Annual Stress Test, 69365-69369 [2014-27610]
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Rules and Regulations
Federal Register
Vol. 79, No. 225
Friday, November 21, 2014
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
I. Background
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 325
RIN 3064–AE18
Annual Stress Test
Federal Deposit Insurance
Corporation.
ACTION: Final rule.
AGENCY:
The Federal Deposit
Insurance Corporation (the Corporation
or FDIC) is issuing a final rule that
implements proposed revisions to
regulations regarding the annual stress
testing requirements for state
nonmember banks and state savings
associations with total consolidated
assets of more than $10 billion (covered
banks). The regulations, which
implement section 165(i)(2) of the
Dodd-Frank Wall Street Reform and
Consumer Protection Act (the DoddFrank Act), require covered banks to
conduct annual stress tests, report the
results of such stress tests to the
Corporation and the Board of Governors
of the Federal Reserve System (the
Board), and publicly disclose a
summary of the results of the required
stress tests. The final rule revises the
2016 stress test cycle and for years
thereafter to begin on January 1 of the
calendar year rather than October 1, as
is provided for by the current rule.
Additionally, the final rule modifies the
‘‘as of’’ dates for financial data (that
covered banks will use to perform their
stress tests) as well as the reporting
dates and public disclosure dates of the
annual stress tests for both $10 billion
to $50 billion covered banks and over
$50 billion covered banks.
DATES: This final rule is effective
January 1, 2015.
FOR FURTHER INFORMATION CONTACT:
Ryan Sheller, Section Chief, (202) 412–
4861, Large Bank Supervision, Division
of Risk Management and Supervision;
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SUMMARY:
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Mark G. Flanigan, Supervisory Counsel,
(202) 898–7426, Grace Pyun, Senior
Attorney, (202) 898–3609, or Benjamin
Klein, Senior Attorney, (202) 898–7027,
Legal Division, Federal Deposit
Insurance Corporation, 550 17th Street
NW., Washington, DC, 20429.
SUPPLEMENTARY INFORMATION:
Section 165(i) of the Dodd-Frank Act
requires two types of stress tests.
Section 165(i)(1) requires the Board to
conduct annual stress tests of holding
companies with $50 billion or more in
total consolidated assets (‘‘supervisory
stress tests’’). Section 165(i)(2) of the
Dodd-Frank Act requires the federal
banking agencies to issue regulations
requiring financial companies with
more than $10 billion in total
consolidated assets to conduct annual
stress tests themselves (company-run
stress tests), and it requires that the
implementing regulations issued by
each of the federal banking agencies be
consistent and comparable with each
other. In October 2012, the FDIC, the
Office of the Comptroller of the
Currency (the OCC), and the Board
(collectively the Agencies) issued final
rules 1 implementing the company-run
stress tests requirements. The FDIC’s
final rule was codified as part 325,
subpart C of the FDIC rules and
regulations (the Annual Stress Test
rule). The Annual Stress Test rule
requires FDIC-insured state nonmember
banks and FDIC-insured state-chartered
savings associations with total
consolidated assets of more than $10
billion to conduct annual stress tests.
Part 325, subpart C identifies two
categories of covered banks. The first
category includes state nonmember
banks and state savings associations that
have between $10 billion and $50
billion in total consolidated assets, and
the second category includes state
nonmember banks and state savings
associations with over $50 billion in
total consolidated assets.2 For both
categories of covered banks, the
company-run stress test must assess the
potential impact of different scenarios 3
1 77 FR 62417 (Oct. 15, 2012) (FDIC); 77 FR 61238
(October 9, 2012) (OCC); 77 FR 62396 (October 12,
2012) (Board).
2 12 CFR 325.202(d).
3 On an annual basis, prior to the start of the
stress testing period and no later than November 15,
the FDIC provides to covered banks a minimum of
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on the capital of the covered bank and
certain related items over a forwardlooking, nine-quarter planning horizon,
taking into account all relevant
exposures and activities.4
Part 325, subpart C also provides
timeframes for the testing, reporting,
and publication of the company-run
stress tests, which vary depending on
the category into which the covered
bank falls. Covered banks use financial
data as of September 30 (the ‘‘as of’’
date) of the preceding calendar year to
make projections that estimate their
financial position under the different
stress scenarios, and to report and
publish the results of their annual stress
test in the following calendar year.
Covered banks with $10 billion to $50
billion in total assets must report the
results of their stress tests by March 31
and publish a summary of their results
between June 15 and June 30.5 Over $50
billion covered banks are required to
report the results of their annual stress
test by January 5 of each calendar year
and publish a summary of their results
between March 15 and March 31.6
These testing, reporting, and publication
milestones are consistent across the
federal banking agencies’ respective
annual stress testing rules.
A covered bank that is a consolidated
subsidiary of a bank holding company
or savings and loan holding company
subject to company-run stress test
requirements administered by the Board
is generally permitted to publish
abbreviated disclosures of its annual
stress test results with the parent
holding company’s summary and on the
same timeline as the parent holding
company.7 The FDIC requires that
specific information be included in the
disclosure to reflect the changes in the
covered bank’s capital ratios and the
reasons for those changes.
Since the publication and codification
of the Annual Stress Test rule, the
Agencies have received feedback from
the industry regarding the resource
three economic scenarios (baseline, adverse, and
severely adverse) and additional scenarios as the
FDIC determines appropriate for the covered banks
to use in performing their stress tests.
4 In addition, certain covered banks with
significant trading activities (as determined by the
FDIC) may be required to include a trading and
counterparty component for the scenarios used in
their stress tests.
5 12 CFR 325.204(a); 325.206(a); 325.207(a).
6 12 CFR 325.204(a); 325.206(a); 325.207(a).
7 12 CFR 325.207(b).
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constraints that covered banks face at
the beginning and end of the calendar
year arising from competing regulatory
and reporting deadlines. Furthermore,
the Agencies are aware that conducting
stress testing during the last quarter of
a calendar year may also make it
difficult for covered banks to make
timely modifications to strategic and
operational plans for the following year
that address any issues identified in the
company-run stress test results.
For these reasons, on July 1, 2014, the
FDIC, in coordination with the Board
and the OCC, issued a notice of
proposed rulemaking (the NPR) in the
Federal Register that proposed to
modify the dates of the stress test cycle
and the corresponding reporting and
publication deadlines. The NPR
proposed to shift the testing, reporting,
and disclosure dates for the 2016
company-run stress test cycle and each
annual cycle thereafter.8 The
Corporation is now issuing a final rule
modifying the dates of the stress test
cycle and the corresponding reporting
and publication deadlines as proposed
in the NPR, as described further below.
The final rule will be consistent with
final rules issued by the OCC and Board
making the same date modifications to
the stress testing cycle, agency
reporting, and public disclosure.
II. Comments Received
The NPR solicited public comment on
all aspects of the proposed rule. The
NPR’s comment period ended on
September 2, 2014, and the FDIC
received five comment letters.
