FED announced an interim final rule to amend Regulation D on reserve requirements of depository institutions due to the financial disruptions related to COVID-19 outbreak. FED is amending Regulation D to delete the six-per-month limit on convenient transfers from the "savings deposit" definition. The amendments are intended to allow depository institution customers more convenient access to their funds and to simplify account administration for depository institutions. FED is also making temporary revisions to the financial statements for holding companies (FR Y-9 reports) and FFIEC call reports, among others, to reflect the amendments to Regulation D. This interim rule became effective on April 24, 2020 while comments on the rule must be received by June 29, 2020.
This interim final rule includes deletion of provisions in the “savings deposit” definition that require depository institutions to either prevent transfers and withdrawals in excess of the limit or to monitor savings deposits ex-post for violations of the limit. The rule also makes conforming changes to the other definitions in Regulation D that refer to “savings deposit” as necessary. The regulatory limit in Regulation D was the basis for distinguishing between reservable "transaction accounts" and non-reservable "savings deposits." The recent action of FED reducing all reserve requirement ratios to zero has rendered this regulatory distinction unnecessary.
The interim final rule allows depository institutions to immediately suspend enforcement of the six transfer limit and to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits. The rule permits, but does not require, depository institutions to suspend enforcement of the six transfer limit. It also does not require any changes to the deposit reporting practices of depository institutions. The changes to the numeric limits on certain kinds of transfers and withdrawals that may be made each month from accounts characterized as “savings deposits” were applicable on April 23, 2020.
FED has temporarily revised the instructions for FR Y-9C reports to accurately reflect aspects of the interim final rule. The agencies have determined that certain revisions should be made to the affected FFIEC reports as a result of this rule making. The changes should be minimal and result in a zero net change in hourly burden. Submissions will, however, be made by the agencies to OMB.
Comment Due Date: June 29, 2020
Effective Date: April 24, 2020
Keywords: Americas, US, Banking, COVID-19, Reporting, Regulation D, Reserve Requirement, FR Y-9C, Call Reports, FFIEC, FED
Previous ArticleUS Agencies Extend Volcker Rule Consultation, Clarify Mortgage Rules
HKMA is consulting on revisions to the Supervisory Policy Manual module CR-G-14 on margin and other risk mitigation standards for non-centrally cleared over-the-counter (OTC) derivatives transactions.
PRA provided further information on the application of regulatory capital and IFRS 9 requirements to payment holidays granted or extended to address the challenges arising from COVID-19 outbreak.
HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.
BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.
ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy.
ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.
EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).
SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.
US Agencies (FDIC, FED, and OCC) published a final rule that makes technical changes to the March 31, 2020 interim final rule that provides a five-year transition period for the impact of the current expected credit loss (CECL) methodology on regulatory capital.
ECB published results of the March 2020 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives markets.