R. Kinney Williams - Yennik, Inc.
R. Kinney Williams
Yennik, Inc.

The Community Banker
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Bank Regulatory News
March 1999

March 31, 1999 - The Federal Reserve Board today announced revisions to its Regulation Z (Truth in Lending) official staff commentary, which applies and interprets the requirements of the
regulation.  The revisions are effective immediately.

March 31, 1999 - The Federal Reserve Board today announced revisions to its Regulation M (Consumer Leasing) official staff commentary, which applies and interprets the requirements of the
regulation.  The revisions are effective immediately.

March 31, 1999 - FDIC MAKES PUBLIC FEBRUARY 1999 ENFORCEMENT ACTIONS;
NO ADMINISTRATIVE HEARINGS SCHEDULED FOR APRIL

The Federal Deposit Insurance Corporation (FDIC) today released a list of orders of
administrative enforcement actions taken against banks and individuals in February. No
administrative hearings are scheduled for April.

March 30, 1999 - LOANS IN AREAS HAVING SPECIAL FLOOD HAZARDS - Revised Standard Flood Hazard Determination Form
The Federal Emergency Management Agency (FEMA) has revised its Standard Flood Hazard
termination Form (SFHDF). The amended SFHDF was published in the attached Federal
Register notice.  The form was revised to comply with the Office of Management and Budget requirements established by the Paperwork Reduction Act of 1995. The changes clarify the instructions for completing the SFHDF and incorporate minor editorial changes to the form. Beginning April 21, 1999, the revised form must be used for noting determinations on whether a property is located within a Special Flood Hazard area. Until then, the existing form may be used.

March 30, 1999 - FEDERAL AGENCIES, FIRST DATA AGREE ON Y2K READINESS DEADLINES
The federal financial institution regulators and First Data Corporation reached agreement today
that the provider of data processing services to banks, thrift institutions and credit unions will
complete Year 2000 testing of the last of six merchant processing systems that serve banking
and credit union clients by June 30, 1999, and fully implement the system in a Y2K production
mode by July 11, 1999.

March 29, 1999 - OCC Describes Effective Practices for Complying With Privacy Provisions in Fair Credit Reporting Act
WASHINGTON -- The Office of the Comptroller of the Currency issued guidance today that is intended to help banks comply with provisions of the Fair Credit Reporting Act governing the treatment of personal information.

March 26, 1999 - FDIC APPROVES ASSUMPTION OF THE DEPOSITS OF VICTORY STATE BANK, COLUMBIA, SOUTH CAROLINA
The Federal Deposit Insurance Corporation (FDIC) has approved the assumption of all the
deposits of Victory State Bank, Columbia, South Carolina, by the newly chartered South
Carolina Community Bank, Columbia, South Carolina.

March 26, 1999 - COMMUNITY REINVESTMENT ACT - HUD's 1999 Adjusted Median Family Income Figures
In response to requests from financial institutions, attached is a listing of 1999 median family
income figures developed by the Department of Housing and Urban Development (HUD) for
each metropolitan statistical area (MSA) and the statewide portions of nonmetropolitan areas.

March 25, 1999 - OCC Testifies on Impact of Technology On the Financial Service Industry
WASHINGTON -- OCC Senior Deputy Comptroller for Economic and Policy Analysis James D. Kamihachi testified today on the impact of technological advances on the financial services industry before the House Subcommittee on Capital Markets, Securities and Government-Sponsored Enterprises.

March 25, 1999 - OCC Reports Bank Trading Revenues Rebound To $2 Billion During Fourth Quarter
WASHINGTON -- Bank trading revenue rebounded in the final three months of 1998, as commercial banks took in nearly $2 billion following a decline in the third quarter. For the year, revenues from trading activities reached $7.9 billion compared with $8 billion in 1997, the Office of the Comptroller of the Currency reported today in its fourth quarter Bank Derivatives Report.

