Daniel K Tarullo: Dodd-Frank Act Implementation
Central bank: fed | Type: speech | Date: 2011-12-06

## Daniel K Tarullo: Dodd-Frank Act ImplementationTestimony

by

Mr

Daniel

K

Tarullo,

Member

of

the

Board

of

Governors

of

the

Federal Reserve System, before the Committee on Banking, Housing, and Urban Affairs, US Senate, Washington DC, 6 December 2011.*

*

*Chairman Johnson, Ranking Member Shelby, and other members of the committee, thank you for the opportunity to testify on the Federal Reserve s implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).

## The Federal Reserve s approach to Dodd-Frank implementationNeedless to say, implementation of the Dodd-Frank Act has been, and continues to be, a formidable

task.

At

the

Federal

Reserve,

hundreds

of

staff

members

are

contributing

to Dodd-Frank projects.

We have issued 29 final rules, public notices, and reports already and we have another 13 rules underway.

All told, we expect the Board will issue approximately 60 sets of rules and formal guidelines as part of its implementation efforts.

We are working diligently

to

complete

the

remaining

rules.

The

challenge

arises

from

the

sheer

number

of studies,

rules,

and

other

implementation

tasks

the

Act

requires

the

Federal

Reserve

to produce in a relatively short period of time.

Moreover, much of the work involves the more time-consuming process of joint rulemakings or coordination with other agencies, all of which are facing similar demands.For

all

the

variation

and

complexity

in

our

Dodd-Frank

implementation

responsibilities,

we have several unifying goals.First and foremost, we want to get it right.

This means implementing the statute faithfully, in a manner that maximizes financial stability and other social benefits at the least cost to credit availability and economic growth.

To achieve this balance, we have assembled interdisciplinary teams for our significant rulemakings, bringing together economists, supervisors, legal staff, and other specialists to help develop sensible policy alternatives and to help avoid unintended consequences.Second,

in

addition

to

a

thorough

internal

analytic

process,

we

also

are

committed

to soliciting and considering the comments of others.

We are, of course, consulting extensively with

other

financial

regulatory

agencies,

both

bilaterally

and

through

the

Financial

Stability Oversight

Council.

The

interagency

consultation

process

has

included

staff

discussions during the initial policy development stage, sharing of draft studies and regulatory text in the interim

phases,

and

dialogue

among

agency

principals

in

the

advanced

stages

of

several rulemakings.Along

with

the

other

agencies

testifying

today,

we

have

gone

well

beyond

the

formal consultation requirements of Dodd-Frank.

Members of the Board, as well as staff at senior levels, have regular meetings with their counterparts at other agencies to discuss implementation

issues

of

common

interest.

Consultations

at

multiple

levels

and

across agencies

help

to

improve

the

consistency

of

regulation

across

the

banking

industry

and reduce the potential for overlapping regulatory requirements.

In addition, these consultations help highlight the interaction among different rules under development by these agencies, as well as the interplay between proposed policy alternatives and existing regulations.We are also trying to make our rulemaking process as fair and transparent as possible, with ample opportunity for the public to comment.

During the proposal stage, we specifically seek comment from the public on the costs and benefits of our proposed approach, as well as on alternative

approaches to our proposal.

We believe strongly that public participation in therulemaking

process

improves

our

ability

to

identify

and

resolve

issues

raised

by

our regulatory proposals.

We generally provide the public a minimum of 60 days to comment on all significant rulemaking proposals, with longer periods permitted for especially complex or significant proposals.Federal Reserve staff have participated in more than 300 meetings with outside parties and their representatives, including community and consumer groups.

To promote transparency in

the

rulemaking

process,

we

include

in

the

public

record

a

memorandum

describing

the attendees and subjects covered in any meetings involving non-governmental participants at which Dodd-Frank rulemakings are discussed.

These summaries are posted on the Federal Reserve Board s website on a weekly basis, as are updates on Board rulemakings and other Dodd-Frank initiatives.Third,

in

drafting

regulations,

we

have

made

special

efforts

to

identify

and,

to

the

degree possible consistent with statutory requirements, minimize the regulatory burden on smaller entities.

We conduct an assessment that takes appropriate account of the potential impact a rule may have on small businesses, small governmental jurisdictions, and small organizations affected by the rule, in accordance with the Regulatory Flexibility Act.

We have paid particular attention to reducing the regulatory burden on community banking organizations.

