Statement of Regulatory Priorities

The primary missions of the Department of the Treasury are:

  • To promote prosperous and stable American and world economies, including promoting domestic economic growth and maintaining our Nation's leadership in global economic issues, supervising national banks and thrift institutions, and helping to bring residents of distressed communities into the economic mainstream.

  • To manage the Government's finances by protecting the revenue and collecting the correct amount of revenue under the Internal Revenue Code, overseeing customs revenue policies, financing the Federal Government and managing its fiscal operations, and producing our Nation's coins and currency.

  • To safeguard the U.S. and international financial systems from those who would use these systems for illegal purposes or to compromise U.S. national security interests, while keeping them free and open to legitimate users.

    Consistent with these missions, most regulations of the Department and its constituent bureaus are promulgated to interpret and implement the laws as enacted by Congress and signed by the President. It is the policy of the Department to comply with applicable requirements to issue a notice of proposed rulemaking and carefully consider public comments before adopting a final rule. Also, the Department invites interested parties to submit views on rulemaking projects while a proposed rule is being developed.

    To the extent permitted by law, it is the policy of the Department to adhere to the regulatory philosophy and principles set forth in Executive Orders 12866, 13563, 13609, and 13771 and to develop regulations that maximize aggregate net benefits to society while minimizing the economic and paperwork burdens imposed on persons and businesses subject to those regulations.

    Treasury is still in the process of evaluating its deregulatory and regulatory actions for FY 2018. At this time, Treasury anticipates possibly up to 25 deregulatory actions, and 2 regulatory actions. Further information about these actions can be found in this Regulatory Plan and Unified Agenda.

    I. Alcohol and Tobacco Tax and Trade Bureau

    The Alcohol and Tobacco Tax and Trade Bureau (TTB) issues regulations to implement and enforce Federal laws relating to alcohol, tobacco, firearms, and ammunition excise taxes and certain non-tax laws relating to alcohol. TTB's mission and regulations are designed to:

    1) Collect the taxes on alcohol, tobacco products, firearms, and ammunition;

    2) Protect the consumer by ensuring the integrity of alcohol products; and

    3) Prevent unfair and unlawful market activity for alcohol and tobacco products.

    As part of TTB's ongoing efforts to modernize its regulations, TTB continuously seeks to identify changes in the industries it regulates, as well as new technologies available in compliance enforcement. TTB's modernization efforts focus on removing outdated requirements and revising regulations to facilitate industry growth and reduce burdens where possible. At the same time, TTB must ensure that it collects the revenue due and protects consumers from deceptive labeling and advertising of alcohol beverages.

    In FY 2018, TTB will continue its multi-year Regulations Modernization effort by prioritizing projects that reduce regulatory burdens, provide greater industry flexibility, and streamline the regulatory system, consistent with Executive Orders 13771 and 13777. TTB rulemaking priorities also include proposing regulatory changes in response to petitions from industry members and other interested parties, and requesting comments on ways TTB may further reduce burden and support a level playing field for the regulated industry. Specifically, during the fiscal year, TTB plans to publish a deregulatory final rule, following a notice published in FY 2017, which reduces the number of reports submitted by certain regulated industry members. TTB also plans to publish for public comment proposed deregulatory changes to reduce the information it requires in connection with permit applications and to expand industry flexibility with regard to alcohol beverage container sizes (standards of fill). Some changes will require amending regulations and others will require only changes to the information collected on forms. Priority projects also include continuing the rulemaking issued in FY 2017 in response to industry member petitions to authorize new wine treating materials and processes, new grape varietal names for use on labels of wine, and new American Viticultural Areas (AVAs). None of the TTB rulemaking documents issued in FY 2018 are expected to be "regulatory actions" as described in Executive Order 13771.

