Top Story Compliance Related

Yesterday, the Federal Emergency Management Agency published [89 FR 8282] a notice of proposed rulemaking that would revise the Standard Flood Insurance Policy by adding a new Homeowner Flood Form and five accompanying endorsements — increased cost of compliance coverage, actual cash value loss settlement, temporary housing expense, basement coverage and builder’s risk.

The new Homeowner Flood Form would replace the Dwelling Form as a source of coverage for homeowners of one-to-four family residences. Together, the new Homeowner Flood Form and endorsements would more closely align with property and casualty homeowners insurance and provide increased options and coverage in a more user-friendly and comprehensible format.

Comments on the proposal will be accepted through April 8, 2024.

The Securities and Exchange Commission yesterday announced its adoption of two rules that require market participants who engage in certain dealer roles, in particular those who take on significant liquidity-providing roles in the markets, to register with the SEC, become members of a self-regulatory organization (SRO), and comply with federal securities laws and regulatory obligations.

The final rules, Exchange Act Rules 3a5-4 and 3a44-2, further define the phrase “as a part of a regular business” in Sections 3(a)(5) and 3(a)(44) of the Securities Exchange Act of 1934 to identify certain activities that would cause persons engaging in such activities to be “dealers” or “government securities dealers” and be subject to the registration requirements of Sections 15 and 15C of the Act, respectively, in connection with certain liquidity-providing roles.

Under the final rules, any person that engages in activities as described in the rules is a “dealer” or “government securities dealer” and, absent an exception or exemption, required to: register with the Commission under Section 15(a) or Section 15C, as applicable; become a member of an SRO; and comply with federal securities laws and regulatory obligations and applicable SRO and Treasury rules and requirements.

The rules will become effective 60 days after they are published in the Federal Register, and compliance will be required one year later.

• Fact Sheet

The OCC, FDIC, and Federal Reserve Board have published [89 FR 8084] a notice of regulatory review and request for comments. As required by the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA), the agencies are reviewing agency regulations to identify outdated or otherwise unnecessary regulatory requirements on insured depository institutions and their holding companies. The agencies divided their regulations into 12 categories. Over the next two years, the agencies will publish four Federal Register documents requesting comment on multiple categories.

This first Federal Register document requests comment on regulations concerning the following three categories: Applications and Reporting, Powers and Activities, and International Operations. Comments will be accepted through May 6, 2024.

The Federal Reserve Banks published 31 Community Reinvestment Act evaluation ratings in January. Twenty-four of the listed banks earned Satisfactory ratings. We congratulate the following seven banks for receiving Satisfactory ratings:

• The Bank of Monroe, Union, WV
• The Bank of Romney, Romney, WV
• Comerica Bank, Dallas, TX
• Deutsche Bank Trust Company Americas, New York, NY
• Martha's Vineyard Bank, Edgartown, MA
• Mizuho Bank (USA), New York, NY
• The Northern Trust Company, Chicago, IL

The American Banker reports that the ABA, Independent Community Bankers of America, U.S. Chamber of Commerce, Texas Bankers Association and other trade associations have filed suit in the Northern District of Texas against the OCC, Federal Reserve, and FDIC, in an attempt to stop the recently finalized Community Reinvestment Act regulations reforms.

The suit argues that the agencies arbitrarily exceeded their statutory authority when they finalized their amendments to the CRA rules in October. The suit also calls on the court to stay the rules pending the outcome of the suit. The complaint argues that the October 2023 update works "a wholesale and unlawful change to a statutory and regulatory regime that, for nearly five decades, has successfully encouraged lending in low- and moderate-income neighborhoods throughout the United States."

FinCEN has published [89 FR 7767] a notice and request for comments on its proposal to renew without changes, its existing information collection requirements relating to Currency Transaction Reports (CTRs). Comments will be accepted though April 5, 2024.

The FDIC has released a list of 56 banks examined for CRA compliance whose evaluation ratings were assigned in November 2023. Of the banks listed, Norway Savings Bank, Norway, Maine, received the only Outstanding rating. The other 55 banks' evaluations were rated Satisfactory.

The Treasury Department on Friday announced sanctions against a transnational procurement network supporting Iran's ballistic missile and unmanned aerial vehicle (UAV) programs.

In a separate release, Treasury announced sanctions against actors responsible for malicious cyber activities on critical infrastructure in the U.S. and other countries.

For the names and identification information of the designated individuals and entities, see BankersOnline's February 2, 2024, OFAC Update.

The FDIC has issued FIN-3-2024 announcing a recent joint notice and request for comment by the FDIC, OCC, and Federal Reserve Board on a proposal to revise certain FFIEC reports, including the Call Report, consistent with proposed changes to the agencies’ regulatory capital rule published by the agencies in the Federal Register on September 18, 2023 (proposed capital rule). The comment period for the proposed capital rule ended on January 16, 2024. The agencies are proposing substantive changes for banks currently filing the FFIEC 031 or banks that would be subject to the expanded risk-based approach under the proposed capital rule, and only making technical revisions to the FFIEC 041 and FFIEC 051.

The proposal would—

• Revise the FFIEC 041 and FFIEC 051, Schedule RC-R, Part I, to remove items that are no longer relevant and make other technical edits;
• Revise the FFIEC 031 instructions to require all banks subject to the expanded risk–based approach under the proposed capital rule to file the FFIEC 031; and
• Revise the FFIEC 031, Schedule RC–R, Part I, Regulatory Capital Components and Ratios, to align the calculation of regulatory capital for institutions subject to Category III or Category IV standards with the calculation used for institutions subject to Category I and Category II standards.

The agencies propose to make these reporting changes effective for the third quarter of 2025 (as of the September 30, 2025, report date), consistent with the proposed July 1, 2025, effective date for the proposed capital rule. For modifications made to the proposed capital rule when the rule is adopted in final form, the agencies would modify the Call Report proposal to incorporate such changes.

Comments will be accepted through March 26, 2024.

OFAC has announced that the president has signed a new Executive Order, “Imposing Certain Sanctions on Persons Undermining Peace, Security, and Stability in the West Bank.”

Under the authority of the new Executive Order, OFAC added four Israeli nationals to its SDN List, with the new "Middle-East-EO" sanctions program tag. For identification information on those individuals, see BankersOnline's February 1, 2024, OFAC Update.