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

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Bank Regulatory News
May 2001

May 31, 2001 - Joint Agency Advisory on Rate-Sensitive Deposits - On May 11, 2001, the Federal Reserve, along with the other federal banking agencies, issued an interagency advisory on brokered and rate-sensitive deposits to highlight the potential risks associated with excessive reliance on such deposits. The advisory also provides guidance on prudent risk identification and management for these types of funding.  www.federalreserve.gov/BoardDocs/SRLetters/2001/Sr0114.htm

May 31, 2001 - Standards for Safeguarding Customer Information - The federal banking agencies jointly issued guidelines establishing standards for safeguarding customer information (Guidelines), which will become effective July 1, 2001.  www.federalreserve.gov/BoardDocs/SRLetters/2001/Sr0115.htm 

May 31, 2001 - The Federal Reserve Board today announced the settlement of its administrative enforcement proceeding against Incus Co., Ltd. and Carlos Hank Rhon of Mexico City, Mexico, Incus's registered owner.   www.federalreserve.gov:80/boarddocs/press/Enforcement/2001/20010531/default.htm 

May 30, 2001 - The Federal Deposit Insurance Corporation (FDIC) today released a list of orders of administrative enforcement actions taken against banks and individuals in April. No administrative hearings are scheduled for June.  http://www.fdic.gov/news/news/press/2001/pr3901.html 

May 30, 2001 -  NCUA Acting Chairman Dennis Dollar told a group of Pennsylvania and New Jersey credit union leaders today that a proposed flexible examination schedule which seeks to extend the exam cycle from 12 to 18 months for certain credit unions with strong CAMEL ratings and make NCUA examinations more risk-focused will carry “great benefits to both credit unions and the NCUA while maintaining the highest standards of safety and soundness.”  http://www.ncua.gov/news/press_releases/nr053001.html 

May 30, 2001 - The Federal Reserve Board is requesting comment on a proposed interim policy statement and a package of short- and long-term proposals pertaining to its Payments System Risk (PSR) policy. In addition, the Board is rescinding the interaffiliate transfer policy.  www.federalreserve.gov/boarddocs/press/BoardActs/2001/20010530/default.htm 

May 29, 2001 - The Federal Reserve Board announced today that it is seeking nominations for appointments to its Consumer Advisory Council.  www.federalreserve.gov/boarddocs/press/General/2001/200105292/default.htm 

May 25, 2001 - Title V of the Gramm-Leach-Bliley Act (GLBA) of 1999 sets forth provisions addressing the obligations of a financial institution with respect to the privacy of consumers' nonpublic personal information.
Press Release:  http://www.occ.treas.gov/ftp/bulletin/2001-26.txt
OCC Privacy Examination Procedures:  http://www.occ.treas.gov/ftp/bulletin/2001-26a.pdf 

May 25, 2001 - NCUA Limits on Disclosing Account Numbers http://www.ncua.gov/ref/opinion_letters/01-jointletter0525.html 

May 23, 2001 - OTS Announces 12 CRA Ratings - The OTS today announced savings associations' Community Reinvestment Act (CRA) performance evaluation ratings that became available in April 2001.  http://www.ots.treas.gov/docs/77134.html 

May 22, 2001 - Comptroller Hawke Tells Bankers That Regulators Must Respond In Measured and Predictable Way to Credit Problems - Comptroller of the Currency John D. Hawke, Jr. said today that the OCC learned from the experience of the late 1980s and early 1990s how important it is to maintain a supervisory approach that is both carefully measured and predictable.  
Press release:  http://www.occ.treas.gov/ftp/release/2001-50.txt 
Speech:   http://www.occ.treas.gov/ftp/release/2001-50a.txt 

May 17, 2001 - Compliance Examination Procedures for Part 332 - "Privacy of Consumer Financial Information"
The Federal Deposit Insurance Corporation (FDIC) and the other federal bank regulatory agencies, acting through the Federal Financial Institutions Examination Council (FFIEC), have developed and approved the attached examination procedures to review supervised financial institutions for compliance with the agencies' regulation on "Privacy of Consumer Financial Information."  http://www.fdic.gov/news/news/financial/2001/fil0146.html 

