula for securitization positions.

The earlier NPR was based largely on the revisions to the market risk framework published by the Basel Committee on Banking Supervision since 2005. However, it did not include aspects of the Basel Committee revisions that rely on credit ratings. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, all federal agencies must remove references to, and requirements of, reliance on credit ratings from their regulations and replace them with appropriate alternatives for evaluating creditworthiness. The agencies believe that the capital requirements resulting from the implementation of these alternative standards would be generally consistent with the standards in the Basel Committee's revisions.

The agencies expect to publish a final market risk capital rule after consideration of the comments on both NPRs. Comments on this NPR are requested by February 3, 2012.

Media Contacts:
Federal Reserve Barbara Hagenbaugh 202-452-2955
FDIC David Barr 202-898-6992
OCC Dean DeBuck 202-874-5770

Attachment (596 KB PDF)


December 05, 2011
Federal Reserve Board Announces Appointment of the Chairs and Deputy Chairs of the 12 Federal Reserve Banks for 2012

The Federal Reserve Board on Monday announced the designation of the chairs and deputy chairs of the 12 Federal Reserve Banks for 2012.

Each Reserve Bank has a nine-member board of directors. The Board of Governors in Washington appoints three of these directors and each year designates one of its appointees as chair and a second as deputy chair.

Following are the names of the chairs and deputy chairs designated by the Board for 2012:

Boston
Kirk A. Sykes, President, Urban Strategy America Fund, L.P., Boston, Mass., named Chair.

William D. Nordhaus, Sterling Professor of Economics, Yale University, New Haven, Conn., named Deputy Chair.

New York
Lee C. Bollinger, President, Columbia University, New York, N.Y, renamed Chair.

Kathryn S. Wylde, President and Chief Executive Officer, Partnership for New York City, New York, N.Y., renamed Deputy Chair.

Philadelphia
Jeremy Nowak, President, William Penn Foundation, Philadelphia, Penn., named Chair.

James E. Nevels, Chairman, The Swarthmore Group, Philadelphia, Penn., named Deputy Chair.

Cleveland
Alfred M. Rankin, Jr., Chairman, President and Chief Executive Officer, NACCO Industries, Inc., Cleveland, Ohio, renamed Chair.

Richard K. Smucker, Chief Executive Officer, The J.M. Smucker Company, Orrville, Ohio, renamed Deputy Chair.

Richmond
Margaret E. McDermid, Senior Vice President and Chief Information Officer, Dominion Resources, Inc., Richmond, Va., renamed Chair.

Linda D. Rabbitt, Chairman and Chief Executive Officer, Rand Construction Corporation, Washington, D.C., renamed Deputy Chair.

Atlanta
Carol B. Tomé, Chief Financial Officer and Executive Vice President, The Home Depot, Atlanta, Ga., renamed Chair.

Thomas I. Barkin, Director, McKinsey & Company, Atlanta, Ga., renamed Deputy Chair.

Chicago
William C. Foote, Retired Chairman of the Board, USG Corporation, Chicago, Ill., renamed Chair.

Jeffrey A. Joerres, Chairman and Chief Executive Officer, ManpowerGroup, Milwaukee, Wis., named Deputy Chair.

St. Louis
Ward M. Klein, Chief Executive Officer, Energizer Holdings, Inc., St.Louis, Mo., named Chair.

Sharon D. Fiehler, Executive Vice President & Chief Administrative Officer, Peabody Energy, St. Louis, Mo., named Deputy Chair.

Minneapolis
Mary K. Brainerd, President and Chief Executive Officer, HealthPartners, Minneapolis, Minn., named Chair.

Randall J. Hogan, Chairman and Chief Executive Officer, Pentair, Incorporated, Minneapolis, Minn., named Deputy Chair.

Kansas City
Paul DeBruce, Chief Executive Officer and Founder, DeBruce Grain, Inc., Kansas City, Mo., renamed Chair.

Barbara Mowry, Chief Executive Officer, GoreCreek Advisors, Greenwood Village, Colo., named Deputy Chair.

Dallas
Herbert D. Kelleher, Founder and Chairman Emeritus, Southwest Airlines, Dallas, Tex., renamed Chair.

Myron E. Ullman III, Chief Executive Officer and Chairman of the Board, J.C. Penney Company, Inc., Plano, Tex., renamed Deputy Chair.

San Francisco
Douglas W. Shorenstein, Chairman and Chief Executive Officer, Shorenstein Properties LLC, San Francisco, Calif., renamed Chair.

Patricia E. Yarrington, Vice President and Chief Financial Officer, Chevron Corporation, San Ramon, Calif., renamed Deputy Chair.


November 30, 2011
Coordinated Central Bank Action to Address Pressures in Global Money Markets

The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing coordinated actions to enhance their capacity to provide liquidity support to the global financial system. The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.

These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points. This pricing will be applied to all operations conducted from December 5, 2011. The authorization of these swap arrangements has been extended to February 1, 2013. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.

As a contingency measure, these central banks have also agreed to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies should market conditions so warrant. At present, there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar, but the central banks judge it prudent to make the necessary arrangements so that liquidity support operations could be put into place quickly should the need arise. These swap lines are authorized through February 1, 2013.

Federal Reserve Actions
The Federal Open Market Committee has authorized an extension of the existing temporary U.S. dollar liquidity swap arrangements with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank through February 1, 2013. The rate on these swap arrangements has been reduced from the U.S. dollar OIS rate plus 100 basis points to the OIS rate plus 50 basis points. In addition, as a contingency measure, the Federal Open Market Committee has agreed to establish similar temporary swap arrangements with these five central banks to provide liquidity in any of their currencies if necessary. Further details on the revised arrangements will be available shortly.

U.S. financial institutions currently do not face difficulty obtaining liquidity in short-term funding markets. However, were conditions to deteriorate, the Federal Reserve has a range of tools available to provide an effective liquidity backstop for such institutions and is prepared to use these tools as needed to support financial stability and to promote the extension of credit to U.S. households and businesses.

Information on Related Actions Being Taken by Other Central Banks
Information on the actions to be taken by other central banks is available on the following websites:
Bank of Canada
Bank of England
Bank of Japan (PDF) PDF icon
European Central Bank
Swiss National Bank (PDF) PDF icon

Frequently Asked Questions: U.S. Dollar and Foreign Currency Liquidity Swaps

For media inquiries, call 202-452-2955.


November 22, 2011
Federal Reserve Board Issues Final Rule on Annual Capital Plans, Launches 2012 Review

The Federal Reserve Board on Tuesday issued a final rule requiring top-tier U.S. bank holding companies with total consolidated assets of $50 billion or more to submit annual capital plans for review.

Also, the Federal Reserve launched the 2012 review, issuing instructions to the firms, including the macroeconomic and financial market scenarios the Federal Reserve is requiring institutions to use to support the stress testing used in their capital plans. As a part of the review, known as the Comprehensive Capital Analysis and Review (CCAR), the Federal Reserve in 2012 will carry out a supervisory stress test based on the same stress scenario provided to the firms to support its analysis of the adequacy of the firms' capital.

The aim of the annual capital plans, which build on the CCAR conducted earlier this year, is to ensure that institutions have robust, forward-looking capital planning processes that account for their unique risks, and to help ensure that institutions have sufficient capital to continue operations throughout times of economic and financial stress. Institutions will be expected to have credible plans that show they have sufficient capital so that they can continue to lend to households and businesses, even under adverse conditions, and are well prepared to meet regulatory capital standards agreed to by the Basel Committee on Banking Supervision as they are implemented in the United States. Boards of directors of the institutions will be required each year to review and approve capital plans before submitting them to the Federal Reserve.

Under the final rule, the Federal Reserve annually will evaluate institutions' capital adequacy, internal capital adequacy assessment processes, and their plans to make capital distributions, such as dividend payments or stock repurchases. The Federal Reserve will approve dividend increases or other capital distributions only for companies whose capital plans are approved by supervisors and are able to demonstrate sufficient financial strength to operate as successful financial intermediaries under stressed macroeconomic and financial market scenarios, even after making the desired capital distributions.

In addition to issuing the final rule, the Federal Reserve Board on Tuesday issued instructions outlining the information the Federal Reserve is seeking from the firms and the analysis the Federal Reserve will do for the CCAR in 2012. There are two sets of instructions: one for the 19 firms that participated in the CCAR in 2011, the other for 12 additional firms with at least $50 billion in assets that have not previously participated in a supervisory stress test exercise. The level of detail and analysis expected in each institution's capital plan will vary based on the company's size, complexity, risk profile, and scope of operations.

The instructions include a supervisory stress scenario that will be used by all of the firms and the Federal Reserve to analyze firms' capital needs to withstand such a scenario while continuing to act as a financial intermediary. The supervisory stress scenario is not the Federal Reserve's forecast for the economy, but is designed to represent an outcome that, while unlikely, may occur if the U.S economy were to experience a deep recession while at the same time economic activity in other major economies were also to contract significantly. For the 19 firms that participated in the CCAR in 2011, the Federal Reserve will conduct a supervisory stress test using internally developed models to generate loss estimates and post-stress capital ratios.

In addition to the macroeconomic scenario provided by the Federal Reserve, the six largest firms will be required to estimate potential losses stemming from a hypothetical global market shock. The global market shock will be based on market price movements seen during the second half of 2008, a time of significant volatility, with adjustments made to incorporate potential sharp market price movements in European sovereign and financial sectors.

Firms' capital adequacy, and their plans to make capital distributions, will be assessed against a number of criteria, including projected performance under the stress scenarios provided by the Federal Reserve and the institutions' internal scenarios. After evaluating the institutions' submissions, the Federal Reserve will publish the results of the supervisory stress tests for each of the 19 institutions including the results of the market shock for the six institutions with large trading operations.

Institutions will be required to submit their capital plans by January 9, 2012.

The capital planning requirements are consistent with the Federal Reserve's obligations to impose enhanced capital and risk-management standards on large financial firms under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Attachments: offsite icon
Questions-and-Answers (PDF)
Federal Register Notice, Capital Plan Final Rule (PDF)
Federal Register Notice, Data Collection (PDF)
Instructions for 19 Firms (PDF)
Instructions for Other Firms (PDF)


November 22, 2011
Minutes of the Federal Open Market Committee, November 1-2, 2011

The Federal Reserve Board and the Federal Open Market Committee on Tuesday released the attached minutes of the Committee meeting held on November 1–2, 2011. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the November 1–2, 2011 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 an approximately 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 offsite icon

Minutes of the Federal Open Market Committee
November 1–2, 2011: PDF | HTML offsite icon


November 15, 2011
Federal Reserve Announces Results of Auction of $5 Billion in 28-day Term Deposits Held on November 14, 2011

On November 14, 2011, the Federal Reserve conducted an auction of $5 billion in 28-day term deposits through its Term Deposit Facility. Following are the results of the auction:

TDF Auction ID: A21
Competitive Amount Offered: $5,000,000,000
Competitive Amount Tendered: $11,093,740,000
Competitive Amount Awarded: $5,000,000,000
Non-Competitive Amount Awarded: $55,100,000
Total Amount Awarded: $5,055,100,000
Stop-Out Rate: 0.26300 percent
Bid-to-Cover Ratio (Competitive Auction): 2.22
Number of Bids Submitted: 53
Number of Participants Submitting Bids: 34

Bids at the stop-out rate were pro-rated at 85.75 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 November 17, 2011, and will mature on December 15, 2011. The stop-out rate shown above will apply to all awarded deposits.


November 09, 2011
Federal Reserve Offers $5 Billion in 28-day Term Deposits through Its Term Deposit Facility

On Monday, November 14, 2011, the Federal Reserve will offer $5 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
TDF Auction ID: A21
Offering Amount: $5,000,000,000
Term: 28 days
Auction Date: Monday, November 14, 2011
Opening Time: 10:00 a.m. ET
Closing Time: 2:00 p.m. ET
Notification Date: Tuesday, November 15, 2011
Settlement Date: Thursday, November 17, 2011
Maturity Date: Thursday, December 15, 2011
Competitive Auction Parameters
Maximum Number of Bids: 3
Minimum Bid Amount (per bid): $10,000
Bid Increment: $10,000
Maximum Bid Amount (per institution): $1,250,000,000
Maximum Bid Rate: 0.75000%
Incremental Bid Rate: 0.00100%
Award Minimum Amount: $10,000
Award Maximum Amount: $1,250,000,000

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.


November 02, 2011
Federal Reserve Board and Federal Open Market Committee Release Economic Projections from the November 1-2 FOMC Meeting

The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached table and charts summarizing the economic projections made by Federal Reserve Board members and Federal Reserve Bank presidents for the November 1-2 meeting of the Committee.

The table will be incorporated into a summary of economic projections released with the minutes of the November 1-2 meeting. Summaries of the economic projections are released on an approximately quarterly schedule.

Attachment (PDF) offsite icon


November 02, 2011
Federal Reserve Issues FOMC Statement

Information received since the Federal Open Market Committee met in September indicates that economic growth strengthened somewhat in the third quarter, reflecting in part a reversal of the temporary factors that had weighed on growth earlier in the year. Nonetheless, recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Household spending has increased at a somewhat faster pace in recent months. Business investment in equipment and software has continued to expand, but investment in nonresidential structures is still weak, and the housing sector remains depressed. Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Moreover, there are significant downside risks to the economic outlook, including strains in global financial markets. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate further. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies 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. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.

The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools to promote a stronger economic recovery in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Charles L. Evans, who supported additional policy accommodation at this time.


October 26, 2011
Annual Adjustments for Reserve Calculations and Deposit Reporting, Regulation D

The Federal Reserve Board on Wednesday announced the annual indexing of the reserve requirement exemption amount and of the low reserve tranche for 2012. These amounts are used in the calculation of reserve requirements of depository institutions. The Board also announced the annual indexing of the nonexempt deposit cutoff level and the reduced reporting limit that will be used to determine deposit reporting panels effective 2012.

