, 64304-64316 [X09-161207]

[Federal Register Volume 74, Number 233 (Monday, December 7, 2009)]
[Unknown Section]
[Pages 64304-64316]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: X09-161207]


[[Page 64304]]




DEPARTMENT OF THE TREASURY (TREAS)



Statement of Regulatory Priorities
The primary missions of the Department of the Treasury are:
 To promote prosperous and stable American and world economies, 
            including promoting domestic economic growth and 
            maintaining our Nation's leadership in global economic 
            issues, supervising national banks and thrift institutions, 
            and helping to bring residents of distressed communities 
            into the economic mainstream.
 To manage the Government's finances by protecting the revenue 
            and collecting the correct amount of revenue under the 
            Internal Revenue Code, overseeing customs revenue 
            functions, financing the Federal Government and managing 
            its fiscal operations, and producing our Nation's coins and 
            currency.
 To safeguard the U.S. and international financial systems from 
            those who would use these systems for illegal purposes or 
            to compromise U.S. national security interests, while 
            keeping them free and open to legitimate users.
Consistent with these missions, most regulations of the Department and 
its constituent bureaus are promulgated to interpret and implement the 
laws as enacted by the Congress and signed by the President. It is the 
policy of the Department to comply with requirements to issue a notice 
of proposed rulemaking and carefully consider public comments before 
adopting a final rule. Also, in particular cases, the Department 
invites interested parties to submit views on rulemaking projects while 
a proposed rule is being developed.
In response to the events of September 11, 2001, the President signed 
the USA PATRIOT Act of 2001 into law on October 26, 2001. Since then, 
the Department has accorded the highest priority to developing and 
issuing regulations to implement the provisions in this historic 
legislation that target money laundering and terrorist financing. These 
efforts, which will continue during the coming year, are reflected in 
the regulatory priorities of the Financial Crimes Enforcement Network 
(FinCEN).
To the extent permitted by law, it is the policy of the Department to 
adhere to the regulatory philosophy and principles set forth in 
Executive Order 12866, and to develop regulations that maximize 
aggregate net benefits to society while minimizing the economic and 
paperwork burdens imposed on persons and businesses subject to those 
regulations.
Emergency Economic Stabilization Act
On October 3, 2008, the President signed the Emergency Economic 
Stabilization Act of 2008 (EESA) (Pub. L. 110-334). Section 101(a) of 
EESA authorizes the Secretary of the Treasury to establish a Troubled 
Asset Relief Program (TARP) to ``purchase, and to make and fund 
commitments to purchase, troubled assets from any financial 
institution, on such terms and conditions as are determined by the 
Secretary, and in accordance with this Act and policies and procedures 
developed and published by the Secretary.''
EESA provides authority to issue regulations and guidance to implement 
the program. Regulations and guidance required by EESA include 
conflicts of interest, executive compensation, and tax guidance. The 
Secretary is also charged with establishing a program that will 
guarantee principal of, and interest on, troubled assets originated or 
issued prior to March 14, 2008.
The Department has issued guidance and regulations and will continue to 
provide program information through the next year. Regulatory actions 
taken to date include the following:
 Executive compensation. In October 2008, the Department issued 
            an interim final rule that set forth executive compensation 
            guidelines for the TARP Capital Purchase Program (73 FR 
            62205). Related tax guidance on executive compensation was 
            announced in IRS Notice 2008-94. In addition, among other 
            EESA tax guidance, the IRS issued interim guidance 
            regarding loss corporation and ownership changes in Notice 
            2008-100, providing that any shares of stock owned by the 
            Department of the Treasury under the Capital Purchase 
            Program will not be considered to cause Treasury's 
            ownership in such corporation to increase. On June 15, 
            2009, the Department issued a revised interim final rule 
            that sets forth executive compensation guidelines for all 
            TARP program participants (74 FR 28394), implementing 
            amendments to the executive compensation provisions of EESA 
            made by the American Recovery and Reinvestment Act of 2009 
            (Pub. L.111-5). Public comments on the revised interim 
            final rule regarding executive compensation were due by 
            August 14, 2009 and will be considered as part of the 
            process of issuing a final rule on this subject.
 Insurance program for trouble assets. On October 14, 2008, the 
            Department released a request for public input on an 
            insurance program for troubled assets.
 Conflicts of interest. On January 21, 2009, the Department 
            issued an interim final rule providing guidance on 
            conflicts of interest pursuant to section 108 of EESA (74 
            FR 3431). Comments on the interim final rule, which were 
            due by March 23, 2009, will be considered as part of the 
            process of issuing a final rule.
During Fiscal Year 2010, the Department will continue implementing the 
EESA authorities to restore capital flows to the consumers and 
businesses that form the core of the nation's economy.
Terrorism Risk Insurance Program Office
The Terrorism Risk Insurance Act of 2002 (TRIA) was signed into law on 
November 26, 2002. The law, which was enacted as a consequence of the 
events of September 11, 2001, established a temporary Federal 
reinsurance program under which the Federal Government shares the risk 
of losses associated with certain types of terrorist acts with 
commercial property and casualty insurers. The Act, originally 
scheduled to expire on December 31, 2005, was extended to December 31, 
2007 by the Terrorism Risk Insurance Extension Act of 2005 (TRIEA). The 
Act has since been extended to December 31, 2014, by the Terrorism Risk 
Insurance Program Reauthorization Act of 2007 (TRIPRA).
The Office of the Assistant Secretary for Financial Institutions is 
responsible for developing and promulgating regulations implementing 
TRIA, as extended and amended by TRIEA and TRIPRA. The Terrorism Risk 
Insurance Program Office, which is part of the Office of the Assistant 
Secretary for Financial Institutions, is responsible for operational 
implementation of TRIA. The purposes of this legislation are to address 
market disruptions, ensure the continued widespread availability and 
affordability of commercial property and casualty insurance for 
terrorism risk, and to allow for a transition period for the private 
markets to stabilize and build capacity while preserving State 
insurance regulation and consumer protections.

