Financial Institutions Regulatory Act (FIRA)

What Is the Financial Institutions Regulatory Act (FIRA)?

The Financial Institutions Regulatory and Interest Rate Control Act (FIRA) is a United States Federal law enacted in 1978 pertaining to depository financial institutions. The act made five major changes to these institutions and created the Central Liquidity Facility and the Federal Financial Institutions Examination Council (FFIEC). The Act also made electronic funds transfers federally regulated, changed the terms under which loans were provided to directors and officers, and authorized cease and desist orders to be placed on them.

Understanding the Financial Institutions Regulatory Act

FIRA was responsible for creating both the Central Liquidity Facility and the Federal Financial Institutions Examination Council (FFIEC).

The Federal Financial Institutions Examination Council (FFIEC)

The Federal Financial Institutions Examination Council (FFIEC) was formed to regulate and create standards for depository financial institutions, as required by Title X of FIRA. The Appraisal Subcommittee (ASC) was formed in 1989, as required by Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). The FFIEC is an interagency body that creates uniform standards, principles, and report forms for the federal examination of financial institutions by the following agencies:

• The Board of Governors of the Federal Reserve System (FRB)
• The National Credit Union Administration (NCUA)
• The Federal Deposit Insurance Corporation (FDIC)
• The Office of the Comptroller of the Currency (OCC)
• The Consumer Financial Protection Bureau (CFPB)

The FFIEC’s State Liaison Committee works to promote and maintain uniform regulation of financial institutions.

The Council works to develop uniform reporting systems for federally supervised financial institutions, their holding companies, and the nonfinancial institution subsidiaries of those institutions and holding companies. For employees of state agencies that supervise financial institutions, the Council hosts schools that provide training programs for federal and state examiners.

In 1980, the Council was given more statutory responsibilities under the Housing and Community Development Act. The Council is responsible for facilitating public access to data that depository institutions must disclose under the Home Mortgage Disclosure Act of 1975 (HMDA) and the aggregation of annual HMDA data, by census tract, for each metropolitan statistical area (MSA).

The Central Liquidity Facility

The Central Liquidity Facility was formed to lend money to credit unions on a short-term basis to help them in times of need, in order to support their financial stability, support mortgage and consumer lending by credit unions, encourage savings, and extend financial resources to all parts of the economy. The Credit Liquidity Facility helps stabilize credit unions that are experiencing unexpected or unusual shortfalls in liquidity. The NCUA oversees the management of the Credit Liquidity Facility. The Credit Liquidity Facility is open to all credit unions, and membership is voluntary.