Stress Testing of Regulated Entities, 73090-73092 [2015-29861]

Download as PDF mstockstill on DSK4VPTVN1PROD with RULES 73090 Federal Register / Vol. 80, No. 226 / Tuesday, November 24, 2015 / Rules and Regulations applicable compliance date for regulations required under Section 15G of the Securities Exchange Act, 15 U.S.C. 78a et seq., added by Section 941(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the documents creating the securitization shall require that the sponsor retain an economic interest in a material portion, defined as not less than five (5) percent, of the credit risk of the financial assets. This retained interest may be either in the form of an interest of not less than five (5) percent in each of the credit tranches sold or transferred to the investors or in a representative sample of the securitized financial assets equal to not less than five (5) percent of the principal amount of the financial assets at transfer. This retained interest may not be sold, pledged or hedged, except for the hedging of interest rate or currency risk, during the term of the securitization. (B) For any securitization that closes upon or following the applicable compliance date for regulations required under Section 15G of the Securities Exchange Act, 15 U.S.C. 78a et seq., added by Section 941(b) of the DoddFrank Wall Street Reform and Consumer Protection Act, the documents creating the securitization shall instead require retention of an economic interest in the credit risk of the financial assets in accordance with such regulations, including the restrictions on sale, pledging and hedging set forth therein. (C) Notwithstanding paragraph (b)(5)(i)(A) of this section, for any securitization that closes following ll llllll November 24, 2015 and prior to the applicable compliance date for regulations required under Section 15G of the Securities Exchange Act, 15 U.S.C. 78a et seq., added by Section 941(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, at the option of the sponsor, the requirements of paragraph (b)(5)(i)(B) of this section may be satisfied if (in lieu of the requirement set forth in paragraph (b)(5)(i)(A) of this section) the documents creating the securitization require retention of an economic interest in the credit risk of the financial assets in accordance with the requirements of the Section 15G regulations as though such regulations were then in effect. * * * * * Dated at Washington, DC, this 22nd day of October, 2015. By order of the Board of Directors. VerDate Sep<11>2014 23:14 Nov 23, 2015 Jkt 238001 Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary. [FR Doc. 2015–29822 Filed 11–23–15; 8:45 am] BILLING CODE 6714–01–P FEDERAL HOUSING FINANCE AGENCY 12 CFR Part 1238 RIN 2590–AA74 Stress Testing of Regulated Entities Federal Housing Finance Agency. ACTION: Final rule. AGENCY: The Federal Housing Finance Agency (FHFA) is adopting a final rule amending its stress testing rule adopted in 2013 to implement section 165(i) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. FHFA received no comments to its proposed amendments, published for comment in an August 21, 2015 Notice of Proposed Rule. These amendments adopt the proposed amendments without change to modify: The start date of the stress test cycles from October 1 of a calendar year to January 1 of the following calendar year; the dates for FHFA to issue scenarios for the upcoming cycle; the dates for the regulated entities to report the results of their stress tests to FHFA; and the dates for the regulated entities to publicly disclose a summary of their stress test results for the severely adverse scenario. These amendments align FHFA’s rule with rules adopted by other financial institution regulators that implement the Dodd-Frank stress testing requirements. SUMMARY: DATES: Effective January 1, 2016. Naa Awaa Tagoe, Senior Associate Director, Office of Financial Analysis, Modeling and Simulations, (202) 649–3140, naaawaa.tagoe@fhfa.gov; Stefan Szilagyi, Examination Manager, FHLBank Modeling, FHLBank Risk Modeling Branch (202) 649–3515, stefan.szilagy@fhfa.gov; Karen Heidel, Senior Counsel, Office of