[[Page 64305]]

Over the past year, the Office of the Assistant Secretary has issued 
proposed rules implementing changes authorized by TRIA as revised by 
TRIPRA. The following regulations should be published by December 31, 
2009:
 Recoupment of Federal Share of Compensation for Insured 
            Losses. This final rule would implement and establish 
            requirements for determining amounts to be recouped and for 
            procedures insurers are to use for collecting terrorism 
            policy surcharges and remitting them to the Treasury.
 Cap on Annual Liability and Pro Rata Share of Insured Losses. 
            This final rule would establish, for purposes of the $100 
            billion cap on annual liability, how Treasury will 
            determine whether aggregate insured losses will exceed $100 
            billion and, if so, how Treasury will determine the pro 
            rata share of insured losses to be paid by each insurer 
            that incurs insured losses under the Program.
During 2010, Treasury will continue the ongoing work of implementing 
TRIA and carrying out revised operations as a result of the TRIPRA 
related regulation changes.
Customs Revenue Functions
On November 25, 2002, the President signed the Homeland Security Act of 
2002 (the Act), establishing the Department of Homeland Security (DHS). 
The Act transferred the United States Customs Service from the 
Department of the Treasury to the DHS, where it is was known as the 
Bureau of Customs and Border Protection (CBP). Effective March 31, 
2007, DHS changed the name of the Bureau of Customs and Border 
Protection to U.S. Customs and Border Protection (CBP) pursuant to 
section 872(a)(2) of the Act (6 USC 452(a)(2)) in a Federal Register 
notice (72 FR 20131) published on April 23, 2007. Notwithstanding the 
transfer of the Customs Service to DHS, the Act provides that the 
Secretary of the Treasury retains sole legal authority over the customs 
revenue functions. The Act also authorizes the Secretary of the 
Treasury to delegate any of the retained authority over customs revenue 
functions to the Secretary of Homeland Security. By Treasury Department 
Order No. 100-16, the Secretary of the Treasury delegated to the 
Secretary of Homeland Security authority to prescribe regulations 
pertaining to the customs revenue functions. This Order further 
provided that the Secretary of the Treasury retained the sole authority 
to approve any such regulations concerning import quotas or trade bans, 
user fees, marking, labeling, copyright and trademark enforcement, and 
the completion of entry or substance of entry summary including duty 
assessment and collection, classification, valuation, application of 
the U.S. Harmonized Schedules, eligibility or requirements for 
preferential trade programs and the establishment of recordkeeping 
requirements relating thereto.
During the past fiscal year, among the Treasury-retained CBP customs-
revenue function regulations issued was an interim rule to amend the 
regulatory provisions relating to the requirement under the United 
States-Bahrain FTA (BFTA) that a good must be ``imported directly'' 
from Bahrain to the United States or from the United States to Bahrain 
to qualify for preferential tariff treatment. The change removed the 
condition that a good passing through the territory of an intermediate 
country must remain under the control of the customs authority of the 
intermediate country. CBP plans to finalize this rulemaking in the 
upcoming fiscal year.
In addition, during the past fiscal year, CBP amended the regulations 
on an interim basis to implement certain provisions of the Tom Lantos 
Block Burmese JADE (Junta's Anti-Democratic Efforts) Act of 2008 
(Public Law 110-286) (the ``JADE Act'') and Presidential Proclamation 
8294 of September 26, 2008, which includes new Additional U.S. Note 4 
to Chapter 71 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). The interim amendments prohibit the importation of 
Burmese-covered articles of jadeite, rubies and articles of jewelry 
containing jadeite or rubies, and sets forth restrictions for the 
importation of non-Burmese covered articles of jadeite, rubies and 
articles of jewelry containing jadeite or rubies.
As a result of last year's ``Farm Bill'' legislation, CBP implemented 
interim regulations on the Softwood Lumber Act of 2008, which 
prescribed special entry requirements as well as an importer 
declaration program applicable to certain softwood lumber (SWL) and SWL 
products exported from any country into the United States; CBP plans to 
finalize the interim rule in the upcoming fiscal year.
During fiscal year 2010, CBP and Treasury plan to give priority to the 
following regulatory matters involving the customs revenue functions 
not delegated to DHS:
 Trade Act of 2002's preferential trade benefit provisions. 
            Treasury and CBP plan to finalize several interim 
            regulations that implement the trade benefit provisions of 
            the Trade Act of 2002 including the Caribbean Basin 
            Economic Recovery Act and the African Growth and 
            Opportunity Act.
 Free Trade Agreements. Treasury and CBP also plan to finalize 
            interim regulations this fiscal year to implement the 
            preferential tariff treatment provisions of the United 
            States-Singapore Free Trade Agreement Implementation Act 
            and the Dominican Republic-Central America-United States 
            Free Trade Agreement (also known as ``CAFTA-DR'') 
            Implementation Act. Treasury and CBP expect to issue 
            interim regulations implementing the United States-
            Australia Free Trade Agreement Implementation Act, the 
            United States-Oman Free Trade Agreement Implementation Act, 
            and the United States-Peru Free Trade Agreement 
            Implementation Act.
 Country of Origin of Textile and Apparel Products. Treasury 
            and CBP also plan to publish a final rule adopting an 
            interim rule that was published on the Country of Origin of 
            Textile and Apparel Products, which implemented the changes 
            brought about, in part, by the expiration of the Agreement 
            on Textile and Clothing and the resulting elimination of 
            quotas on the entry of textile and apparel products from 
            World Trade Organizations (WTO) members.
 North American Free Trade Agreement country of origin rules. 
            Treasury and CBP are determining how to proceed regarding a 
            proposal which was published in July 2008 seeking public 
            comment regarding uniform rules governing the determination 
            of the country of origin of imported merchandise. The 
            proposal attracted considerable interest from the trading 
            community. If finalized, the proposed amendments would 
            extend the application of the North American Free Trade 
            Agreement country of origin rules to all trade.
 Customs Modernization provisions of the North American Free 
            Trade Implementation Act (Customs Mod Act). Treasury and 
            CBP also plan to continue moving forward with amendments to 
            improve its regulatory procedures began under the authority 
            granted by the Customs Mod Act. These efforts, in 
            accordance with the principles of Executive Order 12866,