All depository institutions must hold a percentage of certain types of deposits as reserves in the form of vault cash, as a deposit in a Federal Reserve Bank, or as a deposit in a pass-through account at a correspondent institution. Reserve requirements currently are assessed on the depository institution's net transaction accounts (mostly checking accounts). Depository institutions must also regularly submit deposit reports of their deposits and other reservable liabilities.

For net transaction accounts in 2012, the first $11.5 million, up from $10.7 million in 2011, will be exempt from reserve requirements. A 3 percent reserve ratio will be assessed on net transaction accounts over $11.5 million up to and including $71.0 million, up from $58.8 million in 2011. A 10 percent reserve ratio will be assessed on net transaction accounts in excess of $71.0 million.

These annual adjustments, known as the low reserve tranche adjustment and the reserve requirement exemption amount adjustment, are based on growth in net transaction accounts and total reservable liabilities, respectively, at all depository institutions between June 30, 2010 and June 30, 2011.

For depository institutions that report weekly, the low reserve tranche adjustment and the reserve requirement exemption amount adjustment will apply to the 14-day reserve computation period that begins Tuesday, November 29, 2011, and the corresponding 14-day reserve maintenance period that begins Thursday, December 29, 2011.

For depository institutions that report quarterly, the low reserve tranche adjustment and the reserve requirement exemption amount adjustment will apply to the seven-day reserve computation period that begins Tuesday, December 20, 2011, and the corresponding seven-day reserve maintenance period that begins Thursday, January 19, 2012.

The Board also announced changes in two other amounts, the nonexempt deposit cutoff level and the reduced reporting limit, that are used to determine the frequency with which depository institutions must submit deposit reports. The attached Federal Register notice contains a description of the new boundaries for deposit reporting that will be effective in 2012.

The Board's notice is attached.

For media inquiries, call 202-452-2955.

Attachment (134 KB PDF) Off-site


October 17, 2011
Federal Reserve Board Approves Final Rule Implementing the Resolution Plan Requirement of the Dodd-Frank Act

The Federal Reserve Board on Monday announced the approval of a final rule to implement the resolution plan requirement in the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The final rule requires bank holding companies with assets of $50 billion or more and nonbank financial firms designated by the Financial Stability Oversight Council for supervision by the Board to annually submit resolution plans to the Board and the Federal Deposit Insurance Corporation.

Each plan will describe the company's strategy for rapid and orderly resolution in bankruptcy during times of financial distress. A resolution plan must include a strategic analysis of the plan's components, a description of the range of specific actions the company proposes to take in resolution, and a description of the company's organizational structure, material entities, interconnections and interdependencies, and management information systems.

Under the final rule, companies will submit their initial resolution plans on a staggered basis. The first group of companies, generally those with $250 billion or more in non-bank assets, must submit their initial plans on or before July 1, 2012; the second group, generally those with $100 billion or more, but less than $250 billion, in total non-bank assets, must submit their initial plans on or before July 1, 2013; and the remaining companies, generally those subject to the rule with less than $100 billion in total non-bank assets, must submit their initial plans on or before December 31, 2013.
Press Release off-site image


October 14, 2011
Agencies Issue Guidance and Proposed Revisions to Interagency Questions and Answers Regarding Flood Insurance

The federal agencies that supervise banks, thrifts, and credit unions, and the Farm Credit System, today published guidance that updates the Interagency Questions and Answers Regarding Flood Insurance that were most recently published on July 21, 2009 at 74 FR 35914-35947.

The guidance finalizes two questions and answers that had been previously proposed. The first relates to insurable value. The second relates to force placement of flood insurance. The agencies withdrew another question regarding insurable value.

The agencies request comment on three additional proposed updates to questions and answers relating to force placement of flood insurance. Two answers have been significantly and substantively changed. The third change, regarding force placement of flood insurance, revises a previously finalized Question and Answer for consistency with the proposed changes.

It is the intention of the agencies that, after public comment has been received and considered and the guidance has been adopted in final form, the agencies will issue a final update to the 2009 Interagency Questions and Answers Regarding Flood Insurance. The final update will continue to supplement other guidance or interpretations issued by the agencies and the Federal Emergency Management Agency.

The agencies invite comment on the proposed changes to the Interagency Questions and Answers Regarding Flood Insurance and, more generally, on other issues and concerns regarding compliance with the federal flood insurance statutes and regulations. Comments are due 45 days after publication in the Federal Register, which is expected shortly.
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October 12, 2011
Minutes of the Federal Open Market Committee, September 20-21, 2011

The Federal Reserve Board and the Federal Open Market Committee (FOMC) on Wednesday released the attached minutes of the Committee meeting held on September 20-21, 2011.

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.

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

Minutes of the Federal Open Market Committee
September 20-21, 2011: PDF | HTML off-site image


October 11, 2011
Federal Reserve Board Seeks Comment on Proposed Rules Intended to Simplify the Administration of Reserve Requirements

The Federal Reserve Board on Tuesday requested comment on proposed rules intended to simplify the administration of reserve requirements and reduce administrative and operational costs for both depository institutions and Reserve Banks. The proposals do not affect the stance of monetary policy.

The proposed simplifications to Regulation D (Reserve Requirements of Depository Institutions) are:

  • creating a common two-week maintenance period for all depository institutions
  • creating a penalty-free band around reserve balance requirements in place of using carryover and routine penalty waivers
  • discontinuing as-of adjustments related to deposit revisions and replacing all other as-of adjustments with direct compensation
  • and eliminating the contractual clearing balance program

In connection with the proposed elimination of the contractual clearing balance program, the Board is requesting comment on several issues related to the methodology used for the Private Sector Adjustment Factor that is part of the pricing of Federal Reserve Bank services.

Proposed amendments to Regulation J (Collection of Checks and Other Items by Federal Reserve Banks and Funds Transfers through Fedwire) would eliminate references in Regulation J to "as-of adjustments," consistent with the proposed amendments to Regulation D, and make clarifications about the handling of checks and funds transfers sent to the Federal Reserve Banks.

Comments on the proposal must be submitted within 60 days from the date of publication in the Federal Register, which is expected shortly.
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October 11, 2011
Federal Reserve Board Seeks Comment on Proposal to Implement "Volcker Rule" Requirements of the Dodd-Frank Act

The Federal Reserve Board on Tuesday requested public comment on a proposed regulation implementing the so-called "Volcker Rule" requirements of section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 619 generally contains two prohibitions. First, it prohibits insured depository institutions, bank holding companies, and their subsidiaries or affiliates (banking entities) from engaging in short-term proprietary trading of any security, derivative, and certain other financial instruments for a banking entity's own account, subject to certain exemptions. Second, it prohibits owning, sponsoring, or having certain relationships with, a hedge fund or private equity fund, subject to certain exemptions.

The act also prohibits banking entities from engaging in an exempted transaction or activity if it would involve or result in a material conflict of interest between the banking entity and its clients, customers, or counterparties, or that would result in a material exposure to high-risk assets or trading strategies, in each case as defined by the rule. The act similarly prohibits banking entities from engaging in an exempted transaction or activity if it would pose a threat to the safety and soundness of the banking entity or to the financial stability of the United States.

The proposal, which was developed jointly with the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, clarifies the scope of the act's prohibitions and, consistent with statutory authority, provides certain exemptions to these prohibitions. It is anticipated these agencies will issue a comparable proposal today or in the near future.

Transactions in certain instruments, including obligations of the U.S. government or a U.S. government agency, the government-sponsored enterprises, and state and local governments, are exempt from the statute's prohibitions. Consistent with the statute, other activities exempted include market making, underwriting, and risk-mitigating hedging. The statute also permits banking entities to organize, offer, and invest in a hedge fund or private equity fund subject to a number of conditions.

The proposed rule would require banking entities that engage in these activities to establish an internal compliance program that is designed to ensure and monitor compliance with the statute's prohibitions and restrictions, and implementing regulations. The proposed rule provides commentary intended to assist banking entities in distinguishing permitted market making-related activities from prohibited proprietary trading activities.

The proposal also requires banking entities with significant trading operations to report to the appropriate federal supervisory agency certain quantitative measurements designed to assist the federal supervisory agencies and banking entities in identifying prohibited proprietary trading in the context of certain exempt activities and identifying high-risk assets or trading strategies. It also includes a number of elements intended to reduce the burden of the proposal on smaller, less-complex banking entities. For example, the proposal limits the extent to which smaller banking entities are required to report quantitative measurements.

Comments on the proposal will be received through January 13, 2012.
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September 21, 2011
Federal Reserve Issues FOMC Statement

Information received since the Federal Open Market Committee met in August indicates that economic growth remains slow. Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Household spending has been increasing at only a modest pace in recent months despite some recovery in sales of motor vehicles as supply-chain disruptions eased. Investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect some pickup in the pace of recovery over coming quarters but anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Moreover, there are significant downside risks to the economic outlook, including strains in global financial markets. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate further. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to extend the average maturity of its holdings of securities. The Committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less. This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

To help support conditions in mortgage markets, the Committee will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Committee will maintain its existing policy of rolling over maturing Treasury securities at auction.

The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.

The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action were Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who did not support additional policy accommodation at this time.


September 20, 2011
Federal Reserve Board Issues Final Rule Under Regulation B Regarding Data Collection Compliance Requirements for Motor Vehicle Dealers

The Federal Reserve Board on Tuesday issued a final rule amending Regulation B to provide that motor vehicle dealers are not required to comply with new data collection requirements in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) until the Board issues final regulations to implement the statutory requirements.

The Dodd-Frank Act amended the Equal Credit Opportunity Act to require creditors to collect information about credit applications made by women- or minority-owned businesses and by small businesses. The Consumer Financial Protection Bureau (CFPB) must implement this provision for all creditors except certain motor vehicle dealers who are subject to the Board's jurisdiction. The CFPB previously announced that creditors are not obligated to comply with the data collection requirements until the CFPB issues detailed rules to implement the law. The Board is amending Regulation B to apply the same approach to motor vehicle dealers.

The final rule will take effect upon publication in the Federal Register, which is expected shortly. The Board's notice is attached.
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September 20, 2011
Federal Reserve Announces Results of Auction of $5 Billion in 28-day Term Deposits Held on September 19, 2011

On September 19, 2011, the Federal Reserve conducted an auction of $5 billion in 28-day term deposits through its Term Deposit Facility.Following are the results of the auction:

TDF Auction ID: A20
Competitive Amount Offered: $5,000,000,000
Competitive Amount Tendered: $12,057,990,000
Competitive Amount Awarded: $5,000,000,000
Non-Competitive Amount Awarded: $77,050,000
Total Amount Awarded: $5,077,050,000
Stop-Out Rate: 0.26500 percent
Bid-to-Cover Ratio (Competitive Auction): 2.41
Number of Bids Submitted: 62
Number of Participants Submitting Bids: 43

Bids at the stop-out rate were pro-rated at 17.50 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 September 22, 2011, and will mature on October 20, 2011. The stop-out rate shown above will apply to all awarded deposits.


September 14, 2011
Federal Reserve Offers $5 Billion in 28-day Term Deposits through Its Term Deposit Facility

On Monday, September 19, 2011, the Federal Reserve will offer $5 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

TDF Auction ID: A20
Offering Amount: $5,000,000,000
Term: 28 days
Auction Date: Monday, September 19, 2011
Opening Time: 10:00 a.m. ET
Closing Time: 2:00 p.m. ET
Notification Date: Tuesday, September 20, 2011
Settlement Date: Thursday, September 22, 2011
Maturity Date: Thursday, October 20, 2011
Competitive Auction Parameters
Maximum Number of Bids: 3
Minimum Bid Amount (per bid): $10,000
Bid Increment: $10,000
Maximum Bid Amount (per institution): $1,250,000,000
Maximum Bid Rate: 0.75000%
Incremental Bid Rate: 0.00100%
Award Minimum Amount: $10,000
Award Maximum Amount: $1,250,000,000

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.


August 31, 2011
Federal Reserve Board Seeks Comment on Proposal Outlining Procedures For Securities Holding Companies to Elect to be Supervised by the Federal Reserve

The Federal Reserve Board is seeking comment on a proposed rule outlining the procedures for securities holding companies (SHCs) to elect to be supervised by the Federal Reserve. An SHC is a nonbank company that owns at least one registered broker or dealer.

The Dodd-Frank Wall Street Reform and Consumer Protection Act eliminated the previous securities holding company supervision framework under the Securities and Exchange Commission and permitted SHCs to be supervised by the Federal Reserve. An SHC may seek supervision by the Federal Reserve to meet requirements by a regulator in another country that the firm be subject to comprehensive, consolidated supervision in the United States in order to operate in the country.

The proposal specifies the information that an SHC will need to provide to the Board as part of registration for supervision, including information related to organizational structure, capital, and financial condition. An SHC's registration would generally become effective 45 days after the Board receives all required information.

The proposal provides that upon an effective registration, an SHC would be supervised and regulated as if it were a bank holding company. Consistent with the Dodd-Frank Act, the restrictions on nonbanking activities in the Bank Holding Company Act would not apply to a supervised SHC.

The Board will accept comments on the proposal through October 11, 2011.

For media inquiries, call 202-452-2955.

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August 25, 2011
Credit Quality of Large Loan Commitments Improves for Second Consecutive Year

The credit quality of large loan commitments owned by U.S. banking organizations, foreign banking organizations (FBOs), and nonbanks improved in 2011 for the second consecutive year, according to the Shared National Credits (SNC) Review for 2011. A loan commitment is the obligation of a lender to make loans or issue letters of credit pursuant to a formal loan agreement.

Total criticized loans declined more than 28 percent to $321 billion in 2011, although the percentage of criticized assets remained high compared to pre-financial crisis levels. A criticized loan is rated special mention, substandard, doubtful, or loss. Loans rated as doubtful or loss--the two weakest categories--fell 50 percent to $24 billion in 2011.

Reasons for improvement in credit quality included better operating performance among borrowers, debt restructurings, bankruptcy resolutions, and ongoing access to bond and equity markets. Industries that led the improvement in credit quality were real estate and construction, media and telecommunications, and finance and insurance.

