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Dodd-Frank Wall Street Reform and Consumer Protection Act

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Banking and Financial Companies Other Regulatory Reforms Prohibition on Charter Conversion when Formal or Informal Supervisory Action is Pending Relaxation of Bank De ... – PowerPoint PPT presentation

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Title: Dodd-Frank Wall Street Reform and Consumer Protection Act


1
Dodd-Frank Wall Street Reform and Consumer
Protection Act
2
Banking and Financial CompaniesCapital
Requirements
  • The Collins Amendment
  • Risk-based and leverage capital requirements that
    currently apply to U.S. insured depository
    institutions will apply to BHCs, thrift holding
    companies and systemically important nonbank
    financial companies
  • Banking regulators must issue rules to implement
    this change by January, 2012
  • Phase-in of Collins Amendment capital
    requirements may coincide with implementation of
    Basel III recommendations

3
Banking and Financial CompaniesCapital
Requirements
  • Key Exceptions Collins Amendment does not apply
    to
  • Securities issued by BHCs subject to the Federal
    Reserves Small Bank Holding Company Policy
    Statement
  • TARP CPP securities
  • Securities issued before May 19, 2010 by a BHC
    (or other depository institution holding
    company), with assets less than 15 billion at
    December 31, 2010
  • Key Impact Eliminate Tier 1 capital treatment
    for Trust Preferred Securities (unless issuer is
    otherwise excepted)

4
Banking and Financial CompaniesDeposit Insurance
Reform
  • New Assessment Base for FDIC Deposit Insurance
    Average total consolidated assets, less average
    tangible equity
  • Impact shift DIF assessment burden to larger
    banks that finance assets with significant
    non-deposit funding sources and other liabilities
  • Changes to DIF Reserve Ratio
  • No upper limit
  • Minimum reserve ratio raised to 1.35 from 1.15
  • FDIC Assessment Authority the FDIC may now
    collect assessments to cover the cost of regular
    and special examinations

5
Banking and Financial CompaniesDeposit Insurance
Reform
  • Deposit Account Insurance
  • Maximum deposit insurance increases to 250,000,
    with retroactive application to certain FDIC
    receiverships between January and October 2008
  • Deposit insurance for noninterest bearing
    transaction accounts extended to December 31,
    2012
  • FDIC has additional authority to require reports
    from insured institutions, after consultation
    with other federal regulators
  • Content of these reports is not specified
  • Previously, the other federal banking regulators
    needed to consent before the FDIC could require
    additional reports

6
Banking and Financial Companies Other Regulatory
Reforms
  • Prohibition on Charter Conversion when Formal or
    Informal Supervisory Action is Pending
  • Relaxation of Bank De Novo Interstate Branching
  • Expanded Restrictions on Affiliate Transactions
    including what is Covered, Collateral
    Requirements, Coverage for Financial
    Subsidiaries, and more
  • Greater Restrictions on Transactions with Insiders

7
Banking and Financial CompaniesSmall Business
Lending Fund
  • SBLF was adopted by the U.S. House of
    Representatives currently under consideration by
    U.S. Senate
  • Objective to encourage lending to small
    businesses
  • Mechanics U.S. Treasury would purchase up to
    30 billion of preferred stock in community banks
    and other eligible institutions
  • Key Characteristics Participants must submit a
    small business lending plan preferred stock
    dividend rate decreases as lending to small
    businesses increases
  • TARP Refinance SBLF would permit participating
    institutions to refinance TARP CPP securities
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