    This fiscal year TTB plans to give priority to the following deregulatory and regulatory measures:

  • Proposal to Streamline and Modernize Permit Application Process (RINs: 1513-AC46, 1513-AC47, 1513-AC48, and 1513-AC49, Modernization of Permit and Registration Application Requirements for Distilled Spirits Plants, Permit Applications for Wineries, Qualification Requirements for Brewers, and Permit Application Requirements for Manufacturers of Tobacco Products or Processed Tobacco, respectively). (Deregulatory)

    Consistent with EO 13771 and 13777, in FY 2017, TTB engaged in a review of its regulations to identify any regulatory requirements that could potentially be eliminated, modified, or streamlined in order to reduce burdens on industry. Through four notices of proposed rulemaking, TTB intends to propose eliminating or streamlining various information requirements for application or qualification of distilled spirits plants, wineries, breweries, and manufacturers of tobacco products or processed tobacco. In addition, TTB continues to review comments it receives from the interested public, including industry members, through the Treasury Department's Request for Information on deregulatory ideas (Docket No. TREAS-DO-2017-0012, published in the Federal Register on June 14, 2017), and TTB intends to address those related to application and qualification processes through these notices.

  • Proposed Revisions to the Regulations to Provide Greater Flexibility in the Use of Wine and Distilled Spirits Containers (RIN: 1513-AB56, Standards of Fill for Wine, and RIN: 1513-AC45, Standards of Fill for Distilled Spirits). (Deregulatory)

    In these two notices, TTB will address petitions requesting that it amend regulations governing wine and distilled spirits containers to provide for additional authorized "standards of fill." (The term "standard of fill" generally relates to the size of containers, although the specific regulatory meaning is the authorized amount of liquid in the container, rather than the size or capacity of the container itself.) Rather than proposing the addition of new authorized sizes, however, TTB will propose to eliminate all but minimum and maximum standards of fill for distilled spirits containers, and all but a minimum standard of fill for wine containers. If implemented, this proposal would provide industry members greater flexibility in producing and sourcing containers and consumers broader purchasing options. This deregulatory action would also eliminate restrictions that inhibit competition and the movement of goods in domestic and international commerce, in addition to providing new opportunities for meeting consumer demand.

  • Revisions to the Regulations to Reduce Report Filing Frequency (RIN: 1513-AC30, Changes to Certain Alcohol-Related Regulations Governing Bond Requirements and Tax Return Filing Periods). (Deregulatory)

    On December 18, 2015, President Obama signed into law the Protecting Americans from Tax Hikes Act (PATH Act), which is Division Q of the Consolidated Appropriations Act, 2016. The PATH Act contains changes to certain statutory provisions that TTB administers in the Internal Revenue Code regarding excise tax return due dates and bond requirements for certain smaller excise taxpayers. These amendments took effect beginning in January 2017, and TTB published a temporary rule amending its regulations to implement these provisions. At the same time, TTB published in the Federal Register (82 FR 780) a notice of proposed rulemaking requesting comments on the amendments made in the temporary rule and proposing further amendments to the regulations governing reporting requirements for distilled spirits plants (DSPs) and breweries to reduce the regulatory burden on industry members who pay taxes and file tax returns annually or quarterly. Under the proposal, those industry members would also submit reports annually or quarterly, aligned with their filing of the tax return, rather than monthly as generally provided under current regulations. To be eligible for annual or quarterly filing, the DSP or brewery must reasonably expect to be liable for not more than $1,000 in excise taxes (in the case of annual filing) or $50,000 in excise taxes (in the case of quarterly filing) for the calendar year and must have been liable for not more than these respective amounts in the preceding calendar year. The reduced reporting frequency will reduce regulatory burdens on these smaller industry members.

  • Proposal to Modernize the Alcohol Beverage Labeling and Advertising Requirements (RIN: 1513-AB54). (Deregulatory)

    The Federal Alcohol Administration Act requires that alcohol beverages introduced in interstate commerce have a label issued and approved under regulations prescribed by the Secretary of the Treasury. In accordance with the mandate of Executive Order 13563 of January 18, 2011, regarding improving regulation and regulatory review, TTB conducted an analysis of its alcohol beverage labeling regulations to identify any that might be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with that analysis. These regulations were also reviewed to assess their applicability to the modern alcohol beverage marketplace. As a result of this review, and further review in FY 2017 consistent with Executive Orders 13771 and 13777, regarding reducing regulatory burdens, in FY 2018, TTB plans to propose revisions to consolidate and modernize the regulations concerning the labeling requirements for wine, distilled spirits, and malt beverages. TTB anticipates that these regulatory changes will assist industry in voluntary compliance, decrease industry burden, and result in the regulated industries being able to bring products to market without undue delay. TTB also anticipates that this notice for public comment will give industry members another opportunity to provide comments and suggestions on any additional deregulatory measures in these areas.