[[Page 64306]]

            have involved and will continue to involve significant 
            input from the importing public. CBP will also continue to 
            test new programs to see if they work before proceeding 
            with proposed rulemaking to establish permanently the 
            programs. Consistent with this practice, we expect to 
            finalize a proposal to establish permanently the remote 
            location filing program, which has been a test program 
            under the Customs Mod Act. This rule would allow remote 
            location filing of electronic entries of merchandise from a 
            location other than where the merchandise will arrive. In 
            addition, Treasury and CBP plan to finalize a proposal 
            which was published in August 2008 regarding the electronic 
            payment and refund of quarterly harbor maintenance fees. 
            The rule would provide the trade with expanded electronic 
            payment/refund options for quarterly harbor maintenance 
            fees and would modernize and enhance CBP's port use fee 
            collection efforts.
Community Development Financial Institutions Fund
The Community Development Financial Institutions Fund (Fund) was 
established by the Community Development Banking and Financial 
Institutions Act of 1994 (12 U.S.C. 4701 et seq.). The primary purpose 
of the Fund is to promote economic revitalization and community 
development through the following programs: the Community Development 
Financial Institutions (CDFI) Program, the Bank Enterprise Award (BEA) 
Program, the Native American CDFI Assistance (NACA) Program, and the 
New Markets Tax Credit (NMTC) Program. In addition the Fund administers 
the Financial Education and Counseling Pilot Program (FEC) and the 
Capital Magnet Fund (CMF).
In fiscal year (FY) 2010, subject to funding availability, the Fund 
will provide awards through the following programs:
 Native American CDFI Assistance (NACA) Program. Through the 
            NACA Program, the Fund will provide technical assistance 
            grants and financial assistance awards to promote the 
            development of CDFIs that serve Native American, Alaska 
            Native, and Native Hawaiian communities.
 Bank Enterprise Award (BEA) Program. Through the BEA Program, 
            the Fund will provide financial incentives to encourage 
            insured depository institutions to engage in eligible 
            development activities and to make equity investments in 
            CDFIs.
 New Markets Tax Credit (NMTC) Program. Through the NMTC 
            Program, the CDFI Fund will provide allocations of tax 
            credits to qualified community development entities (CDEs). 
            The CDEs in turn provide tax credits to private sector 
            investors in exchange for their investment dollars; 
            investment proceeds received by the CDEs are be used to 
            make loans and equity investments in low-income 
            communities. The Fund administers the NMTC Program in 
            coordination with the Office of Tax Policy and the Internal 
            Revenue Service.
 Financial Education and Counseling (FEC) Pilot Program. 
            Through the FEC Pilot Program, the CDFI Fund will provide 
            grants to eligible organizations to provide a range of 
            financial education and counseling services to prospective 
            homebuyers. The Fund will administer the FEC Program in 
            coordination with the Office of Financial Education.
 Capital Magnet Fund (CMF). Through the Capital Magnet Fund, 
            the CDFI Fund will provide competitively awarded grants to 
            CDFIs and qualified nonprofit housing organizations to 
            finance affordable housing and related community 
            development projects. In FY 2010, the Fund expects to draft 
            and publish regulations to govern the application process, 
            award selection, and compliance components of the CMF.
Financial Crimes Enforcement Network
As chief administrator of the Bank Secrecy Act (BSA), FinCEN's 
regulations constitute the core of the Department's anti-money 
laundering and counter-terrorism financing programmatic efforts. 
FinCEN's responsibilities and objectives are linked to, and flow from, 
that role. In fulfilling this role, FinCEN seeks to enhance U.S. 
national security by making the financial system increasingly resistant 
to abuse by money launderers, terrorists and their financial 
supporters, and other perpetrators of crime.
The Secretary of the Treasury, through FinCEN, is authorized by the BSA 
to issue regulations requiring financial institutions to file reports 
and keep records that are determined to have a high degree of 
usefulness in criminal, tax, or regulatory matters, or in the conduct 
of intelligence or counter-intelligence activities to protect against 
international terrorism. Those regulations also require designated 
financial institutions to establish anti-money laundering programs and 
compliance procedures. To implement and realize its mission, FinCEN has 
established regulatory objectives and priorities to safeguard the 
financial system from the abuses of financial crime, including 
terrorist financing, money laundering, and other illicit activity. 
These objectives and priorities include: (1) issuing, interpreting, and 
enforcing compliance with regulations implementing the BSA; (2) 
supporting, working with, and, as appropriate, overseeing compliance 
examination functions delegated to other Federal regulators; (3) 
managing the collection, processing, storage, and dissemination of data 
related to the BSA; (4) maintaining a Government-wide access service to 
that same data, and for network users with overlapping interests; (5) 
conducting analysis in support of policymakers, law enforcement, 
regulatory and intelligence agencies, and the financial sector; and (6) 
coordinating with and collaborating on anti-terrorism and anti-money 
laundering initiatives with domestic law enforcement and intelligence 
agencies, as well as foreign financial intelligence units.
During fiscal year 2009, FinCEN issued, or plans to issue, the 
following regulatory actions:
 Currency Transaction Reporting Exemptions. FinCEN published a 
            Final Rule that simplifies the existing currency 
            transaction reporting (CTR) exemption regulatory 
            requirements. The amendments were recommended by the 
            Government Accountability Office in GAO-08-355. By 
            simplifying the regulatory requirements regarding CTR 
            exemptions, FinCEN believes that more depository 
            institutions will avail themselves of the exemptions. The 
            rule was finalized with an effective date of January 5, 
            2009.
 Administrative Rulings. Prior to the end of the fiscal year, 
            FinCEN will issue a final technical rule change to update 
            the Bank Secrecy Act provisions to reflect that 
            Administrative Rulings are published on the FinCEN Web 
            site, rather than in the Federal Register.
 Reorganization of BSA Rules. On October 23, 2008, FinCEN 
            issued a Notice of Proposed Rulemaking to re-designate and 
            reorganize the BSA regulations in a new chapter within the 
            Code of Federal Regulations. The re-designation and 
            reorganization of the regulations in a new chapter is not

