Agencies Issue Joint Statement on Responsibilities for Federal Consumer Financial Laws

On Thursday, November 17, 2011, the Board of Governors of the Federal Reserve System (the "Federal Reserve"), the Consumer Financial Protection Bureau (the "CFPB"), the Federal Deposit Insurance Corporation (the "FDIC"), the National Credit Union Administration (the "NCUA"), and the Office of the Comptroller of the Currency (the "OCC") issued a joint statement that seeks to explains how the total assets of an insured bank, thrift or credit union will be measured for purposes of determining supervisory and enforcement responsibilities under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act'').

Under Section 1025 of Dodd-Frank, the CFPB has exclusive authority to examine institutions for compliance with federal consumer financial laws and primary authority to enforce those laws for institutions with total assets of more than $10 billion.  Section 1026 of the Dodd-Frank Act confirms that the other four regulators (the Federal Reserve, the FDIC, the NCUA, and the OCC) will retain supervisory and enforcement authority for other institutions.  The policy statement states that the measure to be used to determine asset size and the schedule for making such determinations will be the total assets reported in the quarterly Reports of Condition and Income (Call Reports), which banks, thrifts, and insured credit unions are required to file.

The statement also expresses the need to establish a schedule for determining the size of an institution that avoids unwarranted uncertainty or volatility regarding the identity of an institution's primary supervisor for federal consumer financial laws.  After an initial asset size determination based on June 30, 2011 data, an institution generally will not be reclassified unless four consecutive quarterly reports indicate that a change in supervisor is warranted.

Read the Federal Reserve Press release

Read the FDIC Press release

Read the OCC Press release

The CFTC Adopts Rules on Position Limits for Futures and Options Contracts

On Friday, November 18, 2011, the Commodity Futures Trading Commission (the "CFTC") adopted rules which establish a position limits regime for 28 exempt and agricultural commodity futures and options contracts and the physical commodity swaps that are economically equivalent to such contracts.  The new rules were adopted pursuant to Section 4a of the Commodity Exchange Act (the "CEA'') as amended by Title VII of the Dodd-Frank Act.

The Federal Reserve Issues Rules Requiring Annual Capital Plans

On Tuesday, November 21, 2011, the Federal Reserve Board on Tuesday issued a final rule requiring top-tier U.S. bank holding companies with total consolidated assets of $50 billion or more to submit annual capital plans for review.  The rules, issued under Sections 165 and 166 of the Dodd Frank Act, amend Regulation Y to require large bank holding companies to submit capital plans to the Federal Reserve on an annual basis and to require those bank holding companies to obtain approval from the Federal Reserve under certain circumstances before making a capital distribution.  Under the rules, the Federal Reserve will only approve dividend increases or other capital distributions for bank holding companies whose capital plans are approved by supervisors and who are able to demonstrate sufficient financial strength to operate as successful financial intermediaries after making the desired capital distributions.

Read the Federal Reserve Press release

© 2011 Perkins Coie LLP


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