On August 20, the Board of Directors of the Federal Deposit Insurance Corporation (FDIC) approved their version of a set of amendments intended to simplify some of the requirements of the regulations implementing Section 13 of the Bank Holding Company Act of 1956 (the “Volcker Rule”), which was enacted as Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Volcker Rule generally prohibits banking entities from engaging in proprietary trading and from owning or controlling hedge funds or private equity funds subject to numerous qualifications and exemptions set forth in the Volcker Rule regulations, which are identical sets of rules adopted by each of the Volcker Rule regulators (the FDIC, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Federal Reserve), the Commodity Futures Trading Commission (CFTC), and the Securities and Exchange Commission). These final amendments incorporate the responses of the Volcker Rule regulators to the numerous comments they received when they initially proposed a set of amendments in 2018.
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On May 31, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the National Credit Union Administration jointly issued an advisory addressing concerns from the financial industry regarding its perceived shortage of state certified and licensed appraisers, particularly in rural areas. The advisory addresses the appraiser shortage and the subsequent delays in obtaining an appraisal by highlighting two existing options: temporary practice permits and temporary waivers.
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As part of its responsibilities as the primary federal banking regulator for bank holding companies, savings and loan holding companies and state-chartered banks that are members of the Federal Reserve System (referred to as “supervised financial institutions”), the Federal Reserve reviews applications and notices (collectively, “applications”) that may include changes to the ownership and/or the composition of the board of directors or executive management of a supervised financial institution. For many of these applications, the Federal Reserve’s review includes an assessment of whether certain proposed shareholders and policymakers have the competence, experience, integrity, character and financial resources to effectively lead a supervised financial institution in a safe and sound manner. Under certain circumstances, the Federal Reserve also requests from other regulatory and investigative agencies background information about an individual or company involved in a proposal; this is commonly referred to as the “name check” process.
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