Huntington National Bank 2014 Annual Report Download - page 28

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On September 3, 2014, the U.S. banking regulators approved a final rule to implement a minimum liquidity coverage ratio (LCR)
requirement for banking organizations with total consolidated assets of $250 billion or more, and a less stringent modified LCR
requirement to depository institution holding companies below the threshold but with total consolidated assets of $50 billion or more.
The LCR requires covered banking organizations to maintain HQLA equal to projected stressed cash outflows over a 30 calendar-day
stress scenario. We are covered by the modified LCR requirement and therefore subject to the phase-in of the rule beginning January
2016 at 90% and January 2017 at 100%. We will also be required to calculate the LCR monthly. The LCR assigns less severe
outflow assumptions to certain types of customer deposits, which should increase the demand, and perhaps the cost, among banks for
these deposits. Additionally, the HQLA requirements will increase the demand for direct US government and US government-
guaranteed debt that, while high quality, generally carry lower yields than other securities that banks hold in their investment
portfolios.
2. If our regulators deem it appropriate, they can take regulatory actions that could result in a material adverse impact
on our financial results, ability to compete for new business, constrain our ability to fund our liquidity needs or pay dividends,
and increase the cost of our services.
We are subject to the supervision and regulation of various state and federal regulators, including the OCC, Federal Reserve,
FDIC, SEC, CFPB, Financial Industry Regulatory Authority, and various state regulatory agencies. As such, we are subject to a wide
variety of laws and regulations, many of which are discussed in the Regulatory Matters section. As part of their supervisory process,
which includes periodic examinations and continuous monitoring, the regulators have the authority to impose restrictions or conditions
on our activities and the manner in which we manage the organization. Such actions could negatively impact us in a variety of ways,
including monetary fines, impacting our ability to pay dividends, precluding mergers or acquisitions, limiting our ability to offer
certain products or services, or imposing additional capital requirements.
With the development of the CFPB, our consumer products and services are subject to increasing regulatory oversight and
scrutiny with respect to compliance under consumer laws and regulations. We may face a greater number or wider scope of
investigations, enforcement actions and litigation in the future related to consumer practices, thereby increasing costs associated with
responding to or defending such actions. In addition, increased regulatory inquiries and investigations, as well as any additional
legislative or regulatory developments affecting our consumer businesses, and any required changes to our business operations
resulting from these developments, could result in significant loss of revenue, require remuneration to our customers, trigger fines or
penalties, limit the products or services we offer, require us to increase our prices and therefore reduce demand for our products,
impose additional compliance costs on us, cause harm to our reputation or otherwise adversely affect our consumer businesses.
3. Legislative and regulatory actions taken now or in the future that impact the financial industry may materially
adversely affect us by increasing our costs, adding complexity in doing business, impeding the efficiency of our internal
business processes, negatively impacting the recoverability of certain of our recorded assets, requiring us to increase our
regulatory capital, limiting our ability to pursue business opportunities, and otherwise result in a material adverse impact on
our financial condition, results of operation, liquidity, or stock price.
The Dodd-Frank Act represents a comprehensive overhaul of the financial services industry within the United States, establishes
the CFPB, and requires the bureau and other federal agencies to implement many new and significant rules and regulations. It is not
possible to predict the full extent to which the Dodd-Frank Act, or the resulting rules and regulations in their entirety, will impact our
business. Compliance with these new laws and regulations have and will continue to result in additional costs, which could be
significant, and may have a material and adverse effect on our results of operations. In addition, if we do not appropriately comply
with current or future legislation and regulations that apply to our consumer operations, we may be subject to fines, penalties or
judgments, or material regulatory restrictions on our businesses, which could adversely affect operations and, in turn, financial results.
Item 1B: Unresolved Staff Comments
None.