The Board of Governors of the Federal Reserve System (FED) and the Federal Deposit Insurance Corporation (FDIC) issued reporting updates for banks. Additionally, FED, along with FDIC, the Office of the Comptroller of the Currency (OCC), the National Credit Union Administration (NCUA), and the Consumer Financial Protection Bureau (CFPB), in conjunction with the state bank and state credit union regulators, issued a statement on completion of London Inter-Bank Offered Rate (LIBOR) transition. Finally, FED imposed a fine of USD 67.8 million on Wells Fargo & Co of San Francisco, California, for unsafe practices related to the inadequate oversight of sanctions compliance risks at its subsidiary bank, Wells Fargo Bank NA.
With respect to reporting by banks, FED is consulting, until May 30, 2023, to revise and extend, for three years, the FR Y-9 reports. FED proposes to revise the FR Y-9C reports to eliminate and consolidate certain items from the reporting forms and instructions for burden-reduction purposes and to correspond with proposed revisions to the Federal Financial Institutions Examination Council (FFIEC) Call Reports (FFIEC 031, FFIEC 041, and FFIEC 051) related to a statutorily mandated review. The proposal seeks views on previous clarifications to FR Y-9C reporting instructions related to reporting securitizations conducted by Federal Home Loan Mortgage Corporation (FHLMC, also known as Freddie Mac). The proposed changes to the FR Y-9C would take effect as of the June 30, 2023 report date. FED also updated the reporting forms and instructions for complex institution liquidity monitoring report (FR 2052a) while FDIC announced the updates and timeline for submission of Call Reports. FDIC, in a letter to financial institutions, announced that Call Reports for the March 31, 2023 reporting date must be submitted to the Central Data Repository of the relevant US agencies by April 30, 2023, with the exception of certain institutions with foreign offices. The supplemental instructions for Call Reports accompany the FDIC letter.
Within the statement on LIBOR transition, the US agencies reminded supervised institutions that USD LIBOR panels will end on June 30, 2023. The agencies also reiterate their expectations that institutions with USD LIBOR exposure should complete their transition of remaining LIBOR contracts as soon as practicable. As noted in prior interagency statements, failure to adequately prepare for the discontinuation of LIBOR could undermine financial stability as well as safety and soundness of institutions and create litigation, operational, and consumer protection risks. Institutions are encouraged to ensure that replacement alternative rates are negotiated where needed and in place in advance of June 30, 2023, for all LIBOR-referencing financial contracts including investments, derivatives, and loans.
Keywords: Americas, US, Banking, Reporting, FR 2052A, Call Reports, LIBOR Transition, Liquidity Risk, FR Y-9C, Basel, Benchmark Reforms, Wells Fargo, FDIC, FED, OCC, NCUA, CFPB, US Agencies
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
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