Top Stories for February 2001

FDIC Makes Public January 2001 Enforcement Actions

The FDIC released a list of orders of administrative enforcement actions taken against banks and individuals in January 2001. No administrative hearings are scheduled for March 2001. FDIC:PR-14-2001 (2/28/01)

OCC Updates The Permissible Bank Activities Guide

(2/28/01)

OCC Publishes Guide to Aid in Identification of Problem Banks

The OCC published a guide intended to help examiners identify problem banks and assist in their rehabilitation or resolution. OCC:NR 2001-19 (2/28/01)

FRB and Treasury Extend Comment Period on Reg Y

As earlier report, the FRB and Treasury published for public comment a joint proposal that would permit financial holding companies and financial subsidiaries of national banks to engage in real estate brokerage and real estate management. The Agencies are extending the comment period on the proposal to May 1, 2001. 66FR12440 (2/27/01)

OTS Publishes the Community Liaison

(2/27/01)

FDIC's Bank Technology Group Appoint Five Agency Veterans to Key Posts

The Bank Technology Group ensures the FDIC uses a corporate-wide, integrated approach in monitoring and managing risks associated with emerging bank technologies as the risks relate to consumers and to the FDIC's insurance and supervisory functions. Areas of focus include electronic commerce activities such as Internet banking and Internet payments, enabling technologies, and related policy implications. FDIC:PR-13-2001 (2/27/01)

Comptroller Hawke Notes Promise, Risks of Internet Banking

Comptroller of the Currency John D. Hawke, Jr., said that while the OCC’s goal in the area of Internet banking is to encourage innovation, the new technology poses special risks and challenges for regulators. OCC:NR 2001-18 (2/26/01)

NCUA proposes to revise its regulation establishing standards for vital record preservation

The proposal clarifies that a credit union may preserve records in electronic form, as authorized by the Electronic Signatures in Global and National Commerce Act. 66FR11239 (2/23/01)

NCUA is Adopting a Rule Clarifying Repayment Fees

The NCUA is adopting a rule clarifying that as conservator or liquidating agent of a federally-insured credit union, the NCUA Board (Board) will honor a claim for prepayment fees by a Federal Home Loan Bank under the circumstances set forth in the rule. 66FR11229 (2/23/01)

FFIEC Publishes Final Money Laundering Report

Financial Action Task Force on Money Laundering Report on Money Launder Typologies for 2000-2001 (2/23/01)

OCC Issues Alerts on Entities That May Be Conducting Banking Operations in the
United States Without Authorization

The OCC has learned that the British Bank of Commerce, a.k.a. British Bank of Trade & Commerce, 499 Park Avenue, Ste 621, New York, NY 10022 may be operating a banking business in the United States without authorization. OCC: 2001-2 (2/23/01)

Credit unions show marked loan growth in 2000

Lending grew 11 percent and shares grew 6.3 percent in 2000 according to preliminary data compiled from yearend call reports submitted by the nations 10,316 federally insured credit unions. NCUA Press Release (2/23/01)

NCUA Issues Proposed Rule Concerning FCU Investments in and Loas to CUSOs
The first proposed change clarifies that the list of permissible activities in the CUSO regulation is intended to establish broad categories of permissible activities. The second proposed change adds a
federally-chartered corporation to the category of permissible structures for CUSOs.
66 FR 11125 (2/22/01)

FRB Amends Reg T

The List of Foreign Margin Stocks is composed of certain foreign equity securities that qualify as margin securities under Regulation T. The Foreign List is published twice a year by the FRB.
66 FR 11101 (2/22/01)

OCC Issues Alerts on Entities That May Be Conducting Banking Operations in the
United States Without Authorization

The OCC has learned that the Chase (Trust) Bank, 365 Madison Avenue, New York, NY 10002, may be operating a banking business in the United States without authorization. OCC: 2001-1 (2/22/01)

