Federal Reserve Board: H.2 Release for Week Ending April 8, 2017; H.4.1 Release (Balance Sheet) for Week Ending April 13, 2017; Three “Of Note” Items


Of Note:

(1) The PBS Newshour had a column by Jonathan Morduch and Rachel Schneider of the financial instability in the United States of America.

Morduch and Scheider published a book “The Financial Diaries: How American Families Cope in a World of Uncertainty,” and have a website.

(2) In a blurb by the Reuters, “U.S. job openings rise to seven-month high in February,” There is a questionable quote by Chris Rupkey, an economist with MUFG Union Bank in New York:

Hiring, however, slipped to 5.3 million from 5.4 million in January. The hiring rate dipped to 3.6 percent from 3.7 percent the prior month. “It shows you that there is one of the most gigantic skills mismatches out there across the country that we have ever seen in history.

Perhaps, too, there were a lot of fake job ads, that is job postings that employers did not plan to fill. These type of economists never fail to discourage those out of work. If they were so smart, why did they not predict the economic meltdown in 2008?

The handless facepalm

(3) Washington Post Op-Ed: “Black college graduates are losing wealth. Here’s what can help,” by Ray Boshara (Ray Boshara is the director of the St. Louis Fed’s Center for Household Financial Stability and a senior fellow in the Aspen Institute’s Financial Security Program. The views in the op-ed are his own.)

“Finally, the shared experience of historical and ongoing discrimination remains a significant factor. Here my colleagues William Emmons and Lowell Ricketts challenge the standard but debatable “post-racial” economic model, under which the racial wealth gap exists because millions of white families made good financial choices while millions of similarly situated black families did not. But the black-white wealth gap is too large and persistent for equal opportunity and freedom of choice to be plausible.”


The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending April 8, 2017, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Bank Holding Companies People’s United Financial, Inc., Bridgeport, Connecticut — commenter’s request for reconsideration of the Board’s approval of the application by People’s United Financial to acquire Suffolk Bancorp, Riverhead, New York, and thereby indirectly acquire The Suffolk County National Bank of Riverhead.

-Denied, April 6, 2017

 

United Bankshares, Inc., Charleston, West Virginia, and UBV Holding Company, LLC, Fairfax, Virginia — to acquire Cardinal Financial Corporation, McLean, and thereby indirectly acquire Cardinal Bank; and for United Bank, Fairfax, to merge with Cardinal Bank, McLean, and thereby establish branches.

-Approved, April 6, 2017

 

Forms Forms — initial Board review to extend without revision the Annual Daylight Overdraft Capital Report for U.S. Branches and Agencies of Foreign Banks (FR 2225).

-Proposed, April 3, 2017

 

Forms — final Board review to extend without revision the Registration of Mortgage Loan Originators (CFPB Reg G).

-Approved, April 5, 2017

 

Forms — initial Board review to extend with revision the reports for the Survey of Terms of Lending (to be renamed the Survey of Small Business and Farm Lending) (FR 2028B, FR 2028D, and FR 2028S).

-Proposed, April 6, 2017

 

Personnel Division of Information Technology — appointment of Raymond Romero, Lisa Bell, and Kofi Sapong as deputy directors.

-Announced, April 4, 2017

 

Regulations and Policies Office of Minority and Women Inclusion — 2016 annual report to Congress, in accordance with the Dodd-Frank Act.

-Announced, April 6, 2017

 

[Note: See blog post on this report.]

 

Enforcement Devon Bancorp, Inc., Chicago, Illinois — written agreement dated March 13, 2013, terminated April 4, 2017.

-Announced, April 6, 2017

 

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for April 13, 2017, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of April 5, 2017):  $4,530,700 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)

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Federal Reserve Board: H.2 Release for Week Ending April 1, 2017; H.4.1 Release (Balance Sheet) for Week Ending April 6, 2017; Two “Of Note” Items


Of Note:

Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, who was going to retire in October 2017, resigned April 3, 2017 as a result of admitting that he confirmed confidential Federal Open Market Committee (FOMC) information to a Medley Global Advisors employee.

Additionally, Lacker was also in the laughter-filled FOMC meeting when the discussion involved talk of the unemployed people of the United States of America.

The blog posted an article on 2017 Report to the Congress on the Office of Minority and Women Inclusion.

Summary:  Long report, short on actual disclosure at what the Board is doing.


The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending April 1, 2017, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Forms Forms — initial Board review to extend without revision the Recordkeeping and Disclosure Requirements Associated with Regulation R (FR 4025).

