October 12, 2012

Annual Company-Run Stress Test Requirements for Banking Organizations With Total Consolidated Assets Over $10 Billion Other Than Covered Companies; Final Rule (FRB - Fed. Reg. Version)

The Dodd-Frank Act requires the Federal Reserve Board to issue regulations that require financial companies with total consolidated assets of more than $10 billion, and for which the Board is the primary federal financial regulatory agency, to conduct stress tests on an annual basis. The Board is adopting this final rule to implement the company-run stress test requirements in Section 165(i)(2) of the Dodd-Frank Act regarding company-run stress tests for bank holding companies with total consolidated assets greater than $10 billion but less than $50 billion, and state member banks and savings and loan holding companies with total consolidated assets greater than $10 billion. This final rule does not apply to any banking organization with total consolidated assets of less than $10 billion.

Implementation of the stress testing requirements for bank holding companies, savings and loan holding companies, and state member banks with total consolidated assets of greater than $10 billion but less than $50 billion is delayed until September 2013. However, a state member bank that meets the asset threshold on or before November 15, 2012, and is a subsidiary of a bank holding company that participated in the SCAP, must comply with the final rule beginning in the fall of 2012. Additionally, a U.S.-domiciled bank holding company subsidiary of a foreign banking organization that is currently relying on SR Letter 01-01 issued by the Board is not required to comply with the final rule's requirements until October 1, 2015.

Effective Date: November 15, 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 62396.

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