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The Federal Reserve Board has requested comment on a proposal designed to reduce the volatility of the capital requirements stemming from its annual stress tests. The proposal would achieve this primarily by averaging the maximum common equity tier 1 capital declines from the prior two annual supervisory stress tests to inform a firm's stress capital buffer requirement for firms subject to Category I-III standards. For firms subject to Category IV standards subject to biennial supervisory stress tests, results would not be averaged unless those firms voluntarily opt in to consecutive annual stress tests or are subject to consecutive annual stress tests due to a material change.
At its Summer National Meeting in Chicago, the NAIC announced important guidance relating to the statutory accounting treatment of insurance companies’ investments in bank credit risk transfer transactions.
On July 25, 2024, the Fed, the OCC and the FDIC released a “Request for Information on Bank-Fintech Arrangements Involving Banking Products and Services Distributed to Consumers and Businesses.” The RFI was published in the Federal Register on July 31, 2025. The Banking Regulators also issued a joint statement on the RFI.
A recent study, Government Litigation Risk and the Decline in Low-Income Mortgage Lending, provides further evidence that the law of unintended consequences reigns supreme, particularly in the realm of public policy. The study examined the effects of litigation brought by the Department of Justice in the early 2010s against large mortgage lenders for alleged fraud in the origination of Federal House Administration mortgages.
On September 18, 2023, the U.S. Basel III Endgame proposal was published in the Federal Register. The comment period ended on January 16, 2024, with the banking regulators (the Federal Reserve, the OCC, and the FDIC) having received hundreds of comments on the proposal. Acknowledging the many concerns raised in the comment letters, Federal Reserve Chairman Jerome Powell indicated in his March 2024 Congressional testimony that “there will be broad material changes to the proposal.” On June 24, Bloomberg reported that the Federal Reserve has “shown other US regulators a three-page document of possible changes to their bank-capital overhaul that would significantly lighten the load on Wall Street lenders."