-Proposed, March 27, 2017

Enforcement HCSB Financial Corporation, Loris, South Carolina — written agreement issued May 9, 2011, terminated March 21, 2017.

-Announced, March 23, 2017

Santander Holdings USA, Inc., Boston, Massachusetts; and Santander Consumer USA Inc., Dallas, Texas — written agreement with the Federal Reserve Bank of Boston.

-Announced, March 23, 2017

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for April 6, 2017, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of April 5, 2017):  $4,520,794 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)

Federal Reserve Board: Board Issued 2017 Office of Minority and Women Inclusion Report. Slightly More Clarifying Information Included; Potential Improvement Obscured by Lack of Explanation

In March 2017, the Federal Reserve Board (Board) posted the 2017 version of its Office of Minority and Women Inclusion (OMWI). As discussed previously in this blog, there had been some attention in inclusion issues by the Congress and the Board’s Office of Inspector General (IG). The blog had covered these developments, and also a former long-running case (not mentioned by the OMWI report), Artis v. Greenspan Bernanke Yellen.

Overall, with this report, the reader is made to feel skeptical of all Board activities, even if true progress is being made. More explanation of the programs being performed with the money of United States citizens, and the elimination of obscurity,  is expected and required.


Federal Reserve Board, Office of Minority and Women Inclusion,
Reports to Congress

(Preface language for report submitted in 2015.) “Pursuant to section 342(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Office of Diversity and Inclusion (ODI) of the Board of Governors of the Federal Reserve System must submit an annual report to the Congress outlining the activities, successes, and challenges of the office. This is the office’s report for calendar year 2014. Sheila Clark serves as the director of ODI.”

Year Link
2012 http://www.federalreserve.gov/publications/minority-women-inclusion/2012-omwi-preface.htm
2013 http://www.federalreserve.gov/publications/minority-women-inclusion/2013-omwi-preface.htm
2014 http://www.federalreserve.gov/publications/minority-women-inclusion/2014-omwi-preface.htm
2015 http://www.federalreserve.gov/publications/minority-women-inclusion/2015-omwi-preface.htm
2016 http://www.federalreserve.gov/publications/minority-women-inclusion/files/omwi-report-20160331.pdf
2017 https://www.federalreserve.gov/publications/files/omwi-report-20170331.pdf

2014-03-04-auerbach
Sheila Clark’s letter to the EEOC (printed in the Auerbach book, page 123).

In reading the 2017 OMWI report, the report has essentially the same content and structure as in 2016; however, there were some additions. The additions are concerning as they allow worrying questions about the Board’s seriousness to this important issue, given its history in this area.

  • The creation of a Diversity and Inclusion Strategic Plan. (The document seems like a condensed OMWI Report. The issue is the obscurity of Board actions, which is worrisome and makes an observer doubt the organization’s sincerity in improving its failings.)
  • Divisions provide the Board’s Office of Diversity and Inclusion with periodic reports through a Diversity and Inclusion Scorecard. (Again, a description of this scorecard is not in the report, leading to concern about sincerity.)
  • The positions filled in 2015 and 2016 evidence a somewhat similar rate of new hires, 17.1 percent and 16.2 percent, respectively. (See chart below.) The numbers suggest somewhat consistent turnover, leading to the possibility of the existence of a “rank-and-yank” system.
  • The addition of courses to its core professional development curriculum–
    • “Unconscious Bias”
    • “Generational Differences”
    • “Inclusive Leadership.”

(It is unclear whether these courses are merely offered or are required for employees to attend. And, what will be ODI’s oversight responsibility to make sure things stay on track or that the courses prove effective? Again, there is nothing mentioned in the report.)

  • In 2016, the Board created targeted strategies to address low participation of African Americans and Hispanics in research positions. (Unclear what these strategies are.)
  • In April 2016, there was a creation of a Diversity and Economic Inclusion Initiative and a creation of a workgroup, of which the OMWI Director is a member. (The report did not provide any description of these programs.)
Board Hiring and Promotions, 2015 and 2016
2015 2016
Positions filled 576 576
Interns 118 127
Positions filled w/ counting interns 458 449
Total number of Board employees 2673 2766
Percentage (new non-intern hires over total number of employees) 17.1% 16.2%

Given the issues presented by the IG previously and with the long running time of the now-ended Artis v. Greenspan Bernanke Yellen case, the Board’s activities with regard to diversity and inclusion continues to remain an issue of moderate to grave concern until demonstrable, sustained and consistent improvement is shown. Meetings, scorecards, and reports are a start, but insufficient compared to firm results.

