On June 19, the Federal Reserve adopted a final rule that sets overall single counterparty credit limits for global systemically important banking entities (GSIBs) and US bank holding companies with at least $250 billion in total consolidated assets.

The new rule implements section 165(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which requires the Federal Reserve to impose limits on the amount of credit exposure that such a bank holding company or foreign banking organization can have to an unaffiliated company in order to reduce the risks arising from the company’s failure.
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On May 24, Public Law No. 115-74 was signed by President Trump. The law, also known as the Economic Growth, Regulatory Relief and Consumer Protection Act, has six parts:

  • Title I—Improving Consumer Access to Mortgage Credit
  • Title II—Regulatory Relief and Protecting Consumer Access to Credit
  • Tile III—Protections for Veterans, Consumers and Homeowners
  • Title IV—Tailoring Regulations for Certain Bank Holding Companies
  • Title V—Encouraging Capital Formation
  • Title VI—Protections for Student Borrowers

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On May 30, the five Federal regulators responsible for the Volcker Rule approved the publication for comment of numerous proposed changes to the rule. The notice of proposed rulemaking, entitled Proposed Revisions to Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships With, Hedge Funds and Private Equity Funds, was jointly developed by the Federal Reserve Board, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission. The proposed changes are intended to streamline the rule by eliminating or modifying requirements that are not necessary to effectively implement the statute, without diminishing the safety and soundness of banking entities.
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On February 5, the Prudential Regulators—the five federal banking regulators for swap dealers that are banks—proposed technical amendments to their margin rules for uncleared swaps. The amendments aim to harmonize the definition of Eligible Master Netting Agreement (EMNA) in the margin rules with recent changes made to the definition of “Qualifying Master Netting Agreement” (QMNA) in the capital and liquidity rules applicable to banks.
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On September 1, the Board of Governors of the Federal Reserve System adopted a final rule that will affect the rights of counterparties that enter into Qualified Financial Contracts (QFC) (e.g., derivatives, stock loans and repurchase agreements) with banks that have been designated as global systemically important banking organizations (GSIBs). This rule, which was proposed in 2016, would prohibit US GSIBs and their subsidiaries, and the US subsidiaries, branches, and agencies of foreign GSIBs, from entering into a QFC unless the counterparty to the contract has agreed contractually:

  • to abide by the 48-hour stay of QFC termination found in Title II of the Dodd-Frank Act and in the Federal Deposit Insurance Act;
  • to allow transfer of the QFC in the event of a resolution of its counterparty; and
  • to refrain from exercising cross-default termination rights arising from the resolution of an affiliate of its GSIB counterparty.

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On September 6, the Federal Deposit Insurance Corporation (FDIC) issued revised guidelines entitled “Guidelines for Appeals of Material Supervisory Determinations”, which govern appeals by all FDIC-supervised institutions to Division Directors and the Supervision Appeals Review Committee. These revised guidelines expand the circumstances under which banks may appeal a material supervisory determination, enhance consistency with the appeals processes of other federal banking agencies, and include other limited technical and conforming changes.
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On August 2, the Office of the Comptroller of the Currency provided further evidence that change may be forthcoming for banks subject to the Volcker Rule (Section 13 of the Bank Holding Company Act of 1956) by issuing a notice soliciting suggestions and recommendations for revising the regulations implementing the Volcker Rule to better accomplish

On June 15, the Consumer Financial Protection Bureau (CFPB), announced that it is seeking comments on proposed updates to its prepaid rule, “Prepaid Accounts under the Electronic Fund Transfer Act (Regulation E) and the Truth In Lending Act (Regulation Z)” (Prepaid Rule). The Prepaid Rule incorporates prepaid accounts under Regulations E and Z and was originally published in the Federal Register on November 22, 2016 (81 FR 83934) and amended on April 25, 2017 (82 FR 18975).
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On June 7, the Office of the Comptroller of the Currency (OCC) issued frequently asked questions (FAQs) to supplement OCC Bulletin 2013-29, “Third-Party Relationships: Risk Management Guidance,” which was originally issued on October 30, 2013. These FAQs address questions from national banks and federal savings associations. The FAQs and underlying OCC Bulletin 2013-29 apply to