Financial Update (October-December 1997)
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 Aug. 22, the Federal Reserve Board announced modifications to the prudential limits or firewalls that currently apply to bank holding companies engaged in securities underwriting and dealing activities through section 20 subsidiaries. The Board is eliminating those restrictions that have proven to be unduly burdensome or unnecessary in light of other laws or regulations and consolidating the remaining restrictions in a series of eight operating standards. The modifications went into effect Oct. 31. Circular letter: 117-97.
On Aug. 22, the Federal Reserve Board announced that it has adopted amendments to its Regulation E (Electronic Fund Transfers) to carry out statutory amendments to the Electronic Fund Transfer Act. These changes went into effect Sept. 15. The amendments to the regulation exempt certain "needs-tested" electronic benefit transfer programs established or administered by state or local government agencies, such as the food stamp program, from requirements of the Electronic Fund Transfer Act. Circular letter: 544-97.
On Sept. 5, the Federal Reserve Board, along with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, issued a final rule that adopts uniform regulations implementing section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act). As required by section 109, the rule prohibits any bank from establishing or acquiring a branch or branches outside of its home state under the Interstate Act primarily for the purpose of deposit production. The rule also provides guidelines for determining whether such a bank is reasonably helping to meet the credit needs of the communities served by the interstate branches. The final rule went into effect Oct. 10, 1997. Circular letter: 548-97.
On Sept. 11, the Federal Reserve Board announced amendments to Regulation J to help ease the transition to interstate branching in check collection. Federal Reserve Banks will also implement a new account structure under which each depository institution will have a single account relationship. The amendments will allow an institution to send checks to any Reserve Bank for collection, but all of its check collection transactions through the Fed will be reflected in a single account held at its "Administrative Reserve Bank" no matter where the institution has its branches. The amendments and new account structure are effective Jan. 2, 1998. Circular letter: 551-97.
On Sept. 25, the Federal Reserve Board announced that it approved a risk-focused consumer compliance supervision program and extended the consumer examination frequency schedule for state member banks and foreign banking organizations. Implementation of the new program will be phased in during 1998. Circular letter: 555-97.