US Agencies Issue Interim MMLF Rule, FED Updates FR Y-14 Forms
In an effort to mitigate the impact of economic disruptions due to the COVID-19 outbreak, Money Market Mutual Fund Liquidity Facility (MMLF) was launched in the US to enhance the liquidity and functioning of money markets and to support the economy. To this end, US Agencies (FDIC, FED, and OCC) are adopting an interim final rule to allow banking organizations to neutralize the regulatory capital effects of participating in the Money Market Mutual Fund Liquidity Facility (MMLF). This treatment would extend to the community bank leverage ratio. This rule impacts the three FFIEC Call Reports and the FR Y-9C. The interim final rule is effective on March 23, 2020. Comments on the interim final rule must be received no later than May 07, 2020. FED also posted updated reporting forms and instructions for monthly and quarterly capital assessments and stress testing reports (FR Y-14M/Q). Additionally, FED published supporting statement for the reporting, recordkeeping, and disclosure requirements associated with Regulation WW, Regulation Q (FR Q), and Regulation VV (FR VV).
The interim final rule modifies the agencies' capital rules so that financial institutions receive credit for the low risk of their MMLF activities, reflecting the fact that institutions would be taking no credit or market risk in association with such activities. The change only applies to activities with the MMLF. To provide liquidity to the money market sector to help stabilize the financial system, FED authorized the Federal Reserve Bank of Boston to establish the MMLF. Under the MMLF, the Federal Reserve Bank of Boston will extend non-recourse loans to eligible financial institutions to purchase certain types of assets from money market mutual funds. A banking organization that participates in the MMLF could potentially be subject to increased capital requirements. The agencies have determined that the current leverage and risk-based capital requirements for the assets acquired by a banking organization as part of the MMLF do not reflect the substantial protections provided to the organization by the Federal Reserve Bank of Boston in connection with the facility.
The agencies believe that it would be appropriate to exclude the effects of purchasing assets through the MMLF from the regulatory capital of a banking organization. This interim final rule would permit banking organizations to exclude non-recourse exposures acquired as part of the MMLF from a banking organization's total leverage exposure, average total consolidated assets, advanced approaches-total risk-weighted assets, and standardized total risk-weighted assets, as applicable. The agencies seek comment on all aspects of the interim final rule. The interim final rule affects the agencies' current information collections for the Call Reports FFIEC 031, FFIEC 041, and FFIEC 051. The changes to the Call Reports and their related instructions will be addressed in a separate Federal Register notice. Similarly, FED will address corresponding changes to the information collected on the FR Y-9C as part of a separate Federal Register notice.
Related Links
- Joint Press Release
- Interim Final Rule
- FR Y-14M: Reporting Forms and Instructions
- FR Y-14Q: Reporting Forms and Instructions
- Supporting Statement for FR WW
- Supporting Statement for FR Q
- Supporting Statement FR VV
- Reporting Form Updates
Comment Due Date: March 23, 2020
Effective Date: May 07, 2020
Keywords: Americas, US, Banking, Reporting, Regulatory Capital, MMLF, Call Reports, FR Y-9C, FR Y-14, Credit Risk, Market Risk, Liquidity Risk, Stress Testing, CBLR Framework, COVID-19, Boston FED, US Agencies
Featured Experts

Laurent Birade
Advises U.S. and Canadian financial institutions on risk and finance integration, CCAR/DFAST stress testing, IFRS9 and CECL credit loss reserving, and credit risk practices.

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
SNB Announces Measures to Address Impact of COVID-19 CrisisRelated Articles
EBA Launches Stress Tests for Banks, Issues Other Updates
The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
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.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
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.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
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.
CBIRC Revises Measures on Corporate Governance Supervision
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.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
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.