Annual Stress Test by OCC Regulated Institutions; Final Rule (OCC - Pre-Fed. Reg. Version) (with Musical Link)

The Office of the Comptroller of the Currency (OCC) announced publication of its final rule regarding company-run stress testing required by the Dodd-Frank Act. This final rule implements section 165(i) of the Dodd-Frank Act, which requires certain companies to conduct annual stress tests pursuant to regulations prescribed by their respective primary financial regulatory agencies. The rule applies to covered institutions with average total consolidated assets greater than $10 billion.

Under the final rule, covered institutions are divided into two categories: covered institutions with total consolidated assets between $10 and $50 billion, and covered institutions with total consolidated assets over $50 billion. Based on these categories, covered institutions are subject to different stress test requirements and deadlines for reporting and disclosures. A key difference between these categories is that a national bank or Federal savings association which qualifies as an over $50 billion covered institution as of October 9, 2012 must conduct the annual stress test under this final rule beginning this year; other covered institutions that qualify as $10 to $50 billion covered institutions are not subject to the stress test requirements under this final rule until 2013.

Effective Date: October 9, 2012.

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

Today's news also includes comparable rules adopted by the Federal Reserve Board and by theFDIC. Yesterday's news included theFHFA version of this rule.Additional Materials: OCC Press Release; Link to "Under Pressure" (musical interlude).