Featured Product

    OCC Amends Rule on Other Real Estate Owned Activities for Banks

    October 22, 2019

    OCC finalized a rule to clarify and streamline the regulation on other real estate owned (OREO) for national banks and to update the regulatory framework for OREO activities at Federal savings associations. OCC is also removing outdated capital rules for national banks and Federal savings associations, including provisions related to OREO, and is making conforming edits to the other rules that reference those capital rules. This final rule will apply to OREO activities at all national banks and federal savings associations and will be effective from December 01, 2019.

    OREO refers to real estate acquired in satisfaction of debts previously contracted and real estate no longer used or planned to be used to conduct banking activities. Post consultation, OCC is making minor adjustments to the proposed technical amendments related to the capital rules. Specifically, OCC is removing Appendices A and B to risk-based capital guidelines for national banks (12 CFR, Part 3) and capital requirements for Federal savings associations (12 CFR, Part 167) and making conforming technical edits to other CFR parts that reference those provisions.

    Additionally, the holding period for national banks under the final rule remains unchanged and consists of an initial five-year holding period, with up to an additional five years if approved by OCC. The final rule also establishes an initial holding period for Federal savings associations of five years after commencement of the holding period to ensure the safe and sound management of OREO holdings. If the Federal savings association has not disposed of the OREO within the initial five-year holding period, the savings association may request OCC approval to continue to hold the real property as OREO for up to five additional years. These provisions are consistent with the rules that apply to national banks. The final rule also adopts for Federal savings associations the existing national bank provision describing the date the holding period for OREO begins.

    Finally, the final rule updates and streamlines the notification provision by requiring prior notification only when the proposed additional expenditures and recorded investment in an individual OREO property exceeds 10% of the institution's total equity capital based on its most recent Call Report. National banks with significant loan-loss reserves or excessive losses recorded in accumulated other comprehensive income will generally have a reduced limit for notification. National banks holding assets that are deducted under the regulatory capital rule will generally have an increase in limit for notification under the final rule. OCC expects a similar result for Federal savings associations that previously used a notification framework based on lending limits.

     

    Related Link: Federal Register Notice

    Effective Date: December 01, 2019

    Keywords: Americas, US, Banking, OREO, Real Estate, Credit Risk, Regulatory Capital, Federal Savings Association, OCC

    Featured Experts
    Related Articles
    News

    EC Regulation Sets Out Standards for Reporting and Disclosure of MREL

    EC published the Implementing Regulation 2021/763 that lays down implementing technical standards for supervisory reporting and public disclosure of the minimum requirement for own funds and eligible liabilities (MREL).

    May 12, 2021 WebPage Regulatory News
    News

    EBA Report Notes Loan Origination Should Remain in Supervisory Focus

    EBA published a report that examines the convergence of prudential supervisory practices in 2020 and offers conclusions of the EBA college monitoring activity.

    May 12, 2021 WebPage Regulatory News
    News

    APRA Decides to Standardize Submission Date for Quarterly Reporting

    APRA announced the standardization of quarterly reporting due dates for authorized deposit-taking institutions.

    May 11, 2021 WebPage Regulatory News
    News

    ECB Working Group Publishes Recommendations on EURIBOR Fallbacks

    The private sector working group of ECB on euro risk-free rates published the recommendations to address events that would trigger fallbacks in the Euro Interbank Offered Rate (EURIBOR)-related contracts, along with the €STR-based EURIBOR fallback rates (rates that could be used if a fallback is triggered).

    May 11, 2021 WebPage Regulatory News
    News

    Bundesbank Publishes Supporting Documentation for Reporting by Banks

    Bundesbank published a list of "EntryPoints" that are accepted in its reporting system; the list provides taxonomy version and name of the module against each EntryPoint.

    May 11, 2021 WebPage Regulatory News
    News

    EBA Publishes Phase 1 of Reporting Framework 3.1

    EBA published the phase 1 of its reporting framework 3.1, with the technical package covering the new reporting requirements for investment firms (under the implementing technical standards on investment firms reporting).

    May 10, 2021 WebPage Regulatory News
    News

    IOSCO Sees Support for Mandatory Sustainability Reporting

    The Sustainable Finance Taskforce of IOSCO held two roundtables, with global stakeholders, on the IOSCO priorities to enhance the reliability, comparability, and consistency of sustainability-related disclosures and to collect views on the practical implementation of a global system architecture for these disclosures.

    May 10, 2021 WebPage Regulatory News
    News

    APRA to Finalize Capital Adequacy Standard Revisions by January 2022

    Asia Pacific Australia Banking APS 111 Capital Adequacy Regulatory Capital Basel RBNZ APRA

    May 10, 2021 WebPage Regulatory News
    News

    ESMA Issues Guidelines on Outsourcing to Cloud Service Providers

    ESMA published the final guidelines on outsourcing to cloud service providers.

    May 10, 2021 WebPage Regulatory News
    News

    EBA Publishes Data on Deposit Guarantee Schemes

    EBA published annual data for two key concepts and indicators in the Deposit Guarantee Schemes (DGS) Directive—available financial means and covered deposits.

    May 10, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6967