March 24, 1999 - OCC ANNOUNCES SEVEN NEW ENFORCEMENT ACTIONS, AND TWO TERMINATIONS OF EXISTING ACTIONS
WASHINGTON, DC --The Office of the Comptroller of the Currency (OCC) today announced seven new enforcement actions taken against national banks, and two terminations of existing actions. The actions released today include two formal agreements, one cease and desist order, one civil money penalty, three removals, and two terminations of existing orders.

March 23, 1999 - The Federal Reserve Board today announced final amendments to Regulation CC that will facilitate banks' efforts for Year 2000 readiness.  The amendments will allow banks that consummate merger transactions on or after July 1, 1998, and before March 1, 2000, greater time to implement software changes related to the merger.

March 23, 1999 - DEPOSIT INSURANCE REGULATIONS - Amended Deposit Insurance Regulations on Joint Accounts and Payable-on-Death Accounts
The Federal Deposit Insurance Corporation (FDIC) Board of Directors has voted to simplify
the agency's deposit insurance regulations governing the coverage of two common types of
accounts-joint accounts and "payable-on-death" ("POD" or revocable trust) accounts. Current
regulations are frequently misunderstood by both consumers and bankers. That confusion can
create losses for depositors if their insured institution fails and they mistakenly believed their
funds were within the $100,000 insurance limit.

March 23, 1999 - The Federal Reserve Board today announced final amendments to Regulation CC that will facilitate banks' efforts for Year 2000 readiness. The amendments will allow banks that consummate merger transactions on or after July 1, 1998, and before March 1, 2000, greater time to implement software changes related to the merger.

March 23, 1999 - Proposed "Know Your Customer" Rule - Joint Statement
On December 7, 1998, the Board of Governors of the Federal Reserve System, Federal
Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Office of Thrift
Supervision (the "Agencies") published for public comment a proposed "Know Your Customer"
rule. The public comment period for the proposal ended on March 8, 1999.  After reviewing the comments, the Agencies have reevaluated the proposed "Know Your Customer" rule and have decided to withdraw it.

March 23, 1999 - FDIC SIMPLIFIES THE DEPOSIT INSURANCE RULES FOR JOINT ACCOUNTS AND PAYABLE-ON-DEATH ACCOUNTS
The FDIC Board of Directors voted today to simplify the deposit insurance rules governing two
common types of accounts -- joint accounts and "payable-on-death" accounts. The agency is
changing the existing regulations primarily because they have been confusing for both consumers
and bankers. That confusion has caused losses to depositors at failed institutions who mistakenly
believed their funds were within the $100,000 insurance limit.

March 19, 1999 - FFIEC - The December 31, 1998, Uniform Bank Performance Report (UBPR) is now being distributed to all insured commercial banks and Federal Deposit Insurance
Corporation - Insured Savings Banks (FDIC-ISB), and is available for sale to the public. For the most part the formats for the commercial banks and the FDIC-ISBs are identical, however, the FDIC-ISB has their own unique UBPR peer groupings.

March 19, 1999 - Comptroller Says "Information and Education" Can Help Draw Unbanked into System
ARLINGTON, VA -- Comptroller of the Currency John D. Hawke Jr. said today that
while great progress has been made in expanding access to credit, more needs to
be done to bring the "unbanked" into the system.

March 18, 1999 - BANK REPORTS - Reports of Condition and Income (Call Report) for First Quarter 1999
The enclosed materials pertain to the Reports of Condition and Income (Call Report) for the March 31, 1999, report date. Please complete your first quarter Call Report as soon as possible and submit the report electronically. Your completed report must be received by April 30, 1999, in accordance with the filing requirements discussed below. No extensions of time for submitting reports are granted.

March 18, 1999 - OCC RELEASES CRA EVALUATIONS FOR 63 NATIONAL BANKS
WASHINGTON, DC -- The Office of the Comptroller of the Currency (OCC) today released a list of Community Reinvestment Act (CRA) performance evaluations that became public during the period of February 15 through March 14. The list contains only national banks and insured federal branches of foreign banks that have received ratings. The possible ratings are outstanding, satisfactory, needs to improve, and substantial noncompliance.