General Counsel, (202) 649–3073, karen.heidel@ fhfa.gov; or Mark D. Laponsky, Deputy General Counsel, Office of General Counsel, (202) 649–3054, mark.laponsky@fhfa.gov. The telephone number for the Telecommunications Device for the Hearing Impaired is (800) 877–8339. SUPPLEMENTARY INFORMATION: FOR FURTHER INFORMATION CONTACT: PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 I. Background FHFA is an independent agency of the federal government established to regulate and oversee the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises), and the Federal Home Loan Banks (Bank(s)) (collectively, the regulated entities).1 FHFA is the primary federal financial regulator of each regulated entity. FHFA’s regulatory mission is to ensure, among other things, that each of the regulated entities ‘‘operates in a safe and sound manner’’ and that their ‘‘operations and activities . . . foster liquid, efficient, competitive, and resilient national housing finance markets.’’ 2 On September 26, 2013, FHFA published a final rule implementing section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act),3 which requires certain financial companies with total consolidated assets of more than $10 billion to conduct annual stress tests to determine whether the companies have the capital necessary to absorb losses as a result of adverse economic conditions. Each regulated entity is covered by this Dodd-Frank Act requirement. FHFA’s regulation, located at 12 CFR part 1238, requires each regulated entity to conduct an annual stress test based on scenarios provided by FHFA and consistent with FHFA prescribed methodologies and practices. The rule requires the annual stress test period to begin October 1 of one year and end September 30 of the next year, which coincided with the testing period established by Federal Reserve Board (FRB) regulations for its Dodd-Frank Act stress testing. FHFA’s regulation also requires that the Agency issue to the regulated entities stress test scenarios that are generally consistent with and comparable to those developed by the FRB not later than 15 days after the FRB publishes its scenarios.4 Each regulated entity is required to report the stress test results to FHFA and the FRB and publicly disclose a summary of the stress test results for the severely adverse scenario. The reporting date for the Enterprises is on or before February 5, and for the Banks it is on or before April 30.5 The date for each Enterprise 1 Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008, 12 U.S.C. 4501, et seq. 2 12 U.S.C. 4513(a)(1)(B). 3 78 FR 59219 (September 26, 2013). 4 12 CFR 1238.3(b). 5 12 CFR 1238.5(a). E:\FR\FM\24NOR1.SGM 24NOR1 Federal Register / Vol. 80, No. 226 / Tuesday, November 24, 2015 / Rules and Regulations to publicly disclose its results from the severely adverse scenario of the stress test is the period between April 15 and April 30.6 The Banks are required to disclose their summaries between July 15 and July 30.7 Maintaining consistency with the FRB testing rules, these dates were established by measuring forward from the corresponding dates in the FRB regulation, after accounting for differences in the business models of the regulated entities from those of the institutions regulated by the FRB. On October 27, 2014, the FRB published a final rule amending several dates relevant to its rule and from which FHFA measured to determine appropriate dates for stress testing cycles, scenario issuance, test reporting, and summary test disclosures.8 The effect of the rule change shifts the date for scenario issuance by approximately three months. The FRB’s new rule establishes January 1 of each year as the beginning of the stress testing cycle (changed from October 1) and the following December 31 as the date as of which the regulated entity is to identify and use data for testing.9 The new FRB rule requires large bank holding companies with $50 billion or more in total consolidated assets to report their test results not later than April 5 10 and publicly disclose their summary results by mid-July.11 The new FRB rule also requires U.S. banking institutions with total consolidated