Regulations applicable to banks?
Common bank regulations include reserve requirements, which dictate how much money banks must keep on hand; capital requirements, which dictate how much money banks can lend; and liquidity requirements, which dictate how easily banks can convert their assets into cash.
- Americans with Disabilities Act. ...
- Bank Secrecy Act. ...
- Bank Service Company Act. ...
- Community Reinvestment Act. ...
- Consumer Financial Protection Act. ...
- Coronavirus Aid, Relief and Economic Security Act (CARES Act) ...
- Credit Card Accountability Responsibility and Disclosure Act.
Common bank regulations include reserve requirements, which dictate how much money banks must keep on hand; capital requirements, which dictate how much money banks can lend; and liquidity requirements, which dictate how easily banks can convert their assets into cash.
There are numerous agencies assigned to regulate and oversee financial institutions and financial markets in the United States, including the Federal Reserve Board (FRB), the Federal Deposit Insurance Corp. (FDIC), and the Securities and Exchange Commission (SEC).
For release at July 27, 2023
The proposal would modify large bank capital requirements to better reflect underlying risks and increase the consistency of how banks measure their risks. The changes would implement the final components of the Basel III agreement, also known as the Basel III endgame.
The Federal Reserve is the federal regulator of about 1,000 state-chartered member banks, and cooperates with state bank regulators to supervise these institutions. The Federal Reserve also regulates all bank holding companies.
There are two broad classes of regulation that affect banks: safety and soundness regulation and consumer protection regulation. Broadly, regulation consists of the laws, agency regulations, policy guidelines and supervisory interpretations that have been established by lawmakers and policymakers.
All European banks are regulated under Basel II. There are three pillars under Basel II: (1) minimum capital requirements, (2) supervisory review, and (3) market discipline.
Fair lending prohibits lenders from considering your race, color, national origin, religion, sex, familial status, or disability when applying for residential mortgage loans. Fair lending guarantees the same lending opportunities to everyone.
The OCC evaluates the applications to make sure banks' corporate structures are established and maintained in accordance with the principles of a safe and sound banking system.
What regulators regulate banks?
For example, in California, financial institutions are regulated by: Department of Financial Institutions.
The Office of the Comptroller of the Currency (OCC) is an independent bureau of the U.S. Department of the Treasury. The OCC charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks.
The Federal Reserve is responsible for supervising--monitoring, inspecting, and examining--certain financial institutions to ensure that they comply with rules and regulations, and that they operate in a safe and sound manner.
U.S. banking regulation addresses privacy, disclosure, fraud prevention, anti-money laundering, anti-terrorism, anti-usury lending, and the promotion of lending to lower-income populations. Some individual cities also enact their own financial regulation laws (for example, defining what constitutes usurious lending).
Key Interagency final and proposed rules for banks (including Basel III and other capital requirements, resolution-related requirements, and CRA revisions) expected soon. Final and proposed rules from FinCEN on beneficial ownership information and customer due diligence expected in Fall 2023.
| Bank NameBank | CityCity | Closing DateClosing |
|---|---|---|
| First Republic Bank | San Francisco | May 1, 2023 |
| Signature Bank | New York | March 12, 2023 |
| Silicon Valley Bank | Santa Clara | March 10, 2023 |
| Almena State Bank | Almena | October 23, 2020 |
Shadow banks, often known as nonbank financial companies (NBFCs), can usually operate with little to no oversight from regulators. Examples of shadow banks or financial intermediaries not subject to regulation include hedge funds, private equity funds, mortgage lenders, and even large investment banks.
State-chartered banks may ultimately decide to refrain from membership under the Fed because regulation can be less onerous based on state laws and under the Federal Deposit Insurance Corporation (FDIC), which oversees non-member banks. Other examples of non-member banks include the Bank of the West and GMC Bank.
The Advisor Insight. In general, nearly all banks carry FDIC insurance for their depositors. However, there are two limitations to that coverage. The first is that only depository accounts, such as checking, savings, bank money market accounts, and CDs, are covered.
While being mindful of the principles of profitability and productivity, banks are obliged to obey certain ethical principles of banking profession and organizational ethics, which include honesty, integrity, social responsibility, accountability and fairness.
What are the four main principles that govern a bank's lending policies?
The lending process in any banking institutions is based on some core principles such as safety, liquidity, diversity, stability and profitability.
What are the Major Risks for Banks? Major risks for banks include credit, operational, market, and liquidity risk. Since banks are exposed to a variety of risks, they have well-constructed risk management infrastructures and are required to follow government regulations.
Regulations are generally designed to limit banks' exposures to credit, market, and liquidity risks and to overall solvency risk.
Illegal disparate treatment occurs when a lender bases its lending decision on one or more of the prohibited discriminatory factors covered by the fair lending laws, for example, if a lender offers a credit card with a limit of $750 for applicants age 21 through 30 and $1,500 for applicants over age 30.
This bill provides protections for federally regulated financial institutions that serve state-sanctioned marijuana businesses. Currently, many financial institutions do not provide services to state-sanctioned marijuana businesses due to the federal classification of marijuana as a Schedule I controlled substance.
