No-Action Letter Issued Regarding the OCR Final Rule

On April 8, the U.S. Commodity Futures Trading Commission's ("CFTC") Division of Market Oversight issued a no-action letter regarding the ownership and control final rule (the "OCR Final Rule").  The OCR Final Rule requires the electronic submission of trader identification and market participant data on new and updated forms.  The no-action letter extends certain relief previously provided and is intended to provide improvements in the reliability and consistency of the OCR data submitted to the CFTC. Release.

No-Action Relief Regarding Masking Information Reportable under the OCR Final Rule

On April 8, the U.S. Commodity Futures Trading Commission's ("CFTC") Division of Market Oversight issued a no-action letter regarding the masking of information reportable under the ownership and control final rule (the "OCR Final Rule").  The no-action letter permits reporting parties with reporting obligations on OCR Forms 102A and 102B to mask certain identifying information, subject to conditions, until the earlier of: (i) a reporting party no longer holding the requisite reasonable belief regarding the privacy law consequences of reporting; and (ii) March 1, 2017. Release.

On April 13, Moody's published its approach to rating obligations with variable promises, where the source of variation is related to non-standard or non-credit-related reference factors. Report.

On April 7, Fitch published its criteria for rating tender option bonds. Report.

On April 7, Fitch published its criteria for rating Mexican residential mortgage-backed securities (RMBS). Report.

On April 7, DBRS published its criteria for rating companies in the television broadcasting industry. Report. 

On April 7, DBRS published its criteria for rating companies in the radio broadcasting industry. Report. 

On April 7, DBRS published its criteria for rating companies in the printing industry. Report.

On April 7, DBRS published its criteria for rating companies in the publishing industry. Report. 

OCC Releases its Risk Appetite Statement

On April 12, the Office of the Comptroller of the Currency ("OCC") released its Risk Appetite Statement, which sets boundaries of acceptable levels of risk in key areas of agency operations.  The OCC stated that:  "By clearly articulating the acceptable level of risks within our operations, agency management and employees have clearer signposts by which to guide their decisions, and external stakeholders can better understand OCC actions in the context of the risks facing the agency." 

These new guidelines were issued as the OCC has signaled a willingness to work with banks as they develop tools for working with financial technology products.  On March 31, the OCC published its perspective on "responsible innovation in the federal banking system" at the same time as it solicited feedback on what more it could do to support innovation.  In publishing its Whitepaper on Supporting Responsible Innovation in the Federal Banking System:  An OCC Perspective, Comptroller of the Currency Thomas J. Curry stated that:  "Innovation holds much promise. . . . Innovation is not free from risk, but when managed appropriately, risk should not impede progress."

Goldman Sachs Set to Pay $5.1 Billion in RMBS Settlement

On April 11, Goldman Sachs agreed to pay roughly $5.1 billion in a settlement with federal and state officials regarding the marketing and sale of RMBS during the years leading up to the financial crisis.  The settlement is divided into a $2.4 billion civil penalty, $1.8 billion for consumer relief and $875 million in cash.  Cash payments will primarily be divided among the National Credit Union Administration, the Federal Home Loan Banks and the States of California, Illinois and New York. Goldman Settlement.

New York Federal Judge Approves Wells Fargo $1.2 Billion Settlement with FHA

On April 8, U.S. District Judge Jesse M. Furman approved a $1.2 billion settlement paid by Wells Fargo NA to the Federal Housing Administration ("FHA") over allegations that Wells Fargo submitted insurance claims for defaulted loans that failed to meet FHA standards.  The Settlement Order states that "Wells Fargo Bank admits, acknowledges, and accepts responsibility" for certain allegations in the FHA's complaint (October 15, 2012 FIWIR coverage), filed October 9, 2012 in the Southern District of New York. Wells Fargo Settlement Order.

ESMA Publishes Principles on Stakeholder Engagement in Peer Reviews

On April 15, the European Securities and Markets Authority ("ESMA") published a paper on stakeholder engagement in peer reviews.

The paper sets out six high-level principles guiding the interaction with stakeholders with the objective of obtaining background information relevant for the peer review:

• What entities are considered as stakeholders in the context of a peer review?
• Who decides if interaction with stakeholders is needed?
• When does this decision need to be taken? Must national competent authorities ("NCAs") accept the fact of stakeholder engagement?
• If an NCA may decline such a possibility, does an NCA need to explain why it would not want to have stakeholder engagement for a particular peer review?
• How is the interaction organized and how are the stakeholders chosen?
• What use is made of the outcome of the stakeholder interaction?

The principles contribute to ESMA's commitment to focus on supervisory convergence in 2016. ESMA may in the future, in light of its experience, prepare a set of procedures for stakeholder engagement in peer reviews, which could be annexed to the Methodology for peer reviews (ESMA/20131709). Paper.

ISDA Publishes Updated EMIR Classification Letter

On April 13, the International Swaps and Derivatives Association, Inc. ("ISDA") published an updated classification letter that enables counterparties to notify each other of their status for clearing and other regulatory requirements under the European Market Infrastructure Regulation ("EMIR").

The updated letter covers the clearing obligation for certain interest rate derivatives classes denominated in EEA currencies and certain credit default swap index classes. The ISDA EMIR classification letter allows market participants to bilaterally communicate their status to their counterparties by answering a series of questions.

The updated letter makes several substantive amendments, including:

• aligning the definition of "Category 1 entity" to the one used in the final, published version of the G-4 interest rate products regulatory technical standards ("RTS") (which come into force from June 2016); and
• providing the ability for entities to make classifications in respect of the draft RTS for EEA rates and the RTS on credit default swap index classes.

Classification Letter.

FTC to Host Financial Technology Forum on Marketplace Lending – FinTech Series: Marketplace Lending

The Federal Trade Commission will host a forum on June 9 exploring the growing world of marketplace lending and its implications for consumers. This forum is the first in a series of FTC events looking at consumer protection across different areas of emerging financial technology.

Marketplace lending is a developing and fast-growing sector offering new ways for many consumers and small businesses to secure credit. Marketplace lenders are typically online financial platforms that leverage technology to reach potential borrowers, evaluate creditworthiness, and facilitate loans.

The half-day forum will bring together marketplace lending industry participants, consumer groups, researchers, and government representatives. The forum will examine the various models used by companies in this area, the potential benefits to consumers, and possible consumer protection concerns. In addition, the forum will look at how existing consumer protection laws might apply to companies participating in the marketplace lending space.