OCC Finalizes Heightened Standards for Large Financial Institutions

The Office of the Comptroller of the Currency ("OCC") published final guidelines for large financial institutions, which provide that covered institutions should establish and adhere to a written risk governance framework to manage and control its risk-taking activities.Additionally, the guidelines provide minimum standards for the institutions' board of directors to oversee the risk governance framework.

The guidelines apply to insured national banks, insured federal savings associations, and insured federal branches of foreign banks with $50 billion or more in average total consolidated assets. The guidelines also apply to an OCC-regulated institution with less than $50 billion in average total consolidated assets, if that institution's parent company controls at least one other covered institution.

A number of effective dates for the rules apply, depending on the size of the institution:

• institutions with $750 billion or more in average total consolidated assets are expected to comply immediately upon the effective date as published in the Federal Register, which is expected shortly;
• institutions between $100 billion and $750 billion in consolidated assets should comply within six months of the effective date;
• institutions with assets from $50 billion to $100 billion should comply within 18 months of the effective date;
• institutions with less than $50 billion that are covered because their parent company controls at least one other covered bank should comply on the same date that the other covered bank should comply; and
• institutions that reach the $50 billion threshold after publication of the guidelines should comply within 18 months from the date of the call report determining that it exceeded the threshold.

See: OCC Press Release.

Related news: OCC Proposes Formal Guidelines for Heightened Expectations for Large Banks (January 16, 2014).