Federal Reserve System June 2011 – Federal Register Recent Federal Regulation Documents

The Board is publishing for public comment a proposed rule amending Regulation B (Equal Credit Opportunity). Section 704B of the Equal Credit Opportunity Act (ECOA), as added by Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act or Act), requires that financial institutions collect and report information concerning credit applications made by women- or minority- owned businesses and by small businesses. ECOA Section 704B becomes effective on the date that rulemaking authority for ECOA is transferred to the Consumer Financial Protection Bureau (CFPB), which is July 21, 2011. Although the CFPB will have the authority to issue rules to implement ECOA Section 704B for most entities, the Board retains authority to issue rules for certain motor vehicle dealers. This proposed rule excepts motor vehicle dealers that are subject to the Board's jurisdiction from the requirements of ECOA Section 704B temporarily, until the effective date of final rules that will be issued by the Board to implement that provision.

The Board is adopting a final rule that allows bank holding companies that have made a valid election to be taxed under Subchapter S of Chapter 1 of the U.S. Internal Revenue Code (S-Corp BHCs) and bank holding companies organized in mutual form (Mutual BHCs) to include the full amount of any subordinated debt securities issued to the U.S. Department of the Treasury (Treasury) under the capital purchase program (CPP), in tier 1 capital for purposes of the Board's risk-based and leverage capital guidelines for bank holding companies, provided that the Subordinated Securities will count toward the limit on the amount of other restricted core capital elements includable in tier 1 capital; and allows bank holding companies that are subject to the Board's Small Bank Holding Company Policy Statement (small bank holding companies) and that are S-Corp BHCs or Mutual BHCs to exclude the CPP Subordinated Securities from treatment as debt for purposes of the debt-to-equity standard under the Small Bank Holding Company Policy Statement (Policy Statement). The Board is also adopting, and requesting comment on, an interim final rule that allows small bank holding companies that are S-Corps or Mutual BHCs to exclude from treatment as debt for purposes of the debt-to-equity standard under the Policy Statement subordinated debt securities issued to the Treasury through the Small Business Lending Fund established under the Small Business Jobs Act of 2010.

The Board is publishing a final rule amending the staff commentary that interprets the requirements of Regulation Z (Truth in Lending). The Board is required to adjust annually the dollar amount that triggers requirements for certain home mortgage loans bearing fees above a certain amount. The Home Ownership and Equity Protection Act of 1994 (HOEPA) sets forth rules for home-secured loans in which the total points and fees payable by the consumer at or before loan consummation exceed the greater of $400 or 8 percent of the total loan amount. In keeping with the statute, the Board has annually adjusted the $400 amount based on the annual percentage change reflected in the Consumer Price Index as reported on June 1. The adjusted dollar amount for 2012 is $611.

The Board is proposing amendments to Regulation Y to require large bank holding companies to submit capital plans to the Federal Reserve on an annual basis and to require such bank holding companies to provide prior notice to the Federal Reserve under certain circumstances before making a capital distribution.