May 17, 2001 - The Federal Deposit Insurance Corporation (FDIC) has published its semiannual agenda of regulations in the Federal Register to inform the public of the Corporation's regulatory actions and encourage participation in the rulemaking process.  http://www.fdic.gov/news/news/press/2001/pr3801.html 

May 16, 2001 - The Federal Reserve Board today requested public comment on how the Board's regulations may be adapted to online banking and lending.  Comments are due by August 20, 2001.  www.federalreserve.gov/boarddocs/press/BoardActs/2001/20010516/default.htm 

May 16, 2001 - 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 April 15 through May 14.  http://www.occ.treas.gov/ftp/release/2001-48.txt 

May 16, 2001 - The number and size of federally insured credit unions with assets over $50 million grew appreciably during the past year. The number increased from 1,506 to 1,556 between March 2000 and March 2001 while assets grew from $334 to $372.9 billion. These institutions now represent 15 percent of federally insured credit unions and nearly 85 percent of credit union assets.  http://www.ncua.gov/news/press_releases/pr051601.html 

May 16, 2001 - The Federal Reserve Board this month will begin a statistical study of household finances that will provide policymakers with important insight into the economic condition of a broad array of American families.  www.federalreserve.gov/boarddocs/press/General/2001/20010516/default.htm 

May 15, 2001 - The Federal Open Market Committee at its meeting today decided to lower its target for the federal funds rate by 50 basis points to 4 percent. In a related action, the Board of Governors approved a 50 basis point reduction in the discount rate to 3-1/2 percent. www.federalreserve.gov/boarddocs/press/General/2001/20010515/default.htm  

May 15, 2001 - Specially Designated Nationals and Blocked Persons - On April 24, 2001, the Department of the Treasury's Office of Foreign Assets Control (OFAC) amended its listing of specially designated nationals and blocked persons to include the names of additional Specially Designated Narcotics Traffickers.  http://www.fdic.gov/news/news/financial/2001/fil0144.html 

May 15, 2001 - Delegation of Authority to Set and Declare Dividend Rates - As discussed more fully, we are revising our conclusions so that a federal credit union’s board of directors (FCU’s board) may delegate its authority to set dividend rates, within limits.  http://www.ncua.gov/ref/opinion_letters/01-0344.html  

May 15, 2001 - The Office of the Comptroller of the Currency (OCC) today announced 10 new enforcement actions taken against national banks and individuals currently and formerly affiliated with national banks and 2 terminations of existing enforcement actions.  http://www.occ.treas.gov/ftp/release/2001-47.txt 

May 14, 2001 - The Office of the Comptroller of the Currency today issued a revised version of the Large Bank Supervision booklet, updating the guidance and procedures used in supervising large and complex mid-sized national banks.  Press release http://www.occ.treas.gov/ftp/release/2001-46.txt 
Handbook http://www.occ.treas.gov/handbook/lbs.pdf 

May 14, 2001 - The Federal Reserve Board today announced the availability of a new video "Identity Theft: Protect Yourself." The 15-minute video explains how easily someone can obtain your personal financial information and unlawfully use that information to obtain credit or other financial information under your name.  www.federalreserve.gov/BoardDocs/Press/general/2001/20010514/default.htm 

May 14, 2001 - FRB - The Gramm-Leach-Bliley Act (GLBA) repealed the Glass-Steagall Act and made the
following change to the permissible securities underwriting, dealing, and investment activities of state
member banks. Effective March 13, 2000, the GLBA authorized well-capitalized state member
banks to underwrite, deal in, and invest in municipal revenue bonds, without limitation as to the level
of these activities that may be conducted relative to the bank's capital (capital limitations).  www.federalreserve.gov/BoardDocs/SRLetters/2001/Sr0113.htm 


May 11, 2001 - Interim Final Rules Amending Regulations B, E, M, Z, and DD Regarding Electronic Delivery of Required Disclosures
The Board of Governors of the Federal Reserve System (FRB) published the attached interim final rules establishing uniform standards for the electronic delivery of federally mandated disclosures under five consumer protection regulations: B (Equal Credit Opportunity), E (Electronic Fund Transfers), M (Consumer Leasing), Z (Truth in Lending), and DD (Truth in Savings). The rules took effect on March 30, 2001; however, to allow time for any necessary operational changes, the mandatory compliance date is October 1, 2001.  http://www.fdic.gov/news/news/financial/2001/fil0140.html 

