Consumer Financial Protection Bureau (CFPB)
CFPB Issues Final Rule Extending GSE Patch
The Consumer Financial Protection Bureau issued a final rule that extended the Government Sponsored Enterprise (GSE) Patch. The GSE Patch was scheduled to expire on January 10, 2021 but has been extended until the mandatory compliance date of a final rule that amends the QM loan definition in Regulation Z. The GSE Patch will still expire, however, if the GSEs (Fannie Mae and Freddie Mac) exit conservatorship as specified in Regulation Z, a provision which the Bureau will not amend. The hope is to provide a smooth transition away from the GSE Patch while still allowing access to fair mortgage credit when it expires.
The Office of the Comptroller of the Currency (OCC)
OCC and Other Agencies Issue Final Rule to Make Large Banks More Resilient
The Office of the Comptroller of the Currency and the other federal bank regulatory agencies announced a final rule that would require large banks to maintain a set minimum level of stable funding for one year in order to strengthen the resilience of those banks. The net stable funding ratio (NSFR) final rule will require these large banks to maintain funding relative to each institution’s assets, derivatives, and commitments, reducing liquidity risk and increasing financial stability, which will support the ability of these banks to lend to households and business in both normal and difficult conditions.
Securities and Exchange Commission
SEC Adopts Amendments to Auditor Independence Rules
The Securities and Exchange Commission announced that it had finalized amendments to some auditor independence requirements on Rule 2-01 of Regulation S-X. The amendments are intended to reflect staff experience applying the auditor independence framework, modernizing the regulations and focus evaluations on specific relationships and services that may threaten an auditor’s impartiality to ensure investors are protected.
Federal Deposit Insurance Corporation
FDIC Approves Interim Rule Providing Relief from Part 363 Audit and Reporting Requirements
The Federal Deposit Insurance Corporation, in response to recent increased cash inflows resulting from PPP, MMLF, PPPLF and other government stimulus initiatives for some insured depository institutions (IDIs), issued a final interim rule that would temporarily provide relief for the IDIs which would be required to incur substantial costs outside of regulatory action. The rule allows IDIs with growth to determine their Part 363 requirements for the fiscal years ending in 2021 based on consolidated total assets as of December 31, 2019.
National Credit Union Administration
NCUA Proposes Derivative Rule Changes and Approves Final Corporate Rule
The National Credit Union Administration Board unanimously approved two items. The first was a proposed rule that modernizes the Administration’s derivatives rule, allowing for more flexibility for federal credit unions managing their interest rate risk through these financial tools. The second was a final rule updating and clarifying several provisions in their corporate credit union regulations.