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In remarks at the University of Baltimore mid-year commencement, Federal Reserve Board Chair Yellen discussed the job market. She said, “while I expect workers will continue to face some challenges in the coming years, I believe, for two reasons, that the job prospects and career opportunities for new graduates at this time are very good. First, after years of a slow economic recovery, you are entering the strongest job market in nearly a decade. The unemployment rate, at 4.6 percent, is near what it was before the recession. This is a level that has been associated with good job opportunities. ...The second reason for optimism is that you have already done the one thing that research shows is most important to a successful and stable working life: earning the degrees you will receive today. Economists are not certain about many things. But we are quite certain that a college diploma or an advanced degree is a key to economic success. Those with a college degree are more likely to find a job, keep a job, have higher job satisfaction, and earn a higher salary.”

The OCC, Federal Reserve, FDIC and NCUA have issued an interagency "Frequently Asked Questions on the New Accounting Standard on Financial Instruments – Credit Losses" to assist financial institutions and examiners with the new accounting standard, Accounting Standards Update 2016-13, Topic 326, “Financial Instruments – Credit Losses,” issued by the Financial Accounting Standards Board (FASB) on June 16, 2016. The FAQs:

• summarize key elements of the new accounting standard, focusing on such concepts as effective dates, scope, transition and measurement approaches;
• highlight areas within existing U.S. generally accepted accounting principles that will change with the new accounting standard;
• discuss initial supervisory views with respect to measurement methods, portfolio segmentation, use of vendors, scalability, data needs, and allowance processes; and
• outline certain steps that financial institutions are encouraged to take to prepare for the transition to the new accounting standard.

• OCC Bulletin 2016-45
• FDIC FIL-79-2016
• Federal Reserve Board SR 16-19

Related stories:

• FASB issues new guidance on credit losses accounting - June 16, 2016
• Agencies' statement on new accounting standard - June 20, 2016

The Office of the Comptroller of the Currency (OCC) has published a final rule in today's Federal Register addressing the conduct of receiverships for national banks that are not insured by the Federal Deposit Insurance Corporation (FDIC) (uninsured banks) and for which the FDIC would not be appointed as receiver. The final rule implements the provisions of the National Bank Act (NBA) that provide the legal framework for receiverships of such institutions. The final rule adopts the rule as proposed on September 13, 2016, without change. It becomes effective on January 19, 2017. As of December 2, 2016, the OCC supervised 52 uninsured banks, all of which are national trust banks.

The Federal Emergency Management Agency has published a final rule in this morning's Federal Register identifying communities in Brazoria, Chambers, Fort Bend, Galveston, Harris, and Montgomery Counties, Texas, that are scheduled for suspension from the National Flood Insurance Program (NFIP) on January 6, 2017, for noncompliance with the floodplain management requirements of the program.

The CFPB has posted a Bureau Blog article announcing the key areas on which its fair lending team will focus in 2017:

• Redlining. It will continue to evaluate whether lenders have intentionally avoided lending in minority neighborhoods.
• Mortgage and Student Loan Servicing. It will determine whether some borrowers who are behind on their mortgage or student loan payments may have more difficulty working out a new solution with the servicer because of their race or ethnicity.
• Small Business Lending. Congress expressed concern that women-owned and minority-owned businesses may experience discrimination when they apply for credit, and has required the CFPB to take steps to ensure their fair access to credit.

The SEC and New York Attorney General have announced that Deutsche Bank has agreed to pay each regulator $18.5M to settle charges that it misled clients about the performance of a core feature of its automated order router that primarily sent client orders to dark pools. According to the SEC’s order, Deutsche Bank made materially misleading statements and omissions concerning the Dark Pool Ranking Model feature of one of its order routers, known as SuperX+. The Dark Pool Ranking Model was intended to measure execution quality and liquidity of venues to which it sent orders. Deutsche Bank used the Dark Pool Ranking Model to determine which venues would receive orders and the sequence in which Deutsche Bank would send them.

Director Cordray presented prepared remarks yesterday to the participants at the CFPB Research Conference. The Director observed, “in the last two generations, the markets for consumer credit and household finance have expanded and become much more complex. Raw numbers tell the story. The mortgage market today stands at just over $10 trillion. Student loan debt has risen rapidly in recent years to over $1.3 trillion. Auto loan debt exceeds $1.1 trillion. And credit card debt now totals around $700 billion. Growing along with this debt has been the availability, variety, and complexity of consumer financial products and services “ He also noted, “We are also the first federal agency with jurisdiction over both banks and the nonbank financial companies that compete against them in markets like mortgage origination, mortgage servicing, auto finance, consumer installment lending, and the like. Just as an umpire must be authorized to assess the entire field of play, this authority enables us to level the expectations and compliance standards of these two types of financial services providers.”

Cordray also announced the unveiling of a new Consumer Credit Trends web tool, which offers a fresh and timely perspective on the performance of consumer financial markets both today and over time. The beta version of the Consumer Credit Trends tool tracks originations for mortgages, credit cards, auto loans, and student loans.

The OCC has announced the release of a final rule to remove or amend outdated or unnecessary provisions of certain rules to reduce the regulatory burden on national banks and federal savings associations. The rule:

• removes notice and approval requirements for certain changes in permanent capital involving national banks;
• clarifies national bank director oath requirements;
• removes certain financial disclosure requirements for national banks;
• simplifies certain licensing rules for business combinations involving federal mutual savings associations;
• removes unnecessary burden with respect to federal savings associations’ fidelity bond activities;
• removes certain unnecessary regulatory reporting, accounting, and management policy requirements for federal savings associations;
• removes unnecessary requirements in the electronic activities rule for federal savings associations;
• revises certain fiduciary activity requirements for national banks and federal savings associations, including increasing the asset size limit for mini-funds;
• integrates and updates OCC rules for national banks and federal savings associations relating to municipal securities dealers, Securities Exchange Act disclosures, securities offering disclosures, and insider and affiliate transactions;
• updates recordkeeping and confirmation requirements for national banks’ and federal savings associations’ securities transactions; and
• permits the electronic submission of filings required under the Securities Act of 1933 and the Securities Exchange Act of 1934.

The Federal Reserve Board encouraged consumers to closely monitor their financial accounts for unauthorized activity and know where to find help if they spot unauthorized activity. Signs of potential problems may include a notice, bill, or debit card for an account that was not activated or authorized, as well as a notice of fees for unsolicited products or services tied to an existing account. The Federal Reserve maintains the Federal Reserve Consumer Help (FRCH) website, which offers an online complaint form and information on filing complaints by fax and phone for consumers.

The Federal Reserve Board has announced its adoption of a a final rule to strengthen the ability of government authorities to resolve in an orderly way the largest domestic and foreign banks operating in the United States without any support from taxpayer-provided capital. These institutions will be required to meet a new long-term debt requirement and a new "total loss-absorbing capacity" (TLAC) requirement. The final rule applies to domestic firms identified by the Board as global systemically important banks (GSIBs) and to the U.S. operations of foreign GSIBs. The final rule also will require the parent holding company of a domestic GSIB to avoid entering into certain financial arrangements that would create obstacles to an orderly resolution. These "clean holding company" requirements will include bans on issuance of short-term debt to external investors and on entering into derivatives and certain other types of financial contracts with external counterparties. Board Chair Yellen and FDIC Chairman Gruenberg issued statements on the final rule.