    In FY 2018, TTB intends to bring to completion a number of rulemaking projects published as notices of proposed rulemaking in FY 2017 in response to industry member petitions to amend the TTB regulations:

  • Proposal to Amend the Regulations to Authorize the Use of Additional Wine Treating Materials (RIN: 1513-AB61). (Not significant)

    In FY 2017, TTB proposed to amend its regulations pertaining to the production of wine to authorize additional treatments that may be applied to wine and to juice from which wine is made. These proposed amendments were made in response to requests from wine industry members to authorize certain wine treating materials and processes not currently authorized by TTB regulations. Although TTB may administratively approve such treatments, rulemaking may serve several purposes, including acceptance of exported wine made using those treatments in foreign markets. Administrative approval of a wine treatment does not guarantee acceptance in foreign markets of any wine so treated, and conducting rulemaking and adding wine treating materials and processes to TTB regulations through notice and comment rulemaking results in acceptance of the treated wines in certain foreign jurisdictions. TTB intends to reopen the comment period for the FY 2017 notice, as requested by industry members and, after consideration of the comments, issue a final rule.

  • Proposal to Amend the Regulations to Add New Grape Variety Names for American Wines (RIN: 1513-AC24). (Not significant)

    In FY 2017, TTB proposed to amend its wine labeling regulations by adding a number of new names to the list of grape variety names approved for use in designating American wines. The proposed deregulatory amendments would allow wine bottlers to use these additional approved grape variety names on wine labels and in wine advertisements. TTB intends to reopen the comment period for the FY 2017 notice, as requested by industry members and, after consideration of the comments, issue a final rule.

    II. Customs Revenue Functions

    The Homeland Security Act of 2002 (the Act) provides that, although many functions of the former United States Customs Service were transferred to the Department of Homeland Security, the Secretary of the Treasury retains sole legal authority over customs revenue functions. The Act also authorizes the Secretary of the Treasury to delegate any of the retained authority over customs revenue functions to the Secretary of Homeland Security. By Treasury Department Order No. 100-16, the Secretary of the Treasury delegated to the Secretary of Homeland Security authority to prescribe regulations pertaining to the customs revenue functions subject to certain exceptions, but further provided that the Secretary of the Treasury retained the sole authority to approve such regulations.

    During fiscal year 2018, CBP and Treasury plan to give priority to regulatory matters involving the customs revenue functions which streamline CBP procedures, protect the public, or are required by either statute or Executive Order. The examples of these efforts described below are exempt from Executive Order 13771 as they are non-significant rules as defined by Executive Order. Examples of these efforts are described below.

  • Investigation of Claims of Evasion of Antidumping and Countervailing Duties. (Not significant)

    Treasury and CBP plan to finalize interim regulations (81 FR 56477) which amended CBP regulations implementing section 421 of the Trade Facilitation and Trade Enforcement Act of 2015, which set forth procedures to investigate claims of evasion of antidumping and countervailing duty orders.

  • Drawback. (Economically significant; not yet determined)

    Treasury and CBP plan to amend CBP regulations to implement changes to the drawback law contained in section 906 of the Trade Facilitation and Trade Enforcement Act of 2015. These proposed changes to the regulations will liberalize the standard for substituting merchandise, simplify recordkeeping requirements, extend and standardize timelines for filing drawback claims, and require the electronic filing of drawback claims.

  • Enforcement of Copyrights and the Digital Millennium Copyright Act. (Significance not yet determined)

    Treasury and CBP plan to propose amendments to the CBP regulations pertaining to importations of merchandise that violate or are suspected of violating the copyright laws, including the Digital Millennium Copyright Act (DMCA), in accordance with Title III of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) and Executive Order 13785 "Establishing Enhanced Collection and Enforcement of Anti-dumping and Countervailing Duties and Violations of Trade and Customs Laws." The proposed amendments are intended to enhance CBP's enforcement efforts against increasingly sophisticated piratical goods, clarify the definition of piracy, simplify the detention process relative to goods suspected of violating the copyright laws, and prescribe new regulations enforcing the DMCA.