March 18, 1999 - OCC Announces Settlement of Lending Discrimination Case
WASHINGTON, D.C. -- The Office of the Comptroller of the Currency (OCC) today announced that First Central Bank, N.A., Cerritos, Calif., consented to pay a civil money penalty of $25,000 and to establish a $400,000 settlement fund to compensate applicants affected by the bank's alleged violations of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA).

March 17, 1999 - Comptroller Unveils Proposals to Help Community Banks
SAN FRANCISCO -- Comptroller of the Currency John D. Hawke, Jr., unveiled several community bank initiatives today as a down payment on a promise he is making to ensure that OCC supervision is responsive to the needs of community bankers.

March 17, 1999 - LOANS IN AREAS HAVING SPECIAL FLOOD HAZARDS - New Communities Entering the National Flood Insurance Program, January 1998 Through January 1999
The attached listing identifies communities that entered the National Flood Insurance Program
(NFIP) from January 1998 through January 1999. These communities are now eligible for flood
insurance through the NFIP under the Emergency Program or the Regular Program. The Emergency Program is for communities that first enter the NFIP. It is an interim program that provides lower levels of flood insurance for eligible structures at subsidized rates.

March 17, 1999 - FDIC ANALYSTS REVIEW HIGH LOAN-TO-VALUE LENDING;
EVALUATE TRENDS IN COMMERCIAL REAL ESTATE MARKETS

Three articles in the first quarter edition of the Regional Outlook released today by the Federal
Deposit Insurance Corporation (FDIC) examine issues and trends in high loan-to-value (HLTV)
home equity lending, commercial real estate markets and syndicated lending.

March 15, 1999 - FDIC REPORTS THAT COMMERCIAL BANKS AND SAVINGS INSTITUTIONS SET NEW EARNINGS RECORDS IN 1998
Strong contributions from fee income helped propel full-year earnings for commercial banks to a
new record in 1998, the Federal Deposit Insurance Corporation announced today. The FDIC
said the record profits were achieved despite restructuring expenses related to mergers and
weaknesses in overseas markets that caused bank earnings to decline in each of the last two
quarters of 1998.

March 12, 1999 - Jeanne K. Engel Chosen to be New Deputy Comptroller for Community Affairs WASHINGTON - The Office of the Comptroller of the Currency announced today that Jeanne K. Engel has been named to the newly- created position of Deputy Comptroller for Community Affairs. Ms. Engel, an independent consultant with more than 20 years of experience in the area of housing and community development, will advise top OCC management on community development and community relations programs, as well as minority and urban affairs issues.

March 12, 1999 - REAL ESTATE SETTLEMENT PROCEDURES ACT  - HUD Policy Statement on Lender Payments to Mortgage Brokers
The Department of Housing and Urban Development (HUD) has issued the attached policy
statement interpreting the level of services that mortgage brokers must perform in order to receive
compensation from mortgage lenders. HUD's Statement of Policy 1999-1 took effect March 1,
1999.

March 10, 1999 - JOINT INTERAGENCY LETTER TO FINANCIAL INSTITUTIONS
Last November, the Securities and Exchange Commission, Federal Deposit Insurance Corporation, Federal Reserve Board, Office of the Comptroller of the Currency, and Office of Thrift Supervision (the Agencies) issued a Joint Interagency Statement in which they reaffirmed the importance of credible financial statements and meaningful disclosure to investors and to a safe and sound financial system. The Joint Interagency Statement underscored the requirement that depository institutions record and report their allowance for loan and lease losses in accordance with generally accepted accounting principles (GAAP). We stress and continue to emphasize the importance of depository institutions having prudent, conservative, but not excessive, loan loss allowances that fall within an acceptable range of estimated losses. We recognize that today instability in certain global markets, for example, is likely to increase loss inherent in affected institutions’ portfolios and consequently require higher allowances for credit losses than were appropriate in more stable times.

