Financial Update (Second Quarter 2002)

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FedACH

Banks Weather Downturn

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Housing GSEs

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Data Bank

The Docket

T he following is a summary of recent Federal Reserve actions or announcements. Circular letters are available online at www.frbatlanta.org/bank_info/circ_router.cfm.


Dec. 19 The Federal Reserve Board announced that the asset-size exemption threshold for depository institutions under Regulation C (Home Mortgage Disclosure) increased from $31 million to $32 million. Depository institutions with assets of $32 million or less as of Dec. 31, 2001, are exempt from 2002 data collection. However, an institution's exemption from collecting data in 2002 does not affect its responsibility to report the data it was required to collect in 2001. The adjustment became effective Jan. 1, 2002.

Jan. 8 The Federal Reserve Board, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency announced the adoption of final rules governing the regulatory capital treatment of equity investments in nonfinancial companies held by banks, bank holding companies and financial holding companies. The new capital requirements apply symmetrically to equity investments made by banks and their holding companies in nonfinancial companies under the legal authorities specified in the final rules. The final rules became effective on April 1, 2002.

Feb. 6 In conjunction with National Consumer Protection Week, the Federal Reserve Board and several other federal agencies released a publication to help consumers make informed choices about whether to allow their personal financial information to be shared. Privacy Choices for Your Personal Financial Information guides consumers through the choices they face as a result of the privacy provisions of the Gramm-Leach-Bliley Act of 1999.

Feb. 7 The Federal Reserve Board published revisions to Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The Board approved the revisions at its meeting on Jan. 23, 2002. The changes require lenders to disclose pricing data on higher-cost loans, expand the number of nondepository institutions subject to HMDA's reporting requirements and revise certain regulatory definitions. The amendments take effect for data collection beginning Jan. 1, 2003.

Feb. 21 The Federal Reserve Board announced that it would not apply section 9 of the Federal Reserve Act to prohibit a state member bank from acquiring equity securities to hedge the bank's customer-driven equity derivative transactions if such purchases are made in accordance with the conditions and restrictions applicable to national banks. Any state member bank that seeks to acquire equity securities to hedge the bank's equity derivative transactions must receive the prior approval of the Board's director of banking supervision and regulation. In addition, a state member bank may engage in equity hedging activities only to the extent permitted by state law, and the bank must comply with any applicable state notice or approval requirements.

March 11 The federal bank supervisory agencies and the Conference of State Bank Supervisors announced an interagency effort to improve the efficiency of the examination process by standardizing the request for electronic loan information. This information is used primarily to conduct community and midsize bank safety and soundness examinations.

March 19 The federal financial institutions supervisory agencies announced that the financial institutions they supervise should follow the guidance issued by the U.S. Securities and Exchange Commission with respect to auditing and accounting work performed by Arthur Andersen LLP.

March 21 The Federal Reserve Board published a guide to help consumers better understand their rights and responsibilities with regard to electronic check conversion transactions. When Is Your Check Not a Check? Electronic Check Conversion discusses what electronic check conversion is, how consumers can tell if their check will be electronically converted, some of the differences between a regular check transaction and electronic check conversion, consumers' rights in an electronic check conversion transaction, and what consumers can do if they have problems with such transactions.