Posts by Bill Hoisington

TAX DEVELOPMENTS Alternative Diversification Requirements for Government Money Market Funds under Section 817(H) On May 21, 2016, the IRS issued Notice 2016-32. The notice provides guidance on diversification requirements for Government Money Market Funds (MMFs) under IRC 817(h) and 26 CFR 1.817-5. Under 26 CFR 1.817-5, a segregated account is adequately diversified only if: (A)…

TAX DEVELOPMENTS Tax Court Ruling with Implications for Split Dollar Arrangements On March 28, the Tax Court filed Memorandum Opinion 2016-55 in which the court determined that certain payments made by a corporation into the Sterling Benefit Plan (“SBP”), a purported welfare benefit plan, were not deductible and that the employees needed to record them…

LEGISLATIVE DEVELOPMENTS Obama Administration’s 2017 Fiscal Year Budget Proposal On February 9th, the Obama administration released its Fiscal Year 2017 Budget Proposal. The Department of the Treasury also released its Greenbook. The proposal and general explanations include the same series of proposals relating to insurance and other financial products that we have highlighted in previous…

ACCOUNTING DEVELOPMENTS FASB Proposed Accounting Standards Update – Classification of Certain Receipts and Cash Payments On January 29, FASB issued a Proposed Accounting Standards Update applicable to the Statement of Cash Flows (Topic 230) that addresses the classification of certain cash receipts and cash payments. The proposed updates reflect the consensus recommendations of the Emerging…

LEGISLATIVE DEVELOPMENTS PATH Act Enacted – Health, Retirement, and Fringe Benefit Plans Affected On December 18, the President signed H.R. 2029, which included an omnibus appropriations bill and the Protecting Americans from Tax Hikes Act of 2015 (“PATH Act”). The legislation impacts a number of health, retirement, and fringe benefit plans. Noteworthy elements of the…

REGULATORY DEVELOPMENTS Federal Reserve Approves Rule to Modify Capital Plan and Stress Testing Rules On November 25, the Federal Reserve Board approved a final rule to modify its capital plan and stress testing rules. The final rule is largely similar to the proposed rule that we reported on in our July LRA update. Noteworthy elements…

REGULATORY DEVELOPMENTS Basel Committee Coordination Bulletin – Wholesale and Retail Credit Risk Work Programs On October 15, the FRB’s Basel Coordination Committee released Bulletin 15-2, Wholesale and Retail Credit Risk Work Programs for Advanced Approaches Rules. The work programs describe supervisory processes for gathering information on retail and wholesale credit risk management and measurement practices…

REGULATORY DEVELOPMENTS Operational Requirements for Securitizations under Basel III – Update The Basel III rules require significant operational requirements for securitization exposures, including exposures arising indirectly through investment fund structures. Failure to satisfy the operational requirements can result in a 1250% risk-weight, irrespective of the value that might arise from the SSFA or Gross Up…

REGULATORY DEVELOPMENTS Capital Planning and Stress Testing Rule Proposal On July 17, the Federal Reserve Board proposed a rule to modify its capital planning and stress testing regulations. The proposed changes would take effect for the 2016 capital plan and stress testing cycle. Key aspects of the proposal include: Delaying implementation of supplementary leverage ratio…

REGULATORY DEVELOPMENTS Review of Standardized BOLI RWA Reporting for Q1-2015 The first quarter of 2015 marked the initial reporting period for banks under the U.S. Basel III Standardized Approach. As we’ve reported previously, the regulators have provided specific instructions for reporting BOLI RWA in the applicable form (Schedule RC-R). Of note, Schedule RC-R includes specific line items…