Bank Regulatory News

February 1998

Applications Bulletin - Federal Reserve Bank of Dallas week ending February 27, 1998
Notice by Huntington Bancshares, Inc., Huntington, TX, to repurchase 9,823 shares of its common stock

February 27, 1998 - DISCUSSION OF YEAR 2000 ISSUES IN ANNUAL DISCLOSURE - Disclosures Involving Year 2000 Issues Issues related to the century date change and the impact on computer systems and business operations are receiving prominent publicity and attention. Depositors, business partners, investors, and the general public are specifically interested in the effect on the financial condition of each depository institution. The FDIC has previously advised state nonmember banks and savings banks that safe and sound banking practices require them to address Year 2000 issues.

February 26, 1998 - GOVERNMENT SECURITIES - Electronic Confirmation of Transactions and Electronic Records Storage
The Department of the Treasury has issued the attached interpretive letter affecting certain banks wishing to use electronic mail for confirming specific transactions, and to store records electronically. Banks affected are those engaged in repurchase agreement transactions, registered as government securities brokers or dealers, or holding government securities for customers.

February 25, 1998 - FDIC - JANUARY SURVEY FINDS CONTINUING GAINS IN REAL ESTATE MARKETS
The latest results from the FDIC's quarterly Survey of Real Estate Trends showed continuing favorable views of local residential and commercial real estate markets.

February 25, 1998 - REPURCHASE AGREEMENTS - FDIC Adopts FFIEC's Modified Policy Statement on Repurchase Agreements
The FDIC Board of Directors has adopted the Federal Financial Institutions Examination Council's (FFIEC) recently revised supervisory policy statement on repurchase agreements. A copy of the policy statement is attached. It provides guidance to insured depository institutions on repurchase agreement activities, including guidelines for written repurchase agreements, policies and procedures, credit risk management, and collateral management.

February 25, 1998 - TRUTH IN LENDING REIMBURSEMENTS - Reimbursable Violations of the Truth in Lending Act
The Federal Deposit Insurance Corporation (FDIC) is providing additional guidance to bank management on how to prevent violations of the Truth in Lending Act and its implementing regulation, Regulation Z. These violations have the potential to expose an institution to civil liability and require adjustments to the accounts of individual consumers.

February 23, 1998 - St. Louis FRB
ST. LOUIS--Hedging - a strategy firms use to manage financial risk - is often desirable, but before companies pursue it as part of their risk management programs, they should decide why they're hedging, what instruments to hedge, and ensure they've id entified any shortcomings in their control systems.

February 23, 1998- PROHIBITION AGAINST PAYMENT OF INTEREST ON DEMAND DEPOSITS - FDIC Issues Final Rule Prohibiting Payment of Interest on Demand Deposits (Part 329 of FDIC's Rules and Regulations)
The Federal Deposit Insurance Corporation (FDIC) has issued the attached final rule that amends its "Interest on Deposits" regulation. The rule will take effect on April 1, 1998.

Applications Bulletin - Federal Reserve Bank of Dallas week ending February 20, 1998
First Azle Bancshares, Inc., Employee Stock Ownership Plan, Azle, TX, to acquire First Azle Bancshares, Inc., Azle, TX, and First Bank, Azle, TX
Notice by Colorado Valley Bank, La Grange, TX, to increase its investment in bank premises
Notice by First Azle Bancshares, Inc., Azle, TX, to repurchase 397,307 shares of its common stock

February 19, 1998 - The Federal Reserve Board today published for comment proposed amendments to its Regulation C, Home Mortgage Disclosure. Comments are requested by April 27.
The proposed amendments would modify the Loan Application Register to prepare for the Year 2000 data systems conversion. The proposed amendments would require institutions to enter the date of application and the date action was taken using four digits for the year as opposed to two digits. The proposal also deletes the requirement to report the institution's parent company on the Transmittal Sheet, and makes other technical changes.

