April 1, 2002 News Archive

Reminder on Prior Approval Requirements of Regulation H Regarding Core Business Changes
The Board issued SR 02-9 reminding examiners and state member banks of the provisions of Regulation H regarding material changes in the proposed activities presented at the time of admission to membership in the Federal Reserve System. Under Regulation H, state member banks must receive prior approval from the Board before making any significant changes in their business plans. Failure to seek prior approval would be considered a violation of Regulation H.

Financial Institutions Advised to Follow SEC Guidance on Filing Statements Audited by Andersen
The Board issued a press release advising financial institutions to follow the guidance issued by the Securities and Exchange Commission (SEC) with respect to auditing and accounting work performed by Arthur Andersen LLP. The SEC has previously announced that it would continue to accept financial statements audited by Andersen provided the companies obtain certain assurances from Andersen concerning audit quality and controls and that the audit is in accordance with generally accepted auditing standards. Details of the SEC's reporting requirements are available on its web site.

Updated FEMA Brochure "Answers to Questions About the National Flood Insurance Program"
The Board announced that the Federal Emergency Management Agency (FEMA) has released a new edition of the brochure titled "Answers to Questions About the National Flood Insurance Program." A new section has been added on the subject of Repetitive Loss Properties Strategy. The new edition also provides updated web sites as well as FEMA's regional office addresses and telephone numbers.

Consumer Guide on Electronic Check Conversion Transactions
The Board announced the publication of "When is Your Check Not a Check?" (PDF) to help consumers better understand their rights and responsibilities with regard to electronic check conversion transactions. The guide discusses how consumers can tell if their check will be electronically converted and what consumers can do if they have problems with such transactions. The guide also provides a checklist for consumers to use before and after an electronic check conversion transaction, and items to review when they receive their account statements from financial institutions.

SEC Announces Plans for Completing Reviews of Auditor Independence Systems and Controls
The Securities and Exchange Commission (SEC) announced final plans for reviewing the design, implementation and operating effectiveness of each of the five largest independent auditing firm's systems for assuring compliance with the independence rules. Final reports are expected to be issued by October 31, 2002.