Bank Regulatory News
October 1999

October 29, 1999 - Identity Theft and Assumption Deterrence Act of 1998
The Federal Deposit Insurance Corporation (FDIC) has prepared guidance for bankers who suspect their customers may have been victims of identity theft. This crime was addressed with the October 30, 1998, enactment of the attached "Identity Theft and Assumption Deterrence Act of 1998" (Act), which in part amends 18 U.S.C. §1028 ("Fraud and related activity in connection with identification documents"). The following summarizes the provisions of the legislation and recommends certain actions that banks should take in responding to reports of identity theft.

October 28, 1999 - The Federal Reserve Board today announced adoption of a final rule amending Regulation CC, Availability of Funds and Collection of Checks, to clarify the extent to which depository institutions and others may vary the terms of the regulation by agreement for the purpose of instituting electronic return systems.  The rule is effective December 15, 1999.

October 27, 1999 - OCC RELEASES CRA EVALUATIONS FOR 57 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 September 15 through October 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.

October 27, 1999 - Aetna Granted Federal Thrift Charter by OTS
Aetna Inc., a Hartford, Connecticut-based provider of financial and insurance services, has received permission from the Office of Thrift Supervision (OTS) to organize Aetna Trust Company, a federal savings bank, to offer trust services. Aetna becomes a unitary thrift holding company.

October 26, 1999 - Compliance with Federal Flood Insurance Requirements in Light of Recent Natural Disasters
With the recent spate of hurricanes causing severe flooding across the East Coast of the United States, and the potential for flooding from future natural disasters, the Federal Deposit Insurance Corporation (FDIC) is encouraging the institutions it supervises to take special care to meet all the requirements of the flood insurance regulations (12 CFR Part 339).

October 26, 1999 - FDIC Announces the Availability of the Year 2000 Customer Brochure in Two Versions of Chinese and in Korean and the Year 2000 Customer "Statement Stuffer" in Spanish

October 26, 1999 - Fidelity Granted Federal Thrift Charter by OTS
FMR (Fidelity) Corp., the Boston-based mutual fund giant, has received a federal thrift charter from the Office of Thrift Supervision (OTS) to organize a savings bank to offer personal trust services to customers. The new institution, Fidelity Personal Trust Company, will be based in Boston. FMR becomes a thrift holding company.

October 26, 1999 - FFIEC Year 2000 Event Planning Supervisory Strategy of Service Providers and Software Vendors
The Federal Financial Institutions Examination Council (FFIEC) has issued the attached letter to service providers and software vendors to notify them of the member agencies' intentions to intensify the monitoring of operating performance during the fourth quarter of 1999 and the rollover period.

October 25, 1999 - Interagency Policy Statement on External Auditing Programs of Banks and Savings Associations
Upon the recommendation of the Federal Financial Institutions Examination Council, the FDIC Board of Directors has adopted the attached "Interagency Policy Statement on External Auditing Programs of Banks and Savings Associations." It replaces the FDIC's "Statement of Policy Regarding Independent External Auditing Programs of State Nonmember Banks" and is effective for fiscal years beginning on or after January 1, 2000. The other banking agencies have also adopted the interagency policy statement.

October 21, 1999 - OTS Issues New Guidance on Directors' Responsibilities
Directors of thrift institutions "must not abdicate responsibility for deciding policy" and "may never delegate" their responsibilities. Directors also "must exercise independent judgment in evaluating management's actions and competence."  These unequivocal statements are part of the introduction to the "Directors' Responsibilities Guide," a new document unveiled today by the Office of Thrift Supervision (OTS) to 300 directors from 75 OTS-regulated thrifts meeting in Dallas to discuss the oversight role of directors of thrift institutions.

October 21, 1999 - OCC ANNOUNCES FIVE NEW ENFORCEMENT ACTIONS - The Office of the Comptroller of the Currency (OCC) today announced five new enforcement actions taken against national banks and individuals currently and formerly affiliated with national banks.

October 21, 1999 - The Federal Reserve Board, along with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, today issued a final rule on a proposal to expand the examination frequency cycle for certain U.S. branches and agencies of foreign banks.  The rule is effective October 22, 1999.  This rule finalizes an interim rule, effective August 28, 1998, that made U.S. branches and agencies of foreign banks with total assets of $250 million or less eligible for an 18-month examination cycle if they met the qualifying criteria set out in the rule.

October 21, 1999 - The National Credit Union Administration is asking the credit union community to provide feedback by December 3, 1999, on the strategic plan that NCUA will use as its primary guide in responding to the challenges and opportunities that the agency and credit unions will face in the first five years of the 21st century.

October 18, 1999 - The National Credit Union Administration (NCUA) has terminated the Letters of Understanding and Agreement (LUA) issued to Hudson River Teachers Federal Credit Union, Peeksill, New York and N.Y. Methodist Federal Credit Union, White Plains, New York.

October 15, 1999 - The Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation recently issued updated host state loan-to-deposit ratios that the banking agencies will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act). These ratios, which update data released on August 13, 1998, are attached.

October 15, 1999 - The FDIC Board of Directors is seeking comment on the attached "Notice of Proposed Rulemaking Regarding the Treatment of Financial Assets Transferred by an Insured Depository Institution in Connection With a Securitization or Participation Following Appointment of the FDIC as Conservator or Receiver." The FDIC will accept comments on the proposal through November 8, 1999.