assets over $10 billion and less than $50 billion to report their test results by July 31 and publicly disclose their results during the period beginning October 15 and ending October 31.12 Since FHFA measured several of its regulatory dates from corresponding dates in the FRB regulation, FHFA is amending its regulation to maintain consistency and comparability in stress testing regimes. The final rule realigns FHFA’s stress testing rule with those of the FRB, Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) by modifying: (1) The start date of the stress test cycles from October 1 of a calendar year to January 1 of the following calendar year; 6 12 CFR 1238.7(a). CFR 1238.7(a). 8 79 FR 64025 (October 27, 2014), codified at12 CFR part 252. 9 12 CFR 252.12(t)(2), See 79 FR at 64046. 10 12 CFR 252.57(a)(1), See 79 FR at 64054. 11 12 CFR 252.58(a)(1)(i), requires companies to publicly disclose a summary of the stress test results within 15 calendar days after the FRB discloses the results of its supervisory stress test. The FRB will publicly disclose a summary of the supervisory stress test results by June 30 pursuant to 12 CFR 252.46(b)(1). See 79 FR at 64054. 12 12 CFR 252.17(a)(3)(iii), See 79 FR at 64049. mstockstill on DSK4VPTVN1PROD with RULES 7 12 VerDate Sep<11>2014 23:14 Nov 23, 2015 Jkt 238001 (2) the dates regulated entities are required to report stress test results to FHFA and the FRB; (3) the dates by which the regulated entities are required to publicly disclose summaries of the results for the severely adverse scenario; and (4) the date by which FHFA is required to issue stress testing scenarios to its regulated entities. As a result of FHFA’s experience through two stress test cycles, these amendments also lengthen the time between FRB’s issuance of its scenarios and FHFA’s issuance. The original rule’s 15 day period after FRB’s issuance has proven to be too short to allow appropriate analysis, stakeholder input, and adjustment of the scenarios to account for the differences in business models between the Enterprises and Banks as compared with other regulated institutions conducting Dodd-Frank stress tests under their regulators’ rules. Consequently, FHFA is extending the time by which it is required to issue its scenarios to 30 calendar days following FRB’s issuance of its final element of the supervisory scenarios. II. Discussion of Public Comments On August 21, 2015, FHFA published in the Federal Register proposed amendments to the Dodd-Frank stress testing requirements for the regulated entities. The comment period closed on September 21, 2015. FHFA did not receive any comments. Therefore, FHFA is adopting as its final rule the same rule proposed on August 21, 2015, without any change. III. Summary of the Final Rule Annual Stress Test—§ 1238.3 Section 1238.3 of the rule changes the ‘‘as of’’ date for the data used for stress testing from September 30 of that calendar year to December 31 of the previous calendar year. As a result of the shift, the stress test cycles would begin on January 1, based on data as of December 31 of the preceding calendar year. This cycle matches the cycle recently adopted by the other DoddFrank stress testing regulators. Section 1238.3(b) lengthens the amount of time by which FHFA commits to providing a description of the baseline, adverse, and severely adverse scenarios to all regulated entities from within 15 calendar days to within 30 calendar days after the FRB publishes its scenarios. This will provide additional time for FHFA to analyze and adjust the scenarios it issues to the Enterprises and Banks. PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 73091 Required Report to FHFA and the FRB of Stress Test Results and Related Information—§ 1238.5 Section 1238.5 changes the date by which stress test results are required to be reported to the FRB and FHFA. Instead of February 5 of each year, reports are required on or before May 20 for the Enterprises. Instead of April 30 of each year, reports are required on or before August 31 for the Banks. These changes reflect the shift in the stress test cycle and corresponding reporting dates