July 06, 2018

US Agencies (FDIC, FED, and OCC) issued a joint statement detailing rules and associated reporting requirements that are immediately affected by the enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). FED also issued a statement describing how it will no longer subject primarily smaller, less complex banking organizations to certain FED regulations, including those related to stress testing and liquidity.

The joint statement of the US Agencies describes interim positions the regulatory agencies will take before incorporating the changes into their regulations. This statement provides information on rules and associated reporting requirements that the agencies jointly administer and that the EGRRCP Act immediately affected. Certain amendments took effect on the day of the enactment of EGRRCP Act whereas other provisions will take effect at a later date. The changes in the Act affect company-run stress testing, resolution plans, the Volcker rule, high volatility commercial real estate exposures, examination cycles, municipal obligations as high-quality liquid assets, and other provisions. 

The FED statement explains that, upon enactment, EGRRCP Act raised the threshold for Dodd-Frank enhanced prudential standards from USD 50 billion to USD 100 billion dollars in consolidated assets for bank holding companies. This change did not require FED action to have an immediate effect, but did affect the application of several FED regulations. Therefore, certain FED regulations are inconsistent with the new law. As described in the FED statement, FED will not take action to enforce certain regulations and reporting requirements for firms with less than USD 100 billion in consolidated assets, such as rules implementing enhanced prudential standards and the liquidity coverage ratio requirements. FED will continue to supervise the firms to ensure their safe and sound operation. The statement also provides guidance on the FED's implementation of other EGRRCPA changes, including those related to assessments and high volatility commercial real estate exposures. FED will take the positions described in the statement in the interim until it incorporates  changes of EGRRCP Act into its regulations.

 

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Keywords: Americas, US, Banking, EGRRCP Act, Dodd Frank Act, Volcker Rule, Stress Testing, Resolution Planning, Proportionality, US Agencies

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