Comments were submitted by, or on
behalf of, individuals, banks and bank
holding companies, and banking and
financial services industry trade groups
and associations. The commenters
generally supported the proposed
revisions in the NPR, but also requested
additional revisions to the proposed
timeline shifts.
The commenters supported the
proposed timing shift for the start of the
stress test cycles to address the
challenges to banking organizations and
personnel presented at the end of the
calendar year. Some commenters
encouraged the FDIC to accelerate
implementation of the proposed
changes so that the adjusted timeframes
apply beginning with the 2015 stress
test cycle, rather than with the 2016
stress test cycle. The final rule adopts
the proposed revisions to the start of the
stress test cycle and related dates, but
does not accelerate the implementation
of the modified dates. The transition
8 79 FR 37235 (July 1, 2014) (FDIC); 79 FR 37231
(OCC); 79 FR 37420 (Board).
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period is necessary to give the FDIC and
banking organizations sufficient time to
revise reporting schedules and change
internal systems. As such, the new
timeline will become applicable to the
stress testing cycle that begins on
January 1, 2016.
Commenters also requested that the
FDIC provide stress test scenarios by no
later than January 15 of a given calendar
year given the compressed timeframe for
implementation of stress testing
processes. In developing the scenarios,
the FDIC seeks to provide covered banks
with sufficient time to conduct the
annual stress tests, while also ensuring
that the scenarios reflect timely data on
economic and financial conditions.
Under the revised timeline, the FDIC
expects to provide stress test scenarios
as soon as possible and before the
deadlines set by the final rule.
Accordingly, the FDIC has adopted this
aspect of the proposal without
significant change.
Commenters additionally requested
that the length of the planning horizon
be reduced from nine quarters to eight
quarters. The NPR would have shifted
the stress testing timeline by one
quarter, but would have maintained the
nine-quarter planning horizon. The
commenters argued that the ninth
quarter does not provide additional
meaningful information given the
incremental uncertainty in projections
as they move further into the future, and
that eight quarters would still represent
two full years of capital planning. The
FDIC believes that the ninth quarter
period provides meaningful information
to the Agencies in assessing the
projections of covered banks.
Accordingly, the final rule maintains
the nine-quarter planning horizon.
Commenters also requested that the
Agencies delay incorporation of
advanced approaches risk-based capital
rules into the annual stress testing
process indefinitely. The NPR proposed
to revise the testing and reporting dates
and did not address the application of
the risk-based capital rules. As such, the
FDIC believes that technical aspects of
projecting risk-based capital
requirements under the advanced
approaches should be dealt with on a
case-by-case basis and through the
supervisory process.
III. The Final Rule
After reviewing the comments, the
FDIC is issuing this final rule to
implement the changes proposed in the
NPR to part 325, subpart C of the FDIC
Rules and Regulations.
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A. Company-Run Stress Test Timelines
Beginning January 1, 2016, the stress
testing cycle that, under the previous
rule, would have begun on October 1 of
a given calendar year, will begin January
1 of a given calendar year. Beginning
with the 2016 stress-testing cycle, the
final rule requires covered banks to
conduct company-run stress tests using
financial data as of December 31 of the
preceding calendar year, which
represents a three-month shift from
September 30 in the previous rule. The
FDIC will provide the economic
scenarios to be used by covered banks
in their company-run stress tests no
later than February 15, rather than
November 15, as is provided under the
previous rule. For those certain covered
banks with significant amounts of
trading activities that are required to
include trading and counterparty
components in their adverse and
severely adverse scenarios, the FDIC
will select an ‘‘as of’’ date between
January 1 and March 1 of a calendar
year for the data used in this
component. The FDIC will
communicate this date to the covered
banks no later than March 1.
All $10 billion to $50 billion covered
banks will be required to conduct and
submit the results of their company-run
stress tests to the FDIC by July 31 and
publish those results during a period
beginning on October 15 and ending
October 31. Over $50 billion covered
banks will be required to conduct and
submit the results of their company-run
stress tests to the FDIC by April 5 and
publish those results during a period
beginning on June 15 and ending on
July 15. The April 5 reporting deadline
for over $50 billion covered banks is a
minor change from the April 7 deadline
proposed in the NPR.
Furthermore, a covered bank that is a
consolidated subsidiary of a bank
holding company or savings and loan
holding company that is required to
conduct an annual company-run stress
test under applicable regulations of the
Board may continue to elect to conduct
its stress test and report to the FDIC on
the same timeline as its parent bank
holding company or savings and loan
holding company as it had under the
previous rule. Under the final rule,
however, an over $50 billion covered
bank that is a consolidated subsidiary of
a holding company that is subject to
supervisory stress tests conducted by
the Board under 12 CFR part 252 may
publish the required summary of its
company-run stress test no earlier than
the date that the Board publishes the
supervisory stress test results for the
parent holding company, but no later
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than July 15. In addition, if the Board
publishes the supervisory stress test
results of the covered bank’s parent
holding company prior to June 15, then
the covered bank may satisfy its
publication requirement either through
actual publication by the covered bank
or through publication by the parent
holding company under § 325.207.
B. Applicability
The final rule amends the
applicability provisions in § 325.203 of
the Annual Stress Test rule to reflect the
changed timeline. Previously, a state
nonmember bank or state savings
association that became a covered bank
had to conduct its first annual stress test
beginning in the next calendar year after
the date the state nonmember bank or
state savings association became a
covered bank. Under the new 2016
stress testing timeline, if this
applicability provision were left
unchanged, a state nonmember bank or
state savings association that became a
covered bank as of September 30 of a
given year would have been required to
conduct its first stress test on January 1,
three months after becoming a covered
bank. The final rule provides a
minimum of nine months between the
date on which a state nonmember bank
or state savings association becomes a
covered bank and the start date of the
stress testing cycle in which the covered
bank must conduct its first stress test.
To preserve the nine-month minimum,
the final rule establishes a March 31
cutoff date. A state nonmember bank or
state savings association that becomes a
covered bank on or before March 31 of
a given year would be required to
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conduct its first stress test in the next
calendar year. For example, a state
nonmember bank or state savings
association that becomes a covered bank
on or before March 31, 2015 would be
required to conduct its first stress test in
the stress testing cycle beginning
January 1, 2016. A state nonmember
bank or state savings association that
becomes a covered bank after March 31
of a given year would be required to
conduct its first stress test in the second
calendar year after the date the state
nonmember bank or state savings
association becomes a covered bank. For
example, a state nonmember bank or
state savings association that becomes a
covered bank on June 30, 2015 would be
required to conduct its first stress test in
the stress testing cycle beginning
January 1, 2017.
TABLE 1—MODIFIED ANNUAL STRESS TEST TIMELINE FOR $10 BILLION TO $50 BILLION COVERED BANKS
Action required
‘‘As of’’ date for financial data
Current rule
September 30
Final rule
December 31
Distribution of Scenarios for Annual Stress
Tests by FDIC.
