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Federal Reserve announces that it has not objected to a re-submitted capital plan from BB&T Corporation

Release Date: August 23, 2013

For immediate release

The Federal Reserve on Friday announced it has not objected to a re-submitted capital plan from BB&T Corporation.  Earlier this year, the Federal Reserve objected to BB&T’s 2013 capital plan based on a qualitative assessment conducted during the annual Comprehensive Capital Analysis and Review.  BB&T was required to submit a new capital plan under the Federal Reserve’s regulation.

For media inquiries, call 202-452-2955

Federal Reserve Board releases paper on capital planning at large bank holding companies

Release Date: August 19, 2013

For immediate release

Large bank holding companies have considerably improved their capital planning processes in recent years, but have more work to do to enhance their practices for assessing the capital they need to withstand stressful economic and financial conditions, the Federal Reserve said in a paper released on Monday.  

In the paper, the Federal Reserve discussed in detail its expectations for internal capital planning at large bank holding companies and described the range of practices it has observed at these companies during the past three Comprehensive Capital Analysis and Review (CCAR) exercises.  The Federal Reserve conducts the CCAR annually to help ensure that companies have forward-looking capital planning processes that account for their unique risks and result in sufficient capital to enable the institutions to continue lending to households and businesses during times of economic and financial stress. 

The paper, Capital Planning at Large Bank Holding Companies: Supervisory Expectations and Range of Current Practice, is intended to promote better capital planning at bank holding companies generally, and to provide greater clarity on the standards against which those practices are evaluated as part of the CCAR exercise.  In particular, the Federal Reserve emphasized that bank holding companies, when considering their capital needs, should focus on the specific risks they could face under potentially stressful conditions.    

In its evaluation, the Federal Reserve found that firms needed to improve a number of aspects of their capital planning processes, including their accounting for risks most relevant to the specific business activities, their methods of projecting the effect of certain stresses on their capital needs, and their governance of the capital planning processes. 

The Federal Reserve will start the 2014 CCAR process in the fall.  In addition to the 18 firms that participated in 2013, 12 firms with more than $50 billion in total assets that have not previously been part of the CCAR are expected to participate. 

Capital Planning at Large Bank Holding Companies (PDF) | HTML

For media inquiries, call 202-452-2955

Federal Reserve Board issues a final rule establishing annual assessment fees for supervision and regulation of large financial companies

Release Date: August 16, 2013

For immediate release

The Federal Reserve Board on Friday issued a final rule establishing annual assessment fees for its supervision and regulation of large financial companies.

The Dodd-Frank Wall Street Reform and Consumer Protection Act directs the Board to collect assessment fees equal to the expenses it estimates are necessary or appropriate to supervise and regulate bank holding companies and savings and loan holding companies with $50 billion or more in total consolidated assets and nonbank financial companies designated by the Financial Stability Oversight Council for supervision by the Federal Reserve.

The final rule outlines how the Board determines which companies are charged, estimates the applicable expenses, determines each company’s assessment fee, and bills for and collects the assessment fees.

Under the final rule, each calendar year is an assessment period. For the 2012 assessment period, the first year for which assessment fees will be collected, the Board will notify each company of the amount of its assessment when the rule becomes effective in late October. Payments for the 2012 assessment period will be due no later than December 15, 2013. The Board estimates it will collect about $440 million from 70 companies for the 2012 assessment period.

Beginning with the 2013 assessment period, the Federal Reserve will notify each company of the amount of its assessment fee no later than June 30 of the year following the assessment period. Payments will be due by September 15. The Federal Reserve will transfer the assessment fees it collects to the U.S. Treasury.

For media inquiries, call 202-452-2955.

Federal Register notice: HTML | PDF

Board Votes

Agencies seek comment on Dodd-Frank Act stress test guidance for medium-sized firms

Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
 

Agencies Seek Comment on Dodd-Frank Act Stress Test Guidance for Medium-Sized Firms

Three federal bank regulatory agencies are seeking comment on proposed guidance describing supervisory expectations for stress tests conducted by financial companies with total consolidated assets between $10 billion and $50 billion.

These medium-sized companies are required to conduct annual company-run stress tests beginning this fall under rules the agencies issued in October 2012 to implement a provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

To help these companies conduct stress tests appropriately scaled to their size, complexity, risk profile, business mix, and market footprint, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency are proposing guidance to provide additional details tailored to these companies.

The stress test rules allow flexibility to accommodate different approaches by different companies in the $10 billion to $50 billion asset range. Consistent with this flexibility, the proposed guidance describes general supervisory expectations for Dodd-Frank Act stress tests, and, where appropriate, provides examples of practices that would be consistent with those expectations.

The public comment period on the proposed supervisory guidance will be open until September 25, 2013.