For

example,

the

Federal

Reserve

has

established

community

depository institution advisory councils at each of the 12 Federal Reserve banks.

These councils gather input

from

community

depository

organizations

on

ways

to

reduce

regulatory

burden

and improve

the

efficiency

of

our

supervision,

and

also

collect

information

about

the

economy from

the

perspective

of

community

organizations

throughout

the

nation.

A

representative from

each

of

these

12

advisory

councils

serves

on

a

national

Community

Depository Institution

Advisory

Council

that

meets

semiannually

with

the

Board

of

Governors

to

bring together the ideas of all the advisory groups.The

Board

of

Governors

has

also

established

a

subcommittee

of

our

regulatory

and supervisory oversight committee for the express purpose of reviewing all regulatory matters from the perspective of community depository organizations.

These reviews are intended to find

ways

to

reduce

the

burden

on

community

depository

organizations

arising

from

our regulatory policies without reducing the effectiveness of those policies in improving the safety and soundness of depository organizations of all sizes.Fourth,

we

are

working

to

complete

our

Dodd-Frank

projects

as

quickly

as

possible

while meeting

the

three

objectives

already

stated.

There

is

obviously

considerable

value

in providing as much clarity as possible as soon as possible to financial markets and the public about the post-crisis financial regulatory landscape.

## Capital regulation after Dodd-FrankThe breadth of Dodd-Frank s provisions reflects in part that the pre-crisis regulatory regime had been insufficiently attentive to a variety of risks from a variety of sources.

But we should not

forget

that

strong

capital

requirements

remain

the

most

supple

form

of

prudential regulation, because they can provide a buffer against bank losses from any source.

To put it simply,

the

best

way

to

avoid

another

TARP

is

for

our

large

regulated

institutions

to

have adequate capital buffers, reflecting the damage that would be done to the financial system were such institutions to fail.Implicitly, passage of Dodd-Frank was a criticism of the specific features of capital regulation that

prevailed

during

the

pre-crisis

period.

Basel

I

capital

requirements

relied

almost exclusively

on

capital

ratios

that

were

snapshots

of

balance

sheets

and

thus

frequently

a lagging

indicator

of

a

bank

s

condition.

The

kind

of

capital

that

qualified

for

regulatory purposes

was not uniformly reliable as a buffer against losses.

Moreover, capital requirements were set solely with reference to the balance sheet of each firm individually, with little attention to the economy-wide impact of financial stress at large institutions.

And,most

fundamentally,

capital

requirements

had

simply

been

too

low,

in

general

and

with respect to the risk-weightings of certain assets.Strong capital requirements must be at the center of the post-crisis period regulatory regime.

The Federal Reserve is integrating the specific capital-related provisions of Dodd-Frank into its

overall

capital

program.

That

program

has

three

basic

components:

improving

capital regulation

at

the

level

of

individual

firms;

introducing

a

macroprudential

or

system-wide element to capital regulation; and conducting regular stress testing and capital planning.

I will discuss each of the three areas briefly.The first component is to improve the traditional, firm-based approach to capital regulation.

This work is mostly related to standards developed in cooperation with other supervisors in the Basel Committee on Banking Supervision, but there is also a Dodd-Frank element.

The 'Collins

amendment'

in

Dodd-Frank

provided

a

safeguard

against

declines

in

minimum capital

requirements

in

a

capital

regime

based

on

bank

internal

modeling.

The

so-called Basel 2.5 agreement strengthened the market risk capital requirements of Basel II.

Basel III upgraded

the

quality

of

regulatory

capital,

increased

the

quantity

of

minimum

capital requirements, created a capital conservation buffer, and introduced an international leverage ratio

requirement.

In

the

coming

months

the

banking

agencies

will

be

jointly

proposing regulations consistent with Basel 2.5 and Basel III.The second component of our capital program is to introduce a macroprudential element to capital

regulation.

Section

165

of

the

Dodd-Frank

Act

mandated

that

the

Board

establish enhanced

risk-based

capital

standards

for

large

bank

holding

companies.

This

mandate complements the Basel Committee s effort to develop a framework for assessing a capital surcharge on the largest, most interconnected banking organizations based on their global systemic

importance.

Both

the

Dodd-Frank

provision

and

the

Basel

systemic

surcharge framework are motivated by the fact that the failure of a systemically important firm would have dramatically greater negative consequences on the financial system and the economy than

the

failure

of

other

firms.

