It has now been eight months since the Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173, 111th Congress) ("Dodd-Frank") became law July 21, 2010. As we opined in our overview presentation of July 27, 2010, much needed to be done by the regulators before we could better understand the implications of Dodd-Frank. Since that time, the federal bank regulatory agencies ("Agencies")1 have been putting out proposed rulemakings for comment, studies, reports and final rules. This alert will cover the steps that have been taken to date, primarily by the Financial Stability Oversight Council ("FSOC"), the Board, and the FDIC in implementing Titles I, II, III and VI.
The Agencies have approached the implementation of Dodd-Frank in a fairly methodical and triaged manner. They appear to be working their way through the statutory implementation requirements, first doing those with the most current deadline to those furthest out on the timeline.
Titles I and II are intended to address the overriding concerns of Too Big To Fail and "moral hazard," and which financial services companies will be wearing the dubious crown of a Systemically Important Financial Institution ("SIFI"). Title III focuses on a restructuring of the regulatory world by (i) the absorption by the OCC of the OTS, (ii) the parent thrift holding companies becoming supervised by the Board, and (iii) the FDIC being afforded the means to replenish the Deposit Insurance Fund ("DIF"). Title VI's focus is on the Volcker Rule and the statutorily mandated "improvements" to the regulation of banks and their parent holding companies.
- ??Under Title I, most of the future rule makings are to be undertaken by the Board and completed by January 2012.
- The rulemakings are to focus on setting standards for risk-based capital requirements, leverage limits, use of contingent capital, creation of acceptable resolution plans or living wills (the latter along with the FDIC), credit exposure limits, limits on debt, early remediation, intermediate holding companies, and limits thereon (Section 165).
Please see full Alert below for further information.