FDIC Announces Priorities for 2022
On February 7, 2022, Acting Chairman of the Federal Deposit Insurance Corporation (“FDIC”), Martin J. Gruenberg, announced a statement summarizing the FDIC’s regulatory priorities for 2022.
Strengthen Community Reinvestment Act (CRA)
The Federal Reserve (“Fed”), the Comptroller of the Currency (“OCC”), and the FDIC are working together to issue a joint notice of proposed rulemaking to “strengthen and enhance” the Community Reinvestment Act (“CRA”).
The CRA imposes a requirement on banks to provide sufficient credit to the community members that banks serve, including those in low to moderate income communities.
According to Gruenberg, “action on a revision of the CRA will be a top priority of the FDIC.”
Address Financial Risks Posed by Climate Change
Recently, neighboring countries, regulatory bodies, and financial industry participants have launched efforts to (a) assess the risks that the financial industry poses to climate change, (b) implement regulatory or legislative schemes to curtail those risks, and (c) push the financial sector into a low-climate-risk environment.
In accordance with this apparent legislative trend, the FDIC will make addressing these risks a top priority by:
seeking public comment on guidance designed to help banks prudently manage these risks,
establishing an FDIC interdivisional, interdisciplinary working group on climate-related financial risks, and
joining the international Network of Central Banks and Supervisors for Greening the Financial System.
Review Bank Merger Process
The Bank Merger Act governs the process of a bank merging with another and requires regulatory approval for the merger to be completed. The Bank Merger Act, implemented in 1960 and the last amendments, made over 25 years ago,have governed mergers since without comprehensive review or significant amendment. The FDIC will undertake a process to ensure that the terms of the Bank Merger Act are sufficient for its purpose.
Evaluate Crypto-Asset Risks
With the recent increase in crypto-asset and digital asset products in the financial sector, the FDIC has concerns over the “safety and soundness and financial system risks” that such assets could create. The FDIC is committed to carefully considering the risks posed and establishing parameters within which the crypto-asset market could safely thrive.
Finalize Basel III Capital Rule
The FDIC will act to implement the final agreement on modifications to the Basel III international regulatory framework that was reached by the Basel Committee on Banking Supervision. The agreement aims to strengthen the large banking regulatory framework and mitigate market risks impacting large banks.