ABA Banking Journal - August 2010 - (Page 40)
Dodd-Frank Act | Special Report
Washington’s Banking To-Do List
The Dodd-Frank Wall Street Reform and Consumer Protection Act might better be called the “Everything D.C. Policy Wonks and Consumerists Have Wanted ForTenYears, With Some Reform, And Regulatory Burden Act. For traditional banks, that’s ” pretty much where it comes out: a potential avalanche of paper and costs. Nearly every aspect of a typical bank will in some way be impacted by Dodd-Frank, as this graphic demonstrates. Other aspects of the law, those dealing with systemic risk, for example, aren’t even reflected here. These pages will also appear in interactive and substantially expanded form on www.ababj.com, updated as we publish print and online articles related to the law.This special ongoing resource will appear after Labor Day. Thanks to Pittsburgh-based PWCampbell and its client, Mars National Bank, Mars, Pa., for providing the photo used here.
—Steve Cocheo, executive editor
THE TELLER LINE
Issues for front-line bankers FDIC deposit insurance: $250,000 limit becomes permanent and retroactive to Jan. 1, 2008. Transaction Account Guarantee, unlimited in size, extended two years, now mandatory and with no separate charge.
Some “hit you in the wallet” issues Capital (Trust Preferred): BHCs under $15 billion-assets using trust preferred securities as Tier 1 capital will be “grandfathered” for what they already have, but generally banks prohibited from raising new Tier 1 via trust preferred. However, small BHCs subject to Fed’s Small Bank Holding Company Policy Statement— generally those under $500 million—will have an exemption, subject to Fed policy. S&L HC capital: Fed can now set S&L HC standards. Revised or new “source of strength” rules will apply to BHCs and S&L HCs Counter-cyclical capital: Regulators to push for more capital during economic growth but require less during down-cycle, while maintaining safety & soundness. Capital standards: Regulators must set minimum leverage and risk-based ratios for depository institutions and holding companies within 18 months. FDIC Guarantee Program: Upon certain triggering events, FDIC must set up a widely available program to guarantee obligations of solvent insured institutions and HCs during severe economic distress. Aid not to include equity. Risk-retention rules for qualifying and nonqualifying mortgages and other loans coming.
infographic designed by philip desiere
For a complete summary of Dodd-Frank by ABA and Dechert LLP, see www.aba.com/RegReform/default.htm please note the above graphic does not reflect effective dates, regulatory deadlines, etc.
40 | ABA BANKING JOURNAL | august 2010
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