June 3, 2002 News Archive

Board Issues Guidance on Capital Treatment of AIRs Related to Credit Card Securitizations
The Board issued an SR letter and associated interagency guidance on the regulatory capital treatment of accrued interest receivables (AIRs) related to credit card securitizations. The guidance(PDF) clarifies the appropriate risk-based capital treatment for banking organizations that securitize credit card receivables and record AIRs as an on-balance sheet asset.

Board Issues Alert on Securitization Covenants Linked to Supervisory Actions or Thresholds
The Board issued an SR letter alerting banking organizations of the safety and soundness implications of certain securitization covenants that are linked to supervisory actions or the breach of supervisory thresholds as triggers for early amortization events or transfer of servicing. The advisory (PDF) further stipulates that management of the banking organization should amend, modify, or remove these covenants from existing transactions.

Vice Chairman Ferguson Remarks on Community and Regional Banking
In a speech delivered at the convention of the North Carolina Bankers Association in West Virginia, Vice Chairman Roger W. Ferguson, Jr., commented on the increasing complexity and risk management needs of community and regional banks. Vice Chairman Ferguson emphasized the need for sufficient risk-management processes in community and regional banks to meet the risk-management challenges of the banks' current environment. He also mentioned that for an increasing number of banks, new systems and procedures may be needed to keep pace with the more-complex risks associated with an evolving or a growing business.