OCC Revises Information Collection on MLR; FHFA Adopts Final Rules
The Office of the Comptroller of the Currency (OCC) is seeking comments, until August 08, 2022, on the revision of existing information collection on the Money Laundering Risk (MLR) System. Additionally, the Federal Housing Finance Agency (FHFA) adopted a final rule amending the Enterprise Regulatory Capital Framework by introducing new public disclosure requirements for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). FHFA also adopted the final rule requiring Fannie Mae and Freddie Mac to submit annual capital plans and provide prior notice for certain capital actions.
Key highlights of the aforementioned updates follow:
- OCC proposed to revise the existing information collection MLR on Bank Secrecy Act/Money Laundering Risk Assessment. The MLR covers information on products or customers that may be experiencing difficulties or challenges maintaining banking services and is a starting point for banks to develop their risk assessments. OCC’s annual Risk Summary Form (RSF) for 2022 collects data about different products, services, customers, and geographies and included. The changes include the deletion of four and addition of six new products, services, and customers: cash transactions, marijuana-related businesses, ATM Operators, crypto assets—custody, stablecoin issuance, and stablecoin payments.
- The final rule from FHFA on amendments to the Enterprise Regulatory Capital Framework implementing new public disclosure requirements for Fannie Mae and Freddie Mac include quantitative and qualitative disclosures related to risk management, corporate governance, capital structure, and capital requirements and buffers under the standardized approach. The public disclosure requirements in the final rule align with many of the public disclosure requirements for large banking organizations under the regulatory capital framework adopted by United States banking regulators. The final rule will come in effect from August 01, 2022.
- Additionally, FHFA adopted a final rule requiring each Enterprise to submit annual capital plans and provide prior notice for certain capital actions. The requirements in the final rule are consistent with those in the regulatory framework for capital planning for large bank holding companies. The final rule's requirement to develop capital plans will allow the Enterprises to identify the amount of capital they need to raise to meet the Enterprise Regulatory Capital Framework's requirements and to consider the timing of when to raise capital and what types of capital to raise. The final rule will require an Enterprise to develop and maintain a capital plan, which the Enterprise must generally submit to FHFA by May 20 of each year. The plan must contain certain mandatory elements, including an assessment of the expected sources and uses of capital over a planning horizon that reflects the Enterprise's size and complexity, assuming both expected and stressful conditions. The final rule will come in effect from August 02, 2022.
Related Links
- Federal Register Notice on MLR System
- FHFA Rule on ERCF New Public Disclosure Requirements
- FHFA Rule on Capital Planning & Stress Capital Buffer
Keywords: Americas, US, Banking, Bank Secrecy Act, Money Laundering, ML Risk, MLR System, Crypto-Assets, Basel, Regulatory Capital, Disclosures, Fannie Mae, Freddie Mac, Standardized Approach, Capital Adequacy, Capital Planning, Stress Capital Buffer, FHFA, Stablecoins, OCC
Featured Experts
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.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
EBA Consults on Certain Standards and Guidelines Under CRR and BRRDRelated Articles
OSFI Issues Phase2 Consultation on Climate Scenario Exercise for Banks
The Office of the Superintendent of Financial Institutions (OSFI) recently announced a consultation on the second phase of the Standardized Climate Scenario Exercise (SCSE) for banks and other financial institutions it regulates in Canada.
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.