In

addition,

stricter

capital

requirements

on

systemically important

firms

should

help

offset

any

funding

advantage

these

firms

derive

from

their perceived

status

as

too-big-to-fail

and

provide

an

incentive

for

such

firms

to

reduce

their systemic footprint.Of

course,

Dodd-Frank

requires

the

Federal

Reserve

to

impose

more

stringent

capital requirements on all bank holding companies with assets of $50 billion or more, not just the U.S.

firms

that

will

appear

on

the

Basel

Committee

s

list

of

global

systemic

banks.

No decision

has

yet

been

made

as

to

whether

the

more

stringent

capital

requirement

to

be applied to large U.S. banking firms that are not on the eventual list of global systemic banks will be in the form of a quantitative surcharge.

However, analysis of the systemic footprints of these other U.S. bank holding companies suggests that even if surcharges were to apply, their amounts would be quite modest, at least based on the current characteristics of these bank holding companies.The third component of the Federal Reserve s capital program is to establish regular, firmspecific stress testing and capital planning.

Dodd-Frank creates two kinds of stress-testing requirements.

First, it mandates that the Federal Reserve Board conduct annual stress tests on all bank holding companies with $50 billion or more in assets to determine whether they have

the

capital

needed

to

absorb

losses

in

baseline,

adverse,

and

severely

adverse economic conditions.

Second, it requires both these companies and certain other regulated financial

firms

with

between

$10

billion

and

$50

billion

in

assets

to

conduct

internal

stress tests.We will

be

implementing

the

specific

stress-testing

requirements

of

Dodd-Frank

beginning later in 2012.

However, in the interim we are using a modified form of stress testing as part of the annual capital planning process we have established for large bank holding companies.

Last month we announced the parameters and process for this year s capital review, whichwill

be

completed

in

March,

at

which

time

the

results

of

the

stress

test

will

be

publicly reported for the 19 largest firms.

## ConclusionFor all

the

work

that

has

already

gone

into

implementing

Dodd-Frank,

both at the

Federal Reserve and at the other regulatory agencies, there is still

considerable

work

to

do.

Final regulations

implementing

some of

the

Act

s

most

important

provisions,

such

as

the

'living will' requirement and the Collins amendment, are now in place.

Measures to implement other prominent provisions, such as the Volcker rule, have been proposed, but are not yet in final form.

Still

others,

such

as

the

section

165

requirements,

have

not

yet

been

proposed.

Whether completing work on proposed regulations, or moving forward with those yet to be proposed, the Federal Reserve will continue to pursue the four goals I noted earlier.Thank you very much for your attention.

I would be pleased to answer any questions you might have for me.

## Update on Key Implementation Initiatives of the Board of Governors of the Federal Reserve System Under the Dodd-Frank Wall Street Reform and Consumer Protection ActThe following highlights key initiatives undertaken by the Board of Governors of the Federal Reserve System (Board) in connection with the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act).

As of December 5, 2011, the Board has issued seventeen final rules, three public notices and nine reports (Tables 1 and 2).

The Board has proposed an additional thirteen rules for public comment.Table 1.

Summary of the Board s Rulemaking Efforts Under the Dodd-Frank Act as of December 5, 2011 1Seq.DescriptionDueStatus

## Rulemaking Under Title I|

1. | Final Rule to Establish Minimum Risk-Based Capital Requirements (Collins Amendment) [R-1402].

On June 14, 2011, the Board issued a joint final rul e, along with the FDIC and the OCC, to establish a floor for the risk-based capital requirements applicable to the largest, internationally active banking organizations. (Section 171)

| No Deadline

| Completed.

||------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|------------------------||

2 | Proposed Rule to Establish Certain Definitions Under Title I [R-1405].

On February 8, 2011, the Board issued a proposed rule to define when a nonbank company is 'predominantly engaged' in financial activities; and the terms 'significant nonbank financial company' and 'significant bank holding company.' (Section 102)

| No Deadline

| Comment period closed. ||

3 | Final Rule on Resolution Plans (living wills) [R-1414].

On October 17, 2011, the Board and the FDIC issued a final rule that would require large, systemically significant bank holding companies and nonbank financial companies to submit annual resolution plans and quarterly credit exposure reports. (Section 165)

| 1/1/2012

| Completed.

|1 The implementation initiatives highlighted below do not include the Board's rulemaking responsibilities as part of the Financial Stability Oversight Council, or rulemaking initiatives where the Board serves in a consultative role.| 4.

| Final Rule on Capital Plans and Stress Testing Instructions [R-1425].