Federal Register notice: HTML | PDF

Comments on this proposal: Submit | View

Agencies encourage lenders to work with student loan borrowers

Federal Deposit Insurance Corporation 
Board of Governors of the Federal Reserve System 
Office of the Comptroller of the Currency

For immediate release

July 25, 2013

Agencies Encourage Lenders to Work with Student Loan Borrowers

The federal bank regulatory agencies today issued a statement encouraging financial institutions to work constructively with private student loan borrowers experiencing financial difficulties.  Prudent workout arrangements are consistent with safe and sound lending practices and are generally in the long-term best interest of both the financial institution and the borrower.

Student loan borrowers who are unemployed or underemployed may face hardship in making payments on their private student loan debts after separation from school or during periods of economic difficulty.  Current interagency guidance permits prudent workout and modification programs for retail loans, including student loans, .  Institutions that have private student loan workout programs should provide borrowers with information that clearly explains the programs, including eligibility criteria and the process for requesting a modification.

The statement is being issued by the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Office of the Comptroller of the Currency.

Agencies Encourage Financial Institutions to Work with Student Loan Borrowers Experiencing Financial Difficulties (17 KB PDF)

Media Contacts:
Federal Reserve Board	Susan Stawick	202-452-2955
FDIC	Greg Hernandez	202-898-6984
OCC	Stephanie Collins	202-649-6870

Last update: July 25, 2013

Agencies issue proposed rule to exempt subset of higher-priced mortgage loans from appraisal requirements

Board of Governors of the Federal Reserve SystemConsumer Financial Protection BureauFederal Deposit Insurance CorporationFederal Housing Finance AgencyNational Credit Union AdministrationOffice of the Comptroller of the Currency

For immediate relea…

Agencies adopt supplementary leverage ratio notice of proposed rulemaking

Board of Governors of the Federal Reserve SystemFederal Deposit Insurance CorporationOffice of the Comptroller of the Currency

For immediate release
July 9, 2013

Agencies Adopt Supplementary Leverage Ratio Notice of Proposed Rulemaking
The Federal R…

Agencies release public sections of resolution plans for four institutions

Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation

Agencies Release Public Sections of Resolution Plans for Four Institutions

The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board on Tuesday made available the public portions of resolution plans for four firms with U.S. nonbank assets between $100 billion and $250 billion.

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that bank holding companies with total consolidated assets of $50 billion or more and nonbank financial companies designated by the Financial Stability Oversight Council submit resolution plans to the FDIC and Federal Reserve. Each plan must describe the company’s strategy for rapid and orderly resolution in the event of material financial distress or failure of the company.

Firms are required to file their initial resolution plans on a staggered schedule. The firms whose resolution plans were due on July 1, 2013 are BNP Paribas SA, HSBC Holdings plc, Royal Bank of Scotland Group plc, and Wells Fargo & Company. Larger firms with $250 billion or more in total U.S. nonbank assets first submitted plans last year and must submit their second plans by October 1, 2013. Firms with more than $50 billion but less than $100 billion in total U.S. nonbank assets must submit their initial resolution plans by December 31, 2013.

By regulation, resolution plans must be divided into a public section and a confidential section. The public sections of the plans are available on the FDIC and Federal Reserve websites.

Following submission of the resolution plans, the FDIC and Federal Reserve will preliminarily review the plan for informational completeness within 60 days and then review each plan for its compliance with the requirements of the rule. 

Banking agencies issue host state loan-to-deposit ratios

Board of Governors of the Federal Reserve System 
Office of the Comptroller of the Currency 
Federal Deposit Insurance Corporation

Banking Agencies Issue Host State Loan-to-Deposit Ratios

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency today issued the host state loan-to-deposit ratios that the banking agencies will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. These ratios update data released on June 29, 2012.

In general, section 109 prohibits a bank from establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production. Section 109 also prohibits branches of banks controlled by out-of-state bank holding companies from operating primarily for the purpose of deposit production.

Section 109 provides a process to test compliance with the statutory requirements. The first step in the process involves a loan-to-deposit ratio screen that compares a bank’s statewide loan-to-deposit ratio to the host state loan-to-deposit ratio for banks in a particular state.

A second step is conducted if a bank’s statewide loan-to-deposit ratio is less than one-half of the published ratio for that state or if data are not available at the bank to conduct the first step. The second step requires the appropriate banking agency to determine whether the bank is reasonably helping to meet the credit needs of the communities served by the bank’s interstate branches.

A bank that fails both steps is in violation of section 109 and is subject to sanctions by the appropriate banking agency.

The updated host state loan-to-deposit ratios are attached.

Section 109 Host State Loan to Deposit Ratios (32 KB PDF)

Federal Reserve Board proposes new data collection requirements related to money market instruments

Release Date: June 25, 2013
For immediate release
The Federal Reserve Board on Tuesday proposed new data collection requirements related to selected money market instruments. To assist the Federal Reserve in monitoring money market conditions, the pro…