Washington Report 360 | January 4, 2019

Key Highlights

• Due to the partial government shutdown, consumer and small business lending activity is expected to be impacted.
• The Federal Reserve announced that CCAR will not incorporate CECL until after the 2021 cycle; the Federal Reserve, FDIC, and OCC issued a final rule allowing banking organizations a three-year phase in for CECL day-one adverse impacts on regulatory capital.
• The CFPB issued final guidance on publicly available HMDA data, including exclusion of property address and credit score.
• Comptroller Otting was designated Acting Director of the FHFA.

Financial services legislative and regulatory news

The Federal Reserve announced that the CCAR modeling framework will not incorporate the current expected credit losses (CECL) accounting method until after the 2021 cycle.

The Federal Reserve, FDIC, and OCC:

• Issued a final rule allowing banking organizations to phase in the day-one adverse impact on regulatory capital resulting from adoption of CECL.
• Issued final rules to expand the number of institutions eligible for an 18-month examination cycle.
• Invited comment on a proposal to update rules on management interlocks.
• Proposed, along with the SEC and CFTC, to exclude certain banking organizations with less than $10 billion in total assets from the Volcker Rule.

Congress passed and the President signed legislation to reauthorize the NFIP through May 2019.

Financial services policy news

The partial government shutdown impacts include:

• Closure of the FTC.
• Limited operations and activities at the SEC, CFTC, Treasury, and HUD, which are under contingency plans.
• Delayed and/or limited availability for lending programs and services administered through the HUD/FHA, the Small Business Administration, and Treasury’s CDFI.

Comptroller Joseph M. Otting was designated Acting Director of the Federal Housing Finance Agency, beginning January 6, when the current director’s term expires.

The CFPB issued final policy guidance on the HMDA data it intends to make publicly available in 2019; modifications include exclusion of the property address and applicant’s credit score as well as the disclosure of ranges rather than specific values for certain data such as the applicant’s age and the amount of the loan.

Treasury issued its National Illicit Finance Strategy identifying priorities, objectives, and areas for improvement.

The Federal Reserve issued a payments study that found increased growth in the number and value of card payments.

Federal Reserve researchers released a working paper that found better capitalized banks have higher loan growth.

FINRA released a report on selected cybersecurity practices, highlighting branch controls, phishing, inside threats, penetration testing, and mobile devices.