In addition, the Board’s use of rank and yank undermines and destroys all efforts described in this post. The fourth full paragraph, left column on page 7 was used in previous years. [Note: The blog had identified that rank and yank is potentially being used at the Board.]

rank_yank
Artist: Michael Sloan

In all the tables in the “Equal Employment of Minorities and Women,” the delineation of non-minority and minority is obscure, specifically the minority category. Such obscurity can hide issues with specific subgroups under the umbrella of minority.

 

Federal Reserve Board: H.2 Release for Week Ending March 25, 2017; H.4.1 Release (Balance Sheet) for Week Ending March 30, 2017; Three “Of Note” Items


Of Note

According to a Reuters report, The Federal Reserve could gradually wind down its balance sheet, N.Y. Fed President, William Dudley said.

(Update on the Fed’s $4.5 billion balance sheet is below.)

Chair Janet Yellen gave a speech entitled “Addressing Workforce Development Challenges in Low-Income Communities,” at “Creating a Just Economy,” the 2017 annual conference of the National Community Reinvestment Coalition, Washington, D.C.

Comment:  The Chair encouraged entrepreneurship in workforce development, but also observed that capital for such small businesses is hard to find because of factors like “[a] lack of a credit history or a poor credit history and limited collateral–for example, home equity.”

The two observations cancel each other out.

[I cannot help being a bit disappointed with the presentation of this unworkable idea–a possible sign of Fed disinterest. If you must encourage Congress to act (with research and practical, real-world findings), do so, Chair Yellen, rather than give out discouragement.]

United States (population: 308,745,538) (2010 Census)

Race

Percentage of population

Number

White

72.4

223,553,265

Black

12.6

38,929,319

Native American

0.7

540,013

Asian

4.8

14,674,252

The Board published its 2017 Report to the Congress on the Office of Minority and Women Inclusion. (Note: This blog will prepare and post a synopsis of this report in the near future.)


The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending March 25, 2017, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Personnel Division of Monetary Affairs — appointment of Laura Lipscomb as assistant director and Edward Nelson as senior adviser.

-Announced, March 21, 2017

 

Management Division — appointment of Winona Varnon as deputy director and David Capp as senior adviser.

-Approved, March 22, 2017

 

Supervision and Regulation Resolution Plans — joint Board and Federal Deposit Insurance Corporation guidance on the resolution planning requirements of the Dodd-Frank Act for four foreign banking organizations (FBOs) (Barclays PLC, Credit Suisse Group AG, Deutsche Bank AG, and UBS AG); and extension to July 1, 2018, of the FBOs’ 2016 and 2017 resolution plan submission dates.

-Approved, March 22, 2017

 

Resolution Plans — joint Board and Federal Deposit Insurance Corporation feedback on the December 2015 resolution plans of 16 domestic banking organizations; and instructions and guidance for the development of the firms’ December 2017 resolution plans, in accordance with the Dodd-Frank Act.

-Approved, March 22, 2017

 

Enforcement HCSB Financial Corporation, Loris, South Carolina — written agreement issued May 9, 2011, terminated March 21, 2017.

-Announced, March 23, 2017

 

Santander Holdings USA, Inc., Boston, Massachusetts; and Santander Consumer USA Inc., Dallas, Texas — written agreement with the Federal Reserve Bank of Boston.

-Announced, March 23, 2017

 

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for March 30, 2017, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of March 29, 2017):  $4,515,652 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)

Federal Reserve Board: H.2 Release for Week Ending October 31, 2015; Rep. Maxine Waters Issues Report on Diversity at Fed. Financial Agencies, Incl. the Board

[Update 8-March-16: Representative Maxine Waters (D-Calif.) and the Tri-Caucus issued a press release (dated 8-Jan-16) discussing the receipt of letters from the federal financial regulatory agencies.]

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending October 31, 2015, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Regulations and Policies Margin and Capital Requirements for Covered Swap Entities — (1) interagency final rule to establish minimum margin and capital requirements for swaps and security-based swaps that are not cleared through a clearinghouse, in accordance with the Dodd-Frank Act, and (2) request for comment on interim final rule to exempt from margin requirements certain non-cleared swaps, such as those used for hedging purposes by commercial end-user counterparties.

-Approved, October 30, 2015

Regulations Q and YY — publication for comment of proposed rule to require U.S. global systemically important banking organizations and the U.S. operations of systemically important foreign banks to meet a new long-term debt requirement and a new total loss-absorbing capacity requirement.

-Approved, October 30, 2015

In addition, on November 5, 2015, the Board permanently barred Mr. Rohit Bansal, former investment banker at Goldman Sachs & Co. from participating in the banking industry.

