Keep pulling the thread on Chairman Hill.
Federal banking agencies plan to release new capital proposals in the next month to address issues including the servicing of mortgages by banks for their customers.
The banking agencies plan to introduce the Basel III endgame proposal before the end of March.
Under the current risk-based capital framework, mortgage servicing assets (MSAs) are subject to a 25% aggregate cap in the calculation of a bank's core capital.
FDIC Chairman Hill stated that the impact of capital rules on the ability of smaller insured institutions to compete is a major factor that banking agencies are closely examining.
Federal Reserve Vice Chair Michelle Bowman has consistently emphasized that capital standards should be strong but also appropriately calibrated to the size and complexity of the financial institution.
Raising the capital cap for mortgage servicing assets (MSAs) is believed to increase stability in the single-family mortgage marketplace by creating a more orderly and liquid market.
The FDIC finalized significant revisions to the Industrial Loan Company (ILC) regulatory framework at the end of President Donald Trump's first term.
The FDIC's 2020 reforms to the Industrial Loan Company (ILC) framework strengthened parent company oversight and enhanced reporting requirements.
FDIC Chairman Hill assesses that the 2020 reforms to the Industrial Loan Company (ILC) regulatory framework are successfully serving their intended purpose of improving the sector's safety and soundness.