OCC Publishes Guidance on Foreign Official Corruption

The Treasury, OCC, FDIC, OTS and FRB issued guidance to help U.S. financial
institutions avoid transactions that may involve the proceeds of foreign official corruption. OCC 2001-9 (2/22/01)

FRB Raises Exemption Threshold

The FRB has raised the asset size exemption threshold to $31 million for depository institutions
that are required to report data under HMDA. The previous exemption level was $30 million. OCC 2001-10
(2/22/01)

FRB and Treasury Extend Comment Period on Real Estate Activities Proposal

The FRB and the Department of the Treasury announced an extension of the deadline, through May 1, 2001, on their request for comment on whether real estate brokerage and real estate management are activities that are financial in nature or incidental to a financial activity and therefore permissible for financial holding companies and financial subsidiaries of national banks. Joint Press Release (2/22/01)

FDIC Issues Deposit Broker Notification

The FDIC informed banks that due to Congress's repeal of Section 29A of the FDIA - through enactment of the Financial Regulatory Relief and Economic Efficiency Act of 2000 - deposit brokers are no longer required to notify the FDIC that they are acting as deposit brokers or that they have stopped acting as deposit brokers. December 27, 2000, was the effective date of the legislation. FDIC:FIL-16-2001 (2/21/01)

OCC Releases CRA Evaluations for 9 National Banks

The OCC released a list of CRA performance evaluations that became public during the period of
January 15 through February 14. OCC:NR 2001-17 (2/19/01)

OCC Announces New Enforcement Actions

The OCC announced 9 new enforcement actions taken against national banks and individuals currently and formerly affiliated with national banks. OCC: NR 2001-16 (2/19/01)

FDIC Issues Alerts on Entities That May Be Conducting Banking Operations in the United States Without Authorization

The FDIC has learned that the American Republic Bank, Indianapolis, Indiana may be operating
a banking business in the United States illegally or without authorization. FDIC:FIL-15-2001 (2/19/01)

Len Skiles Named NCUA Executive Director

The NCUA Board named veteran decision-maker James Leonard Skiles executive director of the NCUA. As executive director, Skiles will be responsible for the day-to-day operation of the 1000-person federal agency. NCUA Press Release
(2/16/01)

Basel Committee on Banking Supervision Seeks Comment on Consultative Paper on Customer Due Diligence for Banks

As reported in January, the paper is part of the Basel Committee's ongoing effort to strengthen risk-management procedures in banks throughout the world. As set forth in the paper, key elements for customer due diligence policies and procedures include customer acceptance, customer identification, ongoing monitoring of high-risk accounts and risk management. The paper is available on the Bank for International Settlements' Web site.FDIC:FIL-13-2001 (2/16/01)

The FDIC would like to remind institutions that Calendar Year 2000 HMDA data is due by March 1, 2001.

The FDIC has again contracted with the FRB in Washington, DC, to collect and process CY2000 HMDA data from those FDIC-supervised institutions that have a HMDA-reporting obligation. FDIC:FIL-14-2001 (2/16/01)

OCC Issues Procedures on Reverse Stock Split

This advisory dated 05/10/2000 was updated to reflect the addition of Minnesota to the list of states for which the OCC has approved reverse stock splits conducted under state corporate governance procedures. OCC:AL 2000-4 (2/15/01)

FDIC Issues Alert on Entities That May Be Conducting Banking Operations in Canada or the US Without Authorization

The Office of the Superintendent of Financial Institutions (OSFI) of Canada has published the
"Monthly Warning Advisory" (Issue No. 10), which contains the names of entities recently brought to
OSFI's attention through an inquiry or complaint. FDIC:FIL-12-2001 (2/15/01)

Regulators Request Comment on Proposed Rule that would Establish Minimum Capital Requirements

The proposed capital treatment would apply symmetrically to equity investments of banks and bank holding
companies. 66FR10212 (2/14/01)

