Financial Update (January-March 1998)

The Docket

The following is a summary of recent Federal Reserve actions. To obtain a copy of any of these announcements, contact the Atlanta Fed Service Department at (404) 498-8474. Please give the docket number or circular letter number (if applicable) when calling to request a copy. The date on a circular letter may not be the same as the Federal Reserve Board announcement.

On Dec. 2, 1997, the Federal Reserve Board issued a revised version of an amendment to Regulation Z (Truth in Lending), which pertains to disclosures related to variable-rate mortgages. The revised amendment is effective immediately, but compliance is optional until Oct. 1, 1998. The effective date is a revision from the prior release. Circular letter 568-97.

On Dec. 11, 1997, the Federal Reserve Board announced the publication of revised regulations under the Equal Credit Opportunity Act (Regulation B) to implement legislation creating a legal privilege for the results of "self-tests" that creditors voluntarily conduct to determine the level of their compliance with the act. The revisions were effective Jan. 30, 1998. Circular letter 570-97.

On Dec. 16, 1997, the Federal Reserve Board raised the exemption threshold to $29 million for depository institutions that are required to report data under the Home Mortgage Disclosure Act (HMDA). Under the revision to the board's staff commentary to Regulation C, institutions with assets of $29 million or less will not be required to collect HMDA data in 1998. The previous exemption level was $28 million. The new exemption threshold went into effect Jan. 1, 1998. Circular letter 572-97.

On Dec. 17, 1997, the Federal Financial Institutions Examination Council (FFIEC) issued safety and soundness guidance on business-wide risk posed to financial institutions by the Year 2000 problem. The guidance underscores that Year 2000 preparation is not only an information systems issue but an enterprise-wide challenge that must be addressed at the highest level of a financial institution. The guidance lays out what the financial institution regulators expect from senior management and boards of directors in overseeing and managing their Year 2000 projects. Circular Letter 571-97.

On Dec. 18, 1997, the Federal Reserve Board requested comment on proposed comprehensive revisions to its Regulation K governing international banking operations. The proposals are intended to improve the international competitiveness of U.S. banking organizations by expanding permissible activities abroad and reducing the regulatory burden associated with the conduct of such activities. The board also requested comment on proposed revisions to Regulation K that are intended to reduce regulatory burden on foreign banks operating in the United States by streamlining the application and notice process. Comment is requested by March 14, 1998, and should refer to docket number R-0994. Circular letter 501-98.

On Dec. 19, 1997, the Federal Reserve Board issued an interim rule on amendments to reduce regulatory burden in risk-based capital guidelines that apply to banking organizations with significant trading activities. The board jointly issued this interim rule with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. The interim rule became effective Dec. 31, 1997. Circular letter 502-98.

On Dec. 23, 1997, the Federal Reserve Board announced the adoption of final amendments to reduce regulatory distinctions between broker-dealers, banks and other lenders and implement changes to the board's securities credit regulations. The final amendments to Regulations G, T, U and X are effective April 1, 1998. Compliance with Regulation T is optional until July 1, 1998. The board also announced an advance notice of proposed rulemaking and requested comment to amend Regulations T, U and X. Comment is sought on all aspects of these regulations and is due to the board on or before April 1, 1998. Refer to docket number R-0995. Circular letter 504-98.

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