Stress Testing of Regulated Entities; Notice of Proposed Rulemaking, Request for Comment (FHFA - Fed. Reg. Version)

This proposed rule would implement section 165(i)(2) of the Dodd-Frank Act, which requires certain financial companies with total consolidated assets of more than $10 billion, and which are regulated by a primary federal financial regulatory agency, to conduct annual stress tests to determine whether the companies have the capital necessary to absorb losses as a result of adverse economic conditions. This particular rule would authorize the FHFA to mandate stress testing by Fannie Mae, Freddie Mac and the Federal Home Loan Banks. One of the minor eccentricities of the proposal is that it would authorize the FHFA to require stress testing even if the entities it regulates have less than $10 billion in assets. Comments Due: November 5, 2012.

Cross-Reference(s): Dodd-Frank Section 165(i)(2) (Enhanced supervision and prudential standards for nonbank financial companies supervised by the Board of Governors and certain bank holding companies; Stress Tests - By the Company).

View rule release here: 77 FR 60948.