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Financial Reform Glossary

ABS

– Asset-backed security.

AML/CFT

– Anti-money laundering and combating the financing of terrorism.

Automatic IRA

– Proposal that employers in business for at least 2 years that have 10 ormore employees would be required to offer an automatic IRA option (with opt-out)under which regular payroll deduction contributions would be made to an IRA. Alow-cost, standard type of default investment or investments would be prescribed by statute.

Basel II

– Basel II Capital Accord. An international bank capital accord issued by theBCBS. Updates the original international bank capital accord (Basel I), which hasbeen in effect since 1988. Basel II seeks to improve the consistency of capitalregulations internationally, make regulatory capital more risk sensitive, and promoteenhanced risk-management practices among large, internationally active bankingorganizations. Basel II is in the process of being implemented in the U.S.

BCBS

– Basel Committee on Banking Supervision. A committee of the BIS. Bills itself as a forum for regular cooperation by central banks on banking supervisory matters.Purpose is to enhance understanding of key supervisory issues and improve thequality of banking supervision worldwide. Exchanges information on nationalsupervisory issues, approaches and techniques, with a view to promoting commonunderstanding. Also promulgates standards, including the Basel I and II CapitalAccords, the Core Principles for Effective Banking Supervision and the Concordaton cross-border banking supervision.

BHC

– Bank holding company. Regulated by the Federal Reserve pursuant to the BHCAct.

BHC Act

– Bank Holding Company Act of 1956.

BIS

– Bank for International Settlements. An international organization that fostersinternational monetary and financial cooperation and serves as a bank for centralbanks. Committees include the BCBS, CGFS and CPSS. Hosts the FSB. Based inBasel, Switzerland.

CCP

– Central counterparty. Proposal to require standardized OTC derivates to clearthrough regulated CCPs.

CDS

– Credit default swap. An OTC derivative.

CEA

– Commodity Exchange Act.

CFMA

– Commodity Futures Modernization Act of 2000. Exempted OTC derivativesfrom regulation by CFTC and SEC.

CFPA

– Consumer Financial Protection Agency. A proposed new regulator withresponsibility for consumer protection in credit, savings and payments markets. Would have authority to promulgate and interpret regulations under consumer

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2financial services and fair lending statutes, including CRA, ECOA, FDCPA,HMDA, HOEPA and TILA, and would administer the SAFE Act.

CFTC

– Commodity Futures Trading Commission.

CGFS

– Committee on the Global Financial System. A committee of the BIS. Purposeis to identify and assess potential sources of stress in global financial markets, tofurther the understanding of the structural underpinnings of financial markets, and topromote improvements to the functioning and stability of these markets. Formerly known as the Euro-currency Standing Committee.

Council

– The FSOC.

CPO

– Commodity Pool Operator. CEA currently requires that funds trading in thefutures markets register as CPOs and file annual financial statements with theCFTC. Over 1,300 CPOs are currently registered with the CFTC.

CPSS

– Committee on Payment and Settlement Systems. A committee of the BIS.Serves as a forum for central banks to monitor and analyze developments in domesticpayment, settlement and clearing systems as well as in cross-border and multicurrency settlement schemes. Through the Task Force on Securities Settlement Systemsestablished with IOSCO, issued the CPSS-IOSCO standards.

CPSS-IOSCO standards

– Two sets of standards issued by the Task Force on SecuritiesSettlement Systems established jointly by the CPSS and the IOSCO:

Recommendations for Securities Settlement Systems

(Nov. 2001) and

Recommendations for Central Counterparties

(Nov. 2004).

CRA

– Community Reinvestment Act of 1977. Act intended to encourage banks to lendmore in low- and moderate-income neighborhoods. Proposal to give CFPA authority over this area of law. The CFPA would maintain a group of examiners specially trained and certified in community development to conduct CRA examinations of larger institutions.

CRAs

– Credit rating agencies.

Credit CARD Act of 2009

– The Credit Card Accountability Responsibility andDisclosure Act of 2009. Signed into law on May 22, 2009.

credit card bank

– A banking institution that primarily issues credit cards. Exemptedfrom definition of “bank” under the BHC Act. Proposal is to regulate credit cardbanks as banks and the companies that own them as BHCs under the BHC Act.

CSEs

– Consolidated supervised entities. Formerly supervised by SEC’s CSE Program.

CSE Program

– The SEC’s program supervising CSEs. Required as part of the GLBAct. Designed for the largest securities firms. Required supervised entities to submitto SEC examination and comply with SEC requirements on reporting, capital, risk management and recordkeeping. Abandoned in the Fall of 2008 after the failure of Bear Stearns and Lehman Brothers, the acquisition of Merrill Lynch and thetransformation of Goldman Sachs and Morgan Stanley into BHCs.

DOJ

– U.S. Department of Justice.

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ECOA

– Equal Credit Opportunity Act.

FASB

– Financial Accounting Standards Board. An accounting standards setting body.

FATF

– Financial Action Task Force. An inter-governmental body whose purpose is thedevelopment and promotion of national and international policies in the AML/CFTarea.

FCAG

– Financial Crisis Advisory Group. A high-level advisory group established by theFASB and IASB in December 2008. Comprised of senior leaders with broadinternational experience in financial markets, the primary function of the FCAG is toadvise the FASB and IASB about standard-setting implications of the globalfinancial crisis and potential changes to the global regulatory environment.

FCCC

– Financial Consumer Coordinating Council. Proposed coordinating councilcomprised of the heads of the SEC, FTC, DOJ and CFPA, and other state andfederal agencies. Would meet at least quarterly to identify gaps in consumerprotection across financial products and facilitate coordination of consumerprotection efforts.

FDCPA

– Fair Debt Collection Practices Act.

FDIC

– Federal Deposit Insurance Corporation.

FDICIA

– Federal Deposit Insurance Corporation Improvement Act of 1991.Implemented prompt corrective action.

Federal Reserve

– Board of Governors of the Federal Reserve System.

FHC

– Financial holding company. The GLB Act permitted eligible BHCs to elect to beregulated as FHCs. Becoming an FHC made it easier for BHCs to engage ininsurance and securities activities.

FHFA

– Federal Housing Finance Agency. Regulates Fannie Mae, Freddie Mac and theFHLBS.

FHLB

– A Federal Home Loan Bank. One of 12 FHLBs that comprise the FHLBS.

FHLBS

– Federal Home Loan Bank System. A system of 12 FHLBs owned by regulatedfinancial institutions. Provides low-cost credit to financial institutions. The FHLBS isregulated by the FHFA.

FINRA

– Financial Industry Regulatory Authority. SRO for U.S. securities firms.Formed by combination of SRO functions previously performed by the NASD andNYSE.

FSB

– Financial Stability Board. Established to address vulnerabilities and to develop andimplement strong regulatory, supervisory and other policies in the interest of financialstability. Membership includes all G-20 members. Hosted by BIS. Formerly the FSF.

FSF

– Financial Stability Forum. Now the FSB.

FSOC

– Financial Services Oversight Council. A proposed new council of regulatorsresponsible for identifying emerging systemic risks and improving interagency