Despite this progress, poorly underwritten loans originated in 2006 and 2007 continued to adversely affect the SNC portfolio. Approximately 60 percent of criticized assets were originated in these years. Refinancing risk remained elevated as nearly $2 trillion, or 78 percent of the SNC portfolio, matures by the end of 2014. Of this maturing amount, $204 billion was criticized.

Although nonbank entities, such as securitization pools, hedge funds, insurance companies, and pension funds, owned the smallest share of loan commitments, they owned the largest share (58 percent) of classified credits (rated substandard, doubtful, or loss).

In other highlights of the review:

  • Total SNC commitments increased less than 1 percent from the 2010 review. Total SNC loans outstanding fell $93 billion to $1.1 trillion, a decline of 8 percent.
  • Criticized assets represented 13 percent of the SNC portfolio, compared with 18 percent in 2010.
  • Classified assets declined 30 percent to $215 billion in 2011 and represented 9 percent of the portfolio, compared with 12 percent in 2010.
  • Credits rated special mention, which exhibited potential weakness and could result in further deterioration if uncorrected, declined 25 percent to $106 billion in 2011 and represented 4 percent of the portfolio, compared with 6 percent in 2010.
  • Nonaccruals declined to $101 billion from $151 billion. Adjusted for losses, nonaccrual loans declined to $92 billion from $137 billion, a 33 percent reduction.
  • The distribution of credits across entities--U.S. banking organizations, FBOs, and nonbanks--remained relatively unchanged. U.S. banking organizations owned 42 percent of total SNC loan commitments, FBOs owned 38 percent, and nonbanks owned 20 percent. The share owned by nonbanks declined for the first time since 2001. Nonbanks continued to own a larger share of classified (58 percent) and nonaccrual (60 percent) assets compared with their total share of the SNC portfolio. Institutions insured by the Federal Deposit Insurance Corporation owned only 17 percent of classified assets and 15 percent of nonaccrual loans.
  • The media and telecommunications industry group led other industry groups in criticized volume with $70 billion. Finance and insurance followed with $37 billion, then real estate and construction with $35 billion. Although these groups had the largest dollar volume of criticized loans, the three groups with the highest percentage of criticized loans were entertainment and recreation, media and telecommunications, and commercial services.
  • The 2011 review indicated that the number of credits originated in 2010 rose dramatically compared to 2009 and 2008. Although the overall quality of underwriting in 2010 was significantly better than in 2007, some easing of standards was noted compared to the relatively tighter standards in 2009 and the latter half of 2008.

Federal banking agencies expect banks and thrifts to underwrite syndicated loans using prudential underwriting standards, regardless of the intent to hold or sell the loans. Poorly underwritten syndicated loan transactions are subject to regulatory criticism.

The SNC program was established in 1977 to provide an efficient and consistent review and analysis of SNCs. A SNC is any loan or formal loan commitment, and any asset such as real estate, stocks, notes, bonds, and debentures taken as debts previously contracted, extended to borrowers by a federally supervised institution, its subsidiaries, and affiliates that aggregates to $20 million or more and is shared by three or more unaffiliated supervised institutions. Many of these loan commitments are also shared with FBOs and nonbanks, including securitization pools, hedge funds, insurance companies, and pension funds.

In conducting the 2011 SNC Review, agencies reviewed $910 billion of the $2.5 trillion credit commitments in the portfolio. The sample was weighted toward non-investment grade and criticized credits. The results of the review are based on analyses prepared in the second quarter of 2011 using credit-related data provided by federally supervised institutions as of December 31, 2010, and March 31, 2011.
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August 22, 2011
Federal Reserve Board Proposes Phase-in Period for Most Savings and Loan Holding Companies to File Regulatory Reports

The Federal Reserve Board is proposing a two-year phase-in period for most savings and loan holding companies (SLHCs) to file Federal Reserve regulatory reports with the Board and an exemption for some SLHCs from initially filing Federal Reserve regulatory reports.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, supervisory and rulemaking authority for SLHCs and their nondepository subsidiaries transferred from the Office of Thrift Supervision (OTS) to the Board on July 21, 2011. On February 3, 2011, the Federal Reserve Board sought comment on its notice of intent to require SLHCs to submit the same reports as bank holding companies, beginning with the March 31, 2012, reporting period.

After consideration of the comments received on the notice of intent, the Federal Reserve Board proposes to exempt a limited number of SLHCs from initial regulatory reporting using the Federal Reserve's existing regulatory reports and a two-year phase-in period for regulatory reporting for all other SLHCs. Exempt SLHCs would continue to submit Schedule HC, which is currently a part of the Thrift Financial Report, and the OTS H-(b)11 Annual/Current Report.

The Federal Reserve Board will accept comments on the proposal through November 1, 2011.
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August 12, 2011
Board Issues Interim Final Rule Establishing Regulations for Savings and Loan Holding Companies

The Federal Reserve Board on Friday issued an interim final rule establishing regulations for savings and loan holding companies (SLHCs). The rule will take effect once it is published in the Federal Register, which is expected soon.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, supervisory and rulemaking authority for SLHCs and their nondepository subsidiaries transferred from the Office of Thrift Supervision (OTS) to the Board on July 21, 2011. Last month, the Board sought comment on a notice identifying regulations previously issued by the OTS that the Federal Reserve will continue to enforce. The interim final rule issued Friday implements the transfer of those regulations from the OTS to the Board.

The Board on Friday also issued an Order delegating to staff and to the Reserve Banks the authority to take certain actions with respect to SLHCs.

The Board will accept comments on the interim final rule through October 27, 2011.
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August 09, 2011
FOMC Statement

Information received since the Federal Open Market Committee met in June indicates that economic growth so far this year has been considerably slower than the Committee had expected. Indicators suggest a deterioration in overall labor market conditions in recent months, and the unemployment rate has moved up. Household spending has flattened out, investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Temporary factors, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan, appear to account for only some of the recent weakness in economic activity. Inflation picked up earlier in the year, mainly reflecting higher prices for some commodities and imported goods, as well as the supply chain disruptions. More recently, inflation has moderated as prices of energy and some commodities have declined from their earlier peaks. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee now expects a somewhat slower pace of recovery over coming quarters than it did at the time of the previous meeting and anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Moreover, downside risks to the economic outlook have increased. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate further. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent. The Committee currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ these tools as appropriate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.

Voting against the action were: Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who would have preferred to continue to describe economic conditions as likely to warrant exceptionally low levels for the federal funds rate for an extended period.


July 28, 2011
Federal Reserve Seeks Comment on Proposal Setting Standards for Banking Organizations Engaging in Certain Types of Foreign Exchange Transactions

The Federal Reserve Board is seeking comment on a proposal that sets standards for banking organizations regulated by the Federal Reserve that engage in certain types of foreign exchange transactions with retail customers.

The proposal, issued pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, outlines requirements for disclosure, recordkeeping, business conduct, and documentation for retail foreign exchange transactions. Institutions engaging in such transactions will be required to identify themselves to their regulator 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 off-exchange futures and options on futures, over-the-counter options on foreign currency, and so-called rolling spot transactions. The proposal does not include regular spot transactions, listed options on foreign currency, and foreign currency forwards and swaps. The proposal would cover entities regulated by the Federal Reserve including state member banks, bank and financial 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. The agencies have engaged in separate rulemakings as specified by Dodd-Frank.

The Federal Reserve requests comments on the proposal, which will be published soon in the Federal Register, by October 11, 2011.
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July 26, 2011
Federal Reserve Announces Results of Auction of $5 Billion in 28-day Term Deposits Held on July 25, 2011

On July 25, 2011, the Federal Reserve conducted an auction of $5 billion in 28-day term deposits through its Term Deposit Facility. Following are the results of the auction:

TDF Auction ID: A19
Competitive Amount Offered: $5,000,000,000
Competitive Amount Tendered: $6,324,000,000
Competitive Amount Awarded: $5,000,000,000
Non-Competitive Amount Awarded: $87,800,000
Total Amount Awarded: $5,087,800,000
Stop-Out Rate: 0.28000 percent
Bid-to-Cover Ratio (Competitive Auction): 1.26
Number of Bids Submitted: 54
Number of Participants Submitting Bids: 37

Bids at the stop-out rate were pro-rated at 42.57 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 July 28, 2011, and will mature on August 25, 2011. The stop-out rate shown above will apply to all awarded deposits.
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July 21, 2011
Federal Reserve Seeks Comment on Notice Outlining Regulations Previously Issued By the Office of Thrift Supervision

The Federal Reserve Board is seeking comment on a notice that outlines the regulations previously issued by the Office of Thrift Supervision (OTS) that the Federal Reserve will continue to enforce after assuming supervisory responsibility for savings and loan holding companies (SLHCs).

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, supervisory and rule-writing authority for SLHCs and their non-depository subsidiaries will transfer from the OTS to the Board on July 21, 2011. The Board requests comments on the notice by August 31, 2011.

The Board intends to issue an interim final rule soon that will include technical, nomenclature, and other changes to certain OTS regulations to accommodate the transfer of supervisory authority to the Board and to address modifications made by the Dodd-Frank Act.

For media inquiries, call 202-452-2955.

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July 20, 2011
Federal Reserve Offers $5 Billion in 28-day Term Deposits through Its Term Deposit Facility

On Monday, July 25, 2011, the Federal Reserve will offer $5 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

TDF Auction ID:        A19
Offering Amount: $5,000,000,000
Term:   28 days
Auction Date: Monday, July 25, 2011
Opening Time: 10:00 a.m. ET
Closing Time: 2:00 p.m. ET
Notification Date: Tuesday, July 26, 2011
Settlement Date: Thursday, July 28, 2011
Maturity Date: Thursday, August 25, 2011
   
Competitive Auction Parameters  
Maximum Number of Bids: 3
Minimum Bid Amount (per bid): $10,000
Bid Increment: $10,000
Maximum Bid Amount (per institution): $1,250,000,000          
Maximum Bid Rate:   0.75000%
Incremental Bid Rate: 0.00100%
Award Minimum Amount: $10,000
Award Maximum Amount:    $1,250,000,000

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.

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July 14, 2011
Federal Reserve Issues Final Rule to Repeal Regulation Q, which Prohibited the Payment of Interest on Demand Deposits

The Federal Reserve Board on Thursday announced the approval of a final rule to repeal its Regulation Q, which prohibits the payment of interest on demand deposits by institutions that are member banks of the Federal Reserve System.

The final rule implements Section 627 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which repeals Section 19(i) of the Federal Reserve Act in its entirety effective July 21, 2011. The repeal of that section of the Federal Reserve Act on that date eliminates the statutory authority under which the Board established Regulation Q.

The rule also repeals the Board's published interpretation of Regulation Q and removes references to Regulation Q found in the Board's other regulations, interpretations, and commentary.

The Board's notice for the final rule is attached.

For media inquiries, call 202-452-2955.

Attachment (288 KB PDF)PDF icon offsite icon


July 12, 2011
Federal Reserve Releases Lists of Institutions Subject to, and Exempt from, the Debit Card Interchange Fee Standards

The Federal Reserve Board on Tuesday published lists of institutions that are subject to, and exempt from, the debit card interchange fee standards in Regulation II, which implements provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. These lists, available at www.federalreserve.gov/paymentsystems/debitfees.htm, are intended to help payment card networks and others determine which issuers qualify for the statutory exemption from interchange fee standards. The statute exempts any debit card issuer that, together with its affiliates, has assets of less than $10 billion.

The interchange fee standards become effective on October 1, 2011. The Board plans to update the lists annually.
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July 12, 2011
Minutes of the Federal Open Market Committee, June 21-22, 2011

The Federal Reserve Board and the Federal Open Market Committee on Tuesday released the attached minutes of the Committee meeting held on June 21–22, 2011. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the June 21–22, 2011 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 an approximately 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. offsite icon

Minutes of the Federal Open Market Committee
June 21-22, 2011: HTMLoffsite icon | PDF (365 KB) PDF icon offsite icon


July 07, 2011
Federal Reserve Releases Report on College Credit Card Agreements

The Federal Reserve Board on Thursday released a report that contains 2010 payment and account information about more than 1,000 agreements between institutions of higher education or affiliated organizations and credit card issuers. The Board also updated an online database that includes the full text of each agreement that was in effect during 2010.

The Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act) requires issuers to submit to the Board annually their agreements with educational institutions or affiliated organizations, such as alumni associations. For each agreement, issuers are also required to submit information regarding payments made to the institution or organization and the number of accounts opened under the agreement.

An online database, www.FederalReserve.gov/CollegeCreditCardAgreements, provides the complete text of each agreement and the payment and accounts information submitted by issuers. Users may also search for agreements by card issuer, by educational institution or organization, or by the city or state in which the institution or organization is located.
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July 06, 2011
Federal Reserve and FTC Issue Final Rules to Implement the Credit Score Disclosure Requirements of the Dodd-Frank Act

The Federal Reserve Board (Board) and the Federal Trade Commission (FTC) on Wednesday issued final rules to implement the credit score disclosure requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. If a credit score is used in setting material terms of credit or in taking adverse action, the statute requires creditors to disclose credit scores and related information to consumers in notices under the Fair Credit Reporting Act (FCRA).

The final rules amend Regulation V (Fair Credit Reporting) to revise the content requirements for risk-based pricing notices, and to add related model forms that reflect the new credit score disclosure requirements. The Board is issuing these final rules jointly with the FTC.

The final rules also amend certain model notices in Regulation B (Equal Credit Opportunity), which combine the adverse action notice requirements for Regulation B and the FCRA, to reflect the new credit score disclosure requirements

The rules under Regulations V and B are effective 30 days after the date of publication in the Federal Register, which is expected soon.
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June 30, 2011
Banking Agencies Issue Host State Loan-to-Deposit Ratios

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency today issued the host state loan-to-deposit ratios that the banking agencies will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. These ratios update data released on June 24, 2010.

In general, section 109 prohibits a bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production. Section 109 also prohibits branches of banks controlled by out-of-state bank holding companies from operating primarily for the purpose of deposit production.