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            intended to alter regulatory requirements. The regulations 
            will be organized in a more consistent and intuitive 
            structure that more easily allows financial institutions to 
            identify their specific regulatory requirements under the 
            BSA. The new chapter will replace 31 CFR Part 103.
 Money Services Businesses. On May 12, 2009, FinCEN issued a 
            Notice of Proposed Rulemaking addressing definitional 
            thresholds for Money Services Businesses (MSBs), 
            incorporating previously issued Administrative Rules and 
            guidance with regard to MSBs, and addressing the issue of 
            foreign-located MSBs.
 Confidentiality of Suspicious Activity Reports. On March 3, 
            2009, FinCEN issued a Notice of Proposed Rulemaking 
            clarifying the non-disclosure provisions with respect to 
            the existing regulations pertaining to the confidentiality 
            of suspicious activity reports (SARs). In conjunction with 
            this notice, FinCEN issued for comment two guidance 
            documents, SAR Sharing with Affiliates for depository 
            institutions and SAR Sharing with Affiliates for securities 
            and futures industry entities, to solicit comment 
            permitting certain financial institutions to share SARs 
            with their U.S. affiliates that are also subject to SAR 
            reporting requirements.
 Mutual Funds. On June 5, 2009, FinCEN issued a Notice of 
            Proposed Rulemaking addressing the definition of financial 
            institution in the BSA's implementing regulations to 
            include open-end investment companies (mutual funds). 
            Despite the fact that mutual funds are already required to 
            comply with anti-money laundering and customer 
            identification program requirements, file SARs, comply with 
            due diligence obligations pursuant to rules implementing 
            section 312 of the USA PATRIOT Act, and perform other BSA 
            compliance functions, a mutual fund is not designated as a 
            `financial institution' under the BSA implementing 
            regulations. The proposed rule would address obligations to 
            file Currency Transaction Reports for cash transactions 
            over $10,000 in lieu of current obligations to file Form 
            8300s.
 Non-Bank Residential Mortgage Lenders and Originators. On July 
            21, 2009, FinCEN issued an Advance Notice of Proposed 
            Rulemaking (ANPRM) to solicit public comment on a wide 
            range of questions pertaining to the possible application 
            of anti-money laundering (AML) program and suspicious 
            activity report regulations to a specific sub-set of loan 
            and finance companies, i.e., non-bank residential mortgage 
            lenders and originators
 Expansion of Special Information Sharing Procedures (pursuant 
            to section 314(a) of the BSA). Prior to the end of the 
            fiscal year, FinCEN will issue a Notice of Proposed 
            Rulemaking to amend the BSA regulations to allow certain 
            foreign law enforcement agencies, State and local law 
            enforcement agencies, and FinCEN itself to submit requests 
            for information to financial institutions.
 Withdrawal of Proposed Rules. On October 30, 2008, FinCEN 
            withdrew the proposed rules (issued in 2002 and 2003) for 
            investment advisers, commodity trading advisors, and 
            unregistered investment companies. The proposed rules were 
            withdrawn to eliminate uncertainty associated with the 
            existence of out-of-date proposed rules, and to allow 
            FinCEN to issue new notices of proposed rulemaking at a 
            later date that take into account industry regulatory 
            developments with respect to investment advisers, commodity 
            trading advisors, and unregistered investment companies 
            since 2003.
 Renewal of Existing Rules. FinCEN renewed without change the 
            information collections associated with the existing 
            regulations requiring money services businesses, mutual 
            funds, operators of credit card systems, dealers in 
            precious metals, precious stones, or jewels, and certain 
            insurance companies to develop and implement written anti-
            money laundering programs. Also, FinCEN renewed without 
            change the information collections associated with the 
            existing regulations requiring futures commission 
            merchants, introducing brokers in commodities, banks, 
            savings associations, credit unions, certain non-federally 
            regulated banks, mutual funds, and securities broker-
            dealers to develop and implement customer identification 
            programs.
 Administrative Rulings and Written Guidance. FinCEN issued 10 
            Administrative Rulings and written guidance pieces (as of 
            August 2009) interpreting the BSA and providing clarity to 
            regulated industries.
FinCEN's regulatory priorities for fiscal year 2010 include finalizing 
the proposed initiatives mentioned above, as well as the following 
projects:
 Anti-Money Laundering Programs. Pursuant to section 352 of the 
            USA PATRIOT Act, certain financial institutions are 
            required to establish AML programs. Continued from fiscal 
            year 2009, FinCEN will propose a rulemaking to require 
            state-chartered credit unions and other depository 
            institutions without a federal functional regulator to 
            implement AML programs. With the added information from the 
            ANPRM regarding non-bank residential mortgage lenders or 
            originators, FinCEN will research and analyze issues 
            regarding potential regulation of the loan and finance 
            industry, and may issue proposed rulemaking with regard to 
            non-bank residential mortgage lenders and originators. 
            Finally, FinCEN also will continue to consider regulatory 
            options regarding certain corporate and trust service 
            providers.
 Regulatory Framework for Stored Value. The Credit Card 
            Accountability, Responsibility, and Disclosure Act (CARD 
            Act) of 2009 (Section 503) requires FinCEN to issue a final 
            rule ``regarding issuance, sale, redemption, or 
            international transport of stored value'' by mid-February 
            2010. This act has imposed a timetable to activities that 
            were already underway. Just prior to the enactment of the 
            CARD Act, FinCEN issued a Notice of Proposed Rulemaking 
            clarifying the applicability of BSA regulations with 
            respect to MSB activities. As part of this Notice of 
            Proposed Rulemaking, FinCEN solicited comment on the 
            treatment of stored value as money transmission under 
            FinCEN's regulations. In the accelerated rulemaking 
            environment resulting from the CARD Act, FinCEN is 
            consulting with law enforcement and other regulators with 
            the intent to issue a Notice of Proposed Rulemaking and 
            then a Final Rule to meet the established deadline. FBAR 
            Requirements. FinCEN will work with the IRS and other 
            pertinent offices within the Department of the Treasury to 
            issue a Notice of Proposed Rulemaking with regard to 
            revising the regulations governing the filing of Reports of 
            Foreign Bank and Financial Accounts (FBARs). Among other 
            things, FinCEN and the IRS will seek comments regarding 
            when a person with signature authority over, but no 
            financial interest in, a foreign financial account should 
            be relieved of filing an FBAR for the account, and when an 
            interest in a foreign entity

