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

    APRA Consults to Standardize Submission Date for Quarterly Reporting

    APRA proposed to standardize quarterly reporting due dates for authorized deposit-taking institutions. The proposed standardized due date is 35 calendar days after the last day of the reference quarter, which will create a 14-calendar-day extension for credit unions and building societies.

    November 08, 2019 WebPage Regulatory News
    News

    EBA Single Rulebook Q&A: First Update for November 2019

    EBA updated the Single Rulebook question and answer (Q&A) tool with answers to two questions. The answers provide clarifications on topics related to own funds and strong customer authentication under the revised Payment Services Directive or PSD2.

    November 08, 2019 WebPage Regulatory News
    News

    FED Proposes to Extend Initial Compliance Dates Under SCCL Rule

    FED published a proposal to extend, by 18 months, the initial compliance dates for foreign banks subject to the single-counterparty credit limit (SCCL) rule.

    November 08, 2019 WebPage Regulatory News
    News

    EBA Publishes Technical Package on Reporting Framework 2.9.1

    EBA published a new release of the reporting framework 2.9.1. This release includes validation rules, Data Point Model (DPM) data dictionary, XBRL taxonomy, and other supporting documents. Additionally, the release fixes some modeling issues on COREP Liquidity and FINREP.

    November 08, 2019 WebPage Regulatory News
    News

    EBA Publishes Methodology and Draft Templates for Stress Tests in 2020

    EBA published a package for the 2020 EU-wide stress test exercise for banks.

    November 07, 2019 WebPage Regulatory News
    News

    EC Publishes Results of Fitness Check of Reporting Requirements in EU

    EC published results of the fitness check of supervisory reporting requirements in financial services legislation in EU.

    November 07, 2019 WebPage Regulatory News
    News

    BCBS Assesses NSFR and LE Rules in Argentina and China as Compliant

    BCBS published reports that assess the implementation of net stable funding ratio (NSFR) and large exposures, or LE, framework in Argentina and China.

    November 07, 2019 WebPage Regulatory News
    News

    FSB Publishes Summary of Plenary Meeting in Paris

    At the meeting, the Plenary reviewed vulnerabilities in the global financial system, fintech developments (including developments in the crypto-asset markets), ongoing work of FSB, and the work program for 2020.

    November 07, 2019 WebPage Regulatory News
    News

    HKMA Highlights Technology Initiatives at the Hong Kong FinTech Week

    HKMA co-organized, with InvestHK, the Hong Kong FinTech Week 2019, which was a five-day flagship fintech event that attracted thousands of attendees worldwide.

    November 06, 2019 WebPage Regulatory News
    News

    ECB Report on Fallback Provisions in Contracts Referencing EURIBOR

    ECB published a report, by private sector working group on euro risk-free rates, presenting recommendations for fallback provisions in contracts for cash products and derivative transactions referencing EURIBOR.

    November 06, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4118