Section 109 provides a process to test compliance with the statutory requirements. The first step in the process involves a loan-to-deposit ratio screen that compares a bank's statewide loan-to-deposit ratio to the host state loan-to-deposit ratio for banks in a particular state.

A second step is conducted if a bank's statewide loan-to-deposit ratio is less than one-half of the published ratio for that state or if data are not available at the bank to conduct the first step. The second step requires the appropriate banking agency to determine whether the bank is reasonably helping to meet the credit needs of the communities served by the bank's interstate branches.

A bank that fails both steps is in violation of section 109 and is subject to sanctions by the appropriate banking agency.

The updated host state loan-to-deposit ratios are attached.

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June 30, 2011
Mark Bialek Appointed Inspector General of the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection, Effective July 25

Mark Bialek has been appointed inspector general of the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection, effective July 25. He will lead the Office of Inspector General staff in promoting the economy, efficiency, and effectiveness of the Board's and Bureau's programs and operations and in preventing and detecting waste, fraud, and abuse.

Bialek succeeds Elizabeth A. Coleman, who retired on May 2 after nearly 22 years of service at the Board, four as inspector general. Bialek has more than 30 years of experience in the inspector general community. Most recently, he served as deputy inspector general of the Environmental Protection Agency (EPA). He also served as the acting deputy inspector general, the associate deputy inspector general, and counsel to the inspector general of the EPA.

The Office of Inspector General was established by the Congress as an independent oversight authority within the Board. In addition, the Dodd-Frank Wall Street Reform and Consumer Protection Act designated the office as the oversight authority for the Bureau, a rulemaking and enforcement agency financed by, but autonomous from, the Federal Reserve.

Prior to joining the EPA, Bialek served for 12 years as deputy counsel to the inspector general of the Department of State and for eight years as associate counsel to the inspector general of the Department of Commerce. He holds a J.D. from the Antioch School of Law in Washington, D.C., and a B.S. from Suffolk University in Boston, Mass.
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June 30, 2011
Federal Reserve Issues a Final Rule Establishing Standards for Debit Card Interchange Fees and Prohibiting Network Exclusivity Arrangements and Routing Restrictions

The Federal Reserve Board on Wednesday issued a final rule establishing standards for debit card interchange fees and prohibiting network exclusivity arrangements and routing restrictions. This rule, Regulation II (Debit Card Interchange Fees and Routing), is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Debit card interchange fees are established by payment card networks and ultimately paid by merchants to debit card issuers for each electronic debit transaction. As required by the statute, the final rule establishes standards for assessing whether debit card interchange fees received by debit card issuers are reasonable and proportional to the costs incurred by issuers for electronic debit transactions. Under the final rule, the maximum permissible interchange fee that an issuer may receive for an electronic debit transaction will be the sum of 21 cents per transaction and 5 basis points multiplied by the value of the transaction. This provision regarding debit card interchange fees is effective on October 1, 2011.

The Board also approved on Wednesday an interim final rule that allows for an upward adjustment of no more than 1 cent to an issuer's debit card interchange fee if the issuer develops and implements policies and procedures reasonably designed to achieve the fraud-prevention standards set out in the interim final rule. If an issuer meets these standards and wishes to receive the adjustment, it must certify its eligibility to receive the adjustment to the payment card networks in which it participates. Comments on the interim final rule are due by September 30, 2011. The fraud-prevention adjustment is effective on October 1, 2011, concurrent with the debit card interchange fee limits. The Board will re-evaluate this adjustment in light of feedback received during this comment period.

When combined with the maximum permissible interchange fee under the interchange fee standards, a covered issuer eligible for the fraud-prevention adjustment could receive an interchange fee of up to approximately 24 cents for the average debit card transaction, which is valued at $38.

In accordance with the statute, issuers that, together with their affiliates, have assets of less than $10 billion are exempt from the debit card interchange fee standards. To assist payment card networks in determining which of the issuers are subject to the debit card interchange fee standards, the Board plans to publish by mid-July and annually thereafter lists of institutions that are above and below the small issuer exemption asset threshold. Also, the Board plans to annually survey the networks and publish a list of the average interchange transaction fees each network provides to its covered and exempt issuers. This information should enable issuers, including small issuers, to more readily compare the interchange revenue they would receive from each network.

The final rule prohibits all issuers and networks from restricting the number of networks over which electronic debit transactions may be processed to less than two unaffiliated networks. The effective date for the network exclusivity prohibition is April 1, 2012, with respect to issuers, and October 1, 2011, with respect to payment card networks. Issuers of certain health-related and other benefit cards and general-use prepaid cards have a delayed effective date of April 1, 2013, or later in certain circumstances.

Issuers and networks are also prohibited from inhibiting a merchant's ability to direct the routing of the electronic debit transaction over any network that the issuer has enabled to process them. The merchant routing provisions are effective on October 1, 2011.
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June 29, 2011
Federal Reserve and Other Central Banks Announce Extension of Existing Temporary U.S. Dollar Liquidity Swap Arrangements through August 1, 2012

The Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank today announced an extension of the existing temporary U.S. dollar liquidity swap arrangements through August 1, 2012. The Bank of Japan will consider the extension at its next Monetary Policy Meeting. The swap arrangements, established in May 2010, had been authorized through August 1, 2011.

Information on the actions taken by other central banks is available at the following websites:

Bank of Canada

Bank of England

European Central Bank

Swiss National Bank

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June 23, 2011
Agencies Extend Comment Period on Swap Margin and Capital Proposed Rulemaking

Five federal agencies have approved and will submit a Federal Register notice that extends the comment period on a proposed rule to establish margin and capital requirements for swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The comment period was extended to July 11, 2011, to allow interested persons more time to analyze the issues and prepare their comments. Originally, comments were due by June 24, 2011.

The proposal was issued by the Federal Reserve Board, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, and the Office of the Comptroller of the Currency.
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June 22, 2011
Federal Reserve Board and FOMC Release Economic Projections from the June 21-22 FOMC Meeting

The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached table and charts summarizing the economic projections made by Federal Reserve Board members and Federal Reserve Bank presidents for the June 21-22 meeting of the Committee.

The table will be incorporated into a summary of economic projections released with the minutes of the June 21-22 meeting. Summaries of economic projections are released on an approximately quarterly schedule.

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June 22, 2011
FOMC Statement

Information received since the Federal Open Market Committee met in Apri l indicates that the economic recovery is continuing at a moderate pace, though somewhat more slowly than the Committee had expected. Also, recent labor market indicators have been weaker than anticipated. The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Inflation has picked up in recent months, mainly reflecting higher prices for some commodities and imported goods, as well as the recent supply chain disruptions. However, longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The unemployment rate remains elevated; however, the Committee expects the pace of recovery to pick up over coming quarters and the unemployment rate to resume its gradual decline toward levels that the Committee judges to be consistent with its dual mandate. Inflation has moved up recently, but the Committee anticipates that inflation will subside to levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent. The Committee continues to anticipate that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee will complete its purchases of $600 billion of longer-term Treasury securities by the end of this month and will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

The Committee will monitor the economic outlook and financial developments and will act as needed to best foster maximum employment and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.


June 20, 2011
Federal Reserve Proposes Rules Under Regulation B to Clarify Data Collection Compliance Requirements for Motor Vehicle Dealers

The Federal Reserve Board on Monday issued a proposed rule under Regulation B to clarify that motor vehicle dealers temporarily are not required to comply with certain data collection requirements in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) until the Board issues final regulations to implement the statutory requirements. The Board believes that implementing rules are needed to ensure data are collected and reported in a consistent and standardized way.

The Dodd-Frank Act amended the Equal Credit Opportunity Act (ECOA) to require creditors to collect and report information concerning credit applications made by women- or minority-owned businesses and by small businesses. Although the Consumer Financial Protection Bureau (CFPB) generally will have the authority to issue rules to implement this provision of ECOA, the Board retains authority to issue rules for certain motor vehicle dealers. The CFPB previously announced that creditors are not obligated to comply with the data collection requirements until the CFPB issues detailed rules to implement the law. Consistent with the CFPB's determination, the Board is issuing a proposed rule to clarify that this approach also applies to motor vehicle dealers that are subject to the Board's jurisdiction.

Public comments on the proposed rules must be submitted by July 29, 2011.
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June 14, 2011
Agencies Adopt a Final Rule to Establish a Risk-Based Capital Floor

Three federal banking regulatory agencies adopted a final rule that establishes a floor for the risk-based capital requirements applicable to the largest, internationally active banking organizations. The rule, finalized by the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, is consistent with the requirements of Section 171 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

A banking organization operating under the agencies' advanced approaches risk-based capital rules is required to meet the higher of the minimum requirements under the general risk-based capital rules and the minimum requirements under the advanced approaches risk-based capital rules.

The rule also provides limited flexibility to establish appropriate capital requirements for certain low-risk exposures that, in general, are not held by insured depository institutions, but may be held by depository institution holding companies or nonbank financial companies supervised by the Federal Reserve Board.

The final rule will be effective 30 days after publication in the Federal Register; publication is expected soon.
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June 13, 2011
Annual Adjustment of Dollar Threshold for Exempt Consumer Credit and Lease Transactions

The Federal Reserve Board on Monday adjusted Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) by increasing the dollar threshold for exempt consumer credit and lease transactions. Transactions at or below the threshold are subject to the protections of the regulations. These adjustments reflect the annual percentage increase in the consumer price index that was in effect as of June 1, 2011. These annual adjustments are required by statute and will take effect on January 1, 2012.

Effective July 21, 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amends the Truth in Lending Act and the Consumer Leasing Act to expand consumer protections by increasing the thresholds for exempt consumer credit transactions and consumer leases from $25,000 to $50,000. In addition, the Dodd-Frank Act provides that, on or after December 31, 2011, these thresholds must be adjusted annually by any annual percentage increase in the consumer price index.

Based on the adjustments announced Monday, the protections of the Truth in Lending Act and the Consumer Leasing Act generally will apply to consumer credit transactions and consumer leases of $51,800 or less in 2012. However, private education loans and loans secured by real property (such as mortgages) are subject to TILA regardless of the amount of the loan.
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June 13, 2011
Federal Reserve Announces Adoption of Interim Final Rule Pertaining to Small Bank Holding Companies

The Federal Reserve Board on Monday announced the adoption of an interim final rule that allows small bank holding companies that are S-Corps or that are organized in mutual form to exclude subordinated debt issued to Treasury under the Small Business Lending Fund (SBLF) from treatment as "debt" for purposes of the debt-to-equity standard under the Board's Small Bank Holding Company Policy Statement.

The SBLF was authorized by the Small Business Jobs Act of 2010 and is administered by the Treasury Department.

The Board also announced its adoption of a final rule that allows bank holding companies that are S-Corps or that are organized in mutual form to include in Tier 1 capital all subordinated debt issued to Treasury under the Troubled Asset Relief Program (TARP), subject to certain limits. The final rule also allows small bank holding companies that are S-Corps or that are organized in mutual form to exclude subordinated debt issued to Treasury under TARP from treatment as "debt" for purposes of the debt-to-equity standard. This rule makes final the interim final rule that the Board adopted in June 2009.

The final rule and the interim final rule will be effective once they are published in the Federal Register, which is expected soon. The Board is, however, seeking public comment on the interim rule. Comments must be submitted by July 30, 2011.
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June 13, 2011
Annual Adjustment of Fee-based Trigger for Additional Mortgage Loan Disclosures

The Federal Reserve Board on Monday published its annual adjustment to the amount of fees that triggers additional disclosure requirements under the Truth in Lending Act and the Home Ownership and Equity Protection Act of 1994 for home mortgage loans that bear rates or fees above a certain amount.

The dollar amount of the fee-based trigger has been adjusted to $611 for 2012 based on the annual percentage change reflected in the consumer price index that was in effect as of June 1, 2011.

The adjustment is required by statute and is effective January 1, 2012. The adjustment does not affect the rules for "higher-priced mortgage loans" adopted by the Board in July 2008. Coverage of mortgage loans under the July 2008 rules is determined using a different rate-based trigger.

The Home Ownership and Equity Protection Act restricts credit terms such as balloon payments and requires additional disclosures when total points and fees payable by the consumer exceed the fee-based trigger or 8 percent of the total loan amount, whichever is larger.
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June 10, 2011
Federal Reserve Seeks Comment on Annual Capital Plan Reviews

The Federal Reserve Board is seeking comment on a proposal to require top-tier U.S. bank holding companies with total consolidated assets of $50 billion or greater to submit annual capital plans for review.

The aim of the capital plan review, which builds on the Comprehensive Capital Analysis and Review (CCAR) conducted earlier this year, is to ensure that institutions have robust, forward-looking capital planning processes that account for their unique risks and that permit continued operations during times of economic and financial stress. Institutions would be expected to have credible plans to have sufficient capital so that they can continue to lend to households and businesses, even under adverse conditions. Boards of directors of the institutions would be required each year to review and approve capital plans before submitting them to the Federal Reserve.

The Federal Reserve would evaluate institutions' plans to make capital distributions, such as increasing dividend payments or repurchasing or redeeming stock, as part of the capital plan reviews. In some cases, such as when institutions' capital plans have been rejected by the Federal Reserve, firms would be required to receive approval from the Federal Reserve before making capital distributions.

The proposal would institutionalize the recently completed CCAR exercise. The CCAR involved a forward-looking analysis of the capital plans at the 19 largest U.S. bank holding companies. The CCAR followed the Supervisory Capital Assessment Program (SCAP), a standardized stress test led by the Federal Reserve in 2009.

As of March 31, the most recent available data, 35 U.S. bank holding companies had assets of at least $50 billion. According to the proposal, the level of detail and analysis expected in each institution's capital plan would vary based on the company's size, complexity, risk profile, and scope of operations. The Federal Reserve plans to finalize the proposal later this year and to begin the annual capital plan reviews in early 2012.

The proposed capital plans would complement a number of components of the Dodd-Frank Wall Street Reform and Consumer Protection Act, including the development of enhanced prudential standards for large firms and required stress tests. As the Federal Reserve implements the Dodd-Frank Act, it is expected that the company-run Dodd-Frank stress tests will serve as one component of institutions' capital plans.