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            (e.g., a corporation, partnership, trust or estate) should 
            be subject to FBAR reporting.
Other Requirements. FinCEN will continue to consider regulatory action 
in conjunction with the feasibility study prepared pursuant to the 
Intelligence Reform and Terrorism Prevention Act of 2004 concerning the 
issue of obtaining information about certain cross-border funds 
transfers and transmittals of funds. FinCEN also will continue to issue 
proposed and final rules pursuant to Section 311 of the USA PATRIOT 
Act, as appropriate. Finally, FinCEN expects to propose various 
technical and other regulatory amendments in conjunction with its 
ongoing, comprehensive review of existing regulations to enhance 
regulatory efficiency.
Internal Revenue Service
The Internal Revenue Service (IRS), working with the Office of the 
Assistant Secretary (Tax Policy), promulgates regulations that 
interpret and implement the Internal Revenue Code and related tax 
statutes. The purpose of these regulations is to carry out the tax 
policy determined by Congress in a fair, impartial, and reasonable 
manner, taking into account the intent of Congress, the realities of 
relevant transactions, the need for the Government to administer the 
rules and monitor compliance, and the overall integrity of the Federal 
tax system. The goal is to make the regulations practical and as clear 
and simple as possible.
Most IRS regulations interpret tax statutes to resolve ambiguities or 
fill gaps in the tax statutes. This includes interpreting particular 
words, applying rules to broad classes of circumstances, and resolving 
apparent and potential conflicts between various statutory provisions.
During fiscal year 2010, the IRS will accord priority to the following 
regulatory projects:
 Deduction and Capitalization of Costs for Tangible Assets. 
            Section 162 of the Internal Revenue Code allows a current 
            deduction for ordinary and necessary expenses paid or 
            incurred in carrying on any trade or business. Under 
            section 263(a) of the Code, no immediate deduction is 
            allowed for amounts paid out for new buildings or for 
            permanent improvements or betterments made to increase the 
            value of any property or estate. Those expenditures are 
            capital expenditures that generally may be recovered only 
            in future taxable years, as the property is used in the 
            taxpayer's trade or business. It often is not clear whether 
            an amount paid to acquire, produce, or improve property is 
            a deductible expense or a capital expenditure. Although 
            existing regulations provide that a deductible repair 
            expense is an expenditure that does not materially add to 
            the value of the property or appreciably prolong its life, 
            the IRS and Treasury believe that additional clarification 
            is needed to reduce uncertainty and controversy in this 
            area. In August 2006, the IRS and Treasury issued proposed 
            regulations in this area and received numerous comments. In 
            March 2008, the IRS and Treasury withdrew the 2006 proposed 
            regulations and issued new proposed regulations, which have 
            generated relatively few comments. The IRS and Treasury 
            intend to finalize those regulations.
 Arbitrage Investment Restrictions on Tax-Exempt Bonds. The 
            arbitrage investment restrictions on tax-exempt bonds under 
            section 148 generally limit issuers from investing bond 
            proceeds higher-yielding investments. Treasury and the IRS 
            plan to issue proposed regulations to address selected 
            current issues involving the arbitrage restrictions, 
            including clarification of the issue price definition used 
            in the computation of bond yield, clarification and 
            simplification of the rules regarding modifications and 
            terminations of qualified hedging transactions, guidance on 
            the treatment of working capital financing, and selected 
            other issues.
 Tax Credit Bonds. Tax credit bonds are bonds in which the 
            holder receives a federal tax credit in lieu of some or all 
            of the interest on the bond. The American Recovery and 
            Reinvestment Act of 2009 created a number of new types of 
            tax credit bonds and modified the law as it concerned 
            several existing types of tax credit bonds. The IRS and 
            Treasury intend to provide guidance on numerous legal 
            issues concerning tax credit bonds and to develop clear 
            guidelines for the IRS Tax Exempt Bond enforcement program.
 Build America Bonds. Treasury and the IRS plan to issue 
            proposed regulations to provide guidance on interpretative 
            issues that have arisen in implementing the broad new Build 
            America Bond program in section 54AA under the American 
            Recovery and Reinvestment Act of 2009.
 Private Activity Bonds. Treasury and the IRS to issue final 
            regulations on allocation and accounting rules for 
            application of the private business restrictions on tax-
            exempt governmental bonds under section 141. These 
            regulations will include guidance on public-private 
            partnerships and mixed use arrangements in which projects 
            are used in part by State and local governments and in part 
            by private businesses. These regulations will finalize 2006 
            proposed regulations with modifications in consideration of 
            the public comments.
 Guidance on the Tax Treatment of Distressed Debt. Recent 
            events in the financial markets have highlighted a number 
            of unresolved tax issues relating to the amount, character, 
            and timing of income, expense, gain, or loss on distressed 
            debt. In addition, the tax treatment of distressed debt, 
            including distressed debt that has been modified, may 
            affect the qualification of certain entities for tax 
            purposes or result in additional taxes on the investors in 
            such entities, such as regulated investment companies, real 
            estate investment trusts, and real estate mortgage 
            investment conduits. During fiscal year 2009, Congress, 
            Treasury, and the IRS have addressed some of these issues 
            through statutory changes and published guidance. Treasury 
            and the IRS plan to address more of these issues in 
            published guidance.
 Classification of Series LLCs and Cell Companies. Series LLCs 
            were first introduced in Delaware in 1996, and since then, 
            series LLC statutes have been adopted in several other 
            states. These statutes typically permit the entity to 
            segregate assets and liabilities and to associate certain 
            members with specified assets and liabilities. In the 
            insurance and foreign arena, similar entities are sometimes 
            referred to as cell companies. In Notice 2008-19, the IRS 
            requested comments on when a cell of a protected cell 
            company should be treated as a separate insurance company 
            for federal income tax purposes. The IRS also requested 
            comments on similar segregated arrangements, such as series 
            LLCs that do not involve insurance. It is likely that, over 
            time, the use of series LLCs and cell companies will 
            increase. Accordingly, it is important to provide timely 
            guidance to clarify the classification and other tax 
            treatment of this new form of organization. Guidance has 
            been requested on the federal tax classification of these 
            domestic and foreign entities. The IRS

[[Page 64309]]