CN6B2sAUcAQ0nRs

Separately, and also on November 5, 2015, Representative Maxine Waters (D-Calif.), Ranking Member of the House Committee on Financial Services, and the Tri-Caucus, issued a report, “The Dodd-Frank Act Five Years Later: Diversity in the Financial Services Agencies.” In addition, the Committee Democrats issued a letter, with the report, to the agency heads, requesting a response by December 7, 2015.

Notably, but sadly unsurprisingly, the report found that across the federal financial agencies, black/African American employees, overall, received lower performance management scores than white employees (see graphs on page 12 of the report, especially the one for the Board at the bottom of the page).

In addition, the report had specific comments for each agency. I will quote the portion of the report relating to the Board below.

The Federal Reserve Board of Governors (FRB)

Empirically, the FRB workforce was among the most diverse of all the Agencies, both generally and with respect to the senior management. In racial, ethnic, and gender categories, its workforce diversity was found to exceed the CLF. However, the OIG found several areas where the FRB has failed to adhere to statutory requirements.

Procedurally, the FRB did not follow the statutory instructions to name the newly-established diversity office, “the Office of Minority and Women Inclusion,” and instead opted to call it the “Office of Diversity and Inclusion” (“OD&I”).

Substantively, the OIG also recommended that the OD&I Director ensure that No-FEAR Act training is offered on a regular basis, is tailored to the FRB, and includes EEO and diversity and inclusion topics in accordance with the Board’s No-FEAR Act Written Training Plan.[48. Federal Reserve Board, Office of Inspector General, THE BOARD CAN ENHANCE ITS DIVERSITY AND INCLUSION EFFORTS, (2015-MO-B006, Mar. 31, 2015), 54.] Further, the OIG suggested that such trainings be updated as necessary to address any deficiencies identified, and that attendance records be retained.[49. Id.] The OIG noted that the EEOC’s MD-715 “guidance advocates that all employees receive information about the EEO program through training on the EEO process and the protections afforded to employees, related policy statements, and reasonable accommodation procedures.”[50. Id. at 53.] Such diversity and inclusion training is critical to the proper functioning of the human resources office within the agency. Notably, the OIG found that the “data collected [for the OD&I’s MD-715 processes] were not validated against the employee electronic records stored in HR” during the audit period from FY 2011 through FY 2013. The lack of controls for diversity data found at the FRB by the OIG undermines the integrity of the agency’s diversity and inclusion programs, and may in fact be contrary to required EEOC reporting regulations.

Ultimately, the FRB’s implementation of the Section 342 requirements suggests to the Committee staff a tendency toward maintaining the status-quo with respect to workforce diversity efforts. “Although the FRB established the OD&I to include an OMWI function in response to the Dodd-Frank Act requirements, according to the OD&I official, the OD&I has not significantly modified its approach because these activities were already being covered prior to the enactment of the Dodd-Frank Act.”[51. Id. at 55.] Also, like several other agencies, as of the date of the OIG’s report, the OD&I had not finalized a formal set of diversity and inclusion standards, as required by Section 342.

[Author’s note: This blog covered some parts of these audit reports from the Inspectors General, especially that for the Board.]

Federal Financial Agency Report Number Internet Link Comment
Consumer Financial Protection Bureau Audit report 2015-MO-C-002 http://oig.federalreserve.gov/reports/cfpb-diversity-inclusion-mar2015.pdf American Banker article about racial disparities of CFPB staff evaluations.
Department of the Treasury, Office of the Comptroller of the Currency OIG-15-017 http://www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/OIG-15-017.pdf
Federal Deposit Insurance Corporation Eval-15-001 http://www.fdicoig.gov/reports15/15-001EV.pdf
Federal Housing Finance Agency EVL-2015-003 http://fhfaoig.gov/Content/Files/EVL-2015-003.pdf
Federal Reserve Board Audit report 2015-MO-B-006 http://oig.federalreserve.gov/reports/board-diversity-inclusion-mar2015.pdf What is left out of the report is significant: Artis v. Bernanke (now Yellen). Also 12 U.S.C. 244 needs Congressional attention to ensure that Title 5 of the U.S. Code applies to the Board; the Board’s record-keeping on, and reporting of, its internal management is lax.
National Credit Union Administration OIG-14-09 http://www.ncua.gov/about/Leadership/CO/OIG/Documents/OIG201409EqualOpportunityDiversity.pdf Click for blog post on this report
Securities and Exchange Commission 528 http://www.sec.gov/oig/reportspubs/528.pdf Report is thorough, thoughtful, and well done.