Final Volcker Rule amendments, appraisal rule up for FDIC Board action next week

A final rule with revisions to the Volcker Rule, which generally prohibits proprietary trading by banks with more than $10 billion in consolidated assets, is the top item for discussion Aug. 20 during the next open meeting of the Federal Deposit Insurance Corp. (FDIC) Board.

The FDIC released its agenda Tuesday. The board’s summary agenda includes seven items, including a final real estate appraisal rule, for which no discussion is anticipated; these will be resolved by a single vote unless a board members asks that one of the items be moved to the discussion agenda.

However, for now, the discussion agenda includes the following:

  • [Volcker Rule] Memorandum and resolution re: Final Rule: Revisions to Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds.
  • Memorandum and resolution re: Notice of Proposed Rulemaking on Interest Rate Restrictions Applicable to Less than Well Capitalized Banks.

When the board takes action, it will mark the first federal banking or securities agency to proceed on final changes to the rule. The Volcker Rule was last amended in July to exclude from its restrictions community banks with $10 billion or less in total consolidated assets and total trading assets and liabilities of 5% or less of total consolidated assets, in accordance with the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S. 2155). That final rule also permits a hedge fund or private equity fund, under certain circumstances, to share the same name or a variation of the same name with an investment adviser as long as the adviser is not an insured depository institution, a company that controls an insured depository institution, or a bank holding company.

The board’s summary agenda includes final revisions to raise the real estate appraisal threshold for banks (likely to $400,000), begins with the disposition of previous board meeting minutes. The complete summary agenda is:

  • Disposition of Minutes of a Board of Directors’ Meeting Previously Distributed.
  • Memorandum and resolution re: Final Rule to Increase the Appraisal Threshold for Residential Real Estate Transactions, Implement the Rural Residential Appraisal Exemption, and Require Appropriate Appraisal Review.
  • Memorandum and resolution re: Final Rule to Increase the Major Assets Threshold Under the Depository Institutions Management Interlocks Act.
  • Memorandum and resolution re: Notice of Proposed Rulemaking: Removal of Transferred OTS Regulation at Part 390, Subpart M–Deposits.
  • Memorandum and resolution re: Notice of Proposed Rulemaking Regarding the Use of Certain Assessment Credits.
  • Memorandum and resolution re: Proposed Interagency Policy Statement on Allowances for Credit Losses.
  • Report of actions taken pursuant to authority delegated by the Board of Directors.

The board meeting, slated for 10 a.m., will be open to the public and webcast live.

FDIC Board Aug. 20 open meeting agenda