Occ municipal bond guidance software

This edition reflects accounting standards updates asu issued by the fasb through march 31, 2019. Qualified taxcredit bonds have requirements on how much of the proceeds must be spent on a qualified use and when the proceeds must be used for that qualified use. Municipal bonds are those issued by a state or local government to fund operations or specific projects. Occ guidanc oen due diligenc requiremente isn determining whether securitie ars e eligibl foe r investment page 1 of 7 the guidance below was issued by the office of the comptroller of the currency occ on june, 2012, and is being replicated as an attachment to this letter for ease of reference for.

Municipal bonds are loans investors make to local governments. Del rio advisors, llc munisoft software and services. Investment securities comptrollers handbook section 203, 1990. The original owner may sell them to other investors on the. The new guidance rescinds occ bulletin 200147 and occ advisory letter 20009. Occ revises its enforcement policies and procedures manual. This is good news for community banks as well as for virginias counties, cities and towns. General obligation, or go, bonds are backed by the general revenue of the issuing municipality, while revenue bonds are supported by a specific revenue source, such as income from a toll road, hospital, or highereducation system. The office of consumer credit commissioner promotes the highest principles of professional conduct, ethics, and sensitivity to cultural diversity issues. On october 20, 2017, the office of the comptroller of the currency occ issued bulletin 201743 the bulletin outlining principles that occsupervised banks should follow to prudently manage the risks associated with offering new, modified, or expanded products and services acting comptroller keith noreika, in recent remarks, confirmed the occs efforts to. Drive new business, enhance client service and increase efficiency. Feb 10, 2020 whenever you buy or sell a stock, bond, exchange traded fund, or mutual fund, there are two important dates to understand. Ratings are a good start, but they should not be the sole criteria for determining the credit quality of a municipal bond. Comptrollers handbooks all have either recently been, or will be updated risk management guidance.

The office of the comptroller of the currency occ, in collaboration with the other members of the federal financial institutions examination council ffiec, today published in the federal register final supervisory guidance titled social media. Apr 01, 2014 a detailing of the holdings in virginia from that same article showed that many community banks in virginia had noticeably increased their holdings of municipal bonds. In an update to its policies and procedures manual ppm, the office of the comptroller of the currency occ has revised ppm 53103, enforcement action policy, dated september 9, 2011. Bondlink is the goto resource for effective and creative investor outreach solutions for municipal bond issuers. As noted in the response to question 46, many of the concepts, processes, and practices detailed in existing supervisory guidance will continue to be relevant under cecl. Municipal bond default rates vary considerably depending on a variety of factors, including the types of bonds issued and whether the ultimate obligor is a municipal entity or a nonmunicipal entity i. Call features generally, bonds with call features have a lower duration when interest rates fall and a higher duration when interest rates increase.

Realtime data for municipal bonds in the united states. The occs proposal provides guidance to assist national banks and federal savings associations in meeting due diligence requirements in assessing credit risk for portfolio investments. Certain bond issues, and their administration, must comply with the trust indenture act of 1939 tia 15 usc 77aaa bbbb, as amended. Community development community development municipal bonds. It performs a wide variety of interest calculations including tics, sizing calculations, refunding analyses, and arbitrage rebate calculations. The website of occ options clearing corporation has links to a number of occ publications, including the occ rules. To learn about a bond s duration, a number which indicates how sensitive a bond or bond fund is to changes in interest rates, look in the funds fact sheet or, for an individual bond, ask your investment professional. Powers of national banks and federal savings associations. As yields rise on a bond, duration tends to shorten. Below is a listing and description for all market data and statistics reports. During this same 24 years marilyn has written the bond column appearing in forbes magazine. Outsourcing and vendor management thursday, november 9. The office of the comptroller of the currencys occ comptrollers handbook is prepared for use by occ examiners in connection with their examination and supervision of national banks, federal savings associations, and federal branches and federal agencies of foreign banking organizations collectively, banks.

The occ s chartering and licensing activities ensure that the corporate structures of banks are safe and sound. Occ bulletin ffiec it examination handbook infobase. Understanding municipal revenue bonds charles schwab. Occs updated guidance on retail nondeposit investment products february 01, 2015 the office of the comptroller of the currency occ recently released an updated and substantially revised section of its comptrollers handbook titled retail nondeposit investment products the booklet. Requirement to spend available project proceeds of qualified. The occ has released its guidance on due diligence requirements in determining whether investment securities are eligible for investment. May 09, 2009 these are nerveracking times for municipal bond investors.

The software engine, the core of the package, dates back to 1983 and has been used to underwrite tens of billions of dollars of public debt. The appendix lists only those municipal officers who are required by statute to give a bond. Federal reserve board frequently asked questions on the new. Regulate fairly, efficiently, and effectively, addressing both consumers and creditors by enforcing texas credit laws and licensing qualified lenders educate consumers and credit.