The Federal Reserve requests comments on the capital plan review proposal, which will be published soon in the Federal Register, by August 5, 2011.
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June 09, 2011
Agencies Seek Comment on Stress Testing Guidance

The Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation are seeking comment on proposed supervisory guidance regarding stress-testing practices at banking organizations with total consolidated assets of more than $10 billion.

The agencies are issuing the proposed guidance to emphasize the importance of stress testing in equipping banking organizations to assess the risks they face and address a range of potential adverse outcomes. The recent financial crisis underscored the need for banking organizations to conduct stress tests to help prepare for events and circumstances that can threaten their financial condition and viability.

Building on previously issued supervisory guidance that discusses the uses and merits of stress testing in specific areas of risk management, the proposed guidance provides an overview of how an organization should develop a structure for stress testing. The guidance outlines general principles for a satisfactory stress testing framework and describes how stress testing should be used at various levels within an organization. The guidance also discusses the importance of stress testing in capital and liquidity planning, and the importance of strong internal governance and controls in an effective stress-testing framework.

While the guidance does not explicitly address the stress testing requirements outlined in the Dodd-Frank Wall Street Reform and Consumer Protection Act, the agencies anticipate that rulemakings implementing these requirements would be consistent with the principles in the proposed guidance. The agencies also expect the guidance to be consistent with other supervisory initiatives, including those related to capital and liquidity planning. The agencies believe that it is important to establish the principles of stress testing as a background for these future rulemaking activities and supervisory initiatives.

The agencies request comment on the proposed supervisory guidance, which is expected to be published soon in the Federal Register, by July 29. The agencies will consider carefully feedback from commenters when making changes to the proposed guidance.
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June 07, 2011
Agencies Extend Comment Period on Risk Retention Proposed Rulemaking

Six federal agencies have approved and will submit a Federal Register notice that extends the comment period on the proposed rules to implement the credit risk retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The comment period was extended to August 1, 2011, to allow interested persons more time to analyze the issues and prepare their comments. Originally, comments were due by June 10, 2011.

The proposed rule generally would require sponsors of asset-backed securities to retain at least 5 percent of the credit risk of the assets underlying the securities and would not permit sponsors to transfer or hedge that credit risk. The proposal was issued by the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Federal Housing Finance Agency, and the Department of Housing and Urban Development.

Media Contacts:

Federal Reserve Barbara Hagenbaugh (202) 452-2955
FDIC David Barr (202) 898-6992
FHFA Stefanie Johnson (202) 414-6376
HUD Melanie N. Roussell (202) 708-0980
OCC Dean DeBuck (202) 874-5770
SEC Office of Public Affairs (202) 551-4120

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June 01, 2011
Federal Reserve Announces Results of Auction of $5 Billion in 28-day Term Deposits Held on May 31, 2011

On May 31, 2011, the Federal Reserve conducted an auction of $5 billion in 28-day term deposits through its Term Deposit Facility. Following are the results of the auction:
 

TDF Auction ID: A18
Competitive Amount Offered:           $5,000,000,000
Competitive Amount Tendered: $10,855,990,000
Competitive Amount Awarded:         $5,000,000,000
Non-Competitive Amount Awarded: $86,850,000
Total Amount Awarded:        $5,086,850,000
   
Stop-Out Rate: 0.25900 percent
Bid-to-Cover Ratio (Competitive Auction): 2.17
   
Number of Bids Submitted:   54
Number of Participants Submitting Bids: 40

Bids at the stop-out rate were pro-rated at 92.07 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 June 2, 2011, and will mature on June 30, 2011. The stop-out rate shown above will apply to all awarded deposits.
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June 01, 2011
Agencies Release List of Distressed or Underserved Nonmetropolitan Middle-Income Geographies

The federal bank and thrift regulatory agencies today announced the availability of the 2011 list of distressed or underserved nonmetropolitan middle-income geographies where revitalization or stabilization activities will receive Community Reinvestment Act (CRA) consideration as "community development."

"Distressed nonmetropolitan middle-income geographies" and "underserved nonmetropolitan middle-income geographies" are designated by the agencies in accordance with their CRA regulations. The criteria for designating these areas are available on the Federal Financial Institutions Examination Council (FFIEC) website. The designations reflect local economic conditions, including triggers such as unemployment, poverty, and population changes.

As with past releases, the 2011 list will incorporate a one-year lag period for geographies designated as distressed or underserved in 2010, but not designated as such in the 2011 release. Geographies subject to this one-year lag period are eligible to receive consideration for community development activities for 12 months after publication of the 2011 list.

The 2011 list and lists from previous years can be found on the FFIEC website, along with information about the data sources used to generate the list of distressed or underserved geographies.
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May 25, 2011
Federal Reserve Offers $5 Billion in 28-day Term Deposits through its Term Deposit Facility

On Tuesday, May 31, 2011 the Federal Reserve will offer $5 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.

Description of Offering and Competitive Auction Parameters

TDF Auction ID: A18
Offering Amount: $5,000,000,000
Term: 28 days
Auction Date: Tuesday, May 31, 2011
Opening Time: 10:00 a.m. ET
Closing Time: 2:00 p.m. ET
Notification Date: Wednesday, June 1, 2011
Settlement Date: Thursday, June 2, 2011
Maturity Date: Thursday, June 30, 2011
Competitive Auction Parameters
Maximum Number of Bids: 3
Minimum Bid Amount (per bid): $10,000
Bid Increment: $10,000
Maximum Bid Amount (per institution): $1,250,000,000
Maximum Bid Rate: 0.75000%
Incremental Bid Rate: 0.00100%
Award Minimum Amount: $10,000
Award Maximum Amount: $1,250,000,000

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 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. 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.
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May 18, 2011
Minutes of the Federal Open Market Committee, April 26-27, 2011

The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached minutes of the Committee meeting held on April 26-27, 2011. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the April 26-27, 2011 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 an approximately 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.

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May 12, 2011
Federal Reserve Proposes Rule Under Regulation E to Create New Consumer Protections for Remittance Transfers

The Federal Reserve Board on Thursday requested public comment on a proposed rule that would create new protections for consumers who send remittance transfers to recipients located in a foreign country.

The proposed rule would require that remittance transfer providers make certain disclosures to senders of remittance transfers, including information about fees and the exchange rate, as applicable, and the amount of currency to be received by the recipient. In addition, the proposed rule would provide error resolution and cancellation rights for senders of remittance transfers.

The proposal is being made under Regulation E (Electronic Fund Transfers) pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The Federal Register notice is attached. Comments on the proposal must be submitted within 60 days after publication in the Federal Register, which is expected shortly.

Attachment (663 KB PDF)

Summary of Findings: Design and Testing of Remittance Disclosures (1 MB PDF)

Model forms

1. A-30 (8 KB PDF PDF) Model form for pre-payment disclosures for remittance transfers exchanged into local currency (§ 205.31(b)(1))
2. A-31 (10 KB PDF) Model form for receipts for remittance transfers exchanged into local currency (§ 205.31(b)(2))
3. A-32 (9 KB PDF) Model form for combined disclosures for remittance transfers exchanged into local currency (§ 205.31(b)(3))
4. A-33 (19 KB PDF) Model form for pre-payment disclosures for dollar-to-dollar remittance transfers (§ 205.31(b)(1))
5. A-34 (9 KB PDF) Model form for receipts for dollar-to-dollar remittance transfers (§ 205.31(b)(2))
6. A-35 (9 KB PDF) Model form for combined disclosures for dollar-to-dollar remittance transfers (§ 205.31(b)(3))
7. A-36 (16 KB PDF) Model form for error resolution and cancellation disclosures (long) (§ 205.31(b)(4))
8. A-37 (8 KB PDF) Model form for error resolution and cancellation disclosures (short) (§ 205.31(b)(2)(vi))
9. A-38 (8 KB PDF) Model form for pre-payment disclosures--Spanish (§ 205.31(b)(1))
10. A-39 (9 KB PDF) Model form for receipts--Spanish (§ 205.31(b)(2))
11. A-40 (9 KB PDF) Model form for combined disclosures--Spanish (§ 205.31(b)(3))
12. A-41 (17 KB PDF) Model form for error resolution and cancellation disclosures (long)--Spanish (§ 205.31(b)(4))


April 27, 2011
Federal Reserve Board and FOMC Release Table Summarizing Economic Projections from the April 26-27 FOMC Meeting

The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached table summarizing the economic projections made by Federal Reserve Board members and Federal Reserve Bank presidents for the April 26–27 meeting of the Committee.

The table will be incorporated into a summary of economic projections released on May 18 with the minutes of the April 26-27 meeting. Summaries of economic projections are released on an approximately quarterly schedule.

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April 27, 2011
FOMC Statement

Information received since the Federal Open Market Committee met in March indicates that the economic recovery is proceeding at a moderate pace and overall conditions in the labor market are improving gradually. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Commodity prices have risen significantly since last summer, and concerns about global supplies of crude oil have contributed to a further increase in oil prices since the Committee met in March. Inflation has picked up in recent months, but longer-term inflation expectations have remained stable and measures of underlying inflation are still subdued.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The unemployment rate remains elevated, and measures of underlying inflation continue to be somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Increases in the prices of energy and other commodities have pushed up inflation in recent months. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations. The Committee continues to anticipate a gradual return to higher levels of resource utilization in a context of price stability.

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and will complete purchases of $600 billion of longer-term Treasury securities by the end of the current quarter. The Committee will regularly review the size and composition of its securities holdings in light of incoming information and is prepared to adjust those holdings as needed to best foster maximum employment and price stability.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.


April 21, 2011
Federal Reserve Invites Comment on Two Bankruptcy-Related Studies That It Will Conduct

The Federal Reserve Board on Thursday issued a request for public information and comment on two bankruptcy-related studies that it is required to conduct under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Section 216 of the Dodd Frank Act requires the Board, in consultation with the Administrative Office of the United States Courts (AOUSC), to study the resolution of financial companies under Chapter 7 or Chapter 11 of the United States Bankruptcy Code. Section 217 of the act requires the Board, in consultation with the AOUSC, to study international coordination of the resolution of systemically important financial companies under the Bankruptcy Code and applicable foreign law. Section 216 and Section 217 each identifies specific issues that are to be studied.

The Board is seeking public comment on how to address the specific issues that are required to be included in the studies. It is also seeking public comment on any studies, research or other empirical data or information that it should take into account, as well as on any additional factors or considerations that should be addressed.

Comments must be submitted within 30 days from the date of publication in the Federal Register, which is expected shortly.

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Go to the Board of Governors' website to submit or view online comments.offsite icon


April 19, 2011
Federal Reserve Proposes Rule Under Regulation Z Pertaining to a Consumer's Ability to Repay a Mortgage and Minimum Mortgage Underwriting Standards

The Federal Reserve Board on Tuesday requested public comment on a proposed rule under Regulation Z that would require creditors to determine a consumer's ability to repay a mortgage before making the loan and would establish minimum mortgage underwriting standards.

The revisions to the regulation, which implements the Truth in Lending Act (TILA), are being made pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposal would apply to all consumer mortgages (except home equity lines of credit, timeshare plans, reverse mortgages, or temporary loans).

Consistent with the act, the proposal would provide four options for complying with the ability-to-repay requirement.

•  First, a creditor can meet the general ability-to-repay standard by considering and verifying specified underwriting factors, such as the consumer's income or assets.
•  Second, a creditor can make a "qualified mortgage," which provides the creditor with special protection from liability provided the loan does not have certain features, such as negative amortization; the fees are within specified limits; and the creditor underwrites the mortgage payment using the maximum interest rate in the first five years. The Board is soliciting comment on two alternative approaches for defining a "qualified mortgage."
•  Third, a creditor operating predominantly in rural or underserved areas can make a balloon-payment qualified mortgage. This option is meant to preserve access to credit for consumers located in rural or underserved areas where banks originate balloon loans to hedge against interest rate risk for loans held in portfolio.
•  Finally, a creditor can refinance a "non-standard mortgage" with risky features into a more stable "standard mortgage" with a lower monthly payment. This option is meant to preserve access to streamlined refinancings.

The proposal would also implement the Dodd-Frank Act's limits on prepayment penalties.

The Board is soliciting comment on the proposed rule until July 22, 2011. General rulemaking authority for TILA is scheduled to transfer to the Consumer Financial Protection Bureau on July 21, 2011. Accordingly, this rulemaking will not be finalized by the Board.

The Board's notice for the proposed rule is attached.

Highlights of Proposed Ability-to-Repay Rules (26 KB PDF)PDF iconoffsite icon

Notice (1.15 MB PDF)PDF iconoffsite icon


April 18, 2011
Federal Reserve Redesigns the Frequently Asked Questions Section of Its Website

The Federal Reserve Board has redesigned and expanded the Current FAQs (frequently asked questions) section of its website. New questions and answers address the Federal Reserve's roles and actions, currency and coin, consumer issues, the banking and financial system, and the economy.

Many answers link to related information and resources, and videos accompany some answers. Users can navigate the FAQs by topic. Questions and answers will be updated regularly and new entries will be added as needed. Users may submit ideas for new questions using an online form.

To access the Current FAQs, visit: www.federalreserve.gov/faqs/faq.htm. offsite icon


April 15, 2011
Federal Reserve Seeks Comments on Outline of How It Intends to Apply Certain Parts of its Current Consolidated Supervisory Program for Bank Holding Companies to Savings and Loan Holding Companies

The Federal Reserve Board is seeking comment on a notice that outlines how it intends to apply certain parts of its current consolidated supervisory program for bank holding companies to savings and loan holding companies (SLHCs) after assuming supervisory responsibility for SLHCs. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, supervisory and rule-writing authority for SLHCs and their non-depository subsidiaries will transfer from the Office of Thrift Supervision (OTS) to the Board on July 21, 2011.

