Federal Reserve Board Proposes Amendments to Regulations Regarding Extensions of Credit by Federal Reserve Banks

On Monday, December 23, 2013, the Federal Reserve Board proposed amendments to Regulation A (Extensions of Credit by Federal Reserve Banks) to implement Sections 1101 and 1103 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), which amended the Federal Reserve Board's emergency lending authority in Section 13(3) of the Federal Reserve Act.

As required by Sections 1101 and 1103, the proposed amendments seek to limit the Federal Reserve Board's lending authority to ensure that any emergency lending program or facility is for the purpose of providing liquidity to the financial system, and not to aid an individual failing financial company.

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Federal Reserve Board Adopts Final Rule Clarifying the Treatment of Uninsured U.S. Branches and Agencies of Foreign Banks Engaged in Swaps Activities

On Tuesday, December 24, 2013, the Federal Reserve Board issued a final rule under Section 716 of the Dodd-Frank Act to clarify the treatment of uninsured U.S. branches and agencies of foreign banks engaged in swaps activities.  Section 716 of the Dodd-Frank Act generally prohibits the provision of certain types of federal assistance, such as discount window lending and deposit insurance, to regulated banking institutions engaged in swaps activities through their non-regulated affiliates.  The final rule confirms that uninsured U.S. branches and agencies of foreign banks are treated like insured depository institutions for the purposes of these swaps activities regulations.

Under the final rule, however, these uninsured U.S. branches and agencies of foreign banks are eligible to apply for a transition period during which they may seek to conform their swaps activities to the requirements of Section 716 of the Dodd-Frank Act.  The final rule also establishes a process for state member banks and uninsured state branches or agencies of foreign banks to request a transition period to conform their swaps activities to the requirements of Section 716 of the Dodd-Frank Act.

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