Tuesday, May 16, 2017

Fed General Counsel Addresses the New Compliance Landscape

Compliance is More Important than Ever, but Approach May Be Too “Rules Based”

Author: David Schwartz

In a May 9th Address, Michael Held, Executive Vice President and General Counsel of the Federal Reserve Bank of New York, gave his thoughts on the new compliance landscape. Held told his audience at SIFMA’s Compliance and Legal Society Monthly Luncheon that in recent years the role of compliance within supervised financial institutions has grown dramatically in size, scope, and relevance. He also said that since the financial crisis, risk and compliance functions have grown in respect and stature across the financial services industry. Despite this new stature, however, those charged with monitoring compliance at financial institutions face an environment that has become perhaps “too rules-based.” Held offered his thoughts on firms and compliance personnel can meet these new challenges.

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Sunday, April 23, 2017

Are Bank Regulations Harming Small Businesses?

Fed Survey Finds Small Businesses Face Credit Challenges

Author: David Schwartz

A Federal Reserve Report published on April 18, 2017 found that U.S. small businesses are facing hurdles in obtaining much-needed financing for growth. The study indicated that small businesses presently face significantly more stringent credit conditions when approaching their traditional sources of loans for equipment and expansion. The Fed report itself does not point the finger at regulation as the cause for this restriction in the ability of small businesses to access credit. However, large banks have had to tighten credit conditions significantly as a result of increased capital requirements, liquidity restrictions, and stress tests. Because these big banks are the primary source of the for all business financing in the U.S., and the number one source of loans to small businesses, any restrictions on the flow of financing arising out of new banking regulation will perforce affect small businesses. 

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Wednesday, October 23, 2013

In With the New: Federal Reserve and OCC Issue Final Risk-Based and Leverage Capital Rules

Author: David Schwartz

The Office of the Comptroller of the Currency (OCC) and Board of Governors of the Federal Reserve System (Fed), published final rules in the Federal Register on October 11, 2013 revising risk-based and leverage capital requirements for banking organizations and replacing existing interim rules. The final rules consolidate three separate notices of proposed rulemaking that the OCC, Board, and FDIC published in the Federal Register on August 30, 2012, with selected changes. The rules establish a new regulatory capital framework that incorporates Basel III standards and other elements. The rule applicable to all national banks and federal savings associations "strengthens the definition of regulatory capital, increases risk-based capital requirements, and amends the methodologies for determining risk-weighted assets." Pursuant to a schedule of transition periods, the rule is effective for advanced approaches banks on January 1, 2014, and for all other banks on January 1, 2015.

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Tuesday, January 17, 2012

Federal Reserve Proposes Enhanced Prudential Standards and Early Remediation Requirements

Author: David Schwartz
On December 20, 2011, the Federal Reserve Board of Directors published its long awaited proposal on enhanced prudential standards and early remediation requirements.  This proposal, required by the Dodd-Frank Act, would impose greater levels of regulation and supervision on certain US bank holding companies and systematically important non-bank financial companies.  
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Monday, January 16, 2012

First FRB Financial Stability Analysis Serves as a Model for the Industry

Author: David Schwartz
In a December 23, 2011 approval order in connection with the proposed acquisition of RBC Bank (USA), a North Carolina based unit of Royal Bank of Canada, by The PNC Financial Services Group, Inc. includes the FRB's first ever Dodd-Frank financial stability analysis.  This analysis may serve as a model for how the FRB will determine going forward “the extent to which a proposed acquisition, merger, or consolidation would result in greater or more concentrated risks to the stability of the United States banking or financial system” now required under Dodd-Frank.    

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