Category Archives:Federal Reserve Board

Bank Regulators Release Public Section of Resolution Plans

Yesterday, the Federal Reserve and the FDIC issued a joint press release making available the public sections of resolution plans of firms with less than $100 billion in qualifying nonbank assets.  Each plan, commonly known as a living will, must describe the company’s strategy for rapid and orderly resolution under the U.S. Bankruptcy Code in the event of material financial distress or failure of the company. These plans must include both public and confidential sections.

Companies subject to the rule are required to file their resolution plans on a staggered schedule. The largest bank holding companies are required to submit their plans on or before July 1 each year. Nonbank financial companies that are designated by FSOC also must submit on or before July 1. All other firms generally are required to submit their plans on or before December 31 each year.

The public portions of these “living wills” are available on the Federal Reserve and FDIC websites.

Federal Reserve Board Request Comment on Proposed Repeal of Regulation AA

The Federal Reserve Board (FRB) has requested comment on a proposal to repeal its Regulation AA, 12 CFR part 227, which was issued pursuant to its
rule writing authority under section 18(f)(1) of the Federal Trade Commission Act. Section 1092(2) of the Dodd-Frank Act repealed section 18(f)(1) of the FTC Act, thus
eliminating the Board’s authority to write rules that address unfair or deceptive acts or practices, which are contained in Regulation AA.  Regulation AA includes the Board’s “credit practices rule,” which prohibits banks from using certain remedies to enforce consumer credit obligations and from including these remedies in their consumer credit contracts.

In connection with the Fed proposal, interagency guidance was issued clarifying that the repeal of the credit practices rules applicable to banks, savings associations, and federal credit unions is not a determination that the prohibited practices contained in those rules are permissible. The regulators believe the practices described in the former credit practices rules could potentially violate the prohibition against unfair or deceptive practices under the Federal Trade Commission Act and Dodd-Frank Act, even in the absence of a specific regulation governing the conduct.