October 15, 1999 - The attached interim guidelines establishing Year 2000 (Y2K) standards for safety and soundness for national bank transfer agents and broker-dealers ("Supplemental Guidelines") became effective on September 30, 1999. Comments are due by November 29, 1999.

October 14, 1999 - OCC Issues Examination Handbook On Internet Banking
The Office of the Comptroller of the Currency (OCC) issued a new handbook today outlining procedures for examining Internet banking activities in national banks. The OCC estimates that about 500 national banks have transactional web sites that would be subject to today's examination procedures, as would other national banks with non-transactional web sites.

October 14, 1999 - The final rule on management official interlocks was published in the Federal Register on September 24, 1999. The rule is effective January 1, 2000.

October 13, 1999 - The Federal Reserve Board today announced the availability of a new Internet site, 1stSource Community Development Resource Guide, designed to help people find resources for affordable housing, business development, community infrastructure, and agribusiness. The new site, developed by the Federal Reserve Bank of Kansas City, can be accessed at www.1stsource.kc.frb.org.

October 12, 1999 - Federal financial institution regulators today advised banks and thrifts about the risks associated with high loan-to-value (LTV) residential real estate loans. The guidance issued today reminds insured institutions that the Interagency Guidelines for Real Estate Lending Policies adopted in 1992 apply to these transactions.

October 7, 1999 - On September 28, 1999, the Federal Financial Institutions Examination Council (FFIEC) adopted the attached "Interagency Policy Statement on External Auditing Programs of Banks and Savings Associations." This policy statement is directed to banks and savings associations that are exempt from 12 CFR 363 (i.e., institutions with less than $500 million in total assets) or are not otherwise subject to audit requirements by order, agreement, statute, or agency regulations. It provides unified interagency guidance regarding independent external auditing programs of community banks and savings associations. The policy complements the interagency policy statement on internal auditing (OCC 98-1).

October 6, 1999 - The Federal Reserve Board today announced a decrease from $46.5 million to $44.3 million in the net transaction accounts to which a 3 percent reserve requirement will apply in 2000. This adjustment is known as the low reserve tranche adjustment.   The Board also changed from $4.9 million to $5.0 million the amount of reservable liabilities of each depository institution that is subject to a reserve requirement of zero percent.

October 6, 1999 - The National Credit Union Administration Board today said it will return $88.4 million to federally insured credit unions. This is the 5th consecutive cash dividend returned to credit unions from the National Credit Union Share Insurance Fund (NCUSIF).

October 6, 1999 - NCUA Board Member Dennis Dollar announced today that he will be proposing a regulatory relief measure called "Reg-Flex" in an attempt to encourage greater credit union innovation in member service initiatives and to help improve the ability of credit unions to compete in the financial marketplace.

October 5, 1999 - 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 the FDIC assigned to institutions in July 1999.

October 5, 1999 - OCC's Williams Warns of Credit Risk In the Banking System; Calls for Bankers to Scrutinize Loan Portfolios More Closely
WASHINGTON -- The results of the 1999 Shared National Credit Review -- a survey by federal bank regulators of all commercial loans that are shared among three or more banks and exceed $20 million -- show "a marked increased in classified and special mention credits," according to Julie L. Williams, first senior deputy comptroller and chief counsel of the Office of the Comptroller of the Currency (OCC).

October 5, 1999 - OCC ANNOUNCES 13 NEW ENFORCEMENT ACTIONS
WASHINGTON, DC --The Office of the Comptroller of the Currency (OCC) today announced 13 new enforcement actions taken against individuals currently and formerly affiliated with national banks and national banks.

October 5, 1999 - The Office of Thrift Supervision (OTS) reported today that it completed nine enforcement action in August 1999.

October 5, 1999 - The Office of Thrift Supervision (OTS) today released savings associations' Community Reinvestment Act (CRA) performance evaluation ratings that became available in September1999.

October 1, 1999 - The Federal Reserve Board today announced the issuance of a consent Order against William Barber, an institution-affiliated party of the First Western Bank, Cooper City, Florida, a state member bank.  The individual, without admitting to any allegations, consented to the Order to resolve allegations that he violated the Change in Bank Control Act in connection with his acquisition of beneficial ownership of the shares of the bank.

October 1, 1999 - Statement of Roger W. Ferguson, Jr. Member, Board of Governors of the Federal Reserve System
The Federal Reserve supports the creation of the Financial Services Information Sharing and Analysis Center in response to the President's directive to protect our nation's banking and financial services from the threat of physical and cyber attacks.

October 1, 1999 - OTS Releases July Enforcement Statistics
WASHINGTON, D.C., October 1, 1999 -- The Office of Thrift Supervision (OTS) reported today that it completed three enforcement actions in July 1999.

October 1, 1999 - Joint Interagency Statement - The four federal banking agencies have issued the attached joint statement addressing the agencies' supervisory approach to possible temporary balance sheet growth due to potential unusual market responses around the century date change.

October 1, 1999 - FDIC Chairman Donna Tanoue today announced the appointment of John F. Bovenzi as the new Deputy to the Chairman and Chief Operating Officer, effective today. Mr. Bovenzi has been Director of the Division of Resolutions and Receiverships (DRR). He replaces Dennis F. Geer, who retired yesterday after more than 27 years of federal service, including senior positions at the FDIC and the Resolution Trust Corporation for the past eight years.