  • Inter-Partes Proceedings Concerning Exclusion Orders Based on Unfair Practices in Import Trade. (Deregulatory)

    Treasury and CBP plans to publish a proposal to amend its regulations with respect to administrative rulings related to the importation of articles in light of exclusion orders issued by the United States International Trade Commission ("Commission") under section 337 of the Tariff Act of 1930, as amended. The proposed amendments seek to promote the speed, accuracy, and transparency of such rulings through the creation of an inter partes proceeding to replace the current ex parte process.

    III. Financial Crimes Enforcement Network

    As administrator of the Bank Secrecy Act (BSA), the Financial Crimes Enforcement Network (FinCEN) is responsible for developing and implementing regulations that are the core of the Department's anti-money laundering (AML) and counter-terrorism financing efforts. FinCEN's responsibilities and objectives are linked to, and flow from, that role. In fulfilling this role, FinCEN seeks to enhance U.S. national security by making the financial system increasingly resistant to abuse by money launderers, terrorists and their financial supporters, and other perpetrators of crime.

    The Secretary of the Treasury, through FinCEN, is authorized by the BSA to issue regulations requiring financial institutions to file reports and keep records that are determined to have a high degree of usefulness in criminal, tax, or regulatory matters or in the conduct of intelligence or counter-intelligence activities to protect against international terrorism. The BSA also authorizes requiring designated financial institutions to establish AML programs and compliance procedures. To implement and realize its mission, FinCEN has established regulatory objectives and priorities to safeguard the financial system from the abuses of financial crime, including terrorist financing, money laundering, and other illicit activity.

    These objectives and priorities include: (1) issuing, interpreting, and enforcing compliance with regulations implementing the BSA; (2) supporting, working with, and as appropriate, overseeing compliance examination functions delegated to other Federal regulators; (3) managing the collection, processing, storage, and dissemination of data related to the BSA; (4) maintaining a government-wide access service to that same data and for network users with overlapping interests; (5) conducting analysis in support of policymakers, law enforcement, regulatory and intelligence agencies, and the financial sector; and (6) coordinating with and collaborating on anti-terrorism and AML initiatives with domestic law enforcement and intelligence agencies, as well as foreign financial intelligence units.

    FinCEN's regulatory priorities for fiscal year 2018, include:

  • Technical Amendment to the Customer Due Diligence Requirements. (Not significant)

    On May 11, 2016, FinCEN issued Final Rules under the BSA to clarify and strengthen customer due diligence requirements for banks, brokers or dealers in securities, mutual funds, and futures commission merchants and introducing brokers in commodities. The rules contain explicit customer due diligence requirements and include a new regulatory requirement to identify beneficial owners of legal entity customers, subject to certain exemptions. The section of the rule detailing the training requirements for mutual funds was inadvertently omitted from the final rule. This technical amendment will rectify the inadvertent omission and will update several references and terminology.

  • Report of Foreign Bank and Financial Accounts. (Deregulatory)

    On March 10, 2016, FinCEN issued a Notice of Proposed Rulemaking to address requests from filers for clarification of certain requirements regarding the Report of Foreign Bank and Financial Accounts, including requirements with respect to employees, who have signature authority over, but no financial interest in, the foreign financial accounts of their employers.

  • Amendments to the Definitions of Broker or Dealer in Securities. (Regulatory)

    On April 4, 2016, FinCEN issued a Notice of Proposed Rulemaking proposing amendments to the regulatory definitions of broker or dealer in securities under the BSA's regulations. The proposed changes would expand the current scope of the definitions to include funding portals and would require them to implement policies and procedures reasonably designed to achieve compliance with all of the BSA's requirements that are currently applicable to brokers or dealers in securities.

  • Anti-Money Laundering Program Requirements for Banks Lacking a Federal Functional Regulator. (Regulatory)

    On August 25, 2016, FinCEN issued a Notice of Proposed Rulemaking to remove the AML program exemption for banks that lack a Federal functional regulator, including, but not limited to, private banks, non-federally insured credit unions, and certain trust companies. The proposed rule would prescribe minimum standards for AML programs and would ensure that all banks, regardless of whether they are subject to Federal regulation and oversight, are required to establish and implement AML programs.