Reporting of Annual Stress Test Results ...........
Public Disclosure of Annual Stress Test Results
By November 15 ..............................................
By February 15.
By March 31 .....................................................
Between June 15 and June 30 ........................
By July 31.
Between October 15 and October 31.
TABLE 2—MODIFIED ANNUAL STRESS TEST TIMELINE FOR OVER $50 BILLION COVERED BANKS
Action required
‘‘As of’’ date for financial data
Current rule
September 30
Distribution of Scenarios for Annual Stress
Tests by FDIC.
Reporting of Annual Stress Test Results ...........
Public Disclosure of Annual Stress Test Results
By November 15 ..............................................
By February 15.
By January 5 ....................................................
Between March 15 and March 31 ...................
By April 5.
Between June 15 and July 15, except no earlier than Board publication of the supervisory stress test results of the covered
bank’s holding company.9
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IV. Administrative Law Matters
A. Paperwork Reduction Act Analysis
In accordance with the requirements
of the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3521) (‘‘PRA’’), the
Corporation may not conduct or
sponsor, and the respondent is not
required to respond to, an information
collection unless it displays a currently
valid Office of Management and Budget
(‘‘OMB’’) control number. The FDIC has
two stress testing information
collections: The Annual Stress Test and
Stress Testing Reporting Templates,
3064–0187 and –0189.
The Corporation is revising 12 CFR
325.202, 325.203, 325.204, 325.206, and
9 If the Board releases supervisory stress test
results prior to June 15, then the covered bank may
release its annual stress test results prior to June 15,
but no earlier than the release of the supervisory
stress test results and no later than July 15.
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Final rule
December 31
325.207 by modifying timelines for the
testing, reporting, and disclosure of the
annual stress tests for covered banks.
The revisions shift by three months the
‘‘as of’’ date of the financial data used
to conduct company-run stress tests for
covered banks from September 30 to
December 31. The final rule also shifts
the reporting and disclosure deadlines
for both $10 billion to $50 billion
covered banks and over $50 billion
covered banks and provide for a new
transition period for those covered
banks that become covered under the
rule. Additionally, under the final rule,
an over $50 billion covered bank that is
a consolidated subsidiary of a bank
holding company or savings and loan
holding company subject to supervisory
stress tests conducted by the Board may
publish the required summary of its
annual stress test results no earlier than
the date that the Board publishes the
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supervisory stress test results of the
covered bank’s parent holding company,
but no later than July 15. The revision
of timelines in part 325, subpart C does
not revise the FDIC’s stress testing
information collections of information.
B. Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act, 5
U.S.C. 601, et seq. (RFA), requires that
each federal agency either certify that a
proposed rule would not, if adopted in
final form, have a significant economic
impact on a substantial number of small
entities or prepare an initial regulatory
flexibility analysis of the rule and
publish the analysis for comment.10 The
final rule applies only to state
nonmember banks and state savings
associations with more than $10 billion
in total consolidated assets. Under
10 See
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5 U.S.C. 603, 604, and 605.
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regulations issued by the Small
Business Administration (SBA), a bank
or other depository institution is
considered ‘‘small’’ if it has $550
million or less in assets.11 As of June 30,
2014, there are approximately 3,268
small state nonmember banks and state
savings associations. Since the final rule
applies only to twenty-six state
nonmember banks and state savings
associations with more than $10 billion
in total consolidated assets, the
Corporation does not expect that the
final rule will directly affect a
substantial number of small entities. It
is hereby certified that this rule will not
have a significant economic impact on
a substantial number of small entities
and therefore, a regulatory flexibility
analysis under the RFA is not required.
1819(a)(Tenth), 12 U.S.C. 1831o, and 12
U.S.C. 1831p–1.
C. Plain Language
*
Section 722 of the Gramm-LeachBliley Act (Pub. L. 106–102, 113 Stat.
1338, 1471, 12 U.S.C. 4809) requires
federal banking agencies to use plain
language in all proposed and final rules
published after January 1, 2000. The
Corporation sought to present the
proposed rule in a simple and
straightforward manner and invited
comment on how to make the proposed
rule easier to understand. The FDIC
received no comments on the use of
plain language.
D. Small Business Regulatory
Enforcement Fairness Act
The Office of Management and Budget
has determined that the final rule is not
a ‘‘major rule’’ within the meaning of
the relevant sections of the Small
Business Regulatory Enforcement
Fairness Act of 1996 12 (‘‘SBREFA’’).
List of Subjects in 12 CFR Part 325
Administrative practice and
procedure, Banks, Banking, Disclosures,
Federal Deposit Insurance Corporation,
Reporting and recordkeeping
requirements, State savings associations,
Stress tests.
Authority and Issuance
For reasons stated in the preamble,
the Board of Directors of the Federal
Deposit Insurance Corporation amends
subpart C to part 325 of title 12 of the
Code of Federal Regulations as follows:
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PART 325—CAPITAL MAINTENANCE
1. Revise the authority citation for part
325 to read as follows:
■
Authority: 12 U.S.C. 5365(i)(2); 12 U.S.C.
5412(b)(2)(C); 12 U.S.C. 1818, 12 U.S.C.
11 13
12 5
CFR 121.201.
U.S.C. 801, et seq.
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2. In § 325.202, add paragraph (m) to
read as follows:
■
§ 325.202
Definitions.
*
*
*
*
*
(m) Stress test cycle means:
(1) Until October 1, 2015, the period
beginning October 1 of a calendar year
and ending on September 30 of the
following calendar year; and
(2) Beginning October 1, 2015, the
period beginning January 1 of a calendar
year and ending on December 31 of that
year.
■ 3. In § 325.203, revise paragraph (b) to
read as follows:
§ 325.203
Applicability.
*
*
*
*
(b)(1) A state nonmember bank or
state savings association that becomes a
covered bank after October 15, 2012 and
on or before March 31, 2014 shall
conduct its first annual stress test under
this subpart beginning in the next
calendar year after the date the state
nonmember bank or state savings
association becomes a covered bank.
(2) A state nonmember bank or state
savings association that becomes a
covered bank after March 31, 2014 and
on or before March 31, 2015 shall
conduct its first annual stress test under
this subpart in the January 1, 2016 stress
testing cycle.
(3) A state nonmember bank or state
savings association that becomes a
covered bank on or before March 31 in
years following 2015 shall conduct its
first annual stress test under this
subpart in the stress testing cycle in the
next calendar year after the date the
state nonmember bank or state savings
association becomes a covered bank. A
state nonmember bank or state savings
association that becomes a covered bank
after March 31 in years following 2015
shall conduct its first annual stress test
under this subpart in the second
calendar year after the date the state
nonmember bank or state savings
association becomes a covered bank.
*
*
*
*
*
■ 4. Revise § 325.204 to read as follows:
§ 325.204
Annual stress tests required.
