2000 Comment Letters
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Date Mailed:
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September 8, 2000
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Topic:
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This letter is a follow-up to comments submitted in March 2000 about Part 1 of the Report of the Task Force on Payment System Principles and Practices entitled
Core Principles for Systemically Important Payment Systems. The letter outlines several recommendations to help support the Committee's goal of assuring that systemically important payment systems are designed, operated, and overseen in a manner that is consistent with the public interest. The Bank advocates a standard
of little or no credit risk and little or no liquidity risk for systemically important payment systems. This letter draws on analysis from Bill Bergman, Dick Lamm, Jim Moser, and Robert Steigerwald.
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| Date Mailed: |
September 1, 2000
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Brief Description:
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The Board's proposed revisions to Regulation Z - Truth in Lending, concerning Section 32, Home Owners and Equity Protection Act (HOEPA) of 1994 to address the reported increase in predatory lending practices in the home-equity lending market. The letter notes that the Chicago Fed shares the
public's concern regarding predatory lending practices in the mortgage markets but also recognized that distinctions need to be made between legitimate, risk-based subprime lending and loans produced by abusive practices. The letter draws on analysis from Ken Davidson, Bill
Lloyd, Lauren Pilot-Mitchell, and Lorrie Woos.
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| Date Mailed: |
August 7, 2000
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| Topic: |
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| Brief Description:
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The Bank supports the Commission's change in its regulatory approach from one of specific mandates to the consistent application of broad, flexible core principles. The Bank also notes that the proposed regulations are consistent with the unified and streamlined regulatory approach that the Bank
suggested in its March 1999 letter to the Senate Committee on Agriculture, Nutrition and Forestry regarding reauthorization. The letter draws on analysis from Dick Lamm, Jim Moser, John McPartland, and Robert Steigerwald.
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| Date Mailed: |
July 25, 2000
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This letter reiterates that competition by the Reserve Banks in the market for ACH services has been fair and in the public interest. Rather than view the current proposal as a remedy for presumed competitive inequity, the Bank regards it as a policy improvement that will increase coordination among ACH services providers, and consequently enhance the value of the ACH to its users. In addition, the letter outlines potential
adverse implications of the ACH operator definition for competitive equity among commercial ACH intermediaries. The letter draws on analysis from Eve Boboch, Ed Green, and Jim Moser.
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| Date Mailed: |
June 7, 2000
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Brief Description:
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Joint proposal by the BOG, FDIC, OCC, and OTS that proposes revisions to the risk-based capital requirements for certain obligations related to securities transactions.
The letter draws on analysis from Jim Moser, Robert Steigerwald, Donna Zagorski, Doug Evanoff, and Tim Derosier.
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| Date Mailed: |
March 31, 2000
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| Brief Description:
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The BIS is proposing revisions to the current capital adequacy framework issued in 1988. Our comments
support the use of an internal ratings-based approach to capital calculations, rather than using external ratings from third-party agencies. We provide research conducted within the Chicago FRB that supports the accuracy and feasibility of a particular internal ratings-based approach. In addition, we support more liberal capital reduction treatment for risk mitigation techniques. Finally, we support increased
disclosure as a means for improving market discipline and recommend that the committee consider increasing the role of subordinated
debt in the capital structure as another means of improving market discipline. The letter draws on analysis from Lisa Ashley, Rob Bliss, Jon Frye, Dale Klein, John McPartland, Jim Moser, and Jim Nelson.
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| Date Mailed: |
March 17, 2000
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Brief Description:
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The Task Force on Payment System Principles and Practices issued a report expanding the types of payment systems that may be considered "systemically important"
and thus, the degree to which the core principles may apply. Our response to the BIS highlighted our interest in the potential effect that the expanded definition may have on institutions in the Seventh District. Furthermore, we stated our intentions to continue studying this report and send additional comments to the Task Force shortly. The letter draws on analysis from Robert Steigerwald and Bill Bergman.
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| Date Mailed: |
January 7, 2000
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| Brief Description:
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The Board proposed revisions to the official staff commentary on Reg Z. We supported revisions that would clarify that short-term cash advances known as "payday loans"; are subject to truth in lending disclosure requirements. The letter draws on analysis from Lorrie Woos and Ken Davidson.
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