Unanimous votes approving sweeping proposals were taken by three members of the federal deposit agency board – all who were in “acting” capacities – at their meeting Tuesday, the agency reported.
The usual five-member Federal Deposit Insurance Corp. (FDIC) board taking the votes was made up of only three: Acting Chairman Travis Hood, Acting Comptroller of the Currency Rodney Hood, and Acting Director of the Consumer Financial Protection Bureau (CFPB) and director of the White House office of management and budget (OMB) Russell Vought.
The other two seats on the board – both appointed members, including the vice chairman, who must be of the opposite political party of the chairman (who is a Republican) – are vacant. The White House has nominated no one for the seats
Among the decisions made by the FDIC board trio were:
- A proposal to establish a new office of supervisory appeals (OSA). The “independent, stand-alone” office would replace the existing Supervision Appeals Review Committee (SARC) and, according to the agency the only function of the OSA would be to resolve appeals. The agency indicated that would ensure that reviewing officials “have the capacity to review each case with the proper level of attention and diligence, and would be scalable should the volume of appeals increase.” The proposal is subject to a 60-day comment period.
- A proposal to rescind the Community Reinvestment Act (CRA) revised rule adopted only two years ago. The latest proposal would proposal both rescind the Community CRA final rule issued in October 2023 and “reinstate the CRA framework” that existed before then (the 1995 rule). The rule implanting anti-redlining laws has ping-ponged between presidential administrations over the last eight years. That rule followed the adoption in 2020 of a revamped CRA rule by only one regulator, the OCC. Then-Comptroller of the Currency Joseph Otting (appointed by then-President Donald Trump (R)) issued that final rule without the participation of either the Fed or the FDIC, even though the FDIC (then headed by Chairman Jelena McWilliams) participated in the proposed rulemaking. The Fed declined to attach to either the proposed or final rule. The 2023 rule, after its adoption by the banking agencies, was challenged by banking groups , who won an injunction in 2024 against its implementation. The latest iteration is being proposed by all three of the federal banking agencies. A 30-day comment period is sought.
- A proposal for threshold adjustments and indexing to reflect inflation, including those under 12 CFR part 363 of agency rules related to annual independent audit and reporting requirements, and adjust those thresholds in the future based on a proposed indexing methodology. The proposal has a 60-day comment period. Mandated audits for banks of $500 million or more (under Part 363), require the audit to be made by an independent public accountant. The rules also require that banks file and annual report with FDIC (and state regulator where applicable). Management must also establish and maintain an adequate internal control structure over financial reporting comply with designated safety and soundness laws and regulations.
- A proposal on the establishment and relocation of branches and offices aimed at improving “the speed and certainty of, and reduce the regulatory burden associated with, the filing process.” Among other things the proposal would: provide that filings for establishment or relocation from institutions eligible for expedited processing will be deemed approved three business days after submission; eliminate that agency’s discretion to remove filings from expedited processing; and eliminate public notice and comment requirements. The proposal has a 60-day comment period.
- Issued a requestion for information (RFI) about how the agency reviews filings submitted by industrial banks and industrial loan companies to “help inform how the FDIC evaluates the statutory factors applicable to each filing, considering the unique aspects of industrial bank business plans and the broad range of companies that may seek to establish an industrial bank in the modern marketplace.” The RFI has a 60-day comment period.
Leave a Reply