FRB amends Reg A to reflect the decrease in the discount rate

The FRB has amended its Regulation A on Extensions of Credit by Federal Reserve Banks to reflect its approval of a decrease in the basic discount rate at each Federal Reserve Bank. The Board acted on requests submitted by the Boards of Directors of the twelve Federal Reserve Banks. 66FR9907 (2/13/01)

President Bush Appoints Dennis Dollar to Chair the NCUA Board

Mr. Dollar has been the single Republican member of the NCUA Board since October 9, 1997.
During his tenure, Mr. Dollar has supported the expansion of credit union services to more
Americans and has championed a move toward greater regulatory flexibility for credit unions with
sound safety records. NCUA Press Release (2/13/01)

FDIC Issues Alert on Entities That May Be Conducting Banking Operations Without Authorization

The entities were incorporated in the state of Indiana; however, the actual location of their operations is unknown. The State of Indiana Department of Financial Institutions has not issued a banking license to these entities, and they are not authorized to conduct a banking business in the state.
FDIC:FIL-11-2001 (2/9/01)

Basel Committee on Banking Supervision Published a Paper Entitled "Customer Due Diligence for Banks

The committee's paper provides guidance to banks and bank supervisors on customer due diligence. The paper particularly focuses on basic standards for customer acceptance, identification, and dealing with high-risk accounts; the role of supervisors; and customer due diligence in a cross-border context. OCC 2001-7 (2/9/01)

OCC Offers New Guidance on Liquidity Risk

The Liquidity handbook emphasizes the importance of understanding the inherent risks associated with reduced asset liquidity, increased wholesale funding dependence, growing funding concentrations, and higher exposures to rollover risk. OCC:PR 2001-15 (2/9/01)

IRS Extends Time Regarding Mandatory Use of Revised W-9

The IRS has extended the deadline for the mandatory use of the revised W-9 Form until June 30, 2001. Payors must use the revised form for all new solicitations after that date. The revision requires a payee to certify that he or she is a U. S. person. Additional information regarding the extension will be contained an Internal Revenue Bulletin on February 20, 2001. IRS Notice (2/8/01)

FDIC Issues Final rule Implementing the Program Fraud Civil Remedies

The final rule establishes administrative procedures to impose statutorily authorized civil penalties against any person who makes, submits, or presents a false, fictitious, or fraudulent statement or claim to the FDIC in connection with FDIC employment matters, FDIC contracting activities, and the FDIC
Asset Purchaser Certification Program. 66FR9187 (2/7/01)

NCUA Chairwoman Moves to Assist Communications, Legislative Efforts

Newly appointed Chairwoman Yolanda Townsend Wheat recently hired four new staffers to assist with the communications and congressional affairs operations at the NCUA. NCUA Press Release (2/7/01)

OTS Grants Federal Thrift Charter to National Advisors Holdings, Inc.

The National Advisors Holdings, Inc., Overland Park, Kansas received approval from the OTS to organize a federal savings bank to be known as National Advisors Trust Company, FSB (NATCO). The thrift will be located in Overland Park, Kansas and will operate as a nationwide provider of trust products and services. NATCO will not accept deposits or make loans. OTS 01-10 (2/6/01)

OTS Releases January National CRA Ratings

The OTS issued savings associations' Community Reinvestment Act performance evaluation ratings that became available in January 2001. OTS 01-11
(2/6/01)

Comptroller Hawke Outlines E-Banking Challenges Facing International Bank Supervisors

Comptroller of the Currency John D. Hawke, Jr. underscored the need for international cooperation in the supervision of electronic banking in a speech to the annual International Monetary Seminar sponsored by the Banque de France, Paris. OCC:NR 2001-14 (2/6/01)

FDIC Issues February List Of Banks Examined For CRA Compliance

The FDIC issued its monthly list of state nonmember banks recently evaluated for compliance with the CRA. The list covers evaluation ratings that the FDIC assigned to institutions in November 2000.
FDIC: PR-12-2001 (2/6/01)

FDIC Approves Assumption of all Deposits of First Alliance Bank & Trust Co.