Municipal securities overview of market structure, pricing, and regulation why gao did this study municipal securities are debt instruments that state and local governments typically issue to finance diverse projects. The ffiecs bank secrecy actantimoney laundering examination manual, third party payment processors. The worksheet is definitely useful at pulling out critical points to include in your full analysis. Evaluating a municipal bonds interest rate risk 2 subscribe to investor education and emma email updates from the msrb. Search formal enforcement actions taken by the occ. The occ is publishing guidance to assist banks in meeting these requirements. For updates and guidance related to covid19 coronavirus. Occs updated guidance on retail nondeposit investment products. Just as significantly, erinmuni s results have been certified by major accounting firms specializing in the verification of municipal bond issues. Please note that there is a fiveday delay between when an application is received and when it becomes viewable in cas.

The top left chart shows that during the 19932007 time period, when treasury yields move 100bp, municipal yields move just 61bp. Chief executive officers of national banks, department and. Requirement to spend available project proceeds of. A purchaser can select only the needed modules, and purchase other modules later as the need arises. The guidance is designed as an aid to banks, particularly community banks and federal savings associations, regarding the factors they should consider in their due diligence when assessing securities of different degrees of complexity. Whenever you buy or sell a stock, bond, exchange traded fund, or mutual fund, there are two important dates to understand. See also occ advisory letter 20023, guidance on unfair or deceptive acts or practices. As bond specialists, we drill down to determine exactly how the bond is secured and how the investor gets his money back. The guidance was published in the federal register on march 29, 2005, and became effective. Each bank is different and may present specific issues. Mar 16, 2016 municipal bonds have a lot riding on race for the white house.

A corporate bond is a debt instrument issued by a company to raise capital, while a municipal bond is a bond issued by a city, town, or state to raise money for public projects. Key information is available, you just need to know where to look. Occ offers comprehensive options and futures volume, open interest and series and trading data in a variety of formats. To view available documents, you will need acrobat reader. In an unprecedented move debt rater moodys last month assigned a negative outlook to the entire asset class amid the deteriorating. We recently had examiners on site and they liked the worksheet but also required that we do a full cash flow analysis and a memo documenting the factors we used to make our investment grade determination.

The financial accounting standards board fasb issued a new accounting standard, accounting standards update asu no. Many investors, particularly those nearing retirement or in retirement, are concerned about. Occ 20031 occ bulletin comptroller of the currency administrator of national banks subject. Other municipal officers may be required to give bond by ordinance passed by the municipal corporations legislative authority. Investors are attracted to municipal bonds for three reasons. Some of the variables include prerefundings, call status, ratings and valuations. Occ regulation and guidance integration of ots and occ regulations. Classification of securities occ 2028 guidance replaces the previously issued occ 200425, uniform agreement on the classification of securities 2004 agreement by applying the agencies revised investment grade standards of credit worthiness, in place of credit ratings, as. Pierce was appointed by the united states air force 388th fighter wing as.

The advantage of these funds is the income earned is exempt from federal taxation and, in some instances, state and local taxation. Individual investors, through direct purchases or investment funds, own 75 percent of the estimated. Together, these three elements can make a compelling case for including taxfree municipal bonds in your portfolio. Federal reserve board frequently asked questions on the. This booklet addresses the fundamentals risks of assetbased lending and discussed prudent risk management practices and supervisory expectations. Pimco municipal bond managed account portfolios are constructed with two components. New measures to provide more transparency for municipal bond investors dec. When the principal or surety executes this bond by agent or attorney in fact, the evidence of authority must accompany this bond. Apr 14, 2011 kerri corn, the occ s director for market risk policy, said the agency is in the opening stages of determining how much risk banks could be facing from their holdings of municipal bonds. The occ, frb, fdic, and ots are issuing the attached final interagency guidance on response programs for unauthorized access to customer information and customer notice. The date when the issuer repays the principal, the bond s maturity date, may be years in the future. Occ issues risk management principles for new activities. Attachment occ guidanc oen due diligenc requiremente isn. The new occ guidance forces banks to be more cognizant of the.

Guidance on use of municipal bond financing for infrastructure projects ppp cell, infrastructure division, department of economic affairs, ministry of finance, government of india september, 2017 2 preface the government of india goi has identified publicprivate partnerships ppp as an integral. Municipal bond worries spur occ scrutiny of banks exposure. Requirement to spend available project proceeds of qualified tax credit bonds within 3 years of date of issuance. The agencies plan to issue proposed supervisory guidance on the allowance for credit losses under cecl before the first mandatory effective date for the new accounting standard. Some of the many sections of the occ rules pertaining to margins include. Micromuni debt is a debt structuring web based application designed to assist municipal underwriters, financial advisors, and state and local governments in evaluating the debt service repayments of one or more municipal bond issues. Municipal bonds these funds invest in taxexempt bond issued by state, county, or municipal governments. Use cas to search applications and actions via a search parameter s. For example, if you are considering purchasing municipal securities that finance speculative projects.

The ppm sets forth the occs policies and procedures for taking enforcement actions against banks, federal savings associations, federal branches, and agencies banks. Only bonds issued by corporations are potentially subject to the tia. Occ asset management update firma annual risk management conference april 21, 2015 1 disclosure the views and opinions expressed in this presentation are my own, and do not necessarily represent those of the office of the comptroller of the currency, the chief national bank examiner, or the credit and market risk division. Municipal bond returns in 2016 have the potential to match or surpass 2015 performance of 3.

