On 25 September 2020, the Basel Committee on Banking Supervision (Basel Committee) issued a press statement following its meeting on 14, 18 and 25 September 2020 to take stock of COVID-19 risks to the global banking system and related vulnerabilities. Key points in the press statement include: The Basel Committee reiterates its previous guidance that … Continue Reading
On September 15, 2020, the Financial Crimes Enforcement Network (FinCEN), the US anti-money laundering (AML) agency, published a final rule that completes the circle of all banking organizations being treated the same for purposes of AML compliance requirements for banks. The final rule covers banks that do not have a Federal functional regulator, such as … Continue Reading
On August 31, 2020, in response to requests by the Alternative Reference Rates Committee (ARRC), the US Commodities Futures Trading Commission (CFTC) issued revised no-action letters to swap dealers and other market participants relating to the transition from use of the London Interbank Offered Rate (LIBOR) as a reference rates in transactions. These letters supersede … Continue Reading
Last month the US federal banking agencies (the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, and the National Credit Union Administration, collectively, the “US banking regulators”) and the Financial Crimes Enforcement Network (“FinCEN”) the US anti-money laundering (“AML”) agency, issued statements providing guidance on their … Continue Reading
With the potential end of LIBOR quickly approaching in only 16 months, the ARRC has been publishing many helpful resources to aid in the market’s transitions from LIBOR to SOFR, including multiple quick reference resource guides listed below. As part of the ARRC’s Summer Series (a webinar series aimed at educating the public about SOFR … Continue Reading
On July 31, 2020, the Federal Register published the final Volcker Rule covered funds amendments promulgated in June by the federal financial services regulators (the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, the Office of the Comptroller of the Currency, and the Commodity Futures Trading Commission). In her latest … Continue Reading
On July 22, 2020, the US Office of the Comptroller of the Currency (OCC) issued an interpretive letter concluding that national banks and federal savings associations have the authority to provide cryptocurrency custody services for customers. The letter, which uses the term “cryptocurrency” to encompass digital currencies, virtual currencies, and “digital assets that are not … Continue Reading
As noted in previous LIBOR Transition posts, the availability of LIBOR as a reference rate is not guaranteed beyond the end of 2021. On July 1, 2020, the Federal Financial Institutions Examination Council (FFIEC), which consists of US federal and state banking regulators and the Consumer Financial Protection Bureau, issued a Joint Statement highlighting the … Continue Reading
On 9 July 2020, the Financial Stability Board (FSB) and the Basel Committee on Banking Supervision (Basel Committee) issued a report on supervisory issues associated with benchmark transition. The report includes insights on remaining challenges to LIBOR transition based on surveys undertaken by the FSB, the Basel Committee and the International Association of Insurance Supervisors. … Continue Reading
On 8 July 2020, the Basel Committee on Banking Supervision (Basel Committee) published a paper setting out the final targeted revisions to the credit valuation adjustment (CVA) risk framework. In January 2019 the Basel Committee published the revised market risk framework. In November 2019 the Basel Committee consulted on a set of targeted final revisions … Continue Reading
LIBOR is used as a component of an interest or finance charge in consumer transactions as well as the commercial transactions we have discussed in prior LIBOR Transition posts. On June 4, 2020, the US Consumer Financial Protection Bureau (CFPB), issued a proposed rule that would amend US consumer credit regulations to address the pending … Continue Reading
On June 2, 2020, the Office of the Comptroller of the Currency (“OCC”) published a final rule clarifying the permissible interest rates on transferred loans in relation to the “valid-when-made” doctrine. According to the “valid-when-made” doctrine, a loan is valid at its inception and cannot become invalid or unenforceable based on its original terms due … Continue Reading
Following on our post discussing the ARRC’s publication of their 2020 Key Objectives, we mentioned that ARRC panned to release a set of recommended best practices. As promised, the ARRC has published guidance for Best Practices for Completing the Transition from LIBOR (“Best Practices Guidance”), along with an accompanying fact sheet, which sets forth recommended … Continue Reading
Following on our post discussing the ARRC’s recommendations outlining a spread adjusting procedure, we mentioned that the ARRC planned to release a more detailed final recommendation of the spread adjustment methodology for cash products. On May 6, 2020, the ARRC released a supplemental consultation seeking further views on certain technical questions for the spread adjustment … Continue Reading
On April 30, 2020, the US Federal Financial Institutions Examination Council (FFIEC), an interagency group of federal and state banking regulators, issued guidance on “Security in a Cloud Computing Environment.” The FFIEC guidance focuses on security risk management principles and the financial services sector’s use of cloud computing, and supplements its publications on outsourcing of … Continue Reading
On April 9, 2020, the Federal Reserve released an updated term sheet for the Term Asset-Backed Securities Loan Facility (“TALF”). Eligible borrowers under TALF (“Eligible Borrowers”) must now be U.S. companies that own eligible collateral and maintain an account relationship with a primary dealer. A “U.S. company” now is defined as a business that is … Continue Reading
Following up on our past posts on the transition away from the London Interbank Offering Rate (“LIBOR”), and other interbank offering rates (“IBOR”) denominated in other currencies, in this post, we discuss the key objectives for 2020 released by the Alternative Reference Rates Committee (“ARRC”), the group of private market participants advising the Federal Reserve … Continue Reading
Following up on our past posts on the transition away from the London Interbank Offering Rate (“LIBOR”), and interbank offering rates (“IBOR”) denominated in other currencies, in this post, we discuss the agreement reached by the members of the Alternative Reference Rates Committee (“ARRC”) on a spread adjustment methodology for cash products referencing U.S. dollar … Continue Reading
In November 2019, the financial services regulators responsible for the Volcker Rule regulations (the Board of Governors of the Federal Reserve Board, the Office of the Comptroller of the Currency, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission, collectively, the “Agencies”) issued final rules revising the proprietary … Continue Reading
The US anti-money laundering (AML) agency, the Financial Crimes Enforcement Network (FinCEN), has issued guidance regarding AML compliance for financial institutions during the current COVID-19 pandemic. This guidance would be in addition to any issuances from their respective functional regulators, if any. March 16 Guidance On March 16, 2020, FinCEN issued guidance requesting that financial … Continue Reading
Following up on our past posts on the transition away from the London Interbank Offering Rate (“LIBOR”), and other interbank offering rates (“IBOR”) denominated in other currencies, in this post, we discuss the proposal from the Alternative Reference Rates Committee (“ARRC”) consultation on fallback contract language for new variable rate private student loans. This is … Continue Reading
On March 10, 2020, the New York Department of Financial Services (NYDFS) issued guidance to all of its regulated institutions engaged in virtual currency business activity, requiring them to have plans for preparedness to manage the possible operational and financial risks posed by the COVID-19 pandemic. NYDFS requires the plans to be submitted by Thursday, … Continue Reading
After industry groups stressed the need to adopt regulatory changes in light of the COVID-19 pandemic, on March 27, 2020, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency (collectively, the “Banking Agencies”) issued a joint press release announcing an interim final rule … Continue Reading
The US financial regulatory, consumer protection and enforcement supervisors are regularly issuing press releases and statements concerning the COVID-19 pandemic. Each of them has established special links to provide information to the public on its response to the pandemic. Board of Governors of the Federal Reserve System: https://www.federalreserve.gov/covid-19.htm Commodity Futures Trading Commission: https://www.cftc.gov/coronavirus Conference of State … Continue Reading
