Product Updates for August 2023
The Product Updates for August 2023 from BankPolicies.com feature the following revised policy template products:
Asset, Liability and Liquidity Management Policy Template
Liquidity Contingency Funding Plan Policy Template
The update to these products is in response to the Joint Press Release entitled “Agencies Update Guidance on Liquidity Risks and Contingency Planning” dated 07/28/23 that updated existing guidance on liquidity risks and contingency planning. The updated guidance highlights that depository institutions should regularly evaluate and update their contingency funding plans.
The updated guidance encourages depository institutions to incorporate the discount window as part of their contingency funding plans. Consistent with other contingency funding sources, the guidance reinforces the supervisory expectation that if the discount window is part of a depository institution’s contingency funding plans, the depository institution should establish and maintain operational readiness to use the discount window, which includes conducting periodic transactions.
The discount window can readily provide funding for depository institutions and the Central Liquidity Facility can do so for credit unions. The guidance applies to all depository institutions supervised by the agencies.
Bank Secrecy Act Policy Template – Basic
Bank Secrecy Act Policy Template – Comprehensive
Customer Identification Program Policy Template
The update to these products is in response to FFIEC Announcement 2023-02 entitled “Federal and State Regulators Release Updates to the BSA/AML Examination Manual” dated 08/02/23 that released updates to the following sections of the Bank Secrecy Act/Anti-Money Laundering Examination Manual:
Special Information Sharing Procedures to Deter Money Laundering and Terrorist Activity
Due Diligence Programs for Correspondent Accounts for Foreign Financial Institutions
Due Diligence Programs for Private Banking Accounts
Reporting Obligations on Foreign Bank Relationships with Iranian-Linked Financial Institutions
The updates should not be interpreted as new instructions or increased focus on certain areas; instead, they offer further transparency into the examination process and support risk-focused examination work.
Commercial Loan Policy Template
Participation and Purchased Loan Policy Template
The update to these products is in response to OCC Bulletin 2023-27 entitled “Loan Purchase Activities: Legal Lending Limit Guidance” dated 08/08/23 that provides background information on loan purchase activities and the LLL, and provides guidance on the applicability of the LLL to purchased loans and types of recourse arrangements.
The update to this product is in response to the Federal Reserve’s Final Rule entitled “Regulation A: Extensions of Credit by Federal Reserve Bank” dated 08/02/23 that announced final amendments to its regulations to reflect the Federal Reserve Board’s approval of an increase in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically increased by formula as a result of the Board’s primary credit rate action.
The amendments to part 201 (Regulation A) are effective August 2, 2023. The rate changes for primary and secondary credit were applicable on July 27, 2023.
The update to this product is in response to the Federal Reserve’s Final Rule entitled “Regulation D: Reserve Requirements of Financial Institutions” dated 08/02/23 that announced final amendments to its regulations to revise the rate of interest paid on balances (“IORB”) maintained at Federal Reserve Banks by or on behalf of eligible institutions. The final amendments specify that IORB is 5.40 percent, a 0.25 percentage point increase from its prior level. The amendment is intended to enhance the role of IORB in maintaining the federal funds rate in the target range established by the Federal Open Market Committee (“FOMC” or “Committee”).
The amendments to part 204 (Regulation D) are effective August 2, 2023. The IORB rate change was applicable on July 27, 2023.
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