            and Treasury intend to issue guidance that will address the 
            characterization of domestic and foreign series and cells 
            for federal tax purposes.
 Elective Deferral of Certain Business Discharge of 
            Indebtedness Income. In the recent economic downturn, many 
            business taxpayers realized income as a result of modifying 
            the terms of their outstanding indebtedness or refinancing 
            on terms subjecting them to less risk of default. The 
            American Recovery and Reinvestment Act of 2009 includes a 
            special relief provision allowing for the elective deferral 
            of certain discharge of indebtedness income realized in 
            2009 and 2010. The provision, section 108(i) of the Code, 
            is complicated and many of the details will have to be 
            supplied through regulatory guidance. This guidance will 
            have to be provided expeditiously so taxpayers will be able 
            to evaluate the benefits of electing deferral. Treasury and 
            the IRS recently issued Revenue Procedure 2009-37 that 
            prescribes the procedure for making the election. The IRS 
            and Treasury intend to issue additional guidance on such 
            issues as the types of indebtedness eligible for the 
            relief, acceleration of deferred amounts, the operation of 
            the provision in the context of flow-through entities, the 
            treatment of the discharge for the purpose of computing 
            earnings and profits, and the operation of a provision of 
            the statute deferring original issue discount deductions 
            with respect to related refinancings.
 Rules under the Pension Protection Act of 2006 and Other 
            Retirement-Related Guidance. Significant new rules 
            regarding the funding of qualified defined benefit pension 
            plans were enacted as part of the Pension Protection Act of 
            2006 (PPA). The IRS and Treasury prioritized the various 
            pieces of guidance required to comply with those rules. The 
            IRS and Treasury intend to issue additional guidance on the 
            provisions of the PPA related to funding. In addition, the 
            IRS and Treasury will be issuing various items of 
            administrative guidance that facilitate or enhance 
            retirement savings and security.
 Withholding on Government Payments for Property and Services. 
            Section 3402(t) was added to the Internal Revenue Code by 
            the Tax Increase Prevention and Reconciliation Act of 2005 
            (TIPRA). Section 3402(t) requires all Federal, State and 
            local Government entities (except for certain small State 
            entities) to deduct and withhold an income tax equal to 3 
            percent from all payments (with certain enumerated 
            exceptions) the Government entity makes for property or 
            services. Section 3402(t) will be effective with respect to 
            payments made after December 31, 2011. On March 11, 2008, 
            the IRS issued Notice 2008-38 soliciting public comments 
            regarding guidance to be provided to Federal, State and 
            local governments required to withhold under section 
            3402(t). After considering the many comments, the IRS and 
            Treasury issued a Notice of Proposed Rulemaking, which was 
            published in the Federal Register on December 4, 2008. A 
            hearing on the proposed regulations was held on April 16, 
            2009, and the IRS has received 168 comments from 
            stakeholders on the proposed regulations. The IRS and 
            Treasury are considering the comments and intend to issue 
            final regulations.
 Information Reporting of Basis by Brokers and Others. Section 
            403 of the Energy Improvement and Extension Act of 2008 
            (Pub. L. No. 110-343) enacted on October 3, 2008, amended 
            section 6045 to require brokers to report both the basis 
            and gross proceeds of securities sold by customers. Form 
            1099-B is used for this purpose. Basis reporting generally 
            will be required for stock acquired after December 31, 
            2010. Basis reporting will be required for debt securities, 
            such as bonds, acquired after December 31, 2012. The 
            legislation also imposed basis reporting requirements on 
            others in certain circumstances. The IRS and Treasury 
            intend to issue proposed and final regulations under to 
            address these new reporting requirements.
 Information Reporting Concerning Payment Card Transactions. 
            Section 6050W was added to the Internal Revenue Code by the 
            Housing Assistance Tax Act of 2008, enacted on July 30, 
            2008. Section 6050W requires information returns to be made 
            for each calendar year beginning after December 31, 2010, 
            by merchant-acquiring entities and third-party settlement 
            organizations with respect to payment card transactions and 
            third-party payment network transactions occurring in that 
            calendar year. Certain payment card transactions subject to 
            information reporting under section 6050W are subject to 
            backup withholding if the payee has not provided a valid 
            taxpayer identification number (TIN). Announcement 2009-6, 
            2009-9 IRB 643 (Feb. 6, 2009), advised section 6050W filers 
            that they may participate in the TIN matching program under 
            the procedures established in Rev. Proc. 2003-9, 2003-1 
            C.B. 516, which permits program participants to verify the 
            payee TINs required to be reported on information returns 
            and payee statements. Notice 2009-19, 2009-10 IRB 660 (Feb. 
            20, 2009), requested public comments regarding guidance to 
            be provided to payment settlement entities and other 
            affected persons concerning the new requirements under 
            section 6050W. The IRS and Treasury intend to issue 
            proposed and final regulations under sections 6050W to 
            address these requirements.
 Withholding Tax and the Role of Financial Intermediaries. In 
            1997 the IRS and Treasury issued regulations under the 
            section 1441 provisions for withholding tax on certain 
            items of portfolio investment income from U.S. sources. The 
            qualified intermediary (QI) system was a key element. In 
            October 2008 the IRS issued Announcement 2008-98 concerning 
            proposed amendments to the qualified intermediary 
            agreements and rules to address early notice of failures of 
            internal controls, evaluation of risk that foreign accounts 
            may be subject to control by U.S. persons, and association 
            of a U.S. auditor to the oversight of QI performance. The 
            IRS and Treasury intend to issue regulations to address 
            these various areas of compliance involving the withholding 
            taxes on portfolio investment income.
 Foreign Bank Account Reporting (FBAR). In May 2009 the 
            Treasury issued budget proposals for Fiscal Year 2010 which 
            included proposed legislation to address FBAR related 
            issues. In August 2009, the IRS and Treasury issued Notice 
            2009-62 providing an extension until June 30, 2010 to file 
            FBARs for 2008 and earlier calendar years, pending the 
            preparation of further guidance. The IRS and Treasury 
            intend to issue regulations to address these FBAR issues.
Office of the Comptroller of the Currency
The Office of the Comptroller of the Currency (OCC) was created by 
Congress to charter national banks, to oversee a nationwide system of 
banking institutions, and to assure that national banks are safe and 
sound, competitive and profitable, and capable of serving in the best 
possible manner the banking needs of their customers.

[[Page 64310]]

