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» VISIT US ONLINE @ DSNEWS.COM 19 OCC SPELLS OUT REGULATORY RELIEF FOR BANKS Banks are about to receive some of the regu- latory relief they have long been seeking. As part of the review required every 10 years by the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) of 1996, the Office of the Comptroller of the Currency (OCC) announced proposed changes in order to remove outdated or unnecessary provisions and rules, therefore reducing the regulatory burden on banks and federal savings associations. e proposed changes announced Monday followed three Federal Register notices and six outreach meetings conducted nationwide since late 2014. In these outreach meetings, the OCC solicited comments from bankers, consumer and community groups, and other stakeholders or interested parties. While the FDIC, the Federal Reserve, and the OCC are required to review the EGRPRA jointly, the proposed rule changes announced on Monday are exclusive to the OCC and its super- vision of banks and federal savings associations, according to the announcement. "Rather than delaying proposed changes until the completion of the EGRPRA review at the end of the year, the OCC is seeking to reduce undue burden sooner where possible," the OCC's announcement stated. According to the OCC, Monday's proposal complements other actions the agency has taken to further the EGRPRA's mandate both sepa- rately and with other agencies. ose actions include: » A final rule by the OCC issued last May to remove outdated or unnecessary licensing requirements; » Interagency efforts to streamline Call Re- port requirements » An interagency interim final rule that allows more qualifying community banks to be eligible for the 18-month exam cycle; » Interagency guidance on the evaluation process in the appraisal rules In addition to those actions, the OCC has recommended further regulator changes to remove or reduce unnecessary regulatory burden, such as: allowing community banks an exemption from the Volcker rule and a proposal to provide federal savings associations with more flexibility to adapt to business and economic changes, which in turn would allow them to better serve their communities. e proposal would: » Remove notice and approval requirements for certain changes in permanent capital involving national banks; » Simplify certain licensing rules for business combinations involving federal mutual sav- ings associations; » Clarify national bank director oath require- ments; » Remove certain financial disclosure require- ments for national banks; » Remove certain unnecessary regulatory re- porting, accounting, and management policy requirements for federal savings associations; » Allow the electronic submission of filings required under the Securities Act of 1933 and the Securities Exchange Act of 1934; » Remove unnecessary requirements in the electronic activities rule for federal savings associations; » Update recordkeeping and confirmation requirements for national banks' and federal savings associations' securities transactions; and » Integrate and update OCC rules for national banks and federal savings associations relat- ing to municipal securities dealers, Securities Exchange Act disclosures, securities offering disclosures, and insider and affiliate transac- tions. FED OPTS OUT OF RATE HIKE UNTIL 'FURTHER IMPROVEMENT' IN ECONOMY e Federal Open Market Commit- tee (FOMC) stood still as all eyes in the mort- gage industry awaited their announcement to leave the federal funds rate at its current level. With the economic picture on the path of improvement, many in the industry are wondering why the Fed held off this month and when the Committee will actually follow through with one of the four anticipated increases. e FOMC stated in a press release that economic activity expanded at a moderate pace despite the global economic and financial developments of recent months. In addition, household spending increased and the housing sector has shown further improvement. Meanwhile, job gains have been strong and inflation has begun an upward climb but still runs under the Committee's objective. "Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 0.25 percent to 0.50 percent," the FOMC stated. "e stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation." e committee said that it expects, with "gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market indicators will continue to strengthen. However, global economic and financial developments continue to pose risks." As for future rate increases, the FOMC noted that they will take into account measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments and continue to monitor inflation changes. "e Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run," the release said. "However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data." In December, the Fed raised the federal funds rate for the first time in nine years and stated shortly after that they would raise rates four more times in 2016. However, the FOMC has since dialed back on that decision to just two increases. National Association of Federal Credit Unions (NAFCU) Chief Economist, Curt Long said in response to the Fed's decison, "While the FOMC left interest rates unchanged for now, it is clear that conditions have neared the point that would warrant another rate hike. e labor market is strong, inflation is improving and fears over global growth have dissipated somewhat. Barring an unforeseen setback, NAFCU expects that the committee will raise rates no later than June."

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