The Office of the Comptroller of the Currency's (OCC) Acting Comptroller, Michael J. Hsu discussed climate risk management and diversity and inclusion, at the Institute of International Bankers Annual Washington Conference while certain US agencies published a statement on special purpose credit programs under the Equal Credit Opportunity Act and Regulation B.
The OCC Acting Comptroller noted that, later this year, OCC plans to finalize the principles on identification and management of climate-related financial risks for large banks (>USD 100 billion in assets) and then develop more detailed guidance. The plan is to do so on an interagency basis with the Federal Reserve Bank (FED) and the Federal Deposit Insurance Corporation (FDIC). OCC had proposed the draft principles in December 2021. After an appropriate transition period, the agencies (FDIC, FED, and OCC) will then begin assessing climate risk management capabilities of large banks. The US Agencies published an interagency statement.
Additionally, the interagency statement, from the US Agencies, on special purpose credit programs reminds creditors of the ability under the Equal Credit Opportunity Act and Regulation B to establish special purpose credit programs to meet the credit needs of specified classes of persons. These US Agencies are FDIC, FED, the Consumer Financial Protection Board (CFPB), the National Credit Union Administration, OCC, the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Justice, and the Federal Housing Finance Agency. The statement also calls attention to the recent HUD guidance concluding that special purpose credit programs instituted in conformity with Equal Credit Opportunity Act and Regulation B generally do not violate the Fair Housing Act. Accordingly, creditors may consider the use of special purpose credit programs across all types of credit covered by Equal Credit Opportunity Act and Regulation B. The agencies encourage creditors to explore opportunities to develop special purpose credit programs consistent with the Equal Credit Opportunity Act and Regulation B requirements as well as applicable safe and sound lending principles. Equal Credit Opportunity Act and Regulation B permit creditors to extend special purpose credit offered pursuant to any:
- credit assistance program expressly authorized by Federal or state law for the benefit of an economically disadvantaged class of persons
- credit assistance program offered by a not-for-profit organization for the benefit of its members or an economically disadvantaged class of persons
- special purpose credit program offered by a for-profit organization, or in which such an organization participates to meet special social needs, if it meets certain standards prescribed in regulations by CFPB
- News Release on Remarks by Michael J. Hsu
- Remarks of Michael J. Hsu (PDF)
- Notification on Special Purpose Credit Programs
- Statement on Special Purpose Credit Programs (PDF)
Keywords: Americas, US, Banking, Climate Change Risk, ESG, Lending, Special Purpose Credit Programs, Credit Risk, OCC, US Agencies
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Previous ArticleEC Regulation Amends Forms and Templates on Resolution Planning
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.