January 26, 2004 News Archive

Board Seeks Comments on Proposal to Revise CRA Regulation
The federal regulatory agencies have proposed limited amendments to Regulation BB in two specific areas, as follows. First, the definition of "small institution" would be modified to include banks and thrifts with total assets of less than $500 million, an increase from the current $250 threshold, and eliminate consideration of an institution's holding company size entirely. Second, the proposal would specify when unlawful discrimination, other illegal credit practices, or abusive asset-based lending by a bank or its affiliate might adversely affect the bank's CRA rating. The proposal also includes enhancements to the loan data disclosed in CRA public evaluations and CRA disclosure statements.

A joint notice of proposed rulemaking will be published in the near future. The public comment period will extend for 60 days following publication of the proposal in the Federal Register.

FFIEC Announces Plan for Submitting Call Report Data Electronically
The Federal Financial Institutions Examination Council (FFIEC) recently published a notice of voluntary testing and mandatory enrollment for the new electronic system for submitting Call Report data. The plan calls for voluntary testing in the second and third quarters of 2004 followed by mandatory global enrollment for all institutions. Testing will occur in three phases. The first phase will start in April 2004 and involves a pilot program with 15 banks using test data. The second phase will start in May 2004 and involves 30 banks using test and actual data. The final phase will start in August 2004 and involves more than 100 banks using actual data.

Basel Committee Makes Changes to Basel II, Based on Comment Letters
The Basel Committee on Banking Supervision recently made a number of changes to the Basel II Capital Accord based on 52 comment letters. The committee said it made significant progress on the accord and plans to publish changes shortly. Some of the changes include basing the cap on the recognition of excess provisions to a percentage of credit risk-weighted assets rather than the current proposal to base it on Tier 2 capital components. The committee also agreed to simplify the treatment of securitization-related exposures and to refine the rules for recognizing credit risk mitigation techniques. The committee will meet again in May 2004.