adopted by the FRB and other regulators. Publication of Results by Regulated Entities—§ 1238.7 Section 1238.7 specifies a two week period within which the mandatory publication of a summary of the stress test results for the severely adverse scenario must occur. Instead of requiring publication between April 15 and April 30, the Enterprises must publish between August 1 and August 15 of each year. Instead of requiring publication between July 15 and July 30, the Banks must publish between November 15 and November 30 of each year. These changes reflect the shift in the stress test cycle and corresponding publication dates adopted by the FRB and other regulators. IV. Coordination With the FRB and the Federal Insurance Office In accordance with section 165(i)(2)(C) of the Dodd-Frank Act, (12 U.S.C. 5365(i)(2)(C)), FHFA has coordinated with both the FRB and the Federal Insurance Office (FIO). On October 27, 2014, the FRB published a final rule covering ‘‘bank holding compan[ies] with total consolidated assets of greater than $10 billion but less than $50 billion and savings and loan holding companies and state member banks with total consolidated assets of greater than $10 billion,’’ 13 and large bank holding companies and non-bank financial companies, also known as ‘‘covered companies’’ 14; the FDIC issued its final rule on November 21, 2014,15 and the OCC issued its final rule on December 3, 2014.16 Although FHFA’s final rule would not be identical to those of the FRB, the FDIC, and the OCC, it is consistent and comparable with them. 13 12 CFR part 252, subpart B, See 79 FR at 64045. CFR part 252, subpart F, See 79 FR at 64051. 15 79 FR 69365 (November 21, 2014), codified at 12 CFR part 325. 16 79 FR 71630 (December 3, 2014), codified at 12 CFR part 46. 14 12 E:\FR\FM\24NOR1.SGM 24NOR1 73092 Federal Register / Vol. 80, No. 226 / Tuesday, November 24, 2015 / Rules and Regulations V. Differences Between the Banks and the Enterprises Section 1313(f) of the Safety and Soundness Act requires the Director to consider the differences between the Banks and the Enterprises whenever promulgating regulations that affect the Banks. In developing the amendments to this rule, FHFA considered the differences between the Banks and the Enterprises, but also adhered to the statutory mandate that the regulation be ‘‘consistent and comparable’’ with the regulations of the other agencies. In implementing the regulation, FHFA will define scenarios for the regulated entities, bearing in mind the key risk exposures at each regulated entity. In the final rule, FHFA requires different timeframes for reporting stress test results for the Enterprises versus the Banks. For the Enterprises, FHFA sets the dates for reporting stress test results to the regulator, the FRB, and the public in proximity to similar dates in the other agencies’ rules for institutions with over $50 billion in assets. Reporting dates for all the Banks, regardless of size, are set in proximity to similar dates for institutions with less than $50 billion in assets. As a result, the Banks have over three additional months to report results to FHFA, the FRB, and the public. VI. Paperwork Reduction Act The final rule does not contain any collections of information pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.). Therefore, FHFA has not submitted any information to the Office of Management and Budget for review. mstockstill on DSK4VPTVN1PROD with RULES List of Subjects in 12 CFR Part 1238 Administrative practice and procedure, Capital, Federal Home Loan Banks, Government-sponsored enterprises, Regulated entities, Reporting and recordkeeping requirements, Stress test. Authority and Issuance For the reasons stated in the preamble, and under the authority of 12 U.S.C. 4513, 4526, and 5365(i), FHFA 23:14 Nov 23, 2015 Jkt 238001 Authority: 12 U.S.C. 5365(i); 12 U.S.C. 4513, 4526, 4612; and 12 U.S.C. 1426. stress test results for the severely adverse scenario not earlier than November 15 and not later than November 30 of each year. The summary may be published on the regulated entity’s Web site or in any other form that is reasonably accessible to the