Featured Product

    OCC Consults on Amendments to the Stress Testing Rule

    December 18, 2018

    OCC issued a proposed rule on the company-run stress testing requirements for national banks and Federal savings associations. The proposal amends the stress testing rule (12 CFR part 46) that implements the stress testing requirements of section 165(i)(2) of the Dodd–Frank Act, consistent with the requirements imposed by section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCP Act). OCC will accept comments on this notice of proposed rule-making through February 19, 2019.

    The proposed rule would make the following amendments:

    • Revise the minimum threshold for national banks and federal savings associations to conduct stress tests from USD 10 billion to USD 250 billion
    • Revise the frequency by which certain national banks and federal savings associations would be required to conduct stress tests
    • Reduce the number of required stress testing scenarios from three to two
    • Make certain additional facilitating and conforming changes to the stress testing requirements

    Section 401 of EGRRCP Act amends section 165 of the Dodd-Frank Act by raising the minimum asset threshold for banks required to conduct stress tests from USD 10 billion to USD 250 billion. The proposed rule implements this change by eliminating the two existing subcategories of “covered institution”—USD 10 to USD 50 billion covered institution and USD 50 billion or over covered institution—and revising the term “covered institution” to mean a national bank or FSA with average total consolidated assets, calculated as required under this part, that are greater than USD 250 billion. In addition, the proposal makes certain technical and conforming changes to the rule to consolidate requirements that were applied differently to USD 10 to USD 50 billion covered institutions and USD 50 billion or over covered institutions.

    Furthermore, EGRRCP Act eliminates the requirement under section 165 of the Dodd-Frank Act for covered institutions to conduct stress tests on an “annual” basis and, instead, requires that they be “periodic.” Although the term “periodic” is not defined in EGRRCP Act, OCC is proposing that, in general, a covered institution would be required to conduct, report, and publish a stress test once every two years, beginning on January 1, 2020, and continuing every even-numbered year thereafter (that is, 2022, 2024, 2026, and so on). However, a covered institution that is consolidated under a holding company that is required to conduct a stress test at least once every calendar year (pursuant to the FED regulations at 12 CFR part 252) would be required to conduct, report, and publish its stress test annually.

     

    Related Links

    Comment Due Date: February 19, 2019

    Keywords: Americas, US, Banking, Stress Testing, Dodd Frank Act, EGRRCP Act, DFAST, OCC

    Featured Experts
    Related Articles
    News

    BCBS Amends Guidelines on Sound Management of AML/CFT Risks

    BCBS amended the guidelines on sound management of risks related to money laundering and financing of terrorism (ML/FT).

    July 02, 2020 WebPage Regulatory News
    News

    EBA Guidelines on Treatment of Structural Foreign Exchange Under CRR

    EBA finalized the guidelines on treatment of structural foreign-exchange (FX) positions under Article 352(2) of the Capital Requirements Regulation (CRR).

    July 01, 2020 WebPage Regulatory News
    News

    FSB Issues Statement on Impact of COVID-19 Crisis on Benchmark Reform

    FSB published a statement on the impact of COVID-19 pandemic on global benchmark transition.

    July 01, 2020 WebPage Regulatory News
    News

    IAIS Publishes List of Internationally Active Insurance Groups

    IAIS published the list of Internationally Active Insurance Groups (IAIGs) publicly disclosed by group-wide supervisors.

    July 01, 2020 WebPage Regulatory News
    News

    FED Temporarily Revises FR Y-9C With Respect to PPPLF and CARES Act

    FED has temporarily revised the reporting form on consolidated financial statements for holding companies (FR Y-9C; OMB No. 7100-0128).

    July 01, 2020 WebPage Regulatory News
    News

    EC Launches Consultation on Review of Solvency II Directive

    EC launched a consultation on the review of the key elements of Solvency II Directive, with the comment period ending on October 21, 2020.

    July 01, 2020 WebPage Regulatory News
    News

    ECB Consults on Supervisory Approach to Consolidation in Banking

    ECB launched a consultation on the guide that sets out supervisory approach to consolidation projects in the banking sector.

    July 01, 2020 WebPage Regulatory News
    News

    PRA Letter Sets Expectations on Approach to Managing Climate Risks

    PRA published a letter that builds on the expectations set out in the supervisory statement (SS3/19) on enhancing banks' and insurers' approaches to managing the financial risks from climate change.

    July 01, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Amendments to Swap Margin Rule

    US Agencies (Farm Credit Administration, FDIC, FED, FHFA, and OCC) finalized changes to the swap margin rule to facilitate implementation of prudent risk management strategies at banks and other entities with significant swap activities.

    July 01, 2020 WebPage Regulatory News
    News

    IAIS on Package for 2020 Data Collection on ICS and Aggregation Method

    IAIS published technical specifications, questionnaires, and templates for 2020 Insurance Capital Standard (ICS) and Aggregation Method data collections.

    June 30, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5425