The OCC seeks to assure a banking system in which national banks 
soundly manage their risks, maintain the ability to compete effectively 
with other providers of financial services, meet the needs of their 
communities for credit and financial services, comply with laws and 
regulations, and provide fair access to financial services and fair 
treatment of their customers.
Significant rules issued during fiscal year 2009 include:
 Fair Credit Reporting, Accuracy and Integrity of Information 
            Furnished to Consumer Reporting Agencies (12 CFR Part 41). 
            The banking agencies,\1\ the National Credit Union 
            Administration (NCUA), and the Federal Trade Commission 
            (FTC) issued a joint final rule to implement section 312 of 
            the FACT Act. Section 312 requires the issuance of 
            guidelines regarding the accuracy and integrity of 
            information entities furnish to a consumer reporting agency 
            (CRA). Section 312 also requires the issuance of 
            regulations requiring entities that furnish information to 
            a CRA to establish reasonable policies and procedures for 
            the implementation of the guidelines. In addition, section 
            312 requires jointly prescribed regulations that identify 
            the circumstances under which a furnisher of information to 
            a CRA shall be required to investigate a dispute concerning 
            the accuracy of information contained in a consumer report 
            based on the consumer's direct request to the furnisher. A 
            final rule was issued on July 1, 2009 (74 FR 31484).
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\1\ Office of the Comptroller of the Currency, Board of Governors of 
the Federal Reserve System, Federal Deposit Insurance Corporation, and 
Office of Thrift Supervision.
---------------------------------------------------------------------------
 Risk-Based Capital Guidelines; Capital Adequacy Guidelines; 
            Capital Maintenance; Capital - Residential Mortgage Loans 
            Modified Pursuant to the Home Affordable Program (12 CFR 
            Part 3). In order to support and facilitate the timely 
            implementation of the Home Affordable Program (Program) 
            announced by the U.S. Department of Treasury and to promote 
            the stability of banking organizations and the financial 
            system, the banking agencies issued an interim final rule 
            providing that a residential mortgage loan (whether a 
            first-lien or a second-lien loan) modified under the 
            Program will retain the risk weight assigned to the loan 
            prior to the modification, so long as the loan continues to 
            meet other relevant supervisory criteria. The rule 
            minimizes disincentives to bank participation in the 
            Program that could otherwise result from agencies' 
            regulatory capital regulations. The banking agencies 
            believe that this treatment is appropriate in light of the 
            overall important public policy objectives of promoting 
            sustainable loan modifications for at-risk homeowners that 
            balance the interests of borrowers, servicers, and 
            investors. Joint agency action is essential to ensure that 
            the regulatory capital consequences of participation in the 
            Program are the same for all commercial banks and thrifts. 
            An interim final rule was issued on June 30, 2009. (74 FR 
            31160).
 Registration of Mortgage Loan Originators (12 CFR Part 34). 
            The banking agencies, the NCUA, and Farm Credit 
            Administration (FCA) proposed amendments to their rules to 
            implement the S.A.F.E. Mortgage Licensing Act of 2008, 
            Title V of the Housing and Economic Recovery Act of 2008, 
            P.L. 110-289. These amendments require an employee of a 
            depository institution, an employee of a depository 
            institution subsidiary regulated by a Federal banking 
            agency, or an employee of an institution regulated by the 
            FCA that engages in the business of a mortgage loan 
            originator to register with the Nationwide Mortgage 
            Licensing System and Registry (NMLSR) and to obtain a 
            unique identifier. These amendments also provide that these 
            institutions must require their employees who act as 
            mortgage loan originators to comply with this Act's 
            registration and unique identifier requirements and must 
            adopt and follow written policies and procedures to assure 
            compliance with these requirements. A notice of proposed 
            rulemaking was issued on June 9, 2009 (74 FR 27386). The 
            OCC has included this rulemaking project in the Regulatory 
            Plan (1557-AD23).
 Risk-Based Capital Guidelines -- Money Market Mutual Funds (12 
            CFR Part 3). On September 19, 2008, the Board of Governors 
            of the Federal Reserve System adopted the Asset-Backed 
            Commercial Paper Money Market Mutual Fund Liquidity 
            Facility (the ``AMLF'' or ``ABCP Lending Facility'') which 
            enables depository institutions and bank holding companies 
            to borrow from the Federal Reserve Bank of Boston on a 
            nonrecourse basis if they use the proceeds of the loan to 
            purchase certain asset-backed commercial paper (ABCP) from 
            money market mutual funds. The purpose of this action was 
            to reduce strains being experienced by money market mutual 
            funds. To facilitate national bank participation in the 
            program, the OCC adopted on September 19, 2008,\2\ on an 
            interim final basis, an exemption from its risk-based 
            capital guidelines for ABCP held by a national bank as a 
            result of its participation in this program. The AMLF was 
            set to expire on January 30, 2009. However, to encourage 
            the stability of money market mutual funds, the program has 
            been extended. This rule finalizes the risk-based capital 
            exemption and extends the risk-based capital exemption to 
            ABCP purchased beyond the original January 30, 2009 date. 
            This final rule applies the risk-based capital exemption to 
            any ABCP purchased as a result of a national bank's 
            participation in the facility. The risk-based capital 
            exemption will continue to apply if the AMLF has not 
            expired. A final rule was issued on March 27, 2009 (74 FR 
            13336).
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\2\ 73 FR 55704 (September 26, 2008).
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 Minimum Capital Ratios; Capital Adequacy Guidelines; Capital 
            Maintenance; Capital: Deduction of Goodwill Net of 
            Associated Deferred Tax Liability (12 CFR Part 3). The 
            banking agencies issued a final rule to allow their 
            institutions to elect to reduce the amount of goodwill that 
            a bank must deduct from tier 1 capital by the amount of any 
            deferred tax liability associated with that goodwill. This 
            treatment is currently permitted only in the case of 
            goodwill acquired in a nontaxable purchase business 
            combination. This change effectively reduces the amount of 
            goodwill that a bank must deduct from tier 1 capital and 
            reflects a bank's maximum effective exposure to loss in the 
            event that such goodwill is impaired or derecognized for 
            financial reporting purposes. A final rule was issued on 
            December 30, 2008 (74 FR 79602).
 Standards Governing the Release of a Suspicious Activity 
            Report (12 CFR Part 4). The OCC proposed to revise its 
            regulations governing the release of non-public OCC 
            information set forth in 12 CFR part 4, subpart C. The 
            proposal would clarify that the OCC's decision to release a 
            suspicious activity report (SAR) will be governed by the 
            standards set forth in proposed amendments to the OCC's SAR 
            regulation, 12 CFR 21.11(k), that are part of a separate, 
            but simultaneously issued, rulemaking. A notice of

