Product Updates for August 2023
The Product Updates for August 2023 from BankPolicies.com feature the following revised policy template products:
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.
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:
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.
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.
Keeping You Informed
We provide this Product Update Blog as a courtesy to all clients regarding new and revised products released by BankPolicies.com. We feel that it is important to keep our clients well informed of changes to the financial institution industry, including keeping on top of federal regulatory changes, and industry recommended best practices. In this regard, we encourage you to subscribe to our newsletter in which these types of announcements are made including any special offers that can save you time and money. Just contact us to be added to our distribution list.