FDIC February 18, 1998 - Proposed FFIEC Policy Statement on External Auditing Programs of Banks and Savings Associations
The four federal banking agencies, under the auspices of the Federal Financial Institutions Examination Council (FFIEC), have proposed the attached "Policy Statement on External Auditing Programs of Banks and Savings Associations" and are seeking comment on its proposal. The proposal was developed jointly by the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. Attachment: Feb.17, 1998 Federal Register, pages 7796-7802.

February 18, 1998 - Comptroller Warns on Industry Lending Practices
WASHINGTON -- Comptroller of the Currency Eugene A. Ludwig today urged banks to tighten loan underwriting standards and said his agency is preparing to release new guidance that will help institutions develop and apply advanced portfolio management techniques.

The Federal Reserve Board February 18, 1998 - For immediate release
The Federal Reserve Board today announced its approval of the application by WestStar Bank, Bartlesville, Oklahoma, to merge with Victory Bank of Nowata, Nowata, Oklahoma, and also to establish a branch at the main office of Victory Bank, at 108 North Maple, Nowata, Oklahoma.

Applications Bulletin - Federal Reserve Bank of Dallas week ending February 13, 1998
First Azle Bancshares, Inc., Employee Stock Ownership, Plan, Azle, TX, to acquire First Azle Bancshares, Inc., Azle, TX, and First Bank, Azle, TX

FDIC February 10, 1998 - Guidance for Financial Institution Directors Regarding Legal Advice
The Federal Deposit Insurance Corporation has developed the attached guidance for financial institution directors receiving legal advice.   The guidance is intended to ensure that officers and directors of financial institutions recognize that attorneys providing advice and corporate counseling represent, and owe their duty of loyalty to, the financial institution, not officers and directors who in some cases may also be the control owners of the institution. In order to facilitate the exercise of independent approval authority, the board of directors, or any special committee thereof, should assure effective communication of legal advice and counsel prior to action by the board or committee.

The Federal Reserve Board February 6, 1998  - For immediate release
The Federal Reserve Board today published its annual adjustment of the dollar amount that triggers additional disclosure requirements under Truth in Lending for mortgage loans that bear fees above a certain amount. The Home Ownership and Equity Protection Act of 1994 bars credit terms such as balloon payments and requires additional disclosures when total points and fees payable by the consumer exceed $400 or 8 percent of the total loan amount, whichever is larger. The Board must adjust this amount each year based on the annual percentage change in the Consumer Price Index in effect on June 1.

Applications Bulletin - Federal Reserve Bank of Dallas week ending February 6, 1998
JCE/CBI, Ltd., Baytown, TX, only notificant, to acquire an interest in Citizens Bankers, Inc., Baytown, TX (previously reported the week of January 26, 1998)
TransPecos Financial Corporation, Iraan, TX, to acquire Iraan State Bank, Iraan, TX (previously reported the week of January 26, 1998)
Shamrock Bancshares Inc., Shamrock, TX, to acquire Shamrock Delaware Financial, Inc., Dover, DE, and The First National Bank of Shamrock, Shamrock, TX
Shamrock Delaware Financial, Inc., Dover, DE, to acquire The First National Bank of Shamrock, Shamrock, TX

The Federal Reserve Board February 5, 1998 - For immediate release
The Federal Reserve Board today requested additional comment on possible streamlining and reform of the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) for home-secured loans.

February 4, 1998 - OCC WARNS BANKS ON TECHNOLOGY RISKS
WASHINGTON, D.C. -- The Office of the Comptroller of the Currency today emphasized the importance of technology risk management as a critical success factor for national banks, and provided new guidelines for examiners to follow when reviewing a bank's technology risk management procedures.

FDIC February 3, 1998 - Prohibition of Certain Transactions With Sudan; Reporting Requirements for Outstanding Claims Held by U.S. Nationals Against North Korea
The FDIC on December 10, 1997, issued FIL-125-97 on blocking transactions with certain Sudanese banks, as required by Executive Order. The Department of the Treasury's Office of Foreign Assets Control (OFAC) issued a memorandum on December 8, 1997, advising that transactions with the Farmers Bank For Investment & Rural Development, Khartoum, Sudan, also should be blocked. This information was not included in FIL-125-97.

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