There were five noteworthy regulatory and compliance updates for banks and credit unions in May of 2023. Below are the details on these changes and how they affect you and your institution.
FDIC May Updates to RMS Manual
The FDIC has made changes to the Risk Management Manual of Examination Policies (RMS Manual). This new section provides planning instructions for examiners conducting continuous examinations, which is the process the FDIC uses to perform full-scope examinations over the course of a year for certain institutions that are larger, more complex, or present a higher risk profile.
Why Is This Important to Me?
Share this information with your risk management departments to ensure they have the planning instructions for examiners conducting continuous examinations.
Biden-Harris Administration Announces New Development & Improvements on Loan Program Modernization to Expand Access Capital for Small Businesses
The Small Business Administration (SBA) announced streamlined lender procedures. The SBA plans to:
- Streamline eligibility determination of SBA-backed loans
- Add new fraud review on all loans
Why Is This Important to Me?
Share this information with your small business lending department.
Federal Reserve Board Amends Regulation
The Board of Governors of the Federal Reserve System (“Board”) has adopted final amendments to its Regulation D to revise the rate of interest paid on balances (“IORB”) maintained at Federal Reserve Banks by or on behalf of eligible institutions. The final amendments specify that IORB is 5.15 percent, a 0.25 percentage point increase from its prior level.
Why Is This Important to Me?
Share this information with your depository departments.
Federal Reserve Board Issues Financial Stability Report
The Federal Reserve Board issued the May 2023 Financial Stability Report, summarizing the framework for assessing the resilience of the U.S. Financial system and presents the Board’s current assessment.
Why Is This Important to Me?
Share this information with customers as you see fit. In light of recent bank failures, this report is designed to promote public understanding and increase transparency and accountability for the Federal Reserve’s view on these topics.
Silicon Valley Bank Post Mortem Released
The Federal Reserve Board released the results of the review of the supervision and regulation of Silicon Valley Bank. The review finds four key takeaways on the causes of the bank’s failure:
- Silicon Valley Bank’s board of directors and management failed to manage their risks
- Federal Reserve supervisors did not fully appreciate the extent of the vulnerabilities as Silicon Valley Bank grew in size and complexity
- When supervisors did identify vulnerabilities, they did not take sufficient steps to ensure that Silicon Valley Bank fixed those problems quickly enough
- The Board’s tailoring approach in response to the Economic Growth, Regulatory Relief, and Consumer Protection Act and a shift in the stance of supervisory policy impeded effective supervision by reducing standards, increasing complexity, and promoting a less assertive supervisory approach
Why Is This Important to Me?
It’s important to review and understand this post-mortem from an industry leadership standpoint. As stated in the review, our banking system is sound and resilient, with strong capital and liquidity, and the failure of SVB was considered an outlier for several reasons.
About the Author
Rachel Davis
Product Manager at OnCourse Learning
Rachel Davis is the Product Manager of GRC and professional education for banks, credit unions, and non-bank financial services at OnCourse Learning. Rachel has worked in the financial services industry for 12 years and keeps up to date on financial industry hot topics. Rachel received her Bachelor of Arts in English Literature from Saint Louis University.
About the Author
Rachel Davis
Product Manager at OnCourse Learning
Rachel Davis is the Product Manager of GRC and professional education for banks, credit unions, and non-bank financial services at OnCourse Learning. Rachel has worked in the financial services industry for 12 years and keeps up to date on financial industry hot topics. Rachel received her Bachelor of Arts in English Literature from Saint Louis University.