Are you in compliance?

Don't miss out! Sign up today for our weekly newsletters and stay abreast of important GRC-related information and news.

Get updates on Compliance Week offerings, including new features, databases, research, and other resources, along with announcements of upcoming Webcasts, conferences, seminars, CPE/CLE opportunities and more.

Published every Thursday, Compliance Week Europe offers a condensed summary of risk, audit, and compliance news either originating in Europe, or of special interest to European compliance professionals. This newsletter will follow developments by the European Commission, as well as those of national governments across the region, or any U.S.-based news that might have consequence across the Atlantic. Frequency: weekly; Thursday a.m.

A fresh edition of Compliance Week delivered via e-mail and online every Tuesday morning, relentlessly focused on the disclosure, reporting and compliance requirements of our 25,000+ paying subscribers.

Published every Friday, Compliance Weekend was launched at the behest of subscribers, and offers a quick Plain English review of the week's key developments. We hope you enjoy this supplement to Compliance Week's Tuesday edition.

OCC Revises Lending Limit Rule to Include Derivatives

Joe Mont | June 20, 2012

The Office of the Comptroller of the Currency (OCC) has amended its lending limit rule by defining derivative transactions, repurchase agreements, reverse repurchase agreements and securities financing transactions as loans.

As part of the Dodd-Frank Act's efforts to regulate over-the-counter derivatives markets, it requires that, as of July 21, the statutory definition of loans and extensions of credit, must include those credit exposures for purposes of the lending limit. The interim final rule adopted by the OCC to implement this statutory change also consolidates the lending limit rules applicable to national banks and savings associations.

These institutions have through Jan. 1, 2013, to comply with the requirements (state banks are subject to separate restrictions under section 611 of the Dodd-Frank Act). The OCC provided a short-term exception under its lending limits authority to allow time for them to adjust for compliance with the new standard.

To reduce the burden of these new credit exposure calculations, particularly for smaller and mid-size banks and savings associations, the rule permits use in certain circumstances of look-up tables for measuring the exposures for each transaction type.  This method “permits institutions to adopt compliance alternatives that fit their size and risk management requirements, consistent with safety and soundness and the goals of the statute,” according to OCC's announcement of the interim rule.

The revised lending limit rule continues to provide that loans and extensions of credit, including those that arise from derivative and securities financing transactions, must be consistent with safe and sound banking practices.

The rule will be published in the Federal Register on June 21, 2012.  Comments are due by August 6.