OCC Proposes Expansion of Recovery Planning Requirements

The OCC proposed rule changes to current recovery planning guidelines, which would (i) lower the "covered bank threshold," (ii) include a testing requirement and (iii) require the consideration of non-financial risk. 

The proposal affects large insured national banks, insured federal savings associations and insured federal branches. 

The OCC requested comment on the following changes:

• Expanding the subject entities to include "insured national banks, federal savings associations, and federal [bank] branches" that have at least $100 billion in "average total consolidated assets;" the current threshold is $250 billion; 
• Requiring an assessment of non-financial risk, including "an understanding of, and a plan for mitigating, the non-financial challenges and risks, including operational challenges and risks, associated with executing each recovery option during severe stress;" and
• Incorporating a testing requirement in recovery plans which would include not only testing the overall recovery plan, but each element of the plan as well. 

Comments are due within 30 days after publication in the Federal Register.