Office of the Comptroller of the Currency

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The Office of the Comptroller of the Currency (OCC) published a final rule on October 27 that adopts a “bright line test” for determining when a national bank or federal savings bank (bank) is the “true lender” in connection with a loan originated pursuant to a third-party partnership (Final Rule). Under the Final Rule, a Bank makes a loan when it, as of the date of origination, (1) is named as the lender in the loan agreement; or (2) funds the loan. In cases where one bank is named as the lender in the loan agreement and another bank funds the loan, the bank named as the lender in the loan agreement is deemed to have “made” the loan.
Continue Reading OCC Issues Final “True Lender” Rule

On June 25, the five prudential regulators responsible for the margin rules for bank swap dealers (the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), the Farm Credit Administration and the Federal Housing Finance Agency) adopted one final rule and one interim final rule that modify their original framework for margining uncleared swaps.
Continue Reading Prudential Regulators Revise Initial Margin Rules for Uncleared Swaps

On December 3, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the Consumer Financial Protection Bureau (CFPB) and the National Credit Union Administration (the Banking Agencies) released interagency guidance related to the use of alternative data for purposes of underwriting credit (the Guidance).
Continue Reading US Banking Agencies Issue Statement on Alternative Date in Credit Underwriting

On March 15, the five US regulators (the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Farm Credit Administration, the Federal Housing Finance Agency and the Federal Deposit Insurance Corporation) that are responsible for the margin rules for uncleared swaps that apply to prudentially regulated swap dealers adopted an interim final rule designed to ensure that qualifying swaps may be transferred from a UK entity to an affiliate in the European Union or the United States without triggering new margin requirements.
Continue Reading Banking Regulators Adopt Swap Margin Safe Harbor

On February 15, four members of the Commodity Futures Trading Commission (Commissioner Stump recused herself) filed a comment letter regarding the standardized approach for calculating the exposure amount of derivative contracts proposed by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (the Agencies). In 2018, the Agencies proposed a standardized approach for measuring counterparty credit risk (SA-CCR), which would replace the current exposure methodology (CEM) as an alternative method for calculations under the Agencies’ capital rules.
Continue Reading CFTC Commissioners File Comment Letter Regarding Proposed Standardized Approach for Measuring Counterparty Credit Risk

On October 3, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network, the National Credit Union Administration and the Office of the Comptroller of the Currency released a joint statement related to the permissible sharing of Bank Secrecy Act (BSA) resources.
Continue Reading Federal Banking Agencies Issue Interagency Statement on Sharing Bank Secrecy Act Resources

The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission has issued an interpretive letter clarifying that payments of variation margin, price alignment amounts and other payments in satisfaction of outstanding exposures on a counterparty’s cleared swap positions constitute “settlement” under the Commodity Exchange Act (CEA) and CFTC Regulation 39.14. The CEA and CFTC Regulation 39.14 provide that a derivatives clearing organization (DCO) must effect a settlement at least once each business day and ensure that settlements are final when effected.
Continue Reading CFTC Clarifies That Variation Margin Constitutes Settlement