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Federal Reserve's meeting on the U.S. liquidity coverage and margin requirements on non-cleared swaps.

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The Federal Reserve Board on Monday published a report regarding the Independent Foreclosure Review (IFR) and the Payment Agreement that replaced the IFR. The Payment Agreement required large mortgage servicers to provide approximately $10 billion in cash payments to eligible borrowers and other foreclosure prevention assistance. After the Payment Agreement has been fully implemented, the Federal Reserve expects to publish data on the final status of the cash payments and the foreclosure prevention assistance.

Current Economic Situation and Outlook

Between April 2011 and April 2012, the Office of the Comptroller of the Currency (OCC) and the Federal Reserve issued enforcement actions against 16 mortgage loan servicers for deficient practices in mortgage loan servicing and foreclosure processing. In addition to correcting their servicing practices, the actions required the servicers to hire independent consultants to conduct file reviews to determine if borrowers suffered financial injury and were eligible for financial remediation.

To settle their obligations under the IFR, 15 mortgage servicers entered into the Payment Agreement with the OCC and the Federal Reserve to provide $3.9 billion in direct cash payments to borrowers and approximately $6.1 billion in foreclosure prevention assistance. The Payment Agreement provides the greatest benefit to consumers in a timelier manner than would have occurred under the IFR and ensures that servicers cannot ask or require borrowers to waive any legal claims against their servicer as a condition of payment.

The proposed new and revised questions and answers:

  • Address alternative systems for delivering retail banking services.
  • Add examples of innovative or flexible lending practices.
  • Address community development-related issues by: (i) clarifying guidance on economic development; (ii) providing examples of community development loans and activities that are considered to revitalize or stabilize an underserved nonmetropolitan middle-income geography; and (iii) clarifying how community development services are evaluated.
  • Offer guidance on how examiners evaluate the responsiveness and innovativeness of an institution's loans, qualified investments, and community development services.

Also on Monday, the Board released action plans for Goldman Sachs and Morgan Stanley to correct deficiencies in the firms' third-party vendor management procedures. The action plans were required by the enforcement actions issued in 2011 and 2012 by the Federal Reserve for deficiencies in residential mortgage loan servicing and foreclosure processing.

Media Contacts:

Federal Reserve Board
202-452-2955
OCC
Stephanie Collins
202-649-6870
FDIC
Greg Hernandez
202-898-6984
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Recent Developments

Current | :

December 22, 2014

Communications with the public through December 22, 2014

December 18, 2014

Federal Reserve Board announces banking entities have until July 21, 2016, to conform investments in and relationships with covered funds and foreign funds that were in place prior to December 31, 2013

November 5, 2014

Federal Reserve Board issues final rule to implement section 622 of the Dodd-Frank Act

October 28, 2014

Federal Reserve Board issues final rule to amend Regulation HH and Payment System Risk policy

October 22, 2014

Six federal agencies jointly approve final risk retention rule

September 23, 2014

Communications with the public through September 23, 2014

Transaction Data (Released December 1, 2010)

Background

Under provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Federal Reserve provides detailed information about its loans to depository institutions and others, as well as about other covered transactions such as open market operations (OMOs).

This section of the website provides detailed information about the liquidity and credit programs and other monetary policy tools that the Federal Reserve used to respond to the financial crisis that emerged in the summer of 2007. These programs fall into three broad categories--those aimed at addressing severe liquidity strains in key financial markets, those aimed at providing credit to troubled systemically important institutions, and those aimed at fostering economic recovery by lowering longer-term interest rates.

The emergency liquidity programs that the Federal Reserve set up provided secured and mostly short-term loans. Over time, these programs helped to alleviate the strains and to restore normal functioning in a number of key financial markets, supporting the flow of credit to businesses and households. As financial markets stabilized, the Federal Reserve closed most of these programs. Indeed, many of the programs were intentionally priced to be unattractive to borrowers when markets are functioning normally and, as a result, wound down as market conditions improved. The programs achieved their intended purposes with no loss to taxpayers.

The Federal Reserve also provided credit to several systemically important financial institutions. These actions were taken to avoid the disorderly failure of these institutions and the potential catastrophic consequences for the U.S. financial system and economy. All extensions of credit were fully secured and are in the process of being fully repaid.

Finally, the Federal Reserve provided economic stimulus by lowering interest rates. Over the course of the crisis, the Federal Open Market Committee (FOMC) reduced its target for the federal funds rate to a range of 0 to 1/4 percent. With the federal funds rate at its effective lower bound, the FOMC provided further monetary policy stimulus through large-scale purchases of longer-term Treasury debt, federal agency debt, and agency mortgage-backed securities (agency MBS). These asset purchases helped to lower longer-term interest rates and generally improved conditions in private credit markets.

The links to the right provide detailed information about the programs that were established in response to the crisis. Details for each loan include: the borrower, the date that credit was extended, the interest rate, information about the collateral, and other relevant terms. Similar information is supplied for swap line draws and repayments. Details for each agency MBS purchase include: the counterparty to the transaction, the date of the transaction, the amount of the transaction, and the price at which each transaction was conducted. The transaction data are provided in compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Federal Reserve will revise the data to ensure that they are accurate and complete.

No rules about executive compensation or dividend payments were applied to borrowers using Federal Reserve facilities. Executive compensation restrictions were imposed by statute on firms receiving assistance through the U.S. Treasury's Troubled Asset Relief Program (TARP). Dividend restrictions were the province of the appropriate supervisors and were imposed by the Federal Reserve on bank holding companies in that role, but not because of borrowing through the facilities discussed here.

Additional information about the Federal Reserve's credit and liquidity programs is available on the Credit and Liquidity Programs and the Balance Sheet section.

Facilities and Programs

Data