March 9, 1999 - Few Banks Offer Internet Banking Services But Numbers Growing Rapidly WASHINGTON, D.C. -- Few banks and thrifts offer customers the option of conducting transactions over the Internet but their numbers are growing rapidly, according to a new study by the Office of the Comptroller of the Currency (OCC). Bank and thrift Web sites that permit on-line banking transactions grew from an estimated 103 at the end of 1997 to 258 by June 1998, an annualized rate of over 300 percent. These Internet services permit customers to transfer money among accounts and to check account balances. Electronic bill payment over the Internet was also available in three-fourths of the banks that offer transactional Internet banking.

March 5, 1999 the FFIEC issued a clarification for banks converting computer operations during 1999. In short, there is no problems if you have done your homework to ensure that the new system is Y2K compliant.

March 5, 1999- Comptroller Tells Congress that Agricultural Banks Must Remain Strong in Order to Serve Communities
WASHINGTON, D.C. -- Comptroller of the Currency John D. Hawke, Jr. said in Congressional testimony today that the lesson of the last agricultural crisis is that banks must adhere to sound lending practices while continuing to support their communities.

March 5, 1999 - OCC Issues Guidance to Protect National Banks from Intrusions Into Computer Systems
WASHINGTON, D.C. -- The Office of the Comptroller of the Currency (OCC) issued guidance to national banks today outlining the risks posed by intrusions into bank computer systems by cyber-terrorists and others. These outside threats can disrupt computer systems and corrupt or destroy information stored on computer networks.

March 4, 1999 - Comptroller Says "Know-Your-Customer" Rule Should be Rejected
WASHINGTON -- Comptroller of the Currency John D. Hawke, Jr. told Congress today that he believes the proposed "Know-Your-Customer" regulation should be promptly withdrawn once the comment period ends Monday.

March 4, 1999 - GUIDANCE ON SUBPRIME LENDING - Interagency Guidelines on Subprime Lending
The Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal
Reserve System, the Office of the Comptroller of the Currency, and the Office of Thrift
Supervision have jointly issued the attached Interagency Guidelines on Subprime Lending. These
guidelines remind banks of the risks inherent in subprime lending and outline the types of controls
the agencies expect banks to have in place before entering this field of lending.

March 4, 1999 - FDIC ISSUES FEBRUARY LIST OF BANKS EXAMINED FOR CRA
COMPLIANCE

The FDIC today issued its monthly list of state nonmember banks recently evaluated for
compliance with the Community Reinvestment Act (CRA). The list covers evaluation ratings that
became available in February 1999.

March 3, 1999 - The Federal Deposit Insurance Corporation, the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision have jointly issued Interagency Guidance on Subprime Lending.

March 3, 1999 - The Federal Reserve Board today announced its approval of the applications of Arizona Bank, Tucson, Arizona (formerly known as Compass Bank, Tucson, Arizona), to acquire 15 branches in Arizona owned by subsidiary banks of Wells Fargo & Company, San Francisco, California, and to establish branches at the acquired locations.

March 2, 1999 - CAPITAL STANDARDS - Final Rule Revising Risk-Based and Leverage Capital Standards
The Federal Deposit Insurance Corporation (FDIC) Board of Directors has approved the
attached final rule revising the risk-based and leverage capital standards. The final rule will take
effect April 1, 1999. However, institutions may choose to apply the rule beginning March 2,
1999.

March 2, 1999 - The Federal Reserve Board today issued two final rules amending the risk-based and leverage capital standards for state member banks (Regulation H) and the risk-based capital standard for bank holding companies (Regulation Y).

March 1, 1999 - Comptroller Says Effective Supervision Needed to Manage International Crises
WASHINGTON -- Comptroller of the Currency John D. Hawke, Jr. said today that recent financial dislocations have demonstrated the importance of effective supervision and that regulators should work to promote the adoption of fundamental supevisory principles in parts of the world where they have not already been accepted.


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