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 Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.