  • Anti-Money Laundering Program and SAR Requirements for Investment Advisers. (Regulatory)

    On August 25, 2015, FinCEN published in the Federal Register a Notice of Proposed Rulemaking to solicit public comment on proposed rules under the BSA that would prescribe minimum standards for anti-money laundering programs to be established by certain investment advisers and to require such investment advisers to report suspicious activity to FinCEN. FinCEN is considering those comments and preparing a Final Rule.

  • Registration Requirements of Money Services Businesses. (Regulatory)

    FinCEN is considering issuing a Notice of Proposed Rulemaking amending the registration requirements for money services businesses.

  • Changes to the Travel and Recordkeeping Requirements for Funds Transfers and Transmittals of Funds. (Regulatory)

    FinCEN is considering regulatory changes that would require financial institutions to collect and maintain more information regarding funds transfers and transmittals of funds, as well as lower the existing recordkeeping threshold.

  • Changes to the Currency and Monetary Instrument Report (CMIR) Reporting Requirements. (Significance not yet determined)

    FinCEN will research, obtain, and analyze relevant data to validate the need for changes aimed at updating and improving the CMIR and ancillary reporting requirements. Possible areas of study to be examined could include current trends in cash transportation across international borders, transparency levels of physical transportation of currency, the feasibility of harmonizing data fields with bordering countries, and information derived from FinCEN's experience with Geographic Targeting Orders.

  • Other Requirements.

    FinCEN also will continue to issue proposed and final rules pursuant to section 311 of the USA PATRIOT Act, as appropriate. Finally, FinCEN expects that it may propose various technical and other regulatory amendments in conjunction with ongoing efforts with respect to a comprehensive review of existing regulations to enhance regulatory efficiency.

    IV. Bureau of the Fiscal Service

    The Bureau of the Fiscal Service (Fiscal Service) administers regulations pertaining to the Government's financial activities, including: (1) implementing Treasury's borrowing authority, including regulating the sale and issue of Treasury securities; (2) administering Government revenue and debt collection; (3) administering Government wide accounting programs; (4) managing certain Federal investments; (5) disbursing the majority of Government electronic and check payments; (6) assisting Federal agencies in reducing the number of improper payments; and (7) providing administrative and operational support to Federal agencies through franchise shared services.

    During fiscal year 2018, the Fiscal Service will accord priority to the following regulatory projects:

  • Offset of Tax Refund Payments to Collect Past-Due Support. (Not significant)

    On December 30, 2015, the Fiscal Service published an Interim Final Rule, with request for comments, limiting the time period during which Treasury may recover certain tax refund offset collections from States to six months from the date of such collection. Previously, there was no time limit to recoup offset amounts that were collected from tax refunds to which the debtor taxpayer was not entitled. The Fiscal Service anticipates publishing a Final Rule for this time limit for such recoupments in fiscal year 2018.

  • Management of Federal Agency Receipts, Disbursements and Operation of the Cash Management Improvements Fund. (Significance not yet determined)

    The Fiscal Service plans to publish a notice of proposed rulemaking to amend 31 CFR Part 206 governing the collection of public money, along with a request for public comments. This notice will propose implementing statutory authority which mandates that some or all nontax payments made to the Government, and accompanying remittance information, be submitted electronically. Receipt of such items electronically offers significant efficiencies and cost-savings to the government, compared to the receipt of cash, check or money order payments.

  • Payments by Banks and Other Financial Institutions of United States Savings Bonds and United States Savings Notes (Freedom Shares). (Not significant)

    The Fiscal Service plans to amend the savings bond payment regulations in 31 CFR Part 321 to formally add an option for paying agent financial institutions to digitally stamp payment information on paid bond images, instead of physically stamping the information on the original paid bonds. This change will not impose any new burden on banks or customers, and will align the regulation with current practice that has been implemented under waiver authority. The Fiscal Service also plans to amend the paper savings bond regulations to eliminate the current conversion and reissue transactions, which are expensive to process.

    V. Office of the Comptroller of the Currency

    The Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises all national banks and Federal savings associations (FSAs). The agency also supervises the Federal branches and agencies of foreign banks. The OCC's mission is to ensure that national banks and FSAs operate in a safe and sound manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations.