(a) General requirements—(1) $10
billion to $50 billion covered bank. Prior
to January 1, 2016, a $10 billion to $50
billion covered bank must conduct a
stress test on or before March 31 of each
calendar year based on financial data as
of September 30 of the preceding
calendar year. Beginning January 1,
2016, a $10 billion to $50 billion
covered bank must conduct a stress test
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on or before July 31 of each calendar
year based on financial data as of
December 31 of the preceding calendar
year.
(2) Over $50 billion covered bank.
Prior to January 1, 2016, an over $50
billion covered bank must conduct a
stress test on or before January 5 of each
calendar year based on financial data as
of September 30 of the preceding
calendar year. Beginning January 1,
2016, an over $50 billion covered bank
must conduct a stress test on or before
April 5 of each calendar year based on
financial data as of December 31 of the
preceding calendar year.
(b) Scenarios provided by the
Corporation. In conducting the stress
test under this subpart, each covered
bank must use the scenarios provided
the Corporation. The scenarios provided
by the Corporation will reflect a
minimum of three sets of economic and
financial conditions, including baseline,
adverse, and severely adverse scenarios.
The Corporation will provide a
description of the scenarios required
under this section to each covered bank
no later than November 15 (for stress
test cycle beginning October 1, 2014) or
February 15 (for stress test cycle
beginning January 1, 2016, and all stress
test cycles thereafter) of that calendar
year.
(c) Significant trading activities. The
Corporation may require a covered bank
with significant trading activities, as
determined by the Corporation, to
include trading and counterparty
components in its adverse and severely
adverse scenarios. The trading and
counterparty position data used in these
components will be as of a date between
October 1 and December 1 (for the stress
test cycle beginning October 1, 2014) or
between January 1 and March 1 (for the
stress test cycle beginning January 1,
2016, and all stress test cycles
thereafter) of that calendar year selected
by the Corporation and communicated
to the covered bank no later than
December 1 (for the stress test cycle
beginning October 1, 2014) or March 1
(for the stress test cycle beginning
January 1, 2016, and all stress test cycles
thereafter) of the calendar year.
■ 5. Revise § 325.206(a) to read as
follows:
§ 325.206 Required reports of stress test
results to the FDIC and the Board of
Governors of the Federal Reserve System.
(a) Report required for annual stress
test results—(1) $10 billion to $50
billion covered bank. Prior to January 1,
2016, a $10 billion to $50 billion
covered bank must report to the FDIC
and to the Board on or before March 31
the results of the stress test in the
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manner and form specified by the FDIC.
Beginning January 1, 2016, a $10 billion
to $50 billion covered bank must report
to the FDIC and to the Board on or
before July 31 the results of the stress
test in the manner and form specified by
the FDIC.
(2) Over $50 billion covered bank.
Prior to January 1, 2016, an over $50
billion covered bank must report to the
FDIC and to the Board, on or before
January 5, the results of the stress test
in the manner and form specified by the
FDIC. Beginning January 1, 2016, an
over $50 billion covered bank must
report to the FDIC and to the Board, on
or before April 5, the results of the stress
test in the manner and form specified by
the FDIC.
*
*
*
*
*
■ 6. Revise § 325. 207(a) to read as
follows:
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§ 325.207
results.
Publication of stress test
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Dated at Washington, DC, this 18th day of
November 2014.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2014–27610 Filed 11–20–14; 8:45 am]
BILLING CODE 6714–01–P
(a) Publication date—(1) $10 billion to
$50 billion covered bank. (i) Prior to
January 1, 2016, a $10 billion to $50
billion covered bank must publish a
summary of the results of its annual
stress test in the period starting June 15
and ending June 30 (for the stress test
cycle beginning October 1, 2014).
(ii) Beginning January 1, 2016, a $10
billion to $50 billion covered bank must
publish a summary of the results of its
annual stress test in the period starting
October 15 and ending October 31 (for
the stress test cycle beginning January 1,
2016 and for all stress test cycles
thereafter).
(2) Over $50 billion covered bank. (i)
Prior to January 1, 2016, an over $50
billion covered bank must publish a
summary of the results of its annual
stress tests in the period starting March
15 and ending March 31 (for the stress
test cycle beginning October 1, 2014).
(ii) Beginning January 1, 2016, an over
$50 billion covered bank must publish
a summary of the results of its annual
stress tests in the period starting June 15
and ending July 15 (for the stress test
cycle beginning January 1 2016, and for
all stress test cycles thereafter)
provided:
(A) Unless the Corporation
determines otherwise, if the over $50
billion covered bank is a consolidated
subsidiary of a bank holding company
or savings and loan holding company
subject to supervisory stress tests
conducted by the Board of Governors of
the Federal Reserve System under 12
CFR part 252, then, within the June 15
to July 15 period, such covered bank
may not publish the required summary
of its annual stress test earlier than the
date that the Board of Governors of the
VerDate Sep<11>2014
Federal Reserve System publishes the
supervisory stress test results of the
covered bank’s parent holding company.
(B) If the Board of Governors of the
Federal Reserve System publishes the
supervisory stress test results of the
covered bank’s parent holding company
prior to June 15, then such covered bank
may publish its stress test results prior
to June 15, but no later than July 15,
through actual publication by the
covered bank or through publication by
the parent holding company under
paragraph (b) of this section.
*
*
*
*
*
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2013–0072; Directorate
Identifier 2013–NE–04–AD; Amendment 39–
18017; AD 2014–23–01]
RIN 2120–AA64
Airworthiness Directives; Pratt &
Whitney Division Turbofan Engines
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:
We are superseding
airworthiness directive (AD) 2013–15–
09 for all Pratt & Whitney Division (PW)
PW4074, PW4074D, PW4077,
PW4077D, PW4084D, PW4090, and
PW4090–3 turbofan engine models with
certain second-stage high-pressure
turbine (HPT) air seals installed. AD
2013–15–09 required initial and
repetitive inspections for cracks in
second-stage HPT air seals. This new
AD expands the applicability of AD
2013–15–09 to include additional part
numbers (P/Ns), requires removal of the
mating hardware if the second-stage
HPT air seal is found with a throughcrack, and adds a mandatory
terminating action. This AD was
prompted by reports of cracking in the
original location on two additional P/Ns
and reports of through-cracks in a new
location in the second-stage HPT air
seal. We are issuing this AD to prevent
failure of the second-stage HPT air seal,
which could lead to uncontained engine
failure and damage to the airplane.
SUMMARY:
PO 00000
Frm 00005
Fmt 4700
Sfmt 4700
69369
This AD is effective December
26, 2014.
The Director of the Federal Register
approved the incorporation by reference
of a certain publication listed in this AD
as of September 17, 2013 (78 FR 49111,
August 13, 2013).
ADDRESSES: For service information
identified in this AD, contact Pratt &
Whitney Division, 400 Main St., East
Hartford, CT 06108; phone: (860) 565–
8770; fax: (860) 565–4503. You may
view this service information at the
FAA, Engine & Propeller Directorate, 12
New England Executive Park,
Burlington, MA. For information on the
availability of this material at the FAA,
call (781) 238–7125.
