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Regulatory Amendments

Department Adopts Amendments to Part 322 of the Superintendent's Regulations, Changes Asset Pledge Requirements
On December 18, 2002, the Department adopted final amendments to Part 322 of the Superintendent's Regulations, significantly reducing both the amount of the asset pledge required by most foreign banking institutions and the administrative burden of calculating and maintaining the required pledge.

These amendments reflected the Department's commitment to easing the regulatory burden on foreign financial institutions while maintaining its risk-focused supervisory approach.

The new requirements:
       ·   include a single formula for all institutions expressed as a percentage of total third-party liabilities;
  ·   set the asset pledge at 1% of total third-party liabilities, with a minimum pledge for each institution of $2 million, resulting in an overall reduction in required pledge of up to 80% for most institutions;
  ·   cap the pledge at $400 million for well-rated institutions;
  ·   allow all institutions to use an expanded list of securities to satisfy up to 50% of the pledge; and
  ·   relieve administrative burden and the need to carry additional pledge assets as a cushion, through the use of a backward-looking 30-day average calculation, instead of the previously required daily pledge calculation.


Part 41 Amendments of the General Regulation of Banking Board Adopted, Amendments Ban Financing of Single Premium Credit Insurance
On October 2, 2002, nine amendments to Part 41 of the General Regulation of the Banking Board became effective. Part 41 is the regulation that places restrictions and limitations on high cost home loans. These amendments were designed to clarify certain provisions of the regulation and to ban the financing of single premium credit insurance.

Other than the ban on single premium credit insurance, the amendments were not designed to add any compliance burden to lenders or mortgage brokers or to eliminate any consumer protections. Rather, they were designed to clarify certain provisions of the regulation, thereby eliminating confusion in the residential mortgage industry.

Lenders or affiliates are no longer able to finance single premium credit life, accident, health, disability, or loss of income insurance on high cost home loans.

 

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 State of the Financial Services Industry | 2002 Regulatory Amendments | Holocaust Claims Processing Office Accomplishments | Department's Continued Commitment to Lower Manhattan | Fighting Terrorism | Criminal Investigations Bureau Accomplishments | Enforcement Actions | Consumer Outreach | Banking Development Districts | Banking Board Membership | Office Locations


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