The notice identifies three elements of the Board's current supervisory program that are particularly critical to the effective evaluation of the consolidated condition of holding companies:

  • the consolidated supervision program for large and regional holding companies;
  • the supervisory program for small, noncomplex holding companies; and
  • the holding company rating system.

The notice discusses the Board's expectation that application of consolidated capital requirements to SLHCs will be addressed in the Basel III rulemaking process. The notice also states that the Board anticipates that it will assess SLHC capital using supervisory methods similar to those currently employed by the OTS until consolidated capital standards are finalized.

The Board requests comments on the notice, which will be published soon in the Federal Register, by May 23, 2011.
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April 12, 2011
Agencies Seek Comment on Resolution Plan Reporting

Large, systemically significant bank holding companies and nonbank financial companies would be required to submit annual resolution plans and quarterly credit exposure reports under a rule proposed by the Federal Reserve Board and the Federal Deposit Insurance Corporation.

The agencies are requesting comment by June 10, 2011, on the proposal, which would implement requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The requirements apply to bank holding companies with total consolidated assets of $50 billion or more and nonbank financial companies designated by the Financial Stability Oversight Council for supervision by the Board.

The annual resolution plan would be required to describe the company's strategy for rapid and orderly resolution in bankruptcy during times of financial distress. A company would also have to describe how resolution planning and oversight of the resolution planning process fits into the company's overall governance structure. In addition, it would be required to include a detailed listing and description of all significant interconnections and interdependencies among major business lines and operations of the company that, if disrupted, would materially affect the funding or operations of the company or its major operations.

The quarterly credit exposure report would be required to describe the nature and extent of the company's credit exposure to other large financial companies, as well as the nature and extent of credit exposure by other large financial companies to the company. The credit exposure report would be required to include information related to the aggregate credit exposure associated with a range of transactions.
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April 12, 2011
Agencies Seek Comment on Swap Margin and Capital Requirements

Five federal agencies are seeking comment on a proposed rule to establish margin and capital requirements for swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The rule is proposed by the Federal Reserve Board, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, and the Office of the Comptroller of the Currency. The proposed rule would require swap entities regulated by the five agencies to collect minimum amounts of initial margin and variation margin from counterparties to non-cleared swaps and non-cleared, security-based swaps.

The amount of margin that would be required under the proposed rule would vary based on the relative risk of the counterparty and of the swap or security-based swap. A swap entity would not be required to collect margin from a commercial end user as long as its margin exposure is below an appropriate credit exposure limit established by the swap entity. A swap entity would also not be required to collect margin from low-risk financial end users as long as its margin exposure does not exceed a specific threshold. The proposed margin requirements would apply to new, non-cleared swaps or security-based swaps entered into after the proposed rule's effective date. The proposal also seeks comment on several alternative approaches to establishing margin requirements.

Provisions in the Dodd-Frank Act also require the agencies to establish capital requirements for regulated swap entities. The proposed rule would implement these provisions by requiring swap entities to comply with the existing capital standards that apply to those entities as part of their prudential regulation, as those capital standards already address non-cleared swaps and non-cleared, security-based swaps.

Staff of the agencies consulted with staff of the Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission in developing the proposed rule.

The agencies request comments on the proposed rule by June 24, 2011.
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April 06, 2011
Federal Reserve Seeks Comment on Proposed Rule to Repeal Regulation Q, Which Prohibits the Payment of Interest on Demand Deposits

The Federal Reserve Board on Wednesday requested comment on a proposed rule to repeal the Board's Regulation Q, which prohibits the payment of interest on demand deposits by institutions that are member banks of the Federal Reserve System.

The proposed rule would implement Section 627 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which repeals Section 19(i) of the Federal Reserve Act in its entirety effective July 21, 2011. The repeal of that section of the Federal Reserve Act on that date eliminates the statutory authority under which the Board established Regulation Q.

The proposed rule would also repeal the Board's published interpretation of Regulation Q and would remove references to Regulation Q found in the Board's other regulations, interpretations, and commentary.

The Board is seeking comment on whether the repeal of Regulation Q is expected to have implications for balance sheets and income of depository institutions, short-term funding markets such as overnight federal funds market, the demand for interest-bearing demand deposits, and competitive burden on smaller depository institutions.

Comments on the proposal must be submitted within 30 days from the date of publication in the Federal Register, which is expected shortly.
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March 31, 2011
Agencies Seek Comment on Risk Retention Proposal

Six federal agencies are seeking comment on a proposed rule that would require sponsors of asset-backed securities (ABS) to retain at least 5 percent of the credit risk of the assets underlying the securities and would not permit sponsors to transfer or hedge that credit risk. In crafting the proposed rule, the agencies sought to ensure that the amount of credit risk retained is meaningful, while reducing the potential for the rule to negatively affect the availability and cost of credit to consumers and businesses.

The rule is proposed by the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Federal Housing Finance Agency, and the Department of Housing and Urban Development. It would provide sponsors with various options for meeting the risk-retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other things, the options include:

  • retention of risk by holding at least 5 percent of each class of ABS issued in a securitization transaction (also known as vertical retention);
  • retention of a first-loss residual interest in an amount equal to at least 5 percent of the par value of all ABS interests issued in a securitization transaction (horizontal retention);
  • an equally-divided combination of vertical and horizontal retention;
  • retention of a representative sample of the assets designated for securitization in an amount equal to at least 5 percent of the unpaid principal balance of all the designated assets; and
  • for commercial mortgage-backed securities, retention of at least a 5 percent first-loss residual interest by a third party that specifically negotiates for the interest, if certain requirements are met.

As required by the act, the proposal includes descriptions of loans that would not be subject to these requirements, including asset-backed securities that are collateralized exclusively by residential mortgages that qualify as "qualified residential mortgages" (QRMs). The proposal would establish a definition for QRMs--incorporating such criteria as borrower credit history, payment terms, and loan-to-value ratio--designed to ensure they are of very high credit quality. The proposed rule also includes investor disclosure requirements regarding material information concerning the sponsor's retained interests in a securitization transaction. The disclosures would provide investors and the agencies with an efficient mechanism to monitor compliance with the risk-retention requirements of the proposed rules.

The proposed rule also has a zero percent risk-retention requirement for ABS collateralized exclusively by commercial loans, commercial mortgages, or automobile loans that meet certain underwriting standards. As with QRMs, these underwriting standards are designed to be robust and to ensure that the loans backing the ABS are of very low credit risk.

The proposed rule would also recognize that the 100 percent guarantee of principal and interest provided by Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Mortgage Loan Corporation) meets their risk-retention requirements as sponsors of mortgage-backed securities for as long as they are in conservatorship or receivership with capital support from the U.S. government.

The agencies request comments on the proposed rule by June 10, 2011.
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March 30, 2011
Federal Reserve seeks comment on proposed rule related to supervision of designated financial market utilities

The Federal Reserve Board on Wednesday requested comment on a proposed rule that implements two provisions of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act related to the supervision of financial market utilities (FMUs) designated as systemically important by the Financial Stability Oversight Council. FMUs, such as payment systems, central securities depositories, and central counterparties, provide the essential infrastructure to clear and settle payments and other financial transactions.

First, the proposed rule establishes risk-management standards governing the operations related to the payment, clearing, and settlement activities of designated financial market utilities, except those registered as a clearing agency with the Securities and Exchange Commission or as a derivatives clearing organization with the Commodity Futures Trading Commission. The proposed risk-management standards are based on the existing international standards that the Board has incorporated previously into its Policy on Payment System Risk.

Second, the proposed rule establishes requirements and procedures for advance notice of material changes to the rules, procedures, or operations of a designated financial market utility for which the Board is the primary supervisor under Title VIII of the Dodd-Frank Act.

Comments on the proposal must be submitted within 45 days from the date of publication in the Federal Register, which is expected shortly.


March 30, 2011
Agencies Seek Comment on Proposed Rule on Incentive Compensation

Federal financial regulatory agencies request comment on a joint proposed rule to ensure that regulated financial institutions design their incentive compensation arrangements to take account of risk.

The proposed rule, which is being issued pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, would apply to certain financial institutions with more than $1 billion in assets.It also contains heightened standards for the largest of these institutions.

In prohibiting incentive compensation arrangements that could encourage inappropriate risks, the proposal would require compensation practices at regulated financial institutions to be consistent with three key principles--that incentive compensation arrangements should appropriately balance risk and financial rewards, be compatible with effective controls and risk management, and be supported by strong corporate governance. The proposed rule complements guidance previously issued by the agencies, including guidance on sound incentive compensation policies issued by the banking agencies last year.

The agencies are proposing that financial institutions with $1 billion or more in assets be required to have policies and procedures to ensure compliance with the requirements of the rule, and submit an annual report to their federal regulator describing the structure of their incentive compensation arrangements.The agencies are proposing that larger financial institutions, generally those with $50 billion or more in assets, defer at least 50 percent of the incentive compensation of certain officers for at least three years and that the amounts ultimately paid reflect losses or other aspects of performance over time.For purposes of credit unions, large financial institutions would be defined as those with $10 billion or more in assets. The FHFA proposed that the income-deferral provisions apply to all entities it regulates, regardless of size.

The agencies request comments on the proposed rule within 45 days of its publication in the Federal Register, which is expected soon.
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March 30, 2011
Federal Reserve offers $5 billion in 28-day term deposits through its Term Deposit Facility

On Monday, April 4, 2011, the Federal Reserve will offer $5 billion in 28-day term deposits through its Term Deposit Facility. 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.

Description of Offering and Competitive Auction Parameters

TDF Auction ID: A17
Offering Amount: $5,000,000,000
Term: 28 days
Auction Date: Monday, April 4, 2011
Opening Time: 10:00 a.m. ET
Closing Time: 2:00 p.m. ET
Notification Date: Tuesday, April 5, 2011
Settlement Date: Thursday, April 7, 2011
Maturity Date: Thursday, May 5, 2011
 
Competitive Auction Parameters  
Maximum Number of Bids: 3
Minimum Bid Amount (per bid): $10,000
Bid Increment: $10,000
Maximum Bid Amount (per institution): $1,250,000,000
Maximum Bid Rate: 0.75000%
Incremental Bid Rate: 0.00100%
Award Minimum Amount: $10,000
Award Maximum Amount: $1,250,000,000


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 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 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 . 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.
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March 29, 2011
Federal Reserve proposes rule requiring sponsors of asset-backed securities to retain at least 5 percent of the credit risk of the assets underlying the securities

The Federal Reserve Board on Tuesday proposed a rule that would require sponsors of asset-backed securities (ABS) to retain at least 5 percent of the credit risk of the assets underlying the securities.

The rule, which will be proposed jointly with five other federal agencies, would provide sponsors with various options for meeting the risk-retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In drafting the proposed rule, staff at the Federal Reserve Board and at the other agencies sought to ensure that the amount of credit risk retained is meaningful, while taking into account market practices and reducing the potential for the rule to negatively affect the availability and cost of credit to consumers and businesses.

As required by the Dodd-Frank Act, the proposed rule includes a variety of exemptions from these requirements, including an exemption for U.S. government-guaranteed ABS and for mortgage-backed securities that are collateralized exclusively by residential mortgages that qualify as "qualified residential mortgages" (QRMs). The proposal would establish a definition for QRMs--incorporating such criteria as borrower credit history, payment terms, down payment for purchased mortgages, and loan-to-value ratio--designed to ensure they are of very high credit quality. The proposed rule would also allow Fannie Mae and Freddie Mac to satisfy their risk-retention requirements as sponsors of mortgage-backed securities through their 100 percent guarantees of principal and interest for as long as they are in conservatorship or receivership with capital support from the U.S. government.

Comments must be received by June 10, 2011. The notice will be published in the Federal Register after approval from all agencies including the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Federal Housing Finance Agency, and the Department of Housing and Urban Development.
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March 28, 2011
Agencies announce consideration of risk retention notice of proposed rulemaking

The staffs of the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Federal Housing Finance Agency, and the Department of Housing and Urban Development (together, the agencies) announced that the agencies this week are considering for approval a notice of proposed rulemaking that addresses section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. All of the agencies participating in this joint rulemaking process are expected to consider the rule this week and a detailed announcement will be made when this process is complete. If approved, the agencies will publish in the Federal Register a notice of proposed rulemaking for public comment.

Section 941 requires the agencies to prescribe rules to require that a securitizer retain an economic interest in a material portion of the credit risk for any asset that it transfers, sells, or conveys to a third party. The chairperson of the Financial Stability Oversight Council is tasked with coordinating this rulemaking effort.
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March 25, 2011
Federal Reserve expands consumer protection regulations for credit transactions and leases of higher dollar amounts

The Federal Reserve Board on Friday adopted two rules that would expand the coverage of consumer protection regulations to credit transactions and leases of higher dollar amounts.

The final rules amend Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) to implement a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Effective July 21, 2011, the Dodd-Frank Act requires that the protections of the Truth in Lending Act (TILA) and the Consumer Leasing Act (CLA) apply to consumer credit transactions and consumer leases up to $50,000, compared with $25,000 currently. This amount will be adjusted annually to reflect any increase in the consumer price index.

TILA requires creditors to disclose key terms of consumer loans and prohibits creditors from engaging in certain practices with respect to those loans. Currently, consumer loans of more than $25,000 are generally exempt from TILA. However, private education loans and loans secured by real property (such as mortgages) are subject to TILA regardless of the amount of the loan.

The CLA requires lessors to provide consumers with disclosures regarding the cost and other terms of personal property leases. An automobile lease is the most common type of consumer lease covered by the CLA. Currently, a lease is exempt from the CLA if the consumer's total obligation exceeds $25,000.
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March 24, 2011
Chairman Bernanke will hold press briefings four times per year to present the FOMC's current economic projections

Chairman Ben S. Bernanke will hold press briefings four times per year to present the Federal Open Market Committee's current economic projections and to provide additional context for the FOMC's policy decisions.

In 2011, the Chairman's press briefings will be held at 2:15 p.m. following FOMC decisions scheduled on April 27, June 22 and November 2. The briefings will be broadcast live on the Federal Reserve's website. For these meetings, the FOMC statement is expected to be released at around 12:30 p.m., one hour and forty-five minutes earlier than for other FOMC meetings.

