PNC Bank 2012 Annual Report Download - page 24

(Credit CARD Act), the Secure and Fair Enforcement for
Mortgage Licensing Act (the SAFE Act), and Dodd-Frank, as
well as changes to the regulations implementing the Real
Estate Settlement Procedures Act, the Federal Truth in
Lending Act, and the Electronic Fund Transfer Act, including
the new rules set forth in Regulation E related to overdraft
charges.
Dodd-Frank, which was signed into law on July 21, 2010,
comprehensively reforms the regulation of financial
institutions, products and services. Dodd-Frank requires
various federal regulatory agencies to implement numerous
new rules and regulations. Because the federal agencies are
granted broad discretion in drafting these rules and
regulations, and many implementing rules either have not yet
been issued or have only been issued in proposed form, many
of the details and much of the impact of Dodd-Frank may not
be known for many months or years. Among other things,
Dodd-Frank provides for new capital standards that eliminate
the treatment of trust preferred securities as Tier 1 regulatory
capital; requires that deposit insurance assessments be
calculated based on an insured depository institution’s assets
rather than its insured deposits; raises the minimum
Designated Reserve Ratio (the balance in the Deposit
Insurance Fund divided by estimated insured deposits) to
1.35%; establishes a comprehensive regulatory regime for the
derivatives activities of financial institutions; limits
proprietary trading and owning or sponsoring hedge funds and
private equity funds by banking entities; requires the Federal
Reserve to establish a variety of enhanced prudential
standards for bank holding companies with $50 billion or
more in total assets; places limitations on the interchange fees
charged for debit card transactions; and establishes new
minimum mortgage underwriting standards for residential
mortgages.
Dodd-Frank established the 10-member inter-agency Financial
Stability Oversight Council (FSOC), which is charged with
identifying systemic risks and strengthening the regulation of
financial holding companies and certain non-bank companies
deemed to be “systemically important” and could, in
extraordinary cases and in conjunction with the Federal
Reserve, break up financial firms that are deemed to present a
grave threat to the financial stability of the United States.
Dodd-Frank also requires the Federal Reserve to establish
prudential standards for bank holding companies with total
consolidated assets equal to or greater than $50 billion that are
more stringent than the standards and requirements applicable
to bank holding companies with assets below this threshold,
and that increase in stringency for bank holding companies
that present heightened risk to the financial system. Additional
information concerning these enhanced prudential standards is
provided in Item 1A – Risk Factors of this Report. The FSOC
may make recommendations to the Federal Reserve
concerning the establishment and refinement of these
prudential standards and reporting and disclosure
requirements.
Legislative and regulatory developments to date, as well as
those that come in the future, have had and are likely to
continue to have an impact on the conduct of our business.
The more detailed description of the significant regulations to
which we are subject included in this Report is based on the
current regulatory environment and is subject to potentially
material change. See also the additional information included
in Item 1A of this Report under the risk factors discussing the
impact of financial regulatory reform initiatives, including
Dodd-Frank and regulations promulgated to implement it, on
the regulatory environment for PNC and the financial services
industry.
Among other areas that have been receiving a high level of
regulatory focus over the last several years are compliance
with anti-money laundering laws and the protection of
confidential customer information. In addition, at least in part
driven by the current economic and financial situation, there is
an increased focus on fair lending and other issues related to
the mortgage industry. Ongoing mortgage-related regulatory
reforms include measures aimed at reducing mortgage
foreclosures.
Additional legislation, changes in rules promulgated by the
Federal Reserve, the OCC, the Federal Deposit Insurance
Corporation (FDIC), the CFPB, the SEC, the CFTC, other
federal and state regulatory authorities and self-regulatory
organizations, or changes in the interpretation or enforcement
of existing laws and rules, may directly affect the method of
operation and profitability of our businesses. The profitability
of our businesses could also be affected by rules and
regulations that impact the business and financial communities
in general, including changes to the laws governing taxation,
antitrust regulation and electronic commerce.
There are numerous rules governing the regulation of financial
services institutions and their holding companies.
Accordingly, the following discussion is general in nature and
does not purport to be complete or to describe all of the laws
and regulations that apply to us. To a substantial extent, the
purpose of the regulation and supervision of financial services
institutions and their holding companies is not to protect our
shareholders and our non-customer creditors, but rather to
protect our customers (including depositors) and the financial
markets in general.
The PNC Financial Services Group, Inc. – Form 10-K 5