public; * * * * * 2. Amend § 1238.3 by revising paragraphs (a)(1) and (b) to read as follows: Dated: November 11, 2015. Melvin L. Watt, Director, Federal Housing Finance Agency. PART 1238—STRESS TESTING OF REGULATED ENTITIES 1. The authority citation for part 1238 continues to read as follows: ■ ■ § 1238.3 [FR Doc. 2015–29861 Filed 11–23–15; 8:45 am] Annual stress test. (a) * * * (1) Shall complete an annual stress test of itself based on its data as of December 31 of the preceding calendar year; * * * * * (b) Scenarios provided by FHFA. In conducting its annual stress tests under this section, each regulated entity must use scenarios provided by FHFA, which shall be generally consistent with and comparable to those established by the FRB, that reflect a minimum of three sets of economic and financial conditions, including a baseline, adverse, and severely adverse scenario. Not later than 30 days after the FRB publishes its scenarios, FHFA will issue to all regulated entities a description of the baseline, adverse, and severely adverse scenarios that each regulated entity shall use to conduct its annual stress tests under this part. ■ 3. Amend § 1238.5 by revising paragraph (a) to read as follows: § 1238.5 Required report to FHFA and the FRB of stress test results and related information. VII. Regulatory Flexibility Act The final rule applies only to the regulated entities, which do not come within the meaning of small entities as defined in the Regulatory Flexibility Act (see 5 U.S.C. 601(6)). Therefore, in accordance with section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 605(b)), the General Counsel of FHFA certifies that this final rule will not have a significant economic impact on a substantial number of small entities. VerDate Sep<11>2014 amends part 1238 of title 12 of the Code of Federal Regulations as follows: (a) Report required for stress tests. On or before May 20 of each year, the Enterprises must report the results of the stress tests required under § 1238.3 to FHFA, and to the FRB, in accordance with paragraph (b) of this section; and on or before August 31 of each year, the Banks must report the results of the stress tests required under § 1238.3 to FHFA, and to the FRB, in accordance with paragraph (b) of this section; * * * * * ■ 4. Amend § 1238.7 by revising paragraph (a) to read as follows: § 1238.7 Publication of results by regulated entities. (a) Public disclosure of results required for stress tests of regulated entities. The Enterprises must disclose publicly a summary of the stress test results for the severely adverse scenario not earlier than August 1 and not later than August 15 of each year. Each Bank must disclose publicly a summary of the PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 BILLING CODE 8070–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA–2015–0490; Directorate Identifier 2014–NM–018–AD; Amendment 39–18322; AD 2015–23–06] RIN 2120–AA64 Airworthiness Directives; Airbus Airplanes Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. AGENCY: We are superseding Airworthiness Directive (AD) 2008–22– 20 for certain Airbus Model A330–200, A330–300, and A340–300 series airplanes. AD 2008–22–20 required repetitive high frequency eddy current (HFEC) inspections for cracking, repair if necessary, and modification of the upper shell structure of the fuselage. This new AD shortens certain compliance times. This AD was prompted by a determination from a fatigue and damage tolerance evaluation that the compliance times must be reduced. We are issuing this AD to prevent fatigue cracking of the upper shell structure of the fuselage, which could result in reduced structural integrity of the airplane. DATES: This AD becomes effective December 29, 2015. The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of December 29, 2015. The Director of the Federal Register approved the incorporation by reference of certain other publications listed in this AD as of December 17, 2008 (73 FR 66747, November 12, 2008). ADDRESSES: You may examine the AD docket on the Internet at https:// www.regulations.gov/#!docketDetail; SUMMARY: E:\FR\FM\24NOR1.SGM 24NOR1

