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    OCC Proposes Revisions to Templates and Guidance on Stress Testing

    November 01, 2021

    The Office of the Comptroller of the Currency (OCC), published in the Federal Register, a proposal to revise the information collection for the company-run annual stress test reporting template and documentation for covered Institutions with consolidated assets of USD 250 billion or more, under the Dodd-Frank Act. The revised regulatory reporting requirements are applicable to national banks and federal savings associations and the comment period for the proposal ends on December 27, 2021. OCC is also consulting on the supervisory guidance on stress testing for banking organizations with consolidated assets of more than USD 10 billion. The comment period for this guidance ends on November 29, 2021.

    The proposed changes to the template for company-run annual stress test reporting (institutions with consolidated assets of USD 250 billion or more) entail only limited updates to reflect the changes made by the Federal Reserve Board (FED). The proposed OCC reporting forms will substantially resemble the forms used last year. Some of the changes are inapplicable to OCC-regulated institutions and involve new items that would not be collected by the OCC under the proposed changes. For example, the OCC's, FED's, and Federal Deposit Insurance Corporation's January 06, 2021 final rule revising risk-based capital requirements included new items on the FR Y-14A that are inapplicable at the depository institution level and will, therefore, not be collected under the  revisions proposed by OCC. Similarly, in 2021, the reporting forms from OCC did not collect other items collected on the 2021 FR Y-14A, and the proposed changes of OCC do not include these items. The changes proposed by OCC include the minimal adjustments necessary to align line items with placement on the 2021 FR Y-14A. If FED proposes additional changes to the FR Y-14A reporting forms after the publication of this notice, the OCC expects to make corresponding changes to the OCC reporting forms to minimize inconsistencies and reduce burden.

    The proposed supervisory guidance (for institutions with consolidated assets of USD 10 billion) provides an overview of how a banking organization should structure its stress testing activities to ensure that those activities fit into the banking organization's overall risk management. The purpose of the guidance is to outline broad principles for a satisfactory stress testing framework and describe how stress testing should be used. While the guidance is not intended to provide detailed instructions for conducting stress testing for any particular risk or business area, it does describe several types of stress testing activities and how they may be most appropriately used by banking organizations. The guidance also does not explicitly address the stress testing requirements imposed on certain banking organizations by section 165(i) of the Dodd-Frank Act.

     

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    Keywords: Americas, US, Banking, Stress Testing, Guidance, Reporting, Dodd-Frank Act, DFAST, DFAST 10-50, FED

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