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Two Key EGRRCPA Provisions Now Effective

September 10, 2018

Authors

Robert Klingler

Two Key EGRRCPA Provisions Now Effective

September 10, 2018

by: Robert Klingler

As of the end of August 2018, two key provisions of The Economic Growth, Regulatory Relief, and Consumer Protection Act (aka the Crapo bill, S.2155, or increasingly, EGRRCPA) have become effective: the increase in the small bank holding company policy statement threshold and the increase in the expanded examination cycle threshold.  Before looking at those provisions, I have to acknowledge the fabulous Wall Street Journal story by Ryan Tracy, “Can You Say EGRRCPA? Tongue-Twister Banking Law Confuses Washington.”  Personally, I’m now leaning towards “egg-rah-sip-uh.”

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Senate-passed Regulatory Reform Offers Real Benefits to Depository Institutions under $10 Billion in Assets

March 15, 2018

Authors

Robert Klingler

Senate-passed Regulatory Reform Offers Real Benefits to Depository Institutions under $10 Billion in Assets

March 15, 2018

by: Robert Klingler

On March 14, 2018, the Senate passed, 67-31, the Economic Growth, Regulatory Relief and Consumer Protection Act, or S. 2155.  While it may lack a catchy name, its substance is of potentially great importance to community banks.

The following summary focuses on the impact of the bill for depository institutions with less than $10 billion in consolidated assets.  The bill would also

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Regulators Provide Creative Volcker Rule Fix for TruPS

January 14, 2014

Authors

Robert Klingler

Regulators Provide Creative Volcker Rule Fix for TruPS

January 14, 2014

by: Robert Klingler

In facing Congressional and industry backlash related to the effect of the Volcker Rule on TruPS CDOs, federal regulators were expected to choose between two options.  Door 1 was to provide an exemption for TruPS CDOs held by all institutions.  Door 2 was to provide an exemption only for TruPS CDOs held by banks with less than $15 billion in assets, consistent with the Collins Amendment to Dodd-Frank.

The regulators chose neither door, instead opening Door 3: the regulators have exempted TruPS CDOs for all institutions, so long as the TruPS CDO primarily holds TruPS of banks with less than

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Regulators Poised to Remove TRuPS CDOs from Volcker Rule Grasp

January 3, 2014

Authors

Robert Klingler

Regulators Poised to Remove TRuPS CDOs from Volcker Rule Grasp

January 3, 2014

by: Robert Klingler

According to a story in the American Banker (subscription required), the federal banking regulators are looking at exempting all existing collateralized debt obligations backed by trust-preferred securities from compliance with the Volcker Rule.

From a technical perspective, it seems likely that the regulators would effect such an exemption by excluding the debt tranches of CDO’s backed by TRuPS from the definition of an “ownership interest” under the Volcker Rule, thereby allowing continued ownership by banking entities.  Whether the revision is limited to existing TRuPS CDO’s or all is likely largely irrelevant, as the elimination of preferred capital treatment for

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Banking Regulators Agree to (Re)Examine TRuPS CDOs and the Volcker Rule

December 27, 2013

Authors

Robert Klingler

Banking Regulators Agree to (Re)Examine TRuPS CDOs and the Volcker Rule

December 27, 2013

by: Robert Klingler

In a late Christmas present (or perhaps it was just delayed in delivery), the federal banking agencies and the SEC (although apparently not the Commodity Future Trading Commission) announced they would be reviewing whether it would be appropriate to exempt CDOs backed by Trust Preferred Securities from the Volcker Rule’s ban on covered funds.

The agencies have stated that they intend to address the matter no later than January 15, 2014, and believe that, consistent with GAAP, any actions taken in January 2014 should be effective in addressing year-end financial statements so long as such actions are taken before

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Ambiguity Regarding TRuPS CDOs and the Volcker Rule

December 23, 2013

Authors

Robert Klingler

Ambiguity Regarding TRuPS CDOs and the Volcker Rule

December 23, 2013

by: Robert Klingler

On December 19, 2013, the Federal Reserve, FDIC and OCC issued an Interagency FAQ Regarding Collateralized Debt Obligations Backed by Trust Preferred Securities under the Final Volcker Rule.  While roundly criticized by most trade associations and others following the industry as constituting “Frequently Asked Questions Without Answers,” the FAQ does provide additional potential insight on whether banks will ultimately need to dispose of their investments in CDOs backed by TRuPS portfolios (as well as other CDOs).

The greatest weakness in the FAQ, and a generally nasty side-effect of issuing final Volcker Rules shortly before calendar (and thus fiscal) year-ends,

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Volcker Rule Adds Another Nail in TRUPs’ Coffin

December 16, 2013

Authors

Robert Klingler

Volcker Rule Adds Another Nail in TRUPs’ Coffin

December 16, 2013

by: Robert Klingler

On December 10, 2013, the final Volcker Rule was adopted by the federal banking regulators, the SEC, and the CFTC to implement Section 619 of the Dodd-Frank Act.  The Volcker Rule generally prohibits banking entities from engaging in “proprietary trading” and making investments and conducting certain other activities with “private equity funds and hedge funds.”

One unintended consequence appears to be the treatment of Collateralized Debt Obligations (CDOs) backed by Trust Preferred Securities (TRUPs) as “covered funds” under the Volcker Rule.  As a covered fund, banking entities of all sizes will no longer be able to own TRUPs CDOs as

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Financial Services Update – February 4, 2011

February 8, 2011

Authors

Matt Jessee

Financial Services Update – February 4, 2011

February 8, 2011

by: Matt Jessee

Warren Interviews AGs for Consumer Protection Agency

Reports this week indicate that Elizabeth Warren, who is interim head of the U.S. Consumer Financial Protection Bureau, has interviewed four Democratic state attorneys general to be her permanent successor. The four AGs reportedly in the running are Tom Miller of Iowa, Lisa Madigan of Illinois, Roy Cooper of North Carolina and Martha Coakley of Massachusetts. The bureau is scheduled to officially start work on July 21. Under the Dodd-Frank Wall Street Reform Act, which President Obama signed in July, the bureau must have a Senate-confirmed director to perform certain functions such as

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Financial Services Update – January 21, 2011

January 21, 2011

Authors

Matt Jessee

Financial Services Update – January 21, 2011

January 21, 2011

by: Matt Jessee

Immelt Appointed Chairman of Council on Jobs and Competitiveness; Volcker Resigns

On Friday, President Obama announced that General Electric CEO Jeff Immelt will serve as Chairman of the newly created “Council on Jobs and Competitiveness.”  The Council will advise the President on job creation policies and on the establishment of a long-term growth strategy.  Immelt previously served on the board of the President’s Economic Recovery Advisory Board (PERAB).  On Thursday, the President also announced the resignation of PERAB Chairman Paul Volcker and dissolution of the PERAB.

SEC Issues New Rules on Asset Backed Securities

On Thursday, the Securities and Exchange

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Volcker Rule Impact

July 8, 2010

Authors

Jerry Blanchard

Volcker Rule Impact

July 8, 2010

by: Jerry Blanchard

One of the ideas incorporated into the Regulatory Reform Act has been the so-called Volcker Rule, named after former Federal Reserve Chairman, Paul Volcker. Volcker’s proposal was that banks should not be engaged in speculative trading for their own accounts. For example, holdings in mortgage backed securities caused huge losses for the nation’s largest banks.

The rule has now made it into the conference committee’s version of the bill although in a somewhat watered down version of what Volcker had originally proposed.  The bill in its current version would prohibit a bank from investing more than 3% of its tier

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