On November 22, 2011, the Board issued a final rule requiring top-tier U.S. bank holding companies (BHCs) with total consolidated assets of $50 billion or more to submit annual capital plans for review and provided stress testing instructions outlining the information to be provided for the Federal Reserve s 2012 Comprehensive Capital Analysis and Review. (Section 165(i)).

| 1/1/2012

| Completed.

||----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|----------------------------|| Rulemaking Under Title III | Rulemaking Under Title III

| Rulemaking Under Title III | Rulemaking Under Title III || 5.

| Notice of Intent to Require Reporting Forms For Savings and Loan Holding Companies.

On February 3, 2011, the Board provided public notice of its intention to require savings and loan holding companies (SLHCs) to submit the same reports as bank holding companies, beginning with the March 31, 2012 reporting period. (Title III, generally)

| No Deadline

| Completed.

|| 6.

| Notice Related to Supervision of SLHCs [OP-1416].

On April 15, 2011, the Board issued a public notice that outlines how it intends to apply certain parts of its current consolidated supervisory program for bank holding companies to SLHCs after assuming supervisory responsibility for SLHCs. (Title III, generally)

| No Deadline

| Comment period closed.

|| 7.

| Notice of OTS Regulations To Be Continued.

On July 21, 2011, the Board issued a public notice of all OTS regulations that it anticipates continuing to enforce. (Section 316)

| 7/21/11

| Completed.

|| 8.

| Interim Final Rule to Amend OTS Regulations [R-1429].

On August 12, 2011, the Board issued an interim final rule setting forth regulations for SLHCs.

The interim final rule has three components: (1) a new Regulation LL, setting forth regulations generally governing SLHCs; (2) a new Regulation MM, setting forth regulations governing SLHCs in mutual form (MHCs); and (3) several technical amendments to current Board regulations necessary to accommodate the transfer of supervisory authority for SLHCs from the OTS to the Board. (Section 312) | No Deadline

| Completed.

|| 9.

| Information Collection Proposal Related to the Supervision of SLHCs.

On August 22, 2011, the Board issued an information collection proposal for comment that would permit a two-year phase-in period for most SLHCs to file Federal Reserve regulatory reports with the Board and an exemption for some SLHCs from initially filing Federal Reserve regulatory reports. (Title III, generally)

| No Deadline

| Comment period closed.

|

## Rulemaking Under Title VI|

10. | Proposed Rule implementing the Volcker Rule Requirements.

On October 11, the Board requested public comment on a proposed rule that would implement Section 619 of the Act, which contains certain prohibitions and restrictions on the ability of a banking entity and nonbank financial company supervised by the Board to engage in proprietary trading and have certain interests in, or relationships with, a hedge fund or private equity fund.

The comment period will be open until January 13, 2012. (Section 619, generally)

| 10/11/11

| Comment period open.

||-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|------------------------||

11 | Final Rule to Implement the Volcker Rule Conformance Period [R-1397].

On February 9, 2011, the Board issued a final rule to implement the provisions of the Act that give banking firms a period of time to conform their activities and investments to the prohibitions and restrictions of the Volcker Rule. (Section 619(c)(6))

| 1/21/11

| Completed.

||

12 | Final Rule to Allow Interest on Demand Deposits [R-1413].

On July 14, 2011, the Board issued a final rule repealing Regulation Q and allowing payment of interest on demand deposits at institutions that are member banks of the Federal Reserve System. (Section 627)

| No Deadline | Completed.

||

13 | Proposed Rule on Registration of Securities Holding Companies [R-1430].

On August 31, 2011, the Board issued a proposed rule that outlines the requirements that a nonbank company that owns at least one registered broker or dealer, and that is required by a foreign regulator or provision of foreign law to be subject to comprehensive consolidated supervision (securities holding company), must satisfy in order to register with the Board and subject themselves to supervision by the Board. (Section 618)

| No Deadline | Comment period closed. |

## Rulemaking Under Title VII| 14.

| Proposed Rule on Margin and Capital Requirements for Swaps [R-1415].

On April 12, 2011, the Board issued a joint proposed rule with the FCA, FDIC, FHFA and OCC to establish margin and capital requirements for swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants.

