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    FED Revises FR Y-9C Report; OCC to Renew Collection on Mortgage Loans

    September 08, 2022

    The Board of Governors of the Federal Reserve System (FED) is adopting a proposal to revise the FR Y-9C report in context of an updated accounting standard addressing the last-of-layer hedging. In addition, the Office of the Comptroller of the Currency (OCC) is soliciting comments on the renewal of the information collection titled “Appraisals for Higher-Priced Mortgage Loans.”

    Notice on FR Y-9 reports. In March 2022, the Financial Standards Accounting Board (FASB) issued an Accounting Standards Update 2022-01 to implement the last-of-layer hedging. The Update is considered to be a modification of the U.S. GAAP. This Update expands the current single-layer method and allows for multiple hedged layers of a single closed portfolio. In light of the issuance of the Update 2022-01 by FASB, FED has adopted the revisions to the FR Y-9C related to the expansion of last-of-layer hedging proposed in October 2020, with certain modifications to account for the specific content of Accounting Standards Update 2022-01. Specifically, FED has renamed HC-B, line item 7 to “Unallocated portfolio layer fair value hedge basis adjustments” instead of ”Unallocated last-of-layer fair value hedge basis adjustments” to align with the scope of the Accounting Standards Update 2022-01. Additionally, FED is updating the FR Y-9C instructions for Schedules HC-B, Securities, and HC-C, Loans and Leases, to fully align with the U.S. GAAP as detailed in accounting standards update 2022-01. The notice will become effective on September 30, 2022.

    Notice on information collection titled “Appraisals for Higher-Priced Mortgage Loans.” This information collection relates to Section 1471 of the Dodd-Frank Act, which added a new section 129H to the Truth in Lending Act establishing special appraisal requirements for “higher-risk mortgages.” For certain mortgages with an annual percentage rate that exceeds the average prime offer rate by a specified percentage, creditors must obtain an appraisal or appraisals meeting certain specified standards, provide applicants with a notification regarding the use of the appraisals, and give applicants a copy of the written appraisals used to evaluate real estate collateral. Comments on this notice must be submitted by November 07, 2022. Comments submitted in response to this notice will be summarized and included in the request for Office of Management and Budget (OMB) approval.

     

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    Keywords: Americas, US, Banking, Fr Y 9C, Reporting, Accounting, Hedging, GAAP, Mortgage Loans, Lending, Information Collection, Credit Risk, FASB, FED, OCC

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