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FEBRUARY 26, 2021

550 Seventeenth Street, N.W.
Washington, D.C. 20429

Supplement Highlights

Regulatory Capital Treatment for Investments in Certain Unsecured Debt Instruments of Global Systemically Important U.S. Bank Holding Companies, Certain Intermediate Holding Companies, and Global Systemically Important Foreign Banking Organizations; Total Loss-Absorbing Capacity Requirements. The Office of the Comptroller of the Currency, Treasury, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation adopted a final rule that applies to advanced approaches banking organizations with the aim of reducing both interconnectedness within the financial system and systemic risks. The final rule requires deduction from a banking organization's regulatory capital for certain investments in unsecured debt instruments issued by foreign or U.S. global systemically important banking organizations (GSIBs) for the purposes of meeting minimum total loss-absorbing capacity (TLAC) requirements and, where applicable, long-term debt requirements, or for investments in unsecured debt instruments issued by GSIBs that are pari passu or subordinated to such debt instruments. In addition, the Board is adopting changes to its TLAC rules to clarify requirements and correct drafting errors. 86 Fed. Reg. 708.

See pages 2240.13–2240.196

Collection of Civil Money Penalty Debt. The Federal Deposit Insurance (FDIC) amended the FDIC's Procedures for Corporate Debt Collection to include delinquent civil money penalties within the debt covered by those procedures. 86 Fed. Reg. 1740.

See pages 2237–2238.08

FDIC Rules of Practice and Procedure; Technical Revisions. The Federal Deposit Insurance Corporation (FDIC) amended its rules of practice and procedure to codify the agency's longstanding practice of having certain adjudicative functions performed by an inferior officer of the United States appointed by the FDIC's Board of Directors (Board). Additionally, the FDIC is making other technical edits to its rules of practice and procedure to update references to certain positions within the FDIC Legal Division whose titles are outdated. 86 Fed. Reg. 2246.

See pages 2125–2166.42

Unsafe and Unsound Banking Practices: Brokered Deposits and Interest Rate Restrictions. The Federal Deposit Insurance Corporation (FDIC) finalized revisions to its regulations relating to the brokered deposits and interest rate restrictions that apply to less than well capitalized insured depository institutions. For brokered deposits, the final rule establishes a new framework for analyzing certain provisions of the ``deposit broker'' definition, including ``facilitating'' and ``primary purpose.'' For the interest rate restrictions, the FDIC is amending its methodology for calculating the national rate, the national rate cap, and the local market rate cap. Further, the FDIC is explaining when non-maturity deposits are accepted and when non-maturity deposits are solicited for purposes of applying the brokered deposits and interest rate restrictions. 86 Fed. Reg. 6742.

See pages 2047–2068.27, and 2639

Removal of Transferred OTS Regulations Regarding Prompt Corrective Action Directives and Conforming Amendments to Other Regulations. The Federal Deposit Insurance Corporation (FDIC) adopted a final rule to rescind and remove from the Code of Federal Regulations rules entitled ``Prompt Corrective Action'' that were transferred to the FDIC from the Office of Thrift Supervision (OTS) on July 21, 2011, in connection with the implementation of Title III of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and amend certain sections of existing FDIC regulations governing the issuance and review of orders pursuant to the prompt corrective action provisions of the Federal Deposit Insurance Act to make it clear that such rules apply to all insured depository institutions for which the FDIC is the appropriate Federal banking agency. 86 Fed. Reg. 8104.

See pages 2166.12-A–2166.16, and 3431

Removal of Transferred Office of Thrift Supervision (OTS) Regulations Regarding Nondiscrimination Requirements. The Federal Deposit Insurance Corporation (FDIC) is rescinding and removing its regulation titled ``Nondiscrimination Requirements'' and amending its regulation titled ``Fair Housing'' to make it applicable to State savings associations. These actions will streamline the FDIC's rules by eliminating unnecessary, inconsistent, and duplicative regulations, and ensure insured State nonmember banks and State savings associations generally will be subject to the same nondiscrimination requirements. 86 Fed. Reg, 8082.

See pages 2647–2651, and 3321

Net Stable Funding Ratio: Liquidity Risk Measurement Standards and Disclosure Requirements. The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation adopted a final rule that implements a stable funding requirement, known as the net stable funding ratio (NSFR), for certain large banking organizations. The final rule establishes a quantitative metric, the NSFR, to measure the stability of the funding profile of certain large banking organizations and requires these banking organizations to maintain minimum amounts of stable funding to support their assets, commitments, and derivatives exposures over a one-year time horizon. The NSFR is designed to reduce the likelihood that disruptions to a banking organization's regular sources of funding will compromise its liquidity position, promote effective liquidity risk management, and support the ability of banking organizations to provide financial intermediation to businesses and households across a range of market conditions. The NSFR supports financial stability by requiring banking organizations to fund their activities with stable sources of funding on an ongoing basis, reducing the possibility that funding shocks would substantially increase distress at individual banking organizations. The final rule applies to certain large U.S. depository institution holding companies, depository institutions, and U.S. intermediate holding companies of foreign banking organizations, each with total consolidated assets of $100 billion or more, together with certain depository institution subsidiaries (together, covered companies). Under the final rule, the NSFR requirement increases in stringency based on risk-based measures of the top-tier covered company. U.S. depository institution holding companies and U.S. intermediate holding companies subject to the final rule are required to publicly disclose their NSFR and certain components of their NSFR every second and fourth calendar quarter for each of the two immediately preceding calendar quarters. The final rule also amends certain definitions in the agencies' liquidity coverage ratio rule that are also applicable to the NSFR. 86 Fed. Reg. 9120.

See pages 2301–2339

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