[[Page 64311]]

            proposed rulemaking was published on March 9, 2009 (74 FR 
            10136).
 Confidentiality of Suspicious Activity Reports (12 CFR Part 
            21). The OCC proposed to amend its regulations implementing 
            the Bank Secrecy Act governing the confidentiality of a 
            suspicious activity report (SAR) to: clarify the scope of 
            the statutory prohibition on the disclosure by a national 
            bank of a SAR; address the statutory prohibition on the 
            disclosure by the government of a SAR as that prohibition 
            applies to the OCC's standards governing the disclosure of 
            SARs; clarify that the exclusive standard applicable to the 
            disclosure of a SAR, or any information that would reveal 
            the existence of a SAR, by the OCC is ``to fulfill official 
            duties consistent with the purposes of the BSA''; and 
            modify the safe harbor provision in its rules to include 
            changes made by the USA PATRIOT Act. This proposal is based 
            upon a similar proposal issued simultaneously by the 
            Financial Crimes Enforcement Network (FinCEN). A notice of 
            proposed rulemaking was published on March 9, 2009 (74 FR 
            10130).
 Community and Economic Development Entities, Community 
            Development Projects, and Other Public Welfare Investments 
            (12 CFR Part 24). The OCC adopted without change the 
            interim final rule, issued on August 11, 2008, which 
            implemented the statutory change to national banks' 
            community development investment authority made in the 
            Housing and Economic Recovery Act of 2008 (HERA). The OCC 
            also revised Appendix 1 to part 24, the CD-1 National Bank 
            Community Development (Part 24) Investments Form, to make 
            technical changes that are consistent with the HERA 
            provision and the revised regulation. Section 2503 of the 
            HERA revised the community development investment authority 
            in section 24(Eleventh) to restore a national bank's 
            authority to make investments designed primarily to promote 
            the public welfare. A final rule was published on April 7, 
            2009 (74 FR 15657).
 Community Reinvestment Act Regulations (12 CFR Part 25). On 
            August 14, 2008, the Higher Education Opportunity Act 
            (HEOA) was enacted into law. Section 1031 of the HEOA 
            revised the Community Reinvestment Act (CRA) to require the 
            banking agencies, when evaluating a bank's record of 
            meeting community credit needs, to consider, as a factor, 
            low-cost education loans provided by the bank to low-income 
            borrowers. The banking agencies issued a proposal that 
            would implement section 1031 of the HEOA. In addition, the 
            proposal would incorporate into the banking agencies' rules 
            statutory language that allows them to consider as a factor 
            when evaluating a bank's record of meeting community credit 
            needs capital investment, loan participation, and other 
            ventures undertaken by nonminority- and nonwomen-owned 
            financial institutions in cooperation with minority- and 
            women-owned financial institutions and low-income credit 
            unions. A notice of proposed rulemaking was published on 
            June 30, 2009 (74 FR 31209).
The OCC's regulatory priorities for fiscal year 2010 include the 
following:
 Risk-Based Capital Guidelines; Capital Adequacy Guidelines; 
            Capital Maintenance: Regulatory Capital; Impact of 
            Modifications to Generally Accepted Accounting Principles; 
            Consolidation of Asset-Backed Commercial Paper Programs; 
            and Other Related Issues (12 CFR Part 3). The banking 
            agencies issued a notice of proposed rulemaking to: (i) 
            modify their general risk-based capital standards and 
            advanced risk-based capital adequacy frameworks to 
            eliminate the exclusion of certain consolidated asset-
            backed commercial paper programs from risk-weighted assets; 
            and (ii) provide a reservation of authority in their 
            general risk-based capital standards to permit the 
            agencies' to require banking organizations to treat 
            structures that are not consolidated under accounting 
            standards as if they were consolidated for risk-based 
            capital purposes commensurate with the risk relationship of 
            the banking organization to the structure. The banking 
            agencies also requested comment on the effect on regulatory 
            capital requirements of the consolidation of assets 
            required by the Financial Accounting Standard Board's 
            (FASB) recent issuance of Statement of Financial Accounting 
            Standards No. 166, Accounting for Transfers of Financial 
            Assets, an Amendment of FASB Statement No. 140 and 
            Statement of Financial Accounting Standards No. 167, 
            Amendments to FASB Interpretation No. 46(R). A notice of 
            proposed rulemaking was published on September 15, 2009 (74 
            FR 47138).
 Risk-Based Capital Guidelines; Capital Adequacy Guidelines; 
            Capital Maintenance: Basel II Standardized Approach (12 CFR 
            Part 3). As part of the banking agencies' ongoing efforts 
            to develop and refine the capital standards to enhance 
            their risk sensitivity and ensure the safety and soundness 
            of the banking system, they issued a notice of proposed 
            rulemaking to amend various provisions of the capital rules 
            on July 29, 2008, at 73 FR 43982. The changes involve 
            amending the current capital rules for those banks that 
            will not be subject to the advanced internal ratings-based 
            approaches. Work on a final rule is underway.
 Risk-Based Capital Standards: Market Risk (12 CFR Part 3). The 
            banking agencies plan to issue a second notice of proposed 
            rulemaking to amend the market risk capital requirements 
            for national banks. The banking agencies issued a notice of 
            proposed rulemaking on September 25, 2006 (71 FR 55958). 
            The rule would make the current market risk capital 
            requirements generally more risk sensitive with respect to 
            the capital treatment of trading activities in banks and 
            bank holding companies.
 Interagency Proposal for Model Privacy Form under Gramm-Leach-
            Bliley Act (12 CFR Part 40). The banking agencies, along 
            with the NCUA, FTC, the Commodity Futures Trading 
            Commission, and the Securities and Exchange Commission 
            (SEC), issued a joint notice of proposed rulemaking 
            pursuant to section 728 of the Financial Services 
            Regulatory Relief Act of 2006 (Pub. L. 109-351) on March 
            29, 2007 (72 FR 14940). Specifically, a safe harbor model 
            privacy form was proposed that financial institutions may 
            use to provide the disclosures under the privacy rules. 
            After further consumer testing of this model form, the SEC 
            published for comment in the Federal Register a report 
            analyzing this testing on April 20, 2009. 74 FR 17925. The 
            final rule will be published in November 2009.
Office of Thrift Supervision
As the primary Federal regulator of the thrift industry, the Office of 
Thrift Supervision (OTS) has established regulatory objectives and 
priorities to supervise thrift institutions effectively and 
efficiently. These objectives include maintaining and enhancing the 
safety and soundness of the thrift industry; a flexible, responsive 
regulatory structure that enables savings associations to

[[Page 64312]]

provide credit and other financial services to their communities, 
particularly housing mortgage credit; and a risk-focused, timely 
approach to supervision.
OTS, the Office of the Comptroller of the Currency (OCC), the Board of 
Governors of the Federal Reserve System (FRB), and the Federal Deposit 
Insurance Corporation (FDIC) (collectively, the banking agencies) 
continue to work together on regulations where they share the 
responsibility to implement statutory requirements. For example, the 
banking agencies are working jointly on several rules to update capital 
standards to maintain and improve consistency in agency rules. The