    Regulatory priorities for fiscal year 2018 include the following regulatory actions:

  • Regulatory Capital Rules: Retention of Existing Transition Levels for Certain Regulatory Capital Adjustments and Deductions (12 CFR part 3).

    The banking agencies[1] issued a final rule that would extend the current treatment under the regulatory capital rules (capital rules) for certain regulatory capital deductions and risk weights and certain minority interest requirements as they apply to banking organizations that are not subject to the advanced approaches capital rules (non-advanced approaches banking organizations). Specifically, for non-advanced approaches banking organizations, the agencies extended the current regulatory capital treatment of: mortgage servicing assets; deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks; significant investments in the capital of unconsolidated financial institutions in the form of common stock; non-significant investments in the capital of unconsolidated financial institutions; significant investments in the capital of unconsolidated financial institutions that are not in the form of common stock; and common equity tier 1 minority interest, tier 1 minority interest, and total capital minority interest exceeding the capital rules' minority interest limitations. The proposed rule was published on August 25, 2017, 82 FR 40495. The final rule was issued on November 21, 2017, 82 FR 55309.

  • Appraisal Threshold (12 CFR part 34).

    The banking agencies plan to issue a final rule addressing comments received through the process of regulatory review required by the Economic Growth and Regulatory Paperwork Reduction Act of 1996 Amendments (EGRPRA), concerning the regulatory burden associated with appraisals. The rulemaking would expand the current exemption in the interagency rules for appraisals of commercial properties by increasing the appraisal threshold in 12 CFR part 34 (and in the corresponding regulations of the FDIC and FRB), which is currently set at $250,000. The proposed rule was published on July 31, 2017, 82 FR 35478.

  • Securities Transaction Settlement Cycle (12 CFR parts 12 and 151).

    The OCC and FDIC plan to issue a final rule to shorten the standard settlement cycle for certain securities purchased or sold by national banks, federal savings associations, and FDIC-supervised institutions. The proposed rule was published on September 11, 2017, 82 FR 42619.

  • Loans in Areas Having Special Flood Hazards-Private Flood Insurance (12 CFR part 22).

    The banking agencies, the Farm Credit Administration (FCA), and the National Credit Union Administration (NCUA) plan to issue a final rule to amend their regulations regarding loans in areas having special flood hazards to implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012. The proposed rule was published on November 7, 2016, 81 FR 78063.

  • Enhanced Cyber Risk Management Standards (12 CFR part 30).

    The banking agencies plan to issue a notice of proposed rulemaking setting forth enhanced cyber risk management standards for the largest and most interconnected financial organizations in the United States. The advance notice of proposed rulemaking was published on October 26, 2016, 81 FR 74315.

  • Incentive-Based Compensation Arrangements (12 CFR part 42).

    Section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, July 21, 2010) (Dodd-Frank Act) requires the banking agencies, NCUA, Securities and Exchange Commission (SEC), and the Federal Housing Finance Agency (FHFA) to jointly prescribe regulations or guidance prohibiting any type of incentive-based payment arrangement, or any feature of any such arrangement, that the regulators determine encourages inappropriate risks by covered financial institutions by providing an executive officer, employee, director, or principal shareholder with excessive compensation, fees, or benefits, or that could lead to material financial loss to the covered financial institution. The Dodd-Frank Act also requires such agencies jointly to prescribe regulations or guidelines requiring each covered financial institution to disclose to its regulator the structure of all incentive-based compensation arrangements offered by such institution sufficient to determine whether the compensation structure provides any executive officer, employee, director, or principal shareholder with excessive compensation or could lead to material financial loss to the institution. The proposed rule was published on June 10, 2016, 81 FR 37669.

  • Mandatory Contractual Stay Requirements for Qualified Financial Contracts (12 CFR parts 3, 47, and 50).

    The OCC plans to issue a final rule that mitigates potential negative impacts that could result from the disorderly resolution of certain systemically important national banks, Federal savings associations, Federal branches and agencies, and the subsidiaries of these entities. A covered bank would be required to ensure that a covered qualified financial contract (i) contains a contractual stay-and-transfer provision analogous to the statutory stay-and-transfer provisions imposed under title II and the Federal Deposit Insurance Act and (ii) limits the exercise of default rights based on the insolvency of an affiliate of the covered bank. The proposed rule was published on August 19, 2016, 81 FR 55381.

