OCC Publishes Final Rule Revising the Stress Testing Regulation

OCC had proposed several revisions to its stress testing regulation in October 2017 and it received three comments on the proposed rule from individuals. Of these, the two comments did not address the contents of the proposed rule or stress testing while one comment was brief and did not make any specific recommendations (although this comment mentioned stress testing). Therefore, OCC is adopting the proposed rule as final. The final rule makes changes to:

• The range of possible “as-of” dates used in the global market shock component to conform to changes already made by the FED to its stress testing regulations
• Clarify the requirements of the stress testing regulation of OCC
  
• The transition process for covered institutions with USD 50 billion or more in assets

Under the final rule, a covered institution that becomes an over USD 50 billion covered institution (as that term is defined in the OCC stress testing regulation) before September 30 will become subject to the requirements applicable to an over USD 50 billion covered institution beginning on January 01 of the second calendar year after the covered institution becomes an over USD 50 billion covered institution. Additionally, a covered institution that becomes an over USD 50 billion covered institution after September 30 will become subject to the requirements applicable to an over USD 50 billion covered institution beginning on January 01 of the third calendar year after the covered institution becomes an over USD 50 billion covered institution. 

Related Link: Federal Register Notice

Effective Date: March 26, 2018

Keywords: Americas, US, Banking, Stress Testing, Dodd Frank Act, Covered Institutions, OCC