The Agencies previously extended the comment period to July 11, 2011, to allow interested persons more time to analyze the issues and prepare their comments. (Sections 731 and 764)

| No Deadline

| Comment period closed.

||-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|--------------------------|| 15.

| Proposed Rule on Retail Foreign Exchange Futures and Options [R-1428].

On July 28, 2011, the Board issued a proposed rule that that sets standards for banking organizations regulated by the Federal Reserve who engage in certain types of foreign exchange transactions with retail customers. (Section 742)

| No Deadline

| Comment period closed.

||-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------|-----------------------------|| Rulemaking Under Title VIII | Rulemaking Under Title VIII

| Rulemaking Under Title VIII | Rulemaking Under Title VIII || 16.

| Proposed Rule on Financial Market Utilities (FMU) Risk Management Standards and Procedures [R-1412].

On March 30, 2011, the Board issued a proposed rule related to the supervision of FMUs designated as systemically important by the Financial Stability Oversight Council. (Sections 801and 806)

| No Deadline

| Comment period closed.

|| Rulemaking Under Title IX

| Rulemaking Under Title IX

| Rulemaking Under Title IX

| Rulemaking Under Title IX

|| 17.

| Advanced Notice of Proposed Rulemaking on Alternatives to the Use of Credit Ratings in Capital Rules (Regulations H and Y) [R-1391].

On August 10, 2010, the Board issued an advanced notice of proposed rulemaking regarding the alternatives to the use of credit ratings in the risk-based capital rules for banking organizations. (Section 939A)

| No Deadline

| Comment period closed.

|| 18.

| Proposed Rule on Credit Risk Retention [R-1411].

On March 29, 2011, the Board issued a joint proposed rule with five other federal agencies, to implement the credit risk retention requirements applicable in connection with the issuance of asset-backed securities.

The agencies previously had extended the comment period for the proposed rule to allow interested persons more time to analyze the issues and prepare their comments. (Section 941) | 4/17/11

| Comment period closed.

|| 19.

| Proposed Rule on Incentive Compensation [R-1410].

On March 30, 2011, the Board issued a joint proposed rule with the OCC, FDIC, OTS, NCUA, SEC and FHFA to prohibit incentive based compensation arrangements that encourage inappropriate risk-taking by covered financial companies, and to require the disclosure and reporting of certain incentive-based compensation information by covered financial companies. (Section 956)

| 4/21/11

| Comment period closed.

|

## Rulemaking Under Title X|

20. | Final Rule on Data Requirements for Motor Vehicle Dealers [R-1426].

On September 20, 2011, the Board issued a final rule under Regulation B to clarify that motor vehicle dealers are not required to comply with certain data collection requirements in Act until the Board issues final regulations to implement the statutory requirements . (Section 1071)

| No Deadline

| Completed.

||-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|-------------------------------------------------------------||

21 | Proposed Rules on Remittance Transfers Disclosures (Regulation E) [R-1419].

On May 12, 2011, the Board issued a proposed rule to require that remittance transfer providers make certain disclosures to senders of remittance transfers, including information about fees and the exchange rate, as applicable, and the amount of currency to be received by the recipient.

The proposed rule also would provide error resolution and cancellation rights for senders of remittance transfers. (Section 1073)

| 1/21/12

| Comment period closed (rule has been transfer to the CFPB). ||

22 | Debit Interchange - Final Rules Establishing Interchange Standards and Limitations on Payment Card Restrictions [R-1404].

On June 29, 2011, the Board issued a final rule to establish standards for debit card interchange fees, regulations governing network fees, and prohibitions against network exclusivity arrangements and routing restrictions.

The statutory deadline for issuing interchange and network fee rules was April 21, 2011.

The final rules to implement the exclusivity and routing restrictions of the Act were not due until July 21, 2011, but have been combined with the rules on interchange fees. (Section 1075) | 4/21/11 and 7/21/11 | Completed.

||

23 | Debit Interchange - Interim Final Rule Regarding Fraud Prevention Adjustment [R-1404].

On June 29, 2011, the Board issued an interim final rule that allows for an upward adjustment of no more than 1 cent to an issuer s debit card interchange fee if the issuer develops and implements policies and procedures reasonably designed to achieve the rule s fraud-prevention standards . (Section 1075)

| 4/21/11

| Completed.

|

## Rulemaking Under Title XI|

24. | Final Rule to Expand Coverage Under the Truth in Lending Act (Regulation Z) [R-1399].