The introduction of regular press briefings is intended to further enhance the clarity and timeliness of the Federal Reserve's monetary policy communication. The Federal Reserve will continue to review its communications practices in the interest of ensuring accountability and increasing public understanding.
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March 22, 2011
Federal Reserve System Publishes Annual Financial Statements

The Federal Reserve System released the 2010 combined annual comparative financial statements for the Federal Reserve Banks, as well as for the 12 individual Federal Reserve Banks, the limited liability companies (LLCs) 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.

Total Reserve Bank assets as of December 31, 2010, were $2.428 trillion, which represents an increase of $193 billion from the previous year. The composition of the balance sheet changed notably. Holdings of U.S. Treasury securities increased $261 billion and holdings of federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS) increased $86 billion. These increases were partly offset by a $96 billion decrease in loans to depository institutions and a $23 billion decrease in loans extended under the Term Asset-Backed Securities Loan Facility, largely due to early repayments by borrowers.

The Reserve Banks' comprehensive income increased $28 billion over the previous year to $82 billion for the year ended December 31, 2010. The increase was primarily attributable to an increase of $24 billion in interest earnings on the federal agency and GSE MBS holdings.

The Reserve Banks transferred $79 billion of their $82 billion in comprehensive income to the U.S. Treasury in 2010, a $32 billion increase from the amount transferred in 2009.
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March 18, 2011
Federal Reserve Issues Clarifications to Regulation Z Provisions That Apply to Open-end Credit Plans, Including Credit Cards

The Federal Reserve Board on Friday approved a rule amending Regulation Z (Truth in Lending) to clarify aspects of prior Board rules implementing the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit Card Act). This rule is intended to enhance protections for consumers who use credit cards and to resolve areas of uncertainty so that card issuers fully understand their compliance obligations.

In order to protect consumers from incurring unaffordable levels of credit card debt, the Credit Card Act requires that, before opening a new credit card account or increasing the credit limit on an existing account, card issuers consider a consumer's ability to make the required payments on the account. Consistent with the act, the Board's rule addresses practices that can result in extensions of credit to consumers who lack the ability to pay. Specifically, the rule states that credit card applications generally cannot request a consumer's "household income" because that term is too vague to allow issuers to properly evaluate the consumer's ability to pay. Instead, issuers must consider the consumer's individual income or salary.

In addition, the Board's rule clarifies that:

  • Promotional programs that waive interest charges for a specified period of time are subject to the same Credit Card Act protections as promotional programs that apply a reduced rate for a specified period. For example, a card issuer that offers to waive interest charges for six months will be prohibited from revoking the waiver and charging interest during the six-month period, unless the account becomes more than 60 days delinquent.
  • Application and similar fees that a consumer is required to pay before a credit card account is opened are covered by the same Credit Card Act limitations as fees charged during the first year after the account is opened. Because the total amount of these fees cannot exceed 25 percent of the account's initial credit limit, a card issuer that, for example, charges a $75 fee to apply for a credit card with a $400 credit limit generally will not be permitted to charge more than $25 in additional fees during the first year after account opening.

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March 18, 2011
Federal Reserve Completes Comprehensive Capital Analysis and Review

The Federal Reserve on Friday announced it has completed the Comprehensive Capital Analysis and Review (CCAR), its cross-institution study of the capital plans of the 19 largest U.S. bank holding companies.

As a result of the CCAR, some firms are expected to increase or restart dividend payments, buy back shares, or repay government capital. The Federal Reserve on Friday will discuss the reviews and its decisions with firms that requested a capital action. All 19 firms will receive more detailed assessments of their capital planning processes next month.

In February 2009, the Federal Reserve advised bank holding companies that safety and soundness considerations required that dividends be substantially reduced or eliminated. Since that time, the Federal Reserve has indicated that increased capital distributions would generally not be considered prudent in the absence of a well-developed capital plan and a capital position that would remain strong even under adverse conditions.

The Federal Reserve's actions on capital distributions come after significant improvement in both economic conditions and the capital positions of financial institutions. From the end of 2008 through 2010, common equity increased by more than $300 billion at the 19 largest U.S. bank holding companies. Moreover, conclusion of the Basel III agreement to increase capital requirements and passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act have substantially clarified the regulatory environment in which these firms will be operating. The return of capital to shareholders under appropriate conditions is a step in the process of improvement in the financial sector and will help to promote banks' long-term access to capital. Such access will support lending to consumers and businesses. The capital plan reviews foster appropriate capital distributions in a measured fashion while still helping to ensure continued increases in firms' capital bases.

These supervisory reviews by the Federal Reserve come in the context of a significant change in supervisors' expectations for firms' substantive capital policies and capital planning processes. Among other things:

  • Firms are expected to demonstrate their ability to remain viable financial intermediaries as they make the planned capital distributions, even under stressed conditions;
  • Firms are expected to continue to increase their capital base;
  • In 2011, firms generally are expected to limit dividends to 30 percent or less of anticipated earnings;
  • Planned share repurchases will be reviewed if there are material adverse deviations from the revenue and loss assumptions in a firm's capital plan such that capital is not increasing as anticipated; and
  • In the event of a sharp deterioration in economic conditions that could have negative implications for safety and soundness, the Federal Reserve may require modification of previously submitted capital plans.

The CCAR involves a forward-looking, detailed evaluation of capital planning and stress scenario analysis at the 19 large bank holding companies. Although it was not standardized to the degree the Supervisory Capital Assessment Program (SCAP) was in early 2009, it builds on the experience gained during that exercise. In the CCAR, the Federal Reserve assessed the firm's ability, after taking into account the proposed capital actions, to maintain sufficient capital levels to continue lending in stressed economic environments, including under an adverse scenario specified by the Federal Reserve. The adverse scenario was intended to represent developments in a typical recession, with a decline in economic growth, a rise in unemployment, and a sharp drop in risky asset prices (for details, please see Comprehensive Capital Analysis and Review: Objectives and Overview, attached). Federal Reserve supervisors carefully analyzed and adjusted as appropriate projections of stressed revenues and losses provided by the firms in the CCAR.

It is important to note that there are a number of reasons why firms participating in the CCAR may not be making capital distributions this quarter. For example, a firm may not have requested approval of any such action, Federal Reserve supervisors may have believed a requested distribution was too high at this time and could weaken the firm's ability to weather adverse economic conditions, or supervisors may not have been comfortable with the capital planning process underlying the request. Firms may resubmit capital proposals each quarter, with their prospects for an answer of no objection dependent on their responses to any concerns raised during the CCAR.
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March 15, 2011
FOMC Statement

Information received since the Federal Open Market Committee met in January suggests that the economic recovery is on a firmer footing, and overall conditions in the labor market appear to be improving gradually. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Commodity prices have risen significantly since the summer, and concerns about global supplies of crude oil have contributed to a sharp run-up in oil prices in recent weeks. Nonetheless, longer-term inflation expectations have remained stable, and measures of underlying inflation have been subdued.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate remains elevated, and measures of underlying inflation continue to be somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. The recent increases in the prices of energy and other commodities are currently putting upward pressure on inflation. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations. The Committee continues to anticipate a gradual return to higher levels of resource utilization in a context of price stability.

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.


March 03, 2011
Federal Reserve Proposes Amendments to Regulation CC Regarding Collection of Checks and Availability of Funds

The Federal Reserve Board has requested public comment on proposed amendments to Regulation CC (Availability of Funds and Collection of Checks) to encourage banks to clear and return checks electronically, add provisions that govern electronic items cleared through the check-collection system, and shorten the "exception" hold periods on deposited funds.

To encourage electronic collection and return of checks between banks, the proposal provides that a depositary bank would be entitled to the expeditious return of a check only if it agrees to receive returned checks electronically. In addition, the proposal would permit the bank responsible for paying a check to require that checks presented to it for same-day settlement be presented electronically. More generally, the proposal would apply Regulation CC's collection and return provisions, including warranties, to electronic check images that meet certain requirements.

Additionally, due to the faster collection and return timeframes that result from electronic collection and return, the proposal would shorten the safe-harbor period for an exception hold to four business days, which should enable the depositary bank to learn of the return of virtually all unpaid checks before being required to make these deposits available for withdrawal. The proposal also eliminates the references in Regulation CC to "nonlocal" checks. The distinction between local and nonlocal checks is tied to Federal Reserve Bank check processing regions. As of February 2010, the Reserve Banks have ceased operations in all but one of their check processing offices, such that there is now only one check processing region, and all checks are local to each other. Local checks are generally subject to a two-business-day hold period.
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March 01, 2011
Federal Reserve Seeks Comment on Proposed Rules on Risk-Based Pricing Notices and Adverse Action Notices

The Federal Reserve Board and the Federal Trade Commission (FTC) have proposed regulations regarding the credit score disclosure requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The statute requires creditors to disclose credit scores and related information to consumers in risk-based pricing and adverse action notices under the Fair Credit Reporting Act (FCRA) if a credit score was used in setting the credit terms or taking adverse action.

The Board proposes to amend Regulation V (Fair Credit Reporting) to revise the content requirements for risk-based pricing notices and to add related model forms to reflect the new credit score disclosure requirements. The Board is issuing this proposal jointly with the FTC. The Board also proposes to amend certain model notices in Regulation B (Equal Credit Opportunity), which combine the adverse action notice requirements for both Regulation B and the FCRA. The proposed amendments would revise the model notices to incorporate the new credit score disclosure requirements.

Public comments on the proposed rules under Regulations V and B are due 30 days after publication in the Federal Register.
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February 24, 2011
Federal Reserve issues final rule and seeks comment on proposed revisions to escrow account requirements for home mortgage loans

The Federal Reserve Board on Wednesday issued a final rule and requested public comment on a second rule under Regulation Z to revise the escrow account requirements for certain home mortgage loans. The revisions to the regulation, which implements the Truth in Lending Act (TILA), are being made pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The final rule implements a provision of the Dodd-Frank Act that increases the annual percentage rate (APR) threshold used to determine whether a mortgage lender is required to establish an escrow account for property taxes and insurance for first-lien, "jumbo" mortgage loans. Jumbo loans are loans exceeding the conforming loan-size limit for purchase by Freddie Mac, as specified by the legislation.

In July 2008, the Board issued final rules requiring creditors to establish escrow accounts for first-lien higher-priced mortgage loans. A first-lien mortgage is considered a higher-priced mortgage loan if its APR is 1.5 percentage points or more above the current average prime offer rate. Under the final rule being issued today, the escrow requirement will apply to first-lien jumbo loans only if the loan's APR is 2.5 percentage points or more above the average prime offer rate. The APR threshold for non-jumbo loans remains unchanged. The final rule is effective for covered loans for which the creditor receives an application on or after April 1, 2011.

The Board is also proposing a rule that would expand the minimum period for mandatory escrow accounts for first-lien, higher-priced mortgage loans from one to five years, and longer under certain circumstances, such as when the loan is delinquent or in default. The proposed rule would provide an exemption from the escrow requirement for certain creditors that operate in "rural or underserved" counties, as authorized by the legislation.

The proposal also would implement new disclosure requirements contained in the Dodd-Frank Act. Disclosures would be required at least three business days before consummation of a mortgage loan to explain, as applicable, how the escrow account works or the effects of not having an escrow account if one is not being established. The proposed rule also would require consumers to receive disclosures three days before an escrow account is closed. The Board is soliciting comment on the proposed rule for 60 days after publication in the Federal Register, which is expected shortly.
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February 24, 2011
Federal Reserve issues a Spanish version of the 2010 Bank Secrecy Act/Anti-Money Laundering Examination Manual

The Federal Reserve on Wednesday issued a Spanish version (1.9 MB PDF) of the 2010 Federal Financial Institutions Examination Council's Bank Secrecy Act/Anti-Money Laundering Examination Manual. The Federal Reserve, in conjunction with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, developed the Spanish version to make the regulatory expectations regarding Bank Secrecy Act/Anti-Money Laundering compliance programs accessible to a wider group of people. The manual provides current and consistent guidance on risk-based policies, procedures, and processes for banking organizations to comply with the Bank Secrecy Act and safeguard operations from money laundering and terrorist financing.


February 17, 2011
Board begins 2011 Survey of Finance Companies

The Federal Reserve System in February will conduct its Survey of Finance Companies as part of an effort to paint a complete and continuing picture of the sector in the aftermath of the financial crisis.

"As recent events have made very clear, the availability of credit to consumers and businesses is critical to the efficient functioning of our economy," Federal Reserve Chairman Ben S. Bernanke said in a letter to prospective survey participants. The survey results will further the understanding of the structure of the finance company industry, he noted.

The assets and liabilities of finance companies—non-depository companies that provide financing to consumers or businesses—have been surveyed by the Federal Reserve at roughly five-year intervals since 1955. The data collected provide a benchmark for the System's monthly report on the outstanding accounts receivable of finance companies (presented in the Federal Reserve's Finance Companies statistical release) and provide a comprehensive update on these companies' sources of funds. This information in turn becomes an important input to the estimates of total consumer credit (presented in the Federal Reserve's Consumer Credit statistical release) and the U.S. flow of funds accounts.

The attached letter from Chairman Bernanke was sent to approximately 2,500 companies urging their participation in the survey.

Results of the Survey of Finance Companies will appear in an upcoming Federal Reserve Bulletin.
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February 10, 2011
Governor Kevin Warsh resigns from Board of Governors of the Federal Reserve System, effective on or around March 31, 2011

Kevin Warsh announced his intent to resign as a member of the Board of Governors of the Federal Reserve System on or around March 31, 2011.

Governor Warsh, a member of the Board since February 2006, submitted his letter of resignation to President Obama today.

