#2021-40, December 17, 2021

FDIC Board Meeting Features Contentious Exchange on Rulemaking Procedures; MBA Joins State Banking Associations in Calling for ‘Orderly, Transparent’ FDIC

During the Federal Deposit Insurance Corporation (FDIC) Board meeting this week, Chairman Jelena McWilliams ruled a motion from CFPB Director Rohit Chopra to amend the Board minutes to include a notational vote on a request for information (RFI) on bank mergers and acquisitions.  The notational vote, which occurred via email, was approved by Chopra, FDIC Director Martin Gruenberg and Acting Comptroller of the Currency Michael Hsu.

In ruling the motion out of order, Chairman McWilliams noted that it “it doesn’t comply with the previously stated information received from the general counsel about the legitimacy of that action.”  She also stated that “the legal division has previously determined, and the general counsel communicated to all board members, that these actions did not constitute a valid circulation of an additional vote. Therefore, the document cannot be added to the minutes.”

After the meeting adjourned, Director Chopra issued a statement challenging the position that only the FDIC Chairman can raise a matter for discussion at meetings of the board and called for “immediate” resolution of the conflict.  The statement also noted that “[a]bsent a return to legal reality and constructive engagement, board members will need to take further steps to exercise independence from management and to ensure sound governance of the Federal Deposit Insurance Corporation.”  Acting Comptroller Hsu issued a separate statement confirming his vote for the RFI and noting that a majority of FDIC board members should be able to “influence the agency’s agenda and actions.”

Before Tuesday’s Board meeting, the Association joined 50 other state banking trade associations and the American Bankers Association on a letter to the four FDIC directors emphasizing the importance of FDIC independence and transparency to the confidence of banks and consumers in deposit insurance and FDIC supervision.  The letter also states that  “collegiality and a shared responsibility for maintaining market stability historically have overcome the forces that push and pull at non-independent agencies, allowing for gradual change. And when change comes, it is vital from a governance and regulatory expectations standpoint that federal banking agencies not create ambiguity about what constitutes an official action.”

To read the letter, click here.  To read Director Chopra’s statement, click here and to read Acting Comptroller Hsu’s statement, click here.

CFPB Releases Updated Rulemaking Agenda

Late last week, the CFPB released an updated rulemaking agenda which highlights several of the Bureau’s priorities for the coming year, including the Dodd-Frank Act Section 1071 rulemaking. Comments on that proposed rule are being accepted through January 6, 2022.

In addition, the Bureau will begin pre-rule activity regarding consumer access to financial records in April 2022 after reviewing the comments received in response to an advanced notice of proposed rulemaking on this issue.  In June 2022, the agency will issue a notice of proposed rulemaking on amendments to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 regarding automated valuation models while in October 2022, the bureau anticipates pre-rule activity on property assessed clean energy, or PACE, financing.

There were 14 rulemaking activities that are listed as “inactive” on the fall agenda, including a rulemaking on overdraft services.

To view the updated rulemaking agenda, click here.

Agencies Update CRA Asset-Size Thresholds

The federal regulators this week issued the annual adjustment to the asset-size thresholds they will use to differentiate small and intermediate banks and savings associations under the Community Reinvestment Act.  Under the revised thresholds, a “small bank” or “small savings association” is defined as an institution that, as of December 31 of either of the prior two calendar years, had assets of less than $1.384 billion while an “intermediate small bank” or “intermediate small savings association” is defined as a small institution with assets of at least $346 million and less than $1.384 billion as of December 31 of both of the prior two calendar years.

To read more, click here.