FDIC seeks comment on rulemaking process
The Federal Deposit Insurance Corporation (FDIC) has published a request for information in the US Federal Register, seeking input on how it approaches its rulemaking.
The FDIC, which is one of two agencies in the US which provide deposit insurance, oversees commercial banks and savings institutions. At the end of 2018 it insured 5,406 different companies.
In its request, the agency says that the analysis of it regulatory actions is an important part of a credible and transparent rulemaking process. It adds that any comment received will be used to strengthen the analysis of its regulatory actions.
The agency has asked for comment on the effects of changes in regulations on: bank safety and soundness; incidences of customer harm; on the achievement of FDIC objectives; on the cost and availability of bank credit or other financial services; and on the costs incurred for banks in compliance of new rules.
The FDIC is looking for comment by 28 January 2020.
The regulator has been busy this year, playing its part in regulatory decisions across the financial landscape in the US.
In early December the FDIC issued proposed regulations focused on the legal interest rate of loans, following a court decision in 2015.
The decision, made in the Madden v Midland Funding case, provided that a legal interest rate in a bank’s home state at the time of the loan’s origination will remain the legal interest rate, unaffected by subsequent events, including a sale, assignment, or transfer of the loan.
Earlier this year, the agency’s chair Jelena McWilliams said in a speech that core banking software providers and the banks that use them need to evolve to meet the changing needs of US customers.
In a speech at the Federal Reserve Bank of St. Louis, McWilliams says that the adoption of mobile banking has been a “great start” but that room to grow remains, especially when it comes to the development of core infrastructure.
McWilliams also played a part in the simplification of the Volcker Rule, which was approved by the Federal Reserve in October. She said at the time that the Volcker Rule has been one of the most challenging post-crisis reforms to implement for regulators and the industry.
“Distinguishing between what qualifies as proprietary trading and what does not has proven to be extremely difficult,” she said.
“Meanwhile, banks that do relatively little trading are required to go through substantial compliance exercises to ensure that activities that have long been considered traditional banking activities do not run afoul of the [rule].”