OCC, FRB and FDIC Issue Guidance on Implementing Stress Tests of Banks with between $10 and $50 Billion in Total Consolidated Assets

The Office of the Comptroller of the Currency ("OCC"), the Board of Governors of the Federal Reserve System ("FRB") and the FDIC (collectively, the "agencies") issued a final supervisory guidance outlining the principles for the implementation of annual company-run stress tests by banking organizations with total consolidated assets of more than $10 billion but less than $50 billion, pursuant to Section 165(i)(2) of the Dodd-Frank Act and the final rules issued thereunder. The guidance, which is similar to the proposed guidance issued by the agencies last year, discusses supervisory expectations for Dodd-Frank stress test practices and offers additional details about methodologies that should be employed by these banking organizations. The guidance also confirms that banking organizations with assets between $10 billion and $50 billion are not subject to certain requirements applicable only to bank holding companies with assets of at least $50 billion, including the FRB's capital plan rule, the FRB's annual Comprehensive Capital Analysis and Review, supervisory stress tests for capital adequacy, and related data collections supporting the supervisory stress test.

Related news: FRB Issues Final Policy Statement on Scenario Design Framework for Stress Testing (November 7, 2013); Federal Reserve Board Releases Supervisory Scenarios and Instructions for 2014 Capital Planning and Stress Testing (November 1, 2013); Three Federal Bank Agencies Seek Comment on Dodd-Frank Act Stress Test Guidance for Medium-Sized Firms (July 30, 2013); Chairman Bernanke Speech on Stress Testing Banks (April 9, 2013); OCC Proposes Reporting Requirements for Annual Stress Test for Covered Institutions with Consolidated Assets of $10 Billion to $50 Billion (March 15, 2013); Federal Reserve Stress Test Methodology and Results (March 7, 2013); Schedule for Bank Stress Tests Required by Dodd-Frank Act Section 165(i) (December 21, 2012); FRB Releases Proposed Rules to Strengthen Oversight of U.S. Operations of Foreign Banks (with Cammarn Description and Link to Related Cadwalader Memo) (December 14, 2012).