Page 2 - Updates on various issues

CRA Reform. 1,600 comment letters have been submitted on CRA reform, 275 of those
are from industry. Many community groups have opposed CRA reform. The regulators
have a difficult task. This was an ANPR (advance notice of proposed rulemaking) so
there was no proposed text to which to react. Many comments urged changes to reflect
technological developments, and community groups often urged regulators not to
encourage closing of branches. The agencies are reading the letters, and we have
heard that Comptroller Otting wants to see a proposal this winter.

LIBOR’s ARRC. Banker comments are needed on the latest step in developing a
replacement to LIBOR, commenting on both cessation of LIBOR, and the elimination of
LIBOR in the commercial loans market. The Alternative Reference Rates Committee
(ARRC) has recommended Secured Overnight Financing Rate (SOFR) by the New
York Fed to replace LIBOR. Banks need to consider what they have tied to LIBOR on
both sides of the balance sheet, and banks need to have answers since regulators will
ask what they’re doing.

BSA/AML. FinCEN urged banks last week to innovate (use technology or banks share
resources) to manage submission of SARs and said that it will work with banks wanting
to innovate. Banks are encouraged to set up pilot programs and while banks’ errors in
new submissions will not be ignored they will not be punished if they find they previously
weren’t doing a good job of submissions. Agency heads have been meeting monthly to
make BSA/AML reform work better and their staff have been meeting weekly.

Flood Insurance. Congress keeps kicking the can down the road. The program is
funded through December 21, when other government funding expires if Congress
doesn’t act. We anticipate a clean reauthorization (no changes in the program) through
March. Incoming Chair of the House Financial Services Committee Maxine Waters will
focus on affordability of the program.