May 11, 2001 - OCC will Hold Hearing; Agency Seeks Fines, Restitution and Prohibition Order from Two Former Bankers
The Office of the Comptroller of the Currency (OCC) today announced that it will hold a public hearing beginning Monday, May 14, 2001, in the agency’s administrative proceeding against Gene Ulrich, former senior vice president and senior loan officer of Six Rivers National Bank, Eureka, California and against Susan Diehl-McCarthy, former vice president and loan officer of Six Rivers National Bank.  http://www.occ.treas.gov/ftp/release/2001-45.txt 

May 11, 2001 - Agencies Remind Bankers of Risks Associated with Reliance on Brokered and Rate-Sensitive Deposits
The federal bank and thrift regulatory agencies today issued an advisory on the risks of brokered and other rate-sensitive deposits. The agencies warn that excessive reliance on these types of funding products without proper risk management safeguards has the potential to weaken an institution’s financial condition.  FRB www.federalreserve.gov/boarddocs/press/General/2001/20010511/default.htm  FDIC 
http://www.fdic.gov/news/news/press/2001/pr3701.html  OCC http://www.occ.treas.gov/ftp/advisory/2001-5.txt   OTS http://www.ots.treas.gov/docs/77133.html 

May 10, 2001 - Interagency Guidance on Loans Held for Sale
On March 26, 2001, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the National Credit Union Administration (the Agencies) issued the attached interagency guidance on the appropriate reporting treatment for loans that an institution intends to sell. Consistent with generally accepted accounting principles (GAAP), the guidance directs institutions:  www.federalreserve.gov/BoardDocs/SRLetters/2001/Sr0112.htm 

May 9, 2001 - The FDIC today issued guidance on measures to prevent identity theft and pretext calling. The guidance
reminds financial institutions how to report such activities to regulators using Suspicious Activity Reports
(SARs), suggests educating consumers on identity theft and pretext calling, and summarizes relevant
federal laws.  http://www.fdic.gov/news/news/press/2001/pr3601.html 

May 9, 2001 - Guide to Federal Microenterprise Programs
The enclosed publication, Crossing the Bridge to Self-Employment: A Federal Microenterprise Resource Guide, describes various microenterprise programs available through the federal government, and how financial institutions, practitioners and others can access these resources.  http://www.fdic.gov/news/news/financial/2001/fil0138.html 

May 9, 2001 - Guidance on Identity Theft and Pretext Calling
The Federal Deposit Insurance Corporation (FDIC) is issuing the attached "Guidance on Identity Theft and Pretext Calling" to inform banks about developments in these two areas of consumer bank fraud.  http://www.fdic.gov/news/news/financial/2001/fil0139.html 

May 9, 2001 - FDIC examiners have reported an increase in the occurrence of risky underwriting practices by banks in both construction and consumer lending but found that the percentage of banks in the high-risk categories for general underwriting practices declined slightly, according to the agency's latest Report on Underwriting Practices, which covers the six months ending March 31, 2001.  http://www.fdic.gov/news/news/press/2001/pr3501.html 

May 8, 2001 - The Federal Deposit Insurance Corporation (FDIC) today announced that the Bank Insurance Fund (BIF) reported comprehensive income (net income plus current period unrealized gains/losses on available-for-sale securities) of $451 million for the first quarter, compared to $325 million for the same period last year.  http://www.fdic.gov/news/news/press/2001/pr3401.html 

May 8, 2001 - The Federal Financial Institutions Examination Council (FFIEC) has made A Guide to CRA Data Collection and Reporting available on its Internet Web site < www.ffiec.gov/cra >. The FFIEC agencies developed the guide as a resource for financial institutions required to report Community Reinvestment Act (CRA) data. CRA data reports are due annually on March 1.  http://www.occ.treas.gov/ftp/bulletin/2001-25.txt 

May 7, 2001 - The Federal Deposit Insurance Corporation (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 the FDIC assigned to institutions in February 2001.  http://www.fdic.gov/news/news/press/2001/pr3301.html 