"Kevin rendered the Federal Reserve and the nation exemplary service during his time at the Board," Federal Reserve Board Chairman Ben S. Bernanke said. "In particular, his intimate knowledge of financial markets and institutions proved invaluable during the recent crisis. And he worked energetically and effectively behind the scenes overseeing the operations of the Board and the Federal Reserve System. I deeply appreciate his insights and wise counsel and, most especially, his fortitude and friendship during the difficult days, nights, and weekends of the crisis."
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February 09, 2011
Federal Reserve Issues Final Rule to Implement Volcker Rule Conformance Period

The Federal Reserve Board on Wednesday announced its approval of a final rule to implement the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that give banking firms a period of time to conform their activities and investments to the prohibitions and restrictions of the so-called Volcker Rule.

The Volcker Rule generally prohibits banking entities from engaging in proprietary trading in securities, derivatives, or certain other financial instruments and from investing in, sponsoring, or having certain relationships with a hedge fund or private equity fund. The statute generally provides banking entities two years to bring their activities and investments into compliance and allows the Board to extend this conformance period under certain conditions.

The Dodd-Frank Act requires that the Board issue rules implementing the Volcker Rule's conformance period. In developing the rule, the Board consulted with the Department of the Treasury, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. The final rule is substantially similar to the proposal published in November.

The final rule is effective April 1, 2011, and is expected to be published soon in the Federal Register.
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February 08, 2011
Federal Reserve issues proposals related to designation of systemically important nonbank financial companies

The Federal Reserve Board on Tuesday requested comment on a proposed rule that implements two provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act related to the designation by the Financial Stability Oversight Council of systemically important nonbank financial companies for consolidated supervision by the Board.

First, the proposed rule establishes the requirements for determining if a company is "predominantly engaged in financial activities." Under the Dodd-Frank Act, a company generally can be designated by the Council only if 85 percent or more of the company's revenues or assets are related to activities that have been determined to be financial in nature under the Bank Holding Company Act.

Second, the proposed rule defines the terms "significant nonbank financial company" and "significant bank holding company." Among the factors the Council must consider in determining whether to designate a nonbank financial company for supervision by the Board is the extent and nature of the company's transactions and relationships with other "significant" nonbank financial companies and "significant" bank holding companies. Under the proposal, a firm would be considered "significant" if it has $50 billion or more in total consolidated assets or had been designated by the Council as systemically important.

Comments on the proposal must be submitted by March 30, 2011. Publication in the Federal Register is expected shortly.
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February 08, 2011
Federal Reserve announces results of auction of $5 billion in 28-day term deposits held on February 7, 2010

On February 7, 2011, the Federal Reserve conducted an auction of $5 billion in 28-day term deposits through its Term Deposit Facility.Following are the results of the auction:

TDF Auction ID: A16
Competitive Amount Offered: $5,000,000,000
Competitive Amount Tendered: $12,615,010,000
Competitive Amount Awarded: $5,000,020,000
Non-Competitive Amount Awarded: $69,510,000
Total Amount Awarded: $5,069,530,000
   
Stop-Out Rate: 0.26000 percent
Bid-to-Cover Ratio (Competitive Auction): 2.52
   
Number of Bids Submitted: 61
Number of Participants Submitting Bids: 41

Bids at the stop-out rate were pro-rated at 35.53 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 February 10, 2011, and will mature on March 10, 2011.The stop-out rate shown above will apply to all awarded deposits.
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February 03, 2011
Agencies Propose Changes in Reporting Requirements for OTS-Regulated Savings Associations and Savings and Loan Holding Companies

The federal bank and thrift regulatory agencies announced proposed changes to reporting requirements for savings associations and savings and loan holding companies regulated by the Office of Thrift Supervision (OTS). The proposed changes include a change from quarterly Thrift Financial Reports to quarterly Consolidated Reports of Condition and Income, commonly known as Call Reports.

The agencies--the OTS, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve Board--are proposing the changes pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Provisions of Dodd-Frank require the transfer of OTS functions to the OCC, the FDIC, the Federal Reserve Board and the Bureau of Consumer Financial Protection on July 21, 2011.

Benefits of the proposed changes include uniform reporting systems and processes among all FDIC-insured banks and savings institutions. These changes also would make uniform all reporting requirements among all holding companies supervised by the Federal Reserve Board. Also, the agencies would have a common set of reports for monitoring and evaluating financial condition and trends.

The agencies are requesting comment on the proposed changes within 60 days of their publication in the Federal Register, which is expected soon.
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February 03, 2011
Federal Reserve Offers $5 Billion in 28-Day Term Deposits Through Its Term Deposit Facility

On Monday, February 7, 2011 the Federal Reserve will offer $5 billion in 28-day term deposits through its Term Deposit Facility. 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.

Description of Offering and Competitive Auction Parameters

TDF Auction ID: A16
Offering Amount: $5,000,000,000
Term: 28 days
Auction Date: Monday, February 7, 2011
Opening Time: 10:00 a.m. ET
Closing Time: 2:00 p.m. ET
Notification Date: Tuesday, February 8, 2011
Settlement Date: Thursday, February 10, 2011
Maturity Date: Thursday, March 10, 2011
Competitive Auction Parameters
Maximum Number of Bids: 3
Minimum Bid Amount (per bid): $10,000
Bid Increment: $10,000
Maximum Bid Amount (per institution): $1,250,000,000
Maximum Bid Rate: 0.75000%
Incremental Bid Rate: 0.00100%
Award Minimum Amount: $10,000
Award Maximum Amount: $1,250,000,000

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 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 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. 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.


February 02, 2011
Federal Reserve does not plan to proceed with finalizing three pending mortgage rulemakings under Regulation Z

The Federal Reserve Board on Tuesday announced that it does not expect to finalize three pending rulemakings under Regulation Z, which implements the Truth in Lending Act (TILA), prior to the transfer of authority for such rulemakings to the Consumer Financial Protection Bureau (CFPB).

The proposed rules were published as part of the Board's comprehensive review of its mortgage lending regulations under TILA. The first phase of the review consisted of two proposals issued in August 2009, which would have reformed the consumer disclosures under TILA for closed-end mortgage loans and home equity lines of credit (Docket Nos. R-1366 and R-1367). The third proposal was issued in September 2010 (Docket No. R-1390). Among other things, the September 2010 proposal included changes to the disclosures consumers receive to explain their right to rescind certain loans and would have clarified the responsibilities of the creditor if a consumer exercises this rescission right. The September 2010 proposal also included changes to the disclosures for reverse mortgages, proposed new disclosures for loan modifications, restrictions on certain advertising practices and sales practices for reverse mortgages, and changes to the disclosure obligations of loan servicers. In response to the three proposals, the Board received more than 5,000 comments expressing divergent views on many substantive and technical issues.

General rulemaking authority for TILA is scheduled to transfer to the CFPB in July 2011. The Dodd-Frank Wall Street Reform and Consumer Protection Act also requires that the CFPB issue a proposal within 18 months after the designated transfer date to combine, in a single form, the mortgage disclosures required by TILA and the disclosures required by the Real Estate Settlement Procedures Act (RESPA). In light of that mandate, and the upcoming transfer date, the Board has carefully evaluated whether there would be public benefit in proceeding with the rulemakings initiated with the Board's August 2009 and September 2010 proposals at this time. Because the Board's 2009 and 2010 TILA proposals would substantially revise the disclosures for mortgage transactions, any new disclosures adopted by the Board would be subject to the CFPB's further revision in carrying out its mandate to combine the TILA and RESPA disclosures. In addition, a combined TILA-RESPA disclosure rule could well be proposed by the CFPB before any new disclosure requirements issued by the Board could be fully implemented.

For these reasons, the Board has determined that proceeding with the 2009 and 2010 proposals would not be in the public interest. Although there are specific provisions of these Board proposals that would not be affected by the CFPB's development of joint TILA-RESPA disclosures, adopting those portions of the Board's proposals in a piecemeal fashion would be of limited benefit, and the issuance of multiple rules with different implementation periods would create compliance difficulties. Accordingly, the Board does not expect to finalize the August 2009 and September 2010 proposals prior to the July 2011 date for transfer of rulemaking authority to the CFPB.


January 31, 2011
Agencies announce start of Nationwide Mortgage Licensing System and Registry

Washington--The federal bank, thrift and credit union regulatory agencies, along with the Farm Credit Administration, announce that the Nationwide Mortgage Licensing System and Registry will begin accepting federal registrations today.

Under the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act) and the agencies' final rules, residential mortgage loan originators employed by banks, savings associations, credit unions, or Farm Credit System institutions must register with the registry, obtain a unique identifier from the registry, and maintain their registrations.

Following expiration of the 180-day initial registration period on July 29, 2011, any employee of an agency-regulated institution who is subject to the registration requirements will be prohibited from originating residential mortgage loans without first meeting these requirements.  The rules include an exception for mortgage loan originators that originated five or fewer mortgage loans during the previous 12 months and who have never been registered; they would not be required to complete the federal registration process.

The registry announcement is being made by the Board of Governors of the Federal Reserve System, Farm Credit Administration, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision. Further information regarding the registry and the registration process is available at the registry's website: http://mortgage.nationwidelicensingsystem.org/fedreg/Pages/default.aspx.

A notice about the initial registration period will be published soon in the Federal Register.
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January 26, 2011
FOMC Statement

Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, while investment in nonresidential structures is still weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.


January 18, 2011
Federal Reserve sets up diversity and inclusion offices

The Federal Reserve on Tuesday announced the establishment of offices to promote diversity and inclusion at the Federal Reserve Board and at all 12 of the Federal Reserve Banks.

The offices will build on the Federal Reserve System's long-standing efforts to promote equal employment opportunity and diversity, and will continue to work to foster diversity in procurement, with a focus on minority-owned and women-owned businesses. The Dodd-Frank Wall Street Reform and Consumer Protection Act required that diversity and inclusion offices be established at certain federal agencies, including the Federal Reserve Board, and at the Federal Reserve Banks. In addition to promoting diversity at the Board and throughout the System, the Board's Office of Diversity and Inclusion will play an integral role in the development of standards to assess the diversity practices at entities regulated by the Federal Reserve as required by the Dodd-Frank Act.

The heads of the diversity and inclusion offices are:

  • Federal Reserve Board, Sheila Clark. Clark, program director, has overseen the Equal Employment Opportunity programs at the Board since 1995. Prior to joining the Board, Clark was manager of workplace diversity programs at Dow Jones Company. Clark holds a bachelor's degree in management from Marymount College, Tarrytown, New York.

  • Federal Reserve Bank of Boston, Marques Benton. Benton, a vice president, has worked in a number of areas, most recently public and community affairs, where he served as the Bank's point person on several foreclosure-prevention efforts. Benton holds an undergraduate degree in economics from the University of Massachusetts at Amherst and a master's in business administration from Babson College.

  • Federal Reserve Bank of New York, Diane Ashley. Ashley has served as vice president and chief diversity officer at the Bank since 2007. Prior to joining the Bank, Ashley was a senior vice president and director of supplier diversity at Citigroup. Ashley holds a bachelor's degree in French from Yale University, a master's degree in human resources education from Boston University, and a juris doctorate degree from Rutgers University School of Law.

  • Federal Reserve Bank of Philadelphia, Mary Ann Hood. Hood has been a senior vice president of human resources and the Bank's Equal Employment Opportunity officer since 2009. She was promoted to vice president of human resources in 2004 and has been an officer in that department since 2000. She has a bachelor's degree from Hood College, Frederick, Md., and holds a master's degree in human resource development from Villanova University.

  • Federal Reserve Bank of Cleveland, Peggy Velimesis. Velimesis is a senior vice president and chief of staff. She also oversees the human resources and executive information functions and serves as the Bank's Equal Employment Opportunity officer. Prior to joining the Bank, Velimesis was vice president of human resources for Meridia Health System. She holds bachelor's and master's degrees from Cleveland State University.

  • Federal Reserve Bank of Richmond, Tammy Cummings. Cummings has served as senior vice president of human resources and the Bank's Equal Employment officer since 2009. Prior to joining the Richmond Fed in 2006, Cummings was the vice president of human resources at Tredegar Corporation. Cummings holds a bachelor's degree in mass communications from Virginia Commonwealth University.

  • Federal Reserve Bank of Atlanta, Joan Buchanan. Buchanan, a vice president, previously served as an assistant vice president with responsibility for the Bank's Equal Employment Opportunity and corporate secretary functions. She also has served as an officer in bank supervision and regulation, where she worked in consumer compliance, including enforcement of non-discrimination regulations. She received a bachelor's degree in applied psychology from the Georgia Institute of Technology.

  • Federal Reserve Bank of Chicago, Valerie Van Meter. Van Meter serves as the District's Equal Employment Opportunity director in her role as senior vice president andchief financial officer. Van Meter holds a bachelor's degree in economics from the University of Michigan, is a graduate of the Stonier Graduate School of Banking, and holds a master's in business administration from the University of Chicago.

  • Federal Reserve Bank of St. Louis, James Price. Price has served as vice president of diversity and inclusion and as the District's Equal Employment Opportunity officer since 2008. Price holds a bachelor's degree in business administration from Culver-Stockton College.

  • Federal Reserve Bank of Minneapolis, Duane Carter. Carter is the senior vice president of human resources and central bank services, and has served as the Bank's Equal Employment Opportunity officer since 2002. Carter holds a bachelor's degree in agriculture business from the University of Minnesota and a master's in business administration from the University of St. Thomas.

  • Federal Reserve Bank of Kansas City, Donna Ward. Ward was appointed senior vice president of the administrative services division last year after serving as vice president for human resources. She holds a bachelor's degree in business administration from Drury University and a master's in business administration from the University of Missouri-Kansas City.

  • Federal Reserve Bank of Dallas, Tyrone Gholson. Gholson is senior vice president with responsibility for human resources, Treasury services, financial institution relationship management, and public affairs. Gholson has served as the District's Equal Employment Opportunity officer since 1992. He received his bachelor's in business administration from North Texas State University.

  • Federal Reserve Bank of San Francisco, Susan Sutherland. Sutherland, a senior vice president, has overseen Equal Employment Opportunity, human resources, statistics, and strategy and communications, and is the executive committee sponsor of the Bank's diversity efforts. Sutherland holds a bachelor's degree from Wesleyan and a Master of Science in Organizational Development from Pepperdine University.


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