Recent Interagency Rulemaking

By W. Bernard Mason

The banking agencies have issued the following actions on an interagency basis:

CRA Proposed Rulemaking

The four banking agencies are proposing to amend the Community Reinvestment Act Regulation in two ways. The first amendment would reflect the recent statutory change to the CRA made by the Higher Education Opportunity Act (HEOA) that requires the agencies to consider, as a factor in CRA evaluations, low-cost education loans provided by an institution to low-income borrowers. The second change would be to add a new paragraph to address an existing statutory provision permitting the agencies to consider, as a factor in the CRA evaluation of a non-minority and non-women owned financial institution, activities undertaken by the institution in cooperation with minority-and-women-owned financial institutions and low-income credit unions. This proposal will be published with a 30-day comment period.

Interim Rule on Capital Maintenance: Modified Residential Mortgage Loans

The four banking agencies have approved issuance of this interim rule setting forth that a mortgage loan modified under the Making Home Affordable Program will retain the risk weight assigned to the loan (under the agencies' general risk-based capital rules) prior to the modification, so long as the loan continues to meet other applicable prudential criteria. This interim rule will be effective upon publication and contain a 30-day comment period.

Proposed Interagency Guidance - Funding and Liquidity Risk Management

The agencies have approved publication of this proposed guidance for a 60-day comment period. The guidance summarizes the principles of sound liquidity risk management that the agencies have issued in the past and, where appropriate, brings them into conformance with the "Principles for Sound Liquidity Risk Management and Supervision" issued by the Basel Committee on Banking Supervision in September 2008. While the Basel document primarily focuses on large internationally active financial institutions, this proposed guidance emphasizes supervisory expectations for all domestic financial institutions.

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W. Bernard Mason is the Regulatory Relations Liaison for The Risk Management Association. He may be contacted at bmason@rmahq.org.