On March 25, 2011, the Board issued a final rule to require creditors to disclose key terms of consumer loans and prohibit creditors from engaging in certain practices with respect to those loans. (Section 1100(E))

| No Deadline

| Completed.

||-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|--------------||

25 | Final Rule to Expand Coverage Under the Consumer Leasing Act (Regulation M) [R-1400].

On March 25, 2011, the Board issued a final rule requiring lessors to provide consumers with disclosures regarding the cost and other terms of personal property leases. (Section 1100(E))

| No Deadline

| Completed.

||

26 | Final Rule to Increase Exemption Threshold Under the Consumer Leasing Act (Regulation M) [R-1423].

On March 25, 2011, the Board issued a final rule under RegulationM (Consumer Leasing) to increase the dollar threshold for exempt consumer lease transactions.

These annual adjustments are required by statute. (Section 1100(E))

| No Deadline

| Completed.

||

27 | Final Rule to Increase Exemption Threshold Under the Truth in Lending Act (Regulation Z) [R-1424].

On March 25, 2011, the Board issued a final rule to increase the dollar threshold for exempt consumer credit transactions.

These annual adjustments are required by statute. (Section 1100(E))

| No Deadline

| Completed.

||

28 | Final Rule Revising Risk-Based Pricing Notices Under the Fair Credit Reporting Act (FCRA) (Regulation V) [R-1407].

On July 6, 2011, the Board and the FTC issued a joint final rule to revise the content requirements for risk-based pricing notices and to add related model forms to reflect the new credit score disclosure requirements. (Section 1100F)

| No Deadline

| Completed.

||

29 | Final Rule Implementing Combined FCRA Notices Under the Equal Credit Opportunity Act (Regulation B) [R-1408].

On July 6, 2011, the Board issued a final rule amending Regulation B to include the disclosure of credit scores and related information if a credit score is used in taking adverse action.

The revised model notices reflect the new content requirements in section 615(a) of the FCRA, as amended by section 1100F of the Act. (Section 1100F) | No Deadline

| Completed.

|

## Rulemaking Under Title XIV|

30. | Proposed Rule on Escrow Account Requirements Under the Truth in Lending Act (Regulation Z) [R-1406].

On February 23, 2011, the Board issued a proposed rule to expand the minimum period for mandatory escrow accounts for first-lien, higher-priced mortgage loans from one to five years, and longer under certain circumstances; provide an exemption from the escrow requirement for certain creditors that operate in rural or underserved counties; and implement new disclosure requirements contained in the Act. (Sections 1411, 1412 and 1414)

| 1/21/13

| Comment period closed (rule has been transfer to the CFPB)

||-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|--------------------------------------------------------------||

31 | Proposed Rule Regarding Ability to Repay Under the Truth In Lending (Regulation Z) [R-1417].

On April 19, 2011, the Board issued a proposed rule under Regulation Z that would require creditors to determine a consumer s ability to repay a mortgage before making the loan and would establish minimum mortgage underwriting standards.

The proposal would also implement the Act s limits on prepayment penalties.

The Board is soliciting comment on the proposed rule until July 22, 2011. (Sections 1411, 1412 and 1414)

| 1/21/13

| Comment period open (rule has been transfer to the CFPB)

||

32 | Final Rule on Escrow Requirements Under the Truth in Lending Act (Regulation Z) [R-1392].

On February 23, 2011, the Board issued a final rule to increase the annual percentage rate threshold used to determine whether a mortgage lender is required to establish an escrow account for property taxes and insurance for first-lien 'jumbo' residential mortgage loans, effective April 1, 2011. (Section 1461)

| 1/21/13

| Completed.

||

33 | Interim Final Rule on Appraisal Independence (Regulation Z) [R-1394].

On October 18, 2010, the Board issued an interim final rule that is intended to ensure that real estate appraisers are free to use their independent professional judgment in assigning home values without influence or pressure from those with interests in the transactions. (Section 1472)

| 10/19/10

| Completed.

|

## Table 2.

Reports and Studies Under the Dodd-Frank Act|

Seq. | Description

| Due

| Status

||--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|------------||

1 | Study of the Impact of Credit Risk in Securitization Markets.

On October 19, 2010, the Board issued a report on the potential impact of credit risk retention requirements on securitization markets. (Section 941)

| 10/19/10 | Completed. ||

2 | Report on OTS Transition Plan.

