Banking Agencies Extend Comment Deadline for Proposal on Long-Term Debt Requirements for Large Banks

The OCC, the Federal Reserve Board ("FRB") and the FDIC extended the comment deadline on a proposed rule on long-term debt ("LTD") requirements. The comment period was extended to January 16, 2024.

As previously covered, the proposed requirements would apply to large banking entities, holding companies, foreign banking organizations and large insured depository institutions ("IDIs"). The proposal would require certain large depository institution holding companies, U.S. intermediate holding companies of foreign banking organizations, and insured depository institutions, to issue and maintain outstanding a minimum amount of long-term debt. Proposed requirements would allow the FDIC to transfer all deposit liabilities of a failed IDI to a bridge depository institution consistent with the FDI Act's least-cost requirement. The proposed rule is intended to facilitate resolvability in the event of failure and to reduce the risk of contagion within the financial system.