  • Net Stable Funding Ratio (12 CFR part 50).

    The banking agencies plan to issue a final rule to implement the Basel net stable funding ratio standards. These standards would require large, internationally active banking organizations to maintain sufficient stable funding to support their assets, generally over a one-year time horizon. The proposed rule was published on June 1, 2016, 81 FR 35123.

  • Qualifying Master Netting Agreement (12 CFR part 3).

    The OCC plans to finalize its interim final rule to amend the definition of "qualifying master netting agreement" under its regulatory capital and liquidity coverage ratio rule, as well as under its lending limits rule applicable to national banks and FSAs. The interim final rule was published on December 30, 2014, 79 FR 78287.

  • Community Reinvestment Act Regulations (12 CFR parts 25 and 195).

    The banking agencies issued a final rule to amend the home mortgage loan and consumer loan definitions in their regulations implementing the Community Reinvestment Act (CRA) to conform to recent changes made by the CFPB to Regulation C, which implements the Home Mortgage Disclosure Act (HMDA) and make some additional technical revisions. The proposed rule was published on September 20, 2017, 82 FR 43910. The final rule was issued on November 24, 2017, 82 FR 55734.

  • Proprietary Trading and Certain Interests in and Relationships with Covered Funds (12 CFR part 44).

    In light of the 2017 Treasury Report, the OCC expects to issue a proposed rule to amend certain provisions of part 44.

  • Management Official Interlocks Asset Thresholds (12 CFR part 26).

    The OCC plans to issue a direct final rule, through joint action with the FRB and FDIC that would amend agency regulations interpreting the Depository Institution Management Interlocks Act (DIMIA) to increase the asset thresholds based on inflation or market changes. The current asset thresholds are set at $2.5 billion and $1.5 billion.

  • Customer Due Diligence (12 CFR part 21).

    The banking agencies plan to issue an interim final rule to clarify the applicability of recent amendments to the Financial Crimes Enforcement Network (FinCEN) customer due diligence rules to the depository institutions under their supervision. FinCEN expanded its customer due diligence requirements for covered financial institutions, including banks, brokers or dealers in securities, mutual funds, and futures commission merchants and introducing brokers in commodities (FinCEN Rule). As part of that rulemaking, FinCEN amended the elements of the anti-money laundering program financial institutions must implement and maintain in order satisfy program requirements under 31 U.S.C. 5318(h)(1) and the agencies are amending their anti-money laundering program rules to reference requirements in the FinCEN Rule.

  • Capital Simplification (12 CFR part 3).

    The banking agencies issued a proposed rule to simplify the generally applicable capital framework with the goal of meaningfully reducing regulatory burden on community banking organizations while at the same time maintaining safety and soundness and the quality and quantity of regulatory capital in the banking system. The proposed rule was issued on October 27, 2017, 82 FR 49984.

  • Automated Valuation Models (parts 34 and 164).

    The banking agencies, NCUA, FHFA, and the Consumer Financial Protection Bureau (CFPB), in consultation with the Appraisal Subcommittee (ASC) and the Appraisal Standards Board of the Appraisal Foundation, are required to promulgate regulations addressing quality-control standards required under the statute. Section 1473(q) of the Dodd-Frank Act requires that automated valuation models used to estimate collateral value in connection with mortgage origination and securitization activity, comply with quality-control standards designed to ensure a high level of confidence in the estimates produced by automated valuation models; protect against manipulation of data; seek to avoid conflicts of interest; require random sample testing and reviews; and account for other factors the agencies deem appropriate. The agencies plan to issue a proposed rule to implement the requirement to adopt quality-control standards.

  • Source of Strength (12 CFR part 47).

    The banking agencies plan to issue a proposed rule to implement section 616(d) of the Dodd-Frank Act. Section 616(d) requires that bank holding companies, savings and loan holding companies, and other companies that directly or indirectly control an insured depository institution serve as a source of strength for the insured depository institution. The appropriate federal banking agency for the insured depository institution may require that the company submit a report that would assess the company's ability to comply with the provisions of the statute and its compliance.

  • Employment Contracts (12 CFR part 163).

    The OCC plans to issue a proposed rule to remove the requirement that the board of directors of an FSA approve employment contracts with all employees and limit the approval requirement only to contracts with senior executives.

