InfoBytes Blog
Filter
Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.
Fed’s Bowman speaks on current trends in banking regulation
On February 27, Michelle Bowman, a member of the Federal Reserve Board of Governors, gave a speech reflecting on the state of the broader U.S. economy and banking regulation in Tampa, Florida. Bowman highlighted the need for the Fed to focus on “efficiency in how we deliver on our safety and soundness goals.” On capital reform, Bowman noted that since the closure of the comment period for the Basel III “Endgame” reforms, the federal banking agencies have been reviewing the feedback and identifying areas of concern: she hopes that the agencies will take this opportunity to revise the proposal in a way that addresses the concerns raised by the public. After voicing her non-support for the recently adopted Community Reinvestment Act (CRA) final rule, Bowman shared that while the new rule provided some positive changes, the changes are still “unnecessarily complex, overly prescriptive,” and have greater costs than benefits. Bowman highlighted that the final rule treats a wide range of community banks with more than $2 billion in assets as “large banks, and would have resulted in a “nearly tenfold increase in banks with a ‘Need to Improve’ CRA rating” if applied to the period from 2018 to 2020. On Regulation II and debit card interchange fees, Bowman noted that the comment period has been extended until May 12, adding that the proposed permanent decrease in debit card interchange fees will have “consequences for banks of all sizes.” Bowman ended with discussion on bank mergers, climate change, and liquidity.
Fed announces temporary increase of intraday credit by Federal Reserve Banks
On April 23, the Federal Reserve (Fed) announced that it temporarily increased the availability of intraday credit that can be provided by the Federal Reserve Banks. In its policy statement, the Fed stated that it will automatically suspend net debit caps and waive overdraft fees to assist primary credit institutions, which are “eligible to borrow under the Federal Reserve’s primary credit program for the discount window.” In addition, the Fed announced that its max cap procedure will be streamlined to enable secondary credit institutions—which are “eligible only for the Reserve Banks’ secondary credit discount window program”—to utilize the max cap program to “request collateralized capacity from their Reserve Banks,” and will waive the requirement to obtain a self-assessed net debit cap and board resolution before requesting a max cap. The Fed’s actions are effective as of April 24 and will terminate on September 30.