May 7, 2001 - Director’s Interest in Financial Counseling Services Offered by a Third Party.
You have asked if your federal credit union (FCU) may enter into an arrangement with a financial services firm to offer discounted financial counseling to members.  http://www.ncua.gov/ref/opinion_letters/01-0131.html 

May 4, 2001 - The Federal Reserve Board is seeking public comment on a proposed new Regulation W to comprehensively implement sections 23A and 23B of the Federal Reserve Act.  Sections 23A and 23B restrict loans by a bank to an affiliate, asset purchases by a bank from an affiliate and other transactions between a bank and its affiliates.  www.federalreserve.gov/boarddocs/press/BoardActs/2001/20010504/default.htm 

May 4, 2001 - The Office of the Comptroller of the Currency (OCC) has entered into a consent order with Direct Merchants Credit Card Bank, N.A. The consent order requires the bank to cease certain practices in the marketing of the bank’s credit cards and to pay approximately $3.2 million in restitution to 62,000 consumers.  http://www.occ.treas.gov/ftp/eas/ea2001-24.pdf 

May 4, 2001 - The Federal Reserve Board is seeking public comment on interim final rules, under sections 23A and 23B of the Federal Reserve Act, requiring institutions to: 1)adopt policies and procedures to monitor, manage and control credit exposures arising from derivatives transactions with affiliates and intraday credit extensions to affiliates; and 2) subject such transactions to the market terms requirement of section 23B.  www.federalreserve.gov/boarddocs/press/BoardActs/2001/200105042/default.htm 

May 4, 2001 - The Federal Reserve Board is publishing a final rule granting exemptions from and providing interpretations of section 23A of the Federal Reserve Act. The Board approved the final rule at its meeting on May 2, 2001.  www.federalreserve.gov/boarddocs/press/BoardActs/2001/200105043/default.htm 

May 3, 2001 - OCC bulletin transmits a proposed rule on debt cancellation contracts (DCCs) and debt suspension agreements (DSAs) that was published in the Federal Register on April 18, 2001.  
Press release http://www.occ.treas.gov/ftp/bulletin/2001-24.txt 
Bulletin http://www.occ.treas.gov/fr/fedregister/66fr19901.htm 

May 3, 2001 - The Office of the Comptroller of the Currency (OCC) today closed The Malta National Bank, Malta, Ohio, and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC, as receiver, entered into an agreement with North Valley Bank, Zanesville, Ohio, to assume all the deposits of the failed bank.
FDIC http://www.fdic.gov/news/news/press/2001/pr3201.html 
OCC http://www.occ.treas.gov/ftp/release/2001-43.txt 

May 3, 2001 - 2000 Year End Statistics for Federally Insured Credit Unions  http://www.ncua.gov/ref/Statistics/yearend2000.pdf 

May 3, 2001 - Basel Committee Report Outlines Risk Management Principles for Electronic Banking that sets forth fourteen risk management principles on electronic banking for financial institutions in a report issued today.  
Press release http://www.occ.treas.gov/ftp/release/2001-42.txt 
E-banking paper http://www.occ.treas.gov/idtheft.pdf 

May 3, 2001- More than half of the people who make household financial decisions took federal deposit insurance into account when considering recent investments, a survey conducted by The Gallup Organization reveals.  http://www.fdic.gov/news/news/press/2001/pr3101.html 

May 2, 2001 - The Office of Thrift Supervision reported today that it issued a prompt corrective action enforcement order March 23 to Life Bank, San Bernadino, Calif.  http://www.ots.treas.gov/docs/77131.html 

May 2, 2001 - NCUA Addresses Permitted on Report of Officials. http://www.ncua.gov/ref/opinion_letters/01-0333.html 

May 2, 2001 - The Federal Reserve Board today decided to seek public comment on a proposed new Regulation W comprehensively implementing sections 23A and 23B of the Federal Reserve Act. The sections restrict loans by a bank to an affiliate, asset purchases by a bank from an affiliate and other transactions between a bank and its affiliates.  www.federalreserve.gov/boarddocs/press/BoardActs/2001/20010502/default.htm 


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