  • Receiverships for Uninsured Federal Branches and Agencies (12 CFR chapter I).

    The OCC plans to issue an advance notice of proposed rulemaking setting forth key issues to be addressed prior to the development of a framework for receiverships of uninsured federal branches and agencies.

    VI. Internal Revenue Service

    During Fiscal Year 2018, the IRS and Treasury's Office of Tax Policy have the following regulatory priorities. The first priority is to implement, consistent with law, actions recommended in the Second Report pursuant to Executive Order 13789 to eliminate, or in other cases reduce, the burdens imposed on taxpayers by eight regulations that the Treasury has identified for review under Executive Order 13789. These deregulatory actions include:

    1. Withdrawal of proposed regulations under section 2704 regarding restrictions on liquidation of an interest for estate, gift, and generation-skipping transfer taxes. Proposed regulations were published on August 4, 2016.

    2. Withdrawal of proposed regulations under section 103 regarding the definition of political subdivision. Proposed regulations were published on February 23, 2016.

    3. Proposed amendment of regulations under section 7602 regarding the participation of attorneys described in section 6103(n) in a summons interview. Final regulations were published on July 14, 2016.

    4. Proposed removal of temporary regulations under section 707 concerning treatment of liabilities for disguised sale purposes and review of regulations under section 752 concerning liabilities recognized as recourse partnership liabilities. Temporary and proposed regulations were published on October 5, 2016.

    5. Delay and proposed removal of documentation regulations under section 385 and review of other regulations under section 385. Final, temporary, and proposed regulations were published on October 21, 2016.

    6. Proposed modification of regulations under section 367 regarding the treatment of certain transfers of property to foreign corporations. Final regulations were published on December 16, 2016.

    7. Proposed modification of regulations under section 337(d) regarding certain transfers of property to regulated investment companies (RICs) and real estate investment trusts (REITs). Temporary and proposed regulations were published on June 8, 2016.

    8. Proposed modification of regulations under section 987 on income and currency gain or loss with respect to a section 987 qualified business unit. Final regulations were published on December 8, 2016.

    The second priority is, in furtherance of the policies stated in Executive Order 13789, Executive Order 13771, and Executive Order 13777, to undertake a comprehensive review, coordinated by the Treasury Regulatory Reform Task Force, of all tax regulations, regardless of when they were issued. This review will identify tax regulations that are unnecessary, create undue complexity, impose excessive burdens, or fail to provide clarity and useful guidance, and Treasury and the IRS will pursue, consistent with law, reform or revocation of those regulations. Included in the review are longstanding temporary or proposed regulations that have not expired or been finalized. As part of the process coordinated by the Treasury Regulatory Reform Task Force, the IRS Office of Chief Counsel has already identified over 300 regulations for potential revocation. These regulations remain in the Code of Federal Regulations (CFR) but are, to varying degrees, unnecessary, duplicative, or outdated, and force taxpayers to navigate unnecessarily complex or even confusing rules. Treasury and the IRS expect to begin the process of proposing to address these regulations in the fourth quarter of 2017. Treasury and the IRS are also seeking to streamline rules where possible and to repeal or revise regulations that have been superseded by statute or case law.

    The IRS and Treasury are also prioritizing implementation of the President's Executive Order 13813, Promoting Healthcare Choice and Competition Across the United States. The Executive Order, among other things, directs Treasury and the Departments of Labor and Health and Human Services to consider proposing or revising regulations or guidance to expand the availability of short-term, limited-duration insurance and consider proposing or revising regulations or guidance to increase the usability of health reimbursement arrangements.

    An additional priority for the IRS is to publish final regulations under section 1101 of the Bipartisan Budget Act of 2015 (BBA) that are necessary to implement the new centralized partnership audit regime enacted in November 2015. Section 1101(g)(1) of the BBA provides that the new regime is generally effective for partnership tax years beginning after December 31, 2017.

    Finally, Treasury and the IRS anticipate the need to undertake numerous regulatory actions to implement any new legislation enacted in the coming year, including the Administration's current Tax Reform efforts.

    [1] OCC, Board of Governors of the Federal Reserve System (Board), and Federal Deposit Insurance Corporation (FDIC).