Overview
Title
Agency Information Collection Activities: Proposed Collection Renewal; Comment Request
Agencies
ELI5 AI
The FDIC wants people to share their thoughts on some rules for banks about keeping money safe and sharing risks, and people can do this until early next year.
Summary AI
The Federal Deposit Insurance Corporation (FDIC) is inviting the public and other federal agencies to comment on the renewal of two existing information collections as part of the Paperwork Reduction Act of 1995. The first collection relates to the Pillar 2 Guidance under the Advanced Capital Framework, which requires certain banks to document and assess their capital adequacy processes. The second collection involves the Credit Risk Retention Rule, requiring institutions to retain a portion of the credit risk for asset-backed securities they issue. Comments are open until January 13, 2025, and can be submitted by various methods, including email and post.
Abstract
The FDIC, as part of its obligations under the Paperwork Reduction Act of 1995, invites the general public and other Federal agencies to take this opportunity to comment on the request to renew the existing information collections described below (OMB Control No. 3064-0165 and -0183). The notices of proposed renewal for these information collections were previously published in the Federal Register on October 10, 2024, and October 21, 2024, allowing for a 60- day comment period.
Keywords AI
Sources
AnalysisAI
The document in question is a notice from the Federal Deposit Insurance Corporation (FDIC) inviting public comment on the renewal of two existing information collections under the Paperwork Reduction Act of 1995. This commentary provides a general overview of the document, highlights significant issues, and discusses its potential impact on the public and specific stakeholders.
General Summary
The Federal Deposit Insurance Corporation (FDIC) is soliciting feedback on two specific information collections. The first is related to the Pillar 2 Guidance under the Advanced Capital Framework. This framework requires certain banks to document and assess their processes for determining capital adequacy. The second collection pertains to the Credit Risk Retention Rule, which mandates that institutions retain a portion of the credit risk when issuing asset-backed securities. The agency is seeking comments until January 13, 2025, and submissions can be made via email, post, or other methods.
Significant Issues or Concerns
Several concerns arise from the document. Firstly, it contains references to future dates, such as publication dates in the Federal Register, which may indicate typographical errors or placeholders not updated correctly. This could cause confusion about the timeline for public comments and the renewal process.
Additionally, the document uses complex legal and financial terminology that may not be easily understood by the general public. Terms like "capital adequacy," "advanced capital framework," and "credit risk retention" require prior knowledge of financial regulations, potentially making the document inaccessible to some readers.
Furthermore, the document references multiple sections of regulatory rules without providing simple summaries, which could be challenging for readers unfamiliar with legal references.
Impact on the Public and Stakeholders
Overall, the document signifies the FDIC's ongoing efforts to ensure transparency and public involvement in regulatory matters. By seeking comments, the FDIC allows stakeholders, including the general public, insured state nonmember banks, and other federal agencies, to influence regulatory practices.
For the general public, the potential impact might be limited, especially if they lack familiarity with the issues at play. However, the invitation for comments offers an avenue for increased public engagement in financial regulatory processes.
Financial institutions, specifically insured state nonmember banks and their subsidiaries, are directly impacted by these regulations. Compliance with the requirements may involve significant administrative efforts to align with specified documentation and risk retention standards. On the positive side, such measures aim to enhance financial stability and ensure these institutions maintain robust capital management practices.
Another impact is related to the Credit Risk Retention Rule, which could impose additional operational requirements on institutions dealing in asset-backed securities. While this might initially seem burdensome for these entities, the rule aims to safeguard against excessive risk-taking and promote greater transparency in financial markets.
Overall, while the document encourages broad participation, the complexity of its language and regulations may necessitate further efforts from the FDIC to demystify these provisions and ensure clarity for all stakeholders involved.
Issues
• The document contains references to future dates, such as the publication in the Federal Register on October 10, 2024, and October 21, 2024, which could indicate either a typographical error or a placeholder that was not properly updated.
• The complexity of the language used in sections discussing regulatory requirements might be difficult for general public understanding, especially for those not familiar with financial regulatory terms.
• The document refers to multiple sections of regulations and rules, such as those found in 12 CFR part 373, without providing a simple summary, which can make it hard to follow for readers unfamiliar with legal references.
• The document contains complex financial terms related to capital adequacy, advanced capital framework, and credit risk retention, which may not be easily understood by non-specialist audiences without further explanation or simplification.
• There is potential for confusion around the inclusion of multiple agencies and their roles in the process of implementing the regulations, as the document lists several agencies involved in issuing the Credit Risk Retention rule without clearly delineating their specific responsibilities.
• The document mentions potential exemptions and reduced credit risk retention, which could be interpreted as favoring certain types of securitization or financial institutions without a detailed explanation of the fairness or rationale behind these provisions.