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Product Updates November 2019

Product Updates for November 2019

The Product Updates for November 2019 from BankPolicies.com feature the following revised policy template products:

Corporate Governance Policy Template
Stress Testing Program Policy Template

The update to these products is in response to the:

  • OCC’s News Release 2019-114 entitled “OCC Issues Final Rule Amending Stress Testing Rule for National Banks and Federal Savings Associations” dated 10/02/19 which amends the OCC’s stress testing rule at 12 CFR 46 (which implements the stress testing requirements of section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act), consistent with section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final rule revises the minimum threshold for national banks and federal savings associations to conduct stress tests from $10 billion to $250 billion; revises the frequency by which certain national banks and federal savings associations are required to conduct stress tests; reduces the number of required stress testing scenarios from three to two; and makes certain additional technical changes to the stress testing requirements. The final rule is effective as of November 24, 2019.
  • FDIC’s Final Rule dated 10/24/19 that amends the FDIC’s company-run stress testing regulations applicable to state nonmember banks and state savings associations, consistent with section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). Specifically, the final rule revises the minimum threshold for applicability from $10 billion to $250 billion, revises the frequency of required stress tests by FDIC-supervised institutions, and reduces the number of required stress testing scenarios from three to two. The final rule also makes certain conforming and technical changes, and is effective November 25, 2019.

As a reminder, the completed contents of the Stress Testing Program Policy Template are included within the Corporate Governance Policy Template as topic 27.


Management Interlocks Policy
Regulation L Policy

The update to these products is in response to Joint Release entitled “Thresholds Increase for the Major Assets Prohibition of the Depository Institution Management Interlocks Act Rules” dated 10/02/19 that announced updates to rules restricting the ability of a director or other management official to serve at more than one depository institution or depository holding company. The updates provide relief for community banks that have $10 billion or less in total assets.

Previously, the management interlock rules prohibited a management official working at a depository institution or holding company with more than $2.5 billion in total assets from simultaneously working at an unaffiliated depository organization with more than $1.5 billion in total assets. The previous thresholds were established by Congress in 1996. To account for changes in the market, the final rule increases both thresholds to $10 billion in total assets, as the agencies proposed previously.

Management officials will generally remain prohibited from serving with multiple depository organizations that are above the new thresholds, limiting the potential risk of anticompetitive conduct at larger institutions.

The final rule responds to comments received during the recent review required by the Economic Growth and Regulatory Paperwork Reduction Act of 1996. It was jointly issued by the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency and took effect upon publication in the Federal Register.


Other Real Estate Owned Policy Template

The update to this product is in response to the OCC’s final rule entitled “Other Real Estate Owned and Technical Amendments” dated 10/22/19 that clarifies and streamlines its regulation on other real estate owned (OREO) for national banks and updates the regulatory framework for OREO activities at federal savings associations. The final rule is effective January 1, 2020.


Regulation A Policy Template

The update to this product is in response to the Federal Reserve’s Final Rule issued on 10/03/19 that adopted final amendments to its Regulation A 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 Federal Reserve Board’s primary credit rate action.


Regulation C Policy Template

The update to this product is in response to the CFPB’s Final Rule issued on 10/10/19 that amends Regulation C to extend the current temporary threshold of 500 open-end lines of credit to January 1, 2022. The final rule also incorporates into Regulation C the interpretations and procedures from the interpretive and procedural rule issued by the CFPB in August 2018, and further implements the amendments made to the Home Mortgage Disclosure Act by the Economic Growth, Regulatory Relief, and Consumer Protection Act. This final rule is effective on January 1, 2020, except that the amendments to §1003.2 in amendatory instruction 6, the amendments to § 1003.3 in amendatory instruction 7, and the amendments to supplement I to part 1003 in amendatory instruction 8 are effective on January 1, 2022.


Regulation D Policy Template

The update to this product is in response to the Federal Reserve’s Final Rule issued on 10/03/19 that revises the rate of interest paid on balances maintained to satisfy reserve balance requirements (“IORR”) and the rate of interest paid on excess balances (“IOER”) maintained at Federal Reserve Banks by or on behalf of eligible institutions. The final amendments specify that IORR is 1.80 percent and IOER is 1.80 percent, a 0.30 percentage point increase from their prior levels.


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