On January 25, 2011, the Board, OTS, OCC, and FDIC issued a joint report to Congress and the Inspectors General of the participating agencies on the agencies plans to implement the transfer of OTS authorities. (Section 327)

| 1/20/11

| Completed. ||

3 | Report on Debit Card Transactions.

On June 29, 2011, the Board issued a report disclosing certain aggregate or summary information concerning interchange transaction and payment card network fees charged or received in connection with electronic debit transactions. (Section 1075)

| 7/21/11

| Completed. ||

4 | Study of the Resolution of Financial Companies under the Bankruptcy Code.

The Board has approved a study , which the Board has conducted, in consultation with the Administrative Office of the U.S. Courts, related to the resolution of financial companies under the Bankruptcy Code. (Section 216)

| 7/21/11

| Completed. ||

5 | Study of International Coordination Relating to the Resolution of Systemic Financial Companies.

The Board has approved a study , which the Board has conducted, in consultation with the Administrative Office of the U.S. Courts, regarding international coordination relating to the resolution of systemic financial companies under the Bankruptcy Code and applicable foreign law. (Section 217) | 7/21/11

| Completed. ||

6 | Report on Remittance Transfers: Automated Clearing House Expansion (ACH).

On July 19, 2011, the Board approved a report to Congress on the status of ACH expansion for remittance transfers to foreign countries. (Section 1073)

| 7/21/11

| Completed. ||

7. | Report on Designated Clearing Entities.

The Board, CFTC and SEC have approved and soon will issue a joint report to Congress containing recommendations for promoting robust risk management standards and consistency in the supervisory programs of the CFTC and SEC for designated clearing entities. (Section 813)

| 7/21/11

| Completed.

||------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|--------------||

8 | Report on the Use of Credit Ratings in the Board s Rules.

The on July 25, 2011, the Board issued a report to Congress discussing the review the Board has conducted on the use of credit ratings in its regulations and sometime thereafter report to Congress. (Section 939A)

| 7/21/11

| Completed.

||

9 | Report on Government Prepaid Cards.

On July 21, the Board issued a report to Congress on the use of prepaid cards by government authorities, and the interchange transaction and cardholder fees charged with respect to such prepaid cards. (Section 1075)

| 7/21/11

| Completed.

|Table 3.

Other Implementation Initiatives Under the Dodd-Frank Act|

Seq. | Description

| Due

| Status

||--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------|----------||

1 | Assistance to the Financial Stability Oversight Council (FSOC).

The Board has been providing significant support to the FSOC.

The Board continues to assist the FSOC in designing its systemic risk monitoring and evaluation process and in developing its analytical framework and procedures for identifying systemically important nonbank firms and FMUs.

The Board also has contributed significantly to the FSOC s recent studies and reports. (Title I, generally) | Various deadlines

| Ongoing. ||

2 | OTS Transition Initiatives.

The Board has made substantial progress in its plans relating to the transfer of the supervisory authority of the OTS for SLHCs to the Board. (Title III, generally)

| Transfer date was 7/21/11 | Ongoing. ||

3 | Establishment of the Consumer Financial Protection Bureau (CFPB).

The Board has established a transition team, headed by Governor Duke, to work closely with staff at the CFPB and at the Treasury Department to facilitate the transition. (Title X, generally)

| Transfer date was 7/21/11 | Ongoing. |Appendix A to statement by Daniel K.

Tarullo, Member, Board of Governors of the Federal Reserve System Before the Committee on Banking, Housing, and Urban Affairs U.S. Senate Washington, DC, December 6, 2011|

4. | Federal Reserve Governance, Transparency and Audit Initiatives.

On December 1, 2010, the Board provided detailed information on its public website about more than 21,000 individual credit and other transactions conducted during the financial crisis.

The Board also has provided on its public website certain audit and related financial information, including audit reports, financial statements and reports to Congress on the Board s facilities under Section 13(3) of the Federal Reserve Act. (Sections 1109 and 1103)

| 12/1/10 for certain disclosures

| Ongoing.

||------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|------------||

5 | Office of Minority and Women Inclusion.

The Board and the Federal Reserve Banks each have established a formal Office of Minority and Women Inclusion to consolidate and build on existing equal opportunity and contracting resources. (Section 342)

| 1/21/11

| Ongoing.

|