DATES:
Examining the AD Docket
You may examine the AD docket on
the Internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2013–
0072; or in person at the Docket
Management Facility between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket
contains this AD, the regulatory
evaluation, any comments received, and
other information. The address for the
Docket Office (phone: 800–647–5527) is
Document Management Facility, U.S.
Department of Transportation, Docket
Operations, M–30, West Building
Ground Floor, Room W12–140, 1200
New Jersey Avenue SE., Washington,
DC 20590.
FOR FURTHER INFORMATION CONTACT: JoAnn Theriault, Aerospace Engineer,
Engine Certification Office, FAA, Engine
& Propeller Directorate, 12 New England
Executive Park, Burlington, MA 01803;
phone: 781–238–7105; fax: 781–238–
7199; email: jo-ann.theriault@faa.gov.
SUPPLEMENTARY INFORMATION:
Discussion
We issued a notice of proposed
rulemaking (NPRM) to amend 14 CFR
part 39 to supersede AD 2013–15–09,
Amendment 39–17525 (78 FR 49111,
August 13, 2013), (‘‘AD 2013–15–09’’).
AD 2013–15–09 applied to all PW
PW4074, PW4074D, PW4077,
PW4077D, PW4084D, PW4090, and
PW4090–3 turbofan engine models with
certain second-stage HPT air seals
installed. The NPRM published in the
Federal Register on June 5, 2014 (79 FR
32500). The NPRM was prompted by
reports of through-cracks in a different
location on a second-stage HPT air seal,
and reports of cracking in the original
location in two additional second-stage
HPT air seals. Pratt & Whitney
developed a redesigned second-stage
E:\FR\FM\21NOR1.SGM
21NOR1
]]>Agencies
[Federal Register Volume 79, Number 225 (Friday, November 21, 2014)]
[Rules and Regulations]
[Pages 69365-69369]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-27610]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 79, No. 225 / Friday, November 21, 2014 /
Rules and Regulations
[[Page 69365]]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 325
RIN 3064-AE18
Annual Stress Test
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Deposit Insurance Corporation (the Corporation or
FDIC) is issuing a final rule that implements proposed revisions to
regulations regarding the annual stress testing requirements for state
nonmember banks and state savings associations with total consolidated
assets of more than $10 billion (covered banks). The regulations, which
implement section 165(i)(2) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the Dodd-Frank Act), require covered banks to
conduct annual stress tests, report the results of such stress tests to
the Corporation and the Board of Governors of the Federal Reserve
System (the Board), and publicly disclose a summary of the results of
the required stress tests. The final rule revises the 2016 stress test
cycle and for years thereafter to begin on January 1 of the calendar
year rather than October 1, as is provided for by the current rule.
Additionally, the final rule modifies the ``as of'' dates for financial
data (that covered banks will use to perform their stress tests) as
well as the reporting dates and public disclosure dates of the annual
stress tests for both $10 billion to $50 billion covered banks and over
$50 billion covered banks.
DATES: This final rule is effective January 1, 2015.
FOR FURTHER INFORMATION CONTACT: Ryan Sheller, Section Chief, (202)
412-4861, Large Bank Supervision, Division of Risk Management and
Supervision; Mark G. Flanigan, Supervisory Counsel, (202) 898-7426,
Grace Pyun, Senior Attorney, (202) 898-3609, or Benjamin Klein, Senior
Attorney, (202) 898-7027, Legal Division, Federal Deposit Insurance
Corporation, 550 17th Street NW., Washington, DC, 20429.
SUPPLEMENTARY INFORMATION:
I. Background
Section 165(i) of the Dodd-Frank Act requires two types of stress
tests. Section 165(i)(1) requires the Board to conduct annual stress
tests of holding companies with $50 billion or more in total
consolidated assets (``supervisory stress tests''). Section 165(i)(2)
of the Dodd-Frank Act requires the federal banking agencies to issue
regulations requiring financial companies with more than $10 billion in
total consolidated assets to conduct annual stress tests themselves
(company-run stress tests), and it requires that the implementing
regulations issued by each of the federal banking agencies be
consistent and comparable with each other. In October 2012, the FDIC,
the Office of the Comptroller of the Currency (the OCC), and the Board
(collectively the Agencies) issued final rules \1\ implementing the
company-run stress tests requirements. The FDIC's final rule was
codified as part 325, subpart C of the FDIC rules and regulations (the
Annual Stress Test rule). The Annual Stress Test rule requires FDIC-
insured state nonmember banks and FDIC-insured state-chartered savings
associations with total consolidated assets of more than $10 billion to
conduct annual stress tests.
---------------------------------------------------------------------------
\1\ 77 FR 62417 (Oct. 15, 2012) (FDIC); 77 FR 61238 (October 9,
2012) (OCC); 77 FR 62396 (October 12, 2012) (Board).
---------------------------------------------------------------------------
Part 325, subpart C identifies two categories of covered banks. The
first category includes state nonmember banks and state savings
associations that have between $10 billion and $50 billion in total
consolidated assets, and the second category includes state nonmember
banks and state savings associations with over $50 billion in total
consolidated assets.\2\ For both categories of covered banks, the
company-run stress test must assess the potential impact of different
scenarios \3\ on the capital of the covered bank and certain related
items over a forward-looking, nine-quarter planning horizon, taking
into account all relevant exposures and activities.\4\
---------------------------------------------------------------------------
\2\ 12 CFR 325.202(d).
\3\ On an annual basis, prior to the start of the stress testing
period and no later than November 15, the FDIC provides to covered
banks a minimum of three economic scenarios (baseline, adverse, and
severely adverse) and additional scenarios as the FDIC determines
appropriate for the covered banks to use in performing their stress
tests.
\4\ In addition, certain covered banks with significant trading
activities (as determined by the FDIC) may be required to include a
trading and counterparty component for the scenarios used in their
stress tests.
---------------------------------------------------------------------------
Part 325, subpart C also provides timeframes for the testing,
reporting, and publication of the company-run stress tests, which vary
depending on the category into which the covered bank falls. Covered
banks use financial data as of September 30 (the ``as of'' date) of the
preceding calendar year to make projections that estimate their
financial position under the different stress scenarios, and to report
and publish the results of their annual stress test in the following
calendar year. Covered banks with $10 billion to $50 billion in total
assets must report the results of their stress tests by March 31 and
publish a summary of their results between June 15 and June 30.\5\ Over
$50 billion covered banks are required to report the results of their
annual stress test by January 5 of each calendar year and publish a
summary of their results between March 15 and March 31.\6\ These
testing, reporting, and publication milestones are consistent across
the federal banking agencies' respective annual stress testing rules.
---------------------------------------------------------------------------
\5\ 12 CFR 325.204(a); 325.206(a); 325.207(a).
