Background

The Dodd-Frank Act abolished the Office of Thrift Supervision (OTS) and transferred its supervisory and rulemaking authority to the OCC, FDIC, and FRB — the FRB now supervises savings and loan holding companies, the OCC supervises federal savings associations, and the FDIC supervises state-chartered savings associations. See 12 USC 5412; 12 USC 1813(q)(2)(C). When the OTS was officially abolished, on October 19, 2011, all OTS regulations, orders, resolutions, determinations, and advisory materials remained in effect and will remain in effect until the appropriate successor agency modifies, terminates, or supersedes the rules. 12 USC 5414(b). In July of 2011, the OCC and FDIC published a joint notice identifying the former OTS regulations that each agency is now responsible for enforcing. 76 Fed. Reg. 39246 (July 6, 2011).

Recent OCC and FDIC Actions

In a final rule issued in May of 2014, the OCC announced upcoming “integration rulemakings” to identify duplicative rules and to integrate them into a single set of rules for both national banks and federal savings associations. The OCC identified several rules that were “substantively identical” to the OTS rules: consumer protection in sales of insurance, procedures for monitoring BSA compliance, depository management interlocks, appraisals, disclosure and reporting of CRA-related agreements, disposal of consumer information, and identity theft red flags. 79 Fed. Reg. 28393 (May 16, 2014). Most recently, in June of 2014, the OCC issued a proposed rule to integrate the licensing rules for several types of activities and transactions to create a single filing and review process for those activities and transactions. 79 Fed. Reg. 33259 (June 10, 2014).

The FDIC has also indicated that it will incorporate its transferred OTS regulations into existing FDIC rules, amend them, or rescind them. Recently, the FDIC has released two final rules and three proposed rules to rescind and remove OTS regulations to further streamline the FDIC’s rules and eliminate unnecessary regulations. The two final rules remove OTS regulations and establish FDIC regulations as the sole authority for FDIC-supervised institutions in the areas of disclosure and reporting of CRA-related agreements and restrictions on hiring former senior examiners. Two proposed rules also integrate FDIC and OTS management official interlock rules and conservator and receiver procedures. Another proposed rule entirely removes the OTS Electronic Operations rule, which required prior written notice before establishing a transactional website.

We expect the federal banking agencies will continue to issue rules integrating former OTS rules, and the IBA will continue to provide updates on the rule integration process.