Body of Law:
The Federal Reserve Board ("FRB") will implement a new supervisory rating system for large financial institutions.
Effective February 1, 2019, the FRB will enforce a new rating system for large financial institutions ("LFI"). The new system is intended to (i) better reflect current FRB supervisory programs and practices, (ii) enhance the supervisory assessments and communications of supervisory findings and implications and (iii) improve "transparency related to the supervisory consequences of a given rating." The new LFI rating system will apply to (i) all domestic bank holding companies and non-insurance, non-commercial savings and loan holding companies ("SLHCs") with $100 billion or more in total consolidated assets and (ii) U.S. intermediate holding companies of foreign banking organizations with $50 billion or more in total consolidated assets.
The existing RFI/C(D) rating system will continue to be applied to community and regional bank holding companies with less than $100 billion in consolidated assets. In addition, the RFI/C(D) rating system will be expanded to apply to certain SLHCs with less than $100 billion in total consolidated assets on February 1, 2019.
The Board of Governors of the Federal Reserve System requested public comment on two related proposals, including (i) a change in the rating system for large financial institutions, and (ii) the issuance of supervisory guidance for boards of directors under the new ratings system.
The Board of Governors of the Federal Reserve System solicited comments on a proposal that would apply the existing Federal Reserve Board rating system for bank holding companies to savings and loan holding companies.
The Board of Governors of the Federal Reserve System extended the comment deadline for two proposals that would change the ratings system for large financial institutions.
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