\6\ 12 CFR 325.204(a); 325.206(a); 325.207(a).
---------------------------------------------------------------------------
A covered bank that is a consolidated subsidiary of a bank holding
company or savings and loan holding company subject to company-run
stress test requirements administered by the Board is generally
permitted to publish abbreviated disclosures of its annual stress test
results with the parent holding company's summary and on the same
timeline as the parent holding company.\7\ The FDIC requires that
specific information be included in the disclosure to reflect the
changes in the covered bank's capital ratios and the reasons for those
changes.
---------------------------------------------------------------------------
\7\ 12 CFR 325.207(b).
---------------------------------------------------------------------------
Since the publication and codification of the Annual Stress Test
rule, the Agencies have received feedback from the industry regarding
the resource
[[Page 69366]]
constraints that covered banks face at the beginning and end of the
calendar year arising from competing regulatory and reporting
deadlines. Furthermore, the Agencies are aware that conducting stress
testing during the last quarter of a calendar year may also make it
difficult for covered banks to make timely modifications to strategic
and operational plans for the following year that address any issues
identified in the company-run stress test results.
For these reasons, on July 1, 2014, the FDIC, in coordination with
the Board and the OCC, issued a notice of proposed rulemaking (the NPR)
in the Federal Register that proposed to modify the dates of the stress
test cycle and the corresponding reporting and publication deadlines.
The NPR proposed to shift the testing, reporting, and disclosure dates
for the 2016 company-run stress test cycle and each annual cycle
thereafter.\8\ The Corporation is now issuing a final rule modifying
the dates of the stress test cycle and the corresponding reporting and
publication deadlines as proposed in the NPR, as described further
below. The final rule will be consistent with final rules issued by the
OCC and Board making the same date modifications to the stress testing
cycle, agency reporting, and public disclosure.
---------------------------------------------------------------------------
\8\ 79 FR 37235 (July 1, 2014) (FDIC); 79 FR 37231 (OCC); 79 FR
37420 (Board).
---------------------------------------------------------------------------
II. Comments Received
The NPR solicited public comment on all aspects of the proposed
rule. The NPR's comment period ended on September 2, 2014, and the FDIC
received five comment letters. Comments were submitted by, or on behalf
of, individuals, banks and bank holding companies, and banking and
financial services industry trade groups and associations. The
commenters generally supported the proposed revisions in the NPR, but
also requested additional revisions to the proposed timeline shifts.
The commenters supported the proposed timing shift for the start of
the stress test cycles to address the challenges to banking
organizations and personnel presented at the end of the calendar year.
Some commenters encouraged the FDIC to accelerate implementation of the
proposed changes so that the adjusted timeframes apply beginning with
the 2015 stress test cycle, rather than with the 2016 stress test
cycle. The final rule adopts the proposed revisions to the start of the
stress test cycle and related dates, but does not accelerate the
implementation of the modified dates. The transition period is
necessary to give the FDIC and banking organizations sufficient time to
revise reporting schedules and change internal systems. As such, the
new timeline will become applicable to the stress testing cycle that
begins on January 1, 2016.
Commenters also requested that the FDIC provide stress test
scenarios by no later than January 15 of a given calendar year given
the compressed timeframe for implementation of stress testing
processes. In developing the scenarios, the FDIC seeks to provide
covered banks with sufficient time to conduct the annual stress tests,
while also ensuring that the scenarios reflect timely data on economic
and financial conditions. Under the revised timeline, the FDIC expects
to provide stress test scenarios as soon as possible and before the
deadlines set by the final rule. Accordingly, the FDIC has adopted this
aspect of the proposal without significant change.
Commenters additionally requested that the length of the planning
horizon be reduced from nine quarters to eight quarters. The NPR would
have shifted the stress testing timeline by one quarter, but would have
maintained the nine-quarter planning horizon. The commenters argued
that the ninth quarter does not provide additional meaningful
information given the incremental uncertainty in projections as they
move further into the future, and that eight quarters would still
represent two full years of capital planning. The FDIC believes that
the ninth quarter period provides meaningful information to the
Agencies in assessing the projections of covered banks. Accordingly,
the final rule maintains the nine-quarter planning horizon.
Commenters also requested that the Agencies delay incorporation of
advanced approaches risk-based capital rules into the annual stress
testing process indefinitely. The NPR proposed to revise the testing
and reporting dates and did not address the application of the risk-
based capital rules. As such, the FDIC believes that technical aspects
of projecting risk-based capital requirements under the advanced
approaches should be dealt with on a case-by-case basis and through the
supervisory process.
III. The Final Rule
After reviewing the comments, the FDIC is issuing this final rule
to implement the changes proposed in the NPR to part 325, subpart C of
the FDIC Rules and Regulations.
A. Company-Run Stress Test Timelines
Beginning January 1, 2016, the stress testing cycle that, under the
previous rule, would have begun on October 1 of a given calendar year,
will begin January 1 of a given calendar year. Beginning with the 2016
stress-testing cycle, the final rule requires covered banks to conduct
company-run stress tests using financial data as of December 31 of the
preceding calendar year, which represents a three-month shift from
September 30 in the previous rule. The FDIC will provide the economic
scenarios to be used by covered banks in their company-run stress tests
no later than February 15, rather than November 15, as is provided
under the previous rule. For those certain covered banks with
significant amounts of trading activities that are required to include
trading and counterparty components in their adverse and severely
adverse scenarios, the FDIC will select an ``as of'' date between
January 1 and March 1 of a calendar year for the data used in this
component. The FDIC will communicate this date to the covered banks no
later than March 1.
All $10 billion to $50 billion covered banks will be required to
conduct and submit the results of their company-run stress tests to the
FDIC by July 31 and publish those results during a period beginning on
October 15 and ending October 31. Over $50 billion covered banks will
be required to conduct and submit the results of their company-run
stress tests to the FDIC by April 5 and publish those results during a
period beginning on June 15 and ending on July 15. The April 5
reporting deadline for over $50 billion covered banks is a minor change
from the April 7 deadline proposed in the NPR.
Furthermore, a covered bank that is a consolidated subsidiary of a
bank holding company or savings and loan holding company that is
required to conduct an annual company-run stress test under applicable
regulations of the Board may continue to elect to conduct its stress
test and report to the FDIC on the same timeline as its parent bank
holding company or savings and loan holding company as it had under the
previous rule. Under the final rule, however, an over $50 billion
covered bank that is a consolidated subsidiary of a holding company
that is subject to supervisory stress tests conducted by the Board
under 12 CFR part 252 may publish the required summary of its company-
run stress test no earlier than the date that the Board publishes the
supervisory stress test results for the parent holding company, but no
later
[[Page 69367]]
than July 15. In addition, if the Board publishes the supervisory
stress test results of the covered bank's parent holding company prior
to June 15, then the covered bank may satisfy its publication
requirement either through actual publication by the covered bank or
through publication by the parent holding company under Sec. 325.207.
