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Thursday, June 5, 2014

Federal Banking Agencies Review Regulations Including Credit Insurance and Debt Cancellation

By: ABIA Outside Counsel Katie Wechsler, Barnett, Sivon & Natter, P.C.

On Wednesday, June 4, the federal banking agencies (Federal Reserve, FDIC, and OCC) announced the beginning of their review of regulations to identify outdated, unnecessary, or unduly burdensome regulations for insured depository institutions. This review is mandated at least every 10 years under the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA). The CFPB is not a part of this as they are on a separate schedule to review regulations (every 5 years).

This initial notice includes several regulations that the public can comment on. Over the next two years, there will be additional notifications and opportunities to comment on other regulations.
 
Importantly, included in this first round of review are regulations that are of interest to ABIA:
  • OCC Regulations for national bank sales of credit life insurance – 12 CFR Part 2
  • Federal Reserve Board regulations for state member banks on sales of insurance – 12 CFR part 208, Subpart H
  • OCC Regulations for national bank debt cancellation contracts and debt suspension agreements – 12 CFR Part 37
The agencies are looking for feedback on several aspects of these regulations including: need for statutory change; need and purpose of the regulations; overarching approaches/flexibility; effect on competition; reporting, recordkeeping and disclosure requirements; unique characteristics of a type of institution; clarity; burden on community banks and other smaller, insured depository institutions; and scope of rules.

Read the full notice.