Frequently asked questions on the new accounting standard on financial instrumentscredit losses. See also the companion document entitled key differences among national bank, federal savings association, and covered savings association requirements on the occ website. These are links, by year, to occ issuances as published in the federal register. Public comments to occ proposed rules, guidance, and other matters also are available through regulations. Munease is flexible and can be structured to meet your needs and budget. Municipal bond issuers can visit the working with financial professionals page in the msrbs education center at to confirm that their underwriters or municipal advisors are properly registered. Municipal bonds have a lot riding on race for the white house. They are issued by cities, states, counties, or other local governments. Finally, an easy way to get timely municipal bond data forbes.

Jan 28, 2011 investors who buy municipal bonds are in effect lending money to the bond issuer in exchange for a promise of regular interest payments, usually semiannually, and the return of the original investment, or principal. The msrb, its officers, directors, employees, agents, consultants, and licensors shall not be liable or responsible to you or anyone else for any losses, injuries, damages, costs, expenses or claims caused by, arising out of or relating to the following. Occ issues bulletin 201721, an faq to supplement guidance. The occ examines the condition of the banks it supervises and their compliance with laws and regulations. In this regard, if a financial institution decided prior to the end of the third quarter that it would sell a municipal bond after quarterend and management did not expect the fair value of the bond, which is less than its amortized cost, to recover prior to the expected time of sale, a writedown for otherthantemporary impairment should. Kerri corn, the occs director for market risk policy, said the agency is in the opening stages of determining how much risk banks could be facing from their holdings of municipal bonds. Most municipal bonds are taxexempt bondholders do not pay state of federal income tax on interest earnings from municipal bond investors are willing to purchase bond at lower interest rate irs reprieve to help local governments fund projects and compete in the capital market for investors against corporate bond issuers. Pronouncements each of the final statements of governmental accounting standards issued by the gasb since its establishment in 1984 is designed to provide taxpayers, legislators, municipal bond analysts, and others with information that is useful to their decisionmaking process regarding governmental entities. Serving the municipal bond market with cuttingedge business and compliance solutions. How to report taxfree municipal bonds finance zacks. Because many asus have different effective dates for pbes and nonpbes, we have differentiated staff responses for new asus that have been or may be adopted by banks. Community development municipal bonds frbsf community investments pdf, 65 kb barbara rose vanscoy, crafund advisors municipal bond is a general term referring to securities issued by states, cities, towns, counties and special districts. Enter a bank name, persons name, city, state, or other details.

The pages contain links for submitting and reading public comments. From time to time, the status and description of your municipal bonds can change. Finding value through credit analysis a regression analysis of 10yr treasury yields and 10yr municipal yields shows municipal yields rise only a fraction of treasury yields. Best in class 15c212, timeoftrade, suitability, surveillance, bestexecution and ma rule solutions. Erinmuni software for the municipal finance industry. Municipal market advisors and lumesis release faq on bank. This worksheet is used by our management when purchasing municipal bonds. Investors who buy municipal bonds are in effect lending money to the bond issuer in exchange for a promise of regular interest payments, usually semiannually, and the return of the original investment, or principal. Social media consumer compliance risk management guidance. Munease is sold in individual modules that work together seamlessly as one software product. Municipal market advisors and lumesis release faq on bank regulatory guidance affecting municipal portfolios concord, mass. Jan 18, 20 municipal market advisors and lumesis release faq on bank regulatory guidance affecting municipal portfolios concord, mass.

Blue text boxes contain staff responses that were updated to reflect changes to gaap and should not. Municipal bonds generally can be classified into two campsgeneral obligation bonds and revenue bonds. Blue text boxes contain staff responses that were updated to reflect changes to gaap and should not be read in conjunction with. Our goal is ultimately to create efficiencies in the marketplace, helping governments improve their disclosure and lowering issuer borrowing costs. Occ asset management update firma annual risk management. In the four years since the office of the comptroller of the currency occ issued bulletin 2029 on managing thirdparty relationships, the bulletins lack of prescriptive instruction left banks and federal savings associations questioning how to best operationalize the occs guidance to maintain compliance and avoid the dreaded mras matters requiring attention, or worse.

While the occ rules and guidance extend beyond municipal debt, we focus our attention on munis. To view rules that apply to underwriters and municipal advisors, click on the msrb rules page in the rules and guidance. The date when the issuer repays the principal, the bonds maturity date, may be years in the future. Oklahoma corporation commission oil and gas conservation division po box 52000 oklahoma city, ok 731522000 405 5212246 or 405 5226196 405 5220854 fax instructions for completing the forms of the oklahoma corporation commission regarding surety requirements revised 382019 disclaimer. Consolidated regulations are still in development there will be opportunities for industry comment. Providers that specialize in municipal bond data might also offer ratings information, usually for a fee. Introduction to municipal bonds state treasurers office. While prior guidance under bulletin 200147 similarly encouraged banks to develop a risk management plan prior to contracting with third parties. Emma website continuing disclosure filing location and public access to information on municipal securities.