B. Applicability
The final rule amends the applicability provisions in Sec. 325.203
of the Annual Stress Test rule to reflect the changed timeline.
Previously, a state nonmember bank or state savings association that
became a covered bank had to conduct its first annual stress test
beginning in the next calendar year after the date the state nonmember
bank or state savings association became a covered bank. Under the new
2016 stress testing timeline, if this applicability provision were left
unchanged, a state nonmember bank or state savings association that
became a covered bank as of September 30 of a given year would have
been required to conduct its first stress test on January 1, three
months after becoming a covered bank. The final rule provides a minimum
of nine months between the date on which a state nonmember bank or
state savings association becomes a covered bank and the start date of
the stress testing cycle in which the covered bank must conduct its
first stress test. To preserve the nine-month minimum, the final rule
establishes a March 31 cutoff date. A state nonmember bank or state
savings association that becomes a covered bank on or before March 31
of a given year would be required to conduct its first stress test in
the next calendar year. For example, a state nonmember bank or state
savings association that becomes a covered bank on or before March 31,
2015 would be required to conduct its first stress test in the stress
testing cycle beginning January 1, 2016. A state nonmember bank or
state savings association that becomes a covered bank after March 31 of
a given year would be required to conduct its first stress test in the
second calendar year after the date the state nonmember bank or state
savings association becomes a covered bank. For example, a state
nonmember bank or state savings association that becomes a covered bank
on June 30, 2015 would be required to conduct its first stress test in
the stress testing cycle beginning January 1, 2017.
Table 1--Modified Annual Stress Test Timeline for $10 Billion to $50
Billion Covered Banks
------------------------------------------------------------------------
Action required ``As of'' Current rule Final rule December
date for financial data September 30 31
------------------------------------------------------------------------
Distribution of Scenarios By November 15...... By February 15.
for Annual Stress Tests by
FDIC.
Reporting of Annual Stress By March 31......... By July 31.
Test Results.
Public Disclosure of Annual Between June 15 and Between October 15
Stress Test Results. June 30. and October 31.
------------------------------------------------------------------------
Table 2--Modified Annual Stress Test Timeline for Over $50 Billion
Covered Banks
------------------------------------------------------------------------
Action required ``As of'' Current rule Final rule December
date for financial data September 30 31
------------------------------------------------------------------------
Distribution of Scenarios By November 15...... By February 15.
for Annual Stress Tests by
FDIC.
Reporting of Annual Stress By January 5........ By April 5.
Test Results.
Public Disclosure of Annual Between March 15 and Between June 15 and
Stress Test Results. March 31. July 15, except no
earlier than Board
publication of the
supervisory stress
test results of the
covered bank's
holding company.\9\
------------------------------------------------------------------------
IV. Administrative Law Matters
A. Paperwork Reduction Act Analysis
In accordance with the requirements of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501-3521) (``PRA''), the Corporation may not
conduct or sponsor, and the respondent is not required to respond to,
an information collection unless it displays a currently valid Office
of Management and Budget (``OMB'') control number. The FDIC has two
stress testing information collections: The Annual Stress Test and
Stress Testing Reporting Templates, 3064-0187 and -0189.
---------------------------------------------------------------------------
\9\ If the Board releases supervisory stress test results prior
to June 15, then the covered bank may release its annual stress test
results prior to June 15, but no earlier than the release of the
supervisory stress test results and no later than July 15.
---------------------------------------------------------------------------
The Corporation is revising 12 CFR 325.202, 325.203, 325.204,
325.206, and 325.207 by modifying timelines for the testing, reporting,
and disclosure of the annual stress tests for covered banks. The
revisions shift by three months the ``as of'' date of the financial
data used to conduct company-run stress tests for covered banks from
September 30 to December 31. The final rule also shifts the reporting
and disclosure deadlines for both $10 billion to $50 billion covered
banks and over $50 billion covered banks and provide for a new
transition period for those covered banks that become covered under the
rule. Additionally, under the final rule, an over $50 billion covered
bank that is a consolidated subsidiary of a bank holding company or
savings and loan holding company subject to supervisory stress tests
conducted by the Board may publish the required summary of its annual
stress test results no earlier than the date that the Board publishes
the supervisory stress test results of the covered bank's parent
holding company, but no later than July 15. The revision of timelines
in part 325, subpart C does not revise the FDIC's stress testing
information collections of information.
B. Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act, 5 U.S.C. 601, et seq. (RFA),
requires that each federal agency either certify that a proposed rule
would not, if adopted in final form, have a significant economic impact
on a substantial number of small entities or prepare an initial
regulatory flexibility analysis of the rule and publish the analysis
for comment.\10\ The final rule applies only to state nonmember banks
and state savings associations with more than $10 billion in total
consolidated assets. Under
[[Page 69368]]
regulations issued by the Small Business Administration (SBA), a bank
or other depository institution is considered ``small'' if it has $550
million or less in assets.\11\ As of June 30, 2014, there are
approximately 3,268 small state nonmember banks and state savings
associations. Since the final rule applies only to twenty-six state
nonmember banks and state savings associations with more than $10
billion in total consolidated assets, the Corporation does not expect
that the final rule will directly affect a substantial number of small
entities. It is hereby certified that this rule will not have a
significant economic impact on a substantial number of small entities
and therefore, a regulatory flexibility analysis under the RFA is not
required.
---------------------------------------------------------------------------
\10\ See 5 U.S.C. 603, 604, and 605.
\11\ 13 CFR 121.201.
---------------------------------------------------------------------------
C. Plain Language
Section 722 of the Gramm-Leach-Bliley Act (Pub. L. 106-102, 113
Stat. 1338, 1471, 12 U.S.C. 4809) requires federal banking agencies to
use plain language in all proposed and final rules published after
January 1, 2000. The Corporation sought to present the proposed rule in
a simple and straightforward manner and invited comment on how to make
the proposed rule easier to understand. The FDIC received no comments
on the use of plain language.
D. Small Business Regulatory Enforcement Fairness Act
The Office of Management and Budget has determined that the final
rule is not a ``major rule'' within the meaning of the relevant
sections of the Small Business Regulatory Enforcement Fairness Act of
1996 \12\ (``SBREFA'').
---------------------------------------------------------------------------
\12\ 5 U.S.C. 801, et seq.
---------------------------------------------------------------------------
List of Subjects in 12 CFR Part 325
Administrative practice and procedure, Banks, Banking, Disclosures,
Federal Deposit Insurance Corporation, Reporting and recordkeeping
requirements, State savings associations, Stress tests.
Authority and Issuance
For reasons stated in the preamble, the Board of Directors of the
Federal Deposit Insurance Corporation amends subpart C to part 325 of
title 12 of the Code of Federal Regulations as follows:
PART 325--CAPITAL MAINTENANCE
0
1. Revise the authority citation for part 325 to read as follows:
Authority: 12 U.S.C. 5365(i)(2); 12 U.S.C. 5412(b)(2)(C); 12
U.S.C. 1818, 12 U.S.C. 1819(a)(Tenth), 12 U.S.C. 1831o, and 12
U.S.C. 1831p-1.