The Board of Directors of the FDIC has approved the assumption of all the deposits of First Alliance Bank & Trust Company, Manchester, New Hampshire, by Southern New Hampshire Bank & Trust Company, Salem, New Hampshire. FDIC: PR-11-2001 (2/5/01)

FDIC Helps Launch Third Annual National Consumer Protection Week

Joining forces with federal, state and local organizations, the FDIC will help launch the third annual National Consumer Protection Week (NCPW), taking place February 5 - 10. The event will focus on predatory lending and other abusive lending practices, and highlight nationwide consumer protection and education efforts in these areas. FDIC: PR-10-2001 (2/5/01)

OCC Issues Advisory on Internet-Initiated ACH Debits/ACH Risks

The advisory alerts national bank management and boards of directors to specific Automated Clearing
House (ACH) risks and emphasizes the importance of sound ACH risk management practices. In particular,
this advisory describes a recently approved amendment to the operating rules of the National Automated
Clearing House Association. OCC:AL 2001-3 (2/5/01)

FRB Issued Final Rule to Amend Reg H

The FRB issued a final rule that provides a national or state member bank meets the alternative criteria if the bank has a current long-term issuer credit rating from a nationally recognized statistical rating organization that is within the three highest investment grade rating categories used by the organization. 66FR8748
(2/2/01)

FDIC Issues Final Rule on the Disclosure and Reporting of CRA-Related Agreements

As earlier reported in the Federal Register, the FDIC, FRB, OCC and OTS approved final regulations implementing the CRA Sunshine Requirements of the Federal Deposit Insurance Act (FDIA), which were enacted by the Gramm-Leach-Bliley Act. FIL-10-2001 (2/2/01)

OTS Approves MONY's Acquisition of The Advest Group, Inc.

The MONY Group Inc., New York, N.Y., and its subsidiary, MONY Acquisition Corp., received approval from the OTS to acquire AGI and Advest Bank and Trust Company (the Savings Bank), Hartford, Connecticut. OTS 01-09 (2/2/01)

Technology Enhances Banks' Ability to Segment Banking Business, Play to Strengths

In a financial world increasingly influenced by technology, one key to a
bank's success may be its ability to segment products and services into component parts that can
then be marketed separately, said Julie L. Williams, First Senior Deputy Comptroller and Chief
Counsel. OCC:NR 2001-13 Remarks by Julie L. Williams (2/2/01)

Agencies Publish Final Rule on Standards for Safekeeping Customer Information

The OCC, FRB, FDIC, OTS published final Guidelines establishing standards for safeguarding customer information that implement sections 501 and 505(b) of the Gramm-Leach-Bliley Act. 66FR8615 (2/1/01)

NCUA Issues Order of Prohibition

The NCUA announced that it has issued Prohibition Orders against San Clemente Securities Inc., a brokerage firm located in San Clemente, California. NCUA Press Release (2/1/01)

Comptroller Highlights National Bank Commitment to Community Development Investments

Comptroller of the Currency John D. Hawke, Jr. praised national bank community development investments for supporting neighborhood revitalization efforts across the country. Part 24 of the OCC’s regulations authorizes national banks to make investments that are designed primarily to promote the public welfare. OCC:NR 2001-11 (2/1/01)

Regulators Jointly Issue Expanded Examination Guidance for Subprime Lending Programs

The FRB, OCC, FDIC and OTS, has developed expanded examination guidance on subprime lending.
The purpose of the expanded guidance is to strengthen the Agencies' supervision of institutions with subprime lending programs. The guidance is directed primarily to those institutions that have subprime lending programs that equal or exceed 25 percent of tier 1 regulatory capital. Joint Press Release (2/1/01)

FOMC Lowers its Target for Federal Funds

The FOMC at its meeting decided to lower its target for the federal funds rate by 50 basis points to 5-1/2 percent. In a related action, the Board of Governors approved a 50 basis point reduction in the discount rate to 5 percent. FRB Press Release (2/1/01)