0
2. In Sec. 325.202, add paragraph (m) to read as follows:
Sec. 325.202 Definitions.
* * * * *
(m) Stress test cycle means:
(1) Until October 1, 2015, the period beginning October 1 of a
calendar year and ending on September 30 of the following calendar
year; and
(2) Beginning October 1, 2015, the period beginning January 1 of a
calendar year and ending on December 31 of that year.
0
3. In Sec. 325.203, revise paragraph (b) to read as follows:
Sec. 325.203 Applicability.
* * * * *
(b)(1) A state nonmember bank or state savings association that
becomes a covered bank after October 15, 2012 and on or before March
31, 2014 shall conduct its first annual stress test under this subpart
beginning in the next calendar year after the date the state nonmember
bank or state savings association becomes a covered bank.
(2) A state nonmember bank or state savings association that
becomes a covered bank after March 31, 2014 and on or before March 31,
2015 shall conduct its first annual stress test under this subpart in
the January 1, 2016 stress testing cycle.
(3) A state nonmember bank or state savings association that
becomes a covered bank on or before March 31 in years following 2015
shall conduct its first annual stress test under this subpart in the
stress testing cycle in the next calendar year after the date the state
nonmember bank or state savings association becomes a covered bank. A
state nonmember bank or state savings association that becomes a
covered bank after March 31 in years following 2015 shall conduct its
first annual stress test under this subpart in the second calendar year
after the date the state nonmember bank or state savings association
becomes a covered bank.
* * * * *
0
4. Revise Sec. 325.204 to read as follows:
Sec. 325.204 Annual stress tests required.
(a) General requirements--(1) $10 billion to $50 billion covered
bank. Prior to January 1, 2016, a $10 billion to $50 billion covered
bank must conduct a stress test on or before March 31 of each calendar
year based on financial data as of September 30 of the preceding
calendar year. Beginning January 1, 2016, a $10 billion to $50 billion
covered bank must conduct a stress test on or before July 31 of each
calendar year based on financial data as of December 31 of the
preceding calendar year.
(2) Over $50 billion covered bank. Prior to January 1, 2016, an
over $50 billion covered bank must conduct a stress test on or before
January 5 of each calendar year based on financial data as of September
30 of the preceding calendar year. Beginning January 1, 2016, an over
$50 billion covered bank must conduct a stress test on or before April
5 of each calendar year based on financial data as of December 31 of
the preceding calendar year.
(b) Scenarios provided by the Corporation. In conducting the stress
test under this subpart, each covered bank must use the scenarios
provided the Corporation. The scenarios provided by the Corporation
will reflect a minimum of three sets of economic and financial
conditions, including baseline, adverse, and severely adverse
scenarios. The Corporation will provide a description of the scenarios
required under this section to each covered bank no later than November
15 (for stress test cycle beginning October 1, 2014) or February 15
(for stress test cycle beginning January 1, 2016, and all stress test
cycles thereafter) of that calendar year.
(c) Significant trading activities. The Corporation may require a
covered bank with significant trading activities, as determined by the
Corporation, to include trading and counterparty components in its
adverse and severely adverse scenarios. The trading and counterparty
position data used in these components will be as of a date between
October 1 and December 1 (for the stress test cycle beginning October
1, 2014) or between January 1 and March 1 (for the stress test cycle
beginning January 1, 2016, and all stress test cycles thereafter) of
that calendar year selected by the Corporation and communicated to the
covered bank no later than December 1 (for the stress test cycle
beginning October 1, 2014) or March 1 (for the stress test cycle
beginning January 1, 2016, and all stress test cycles thereafter) of
the calendar year.
0
5. Revise Sec. 325.206(a) to read as follows:
Sec. 325.206 Required reports of stress test results to the FDIC and
the Board of Governors of the Federal Reserve System.
(a) Report required for annual stress test results--(1) $10 billion
to $50 billion covered bank. Prior to January 1, 2016, a $10 billion to
$50 billion covered bank must report to the FDIC and to the Board on or
before March 31 the results of the stress test in the
[[Page 69369]]
manner and form specified by the FDIC. Beginning January 1, 2016, a $10
billion to $50 billion covered bank must report to the FDIC and to the
Board on or before July 31 the results of the stress test in the manner
and form specified by the FDIC.
(2) Over $50 billion covered bank. Prior to January 1, 2016, an
over $50 billion covered bank must report to the FDIC and to the Board,
on or before January 5, the results of the stress test in the manner
and form specified by the FDIC. Beginning January 1, 2016, an over $50
billion covered bank must report to the FDIC and to the Board, on or
before April 5, the results of the stress test in the manner and form
specified by the FDIC.
* * * * *
0
6. Revise Sec. 325. 207(a) to read as follows:
Sec. 325.207 Publication of stress test results.
(a) Publication date--(1) $10 billion to $50 billion covered bank.
(i) Prior to January 1, 2016, a $10 billion to $50 billion covered bank
must publish a summary of the results of its annual stress test in the
period starting June 15 and ending June 30 (for the stress test cycle
beginning October 1, 2014).
(ii) Beginning January 1, 2016, a $10 billion to $50 billion
covered bank must publish a summary of the results of its annual stress
test in the period starting October 15 and ending October 31 (for the
stress test cycle beginning January 1, 2016 and for all stress test
cycles thereafter).
(2) Over $50 billion covered bank. (i) Prior to January 1, 2016, an
over $50 billion covered bank must publish a summary of the results of
its annual stress tests in the period starting March 15 and ending
March 31 (for the stress test cycle beginning October 1, 2014).
(ii) Beginning January 1, 2016, an over $50 billion covered bank
must publish a summary of the results of its annual stress tests in the
period starting June 15 and ending July 15 (for the stress test cycle
beginning January 1 2016, and for all stress test cycles thereafter)
provided:
(A) Unless the Corporation determines otherwise, if the over $50
billion covered bank is a consolidated subsidiary of a bank holding
company or savings and loan holding company subject to supervisory
stress tests conducted by the Board of Governors of the Federal Reserve
System under 12 CFR part 252, then, within the June 15 to July 15
period, such covered bank may not publish the required summary of its
annual stress test earlier than the date that the Board of Governors of
the Federal Reserve System publishes the supervisory stress test
results of the covered bank's parent holding company.
(B) If the Board of Governors of the Federal Reserve System
publishes the supervisory stress test results of the covered bank's
parent holding company prior to June 15, then such covered bank may
publish its stress test results prior to June 15, but no later than
July 15, through actual publication by the covered bank or through
publication by the parent holding company under paragraph (b) of this
section.
* * * * *
Dated at Washington, DC, this 18th day of November 2014.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2014-27610 Filed 11-20-14; 8:45 am]
BILLING CODE 6714-01-P