Agencies

[Federal Register Volume 80, Number 226 (Tuesday, November 24, 2015)]
[Rules and Regulations]
[Pages 73090-73092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-29861]


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FEDERAL HOUSING FINANCE AGENCY

12 CFR Part 1238

RIN 2590-AA74


Stress Testing of Regulated Entities

AGENCY: Federal Housing Finance Agency.

ACTION: Final rule.

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SUMMARY: The Federal Housing Finance Agency (FHFA) is adopting a final 
rule amending its stress testing rule adopted in 2013 to implement 
section 165(i) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act. FHFA received no comments to its proposed amendments, 
published for comment in an August 21, 2015 Notice of Proposed Rule. 
These amendments adopt the proposed amendments without change to 
modify: The start date of the stress test cycles from October 1 of a 
calendar year to January 1 of the following calendar year; the dates 
for FHFA to issue scenarios for the upcoming cycle; the dates for the 
regulated entities to report the results of their stress tests to FHFA; 
and the dates for the regulated entities to publicly disclose a summary 
of their stress test results for the severely adverse scenario. These 
amendments align FHFA's rule with rules adopted by other financial 
institution regulators that implement the Dodd-Frank stress testing 
requirements.

DATES: Effective January 1, 2016.

FOR FURTHER INFORMATION CONTACT: Naa Awaa Tagoe, Senior Associate 
Director, Office of Financial Analysis, Modeling and Simulations, (202) 
649-3140, naaawaa.tagoe@fhfa.gov; Stefan Szilagyi, Examination Manager, 
FHLBank Modeling, FHLBank Risk Modeling Branch (202) 649-3515, 
stefan.szilagy@fhfa.gov; Karen Heidel, Senior Counsel, Office of 
General Counsel, (202) 649-3073, karen.heidel@fhfa.gov; or Mark D. 
Laponsky, Deputy General Counsel, Office of General Counsel, (202) 649-
3054, mark.laponsky@fhfa.gov. The telephone number for the 
Telecommunications Device for the Hearing Impaired is (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    FHFA is an independent agency of the federal government established 
to regulate and oversee the Federal National Mortgage Association 
(Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) 
(collectively, the Enterprises), and the Federal Home Loan Banks 
(Bank(s)) (collectively, the regulated entities).\1\ FHFA is the 
primary federal financial regulator of each regulated entity. FHFA's 
regulatory mission is to ensure, among other things, that each of the 
regulated entities ``operates in a safe and sound manner'' and that 
their ``operations and activities . . . foster liquid, efficient, 
competitive, and resilient national housing finance markets.'' \2\
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    \1\ Federal Housing Enterprises Financial Safety and Soundness 
Act of 1992, as amended by the Housing and Economic Recovery Act of 
2008, 12 U.S.C. 4501, et seq.
    \2\ 12 U.S.C. 4513(a)(1)(B).
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    On September 26, 2013, FHFA published a final rule implementing 
section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act),\3\ which requires certain financial 
companies with total consolidated assets of more than $10 billion to 
conduct annual stress tests to determine whether the companies have the 
capital necessary to absorb losses as a result of adverse economic 
conditions. Each regulated entity is covered by this Dodd-Frank Act 
requirement. FHFA's regulation, located at 12 CFR part 1238, requires 
each regulated entity to conduct an annual stress test based on 
scenarios provided by FHFA and consistent with FHFA prescribed 
methodologies and practices. The rule requires the annual stress test 
period to begin October 1 of one year and end September 30 of the next 
year, which coincided with the testing period established by Federal 
Reserve Board (FRB) regulations for its Dodd-Frank Act stress testing.
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    \3\ 78 FR 59219 (September 26, 2013).
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    FHFA's regulation also requires that the Agency issue to the 
regulated entities stress test scenarios that are generally consistent 
with and comparable to those developed by the FRB not later than 15 
days after the FRB publishes its scenarios.\4\ Each regulated entity is 
required to report the stress test results to FHFA and the FRB and 
publicly disclose a summary of the stress test results for the severely 
adverse scenario. The reporting date for the Enterprises is on or 
before February 5, and for the Banks it is on or before April 30.\5\ 
The date for each Enterprise

[[Page 73091]]

to publicly disclose its results from the severely adverse scenario of 
the stress test is the period between April 15 and April 30.\6\ The 
Banks are required to disclose their summaries between July 15 and July 
30.\7\ Maintaining consistency with the FRB testing rules, these dates 
were established by measuring forward from the corresponding dates in 
the FRB regulation, after accounting for differences in the business 
models of the regulated entities from those of the institutions 
regulated by the FRB.
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    \4\ 12 CFR 1238.3(b).
    \5\ 12 CFR 1238.5(a).
    \6\ 12 CFR 1238.7(a).
    \7\ 12 CFR 1238.7(a).
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    On October 27, 2014, the FRB published a final rule amending 
several dates relevant to its rule and from which FHFA measured to 
determine appropriate dates for stress testing cycles, scenario 
issuance, test reporting, and summary test disclosures.\8\ The effect 
of the rule change shifts the date for scenario issuance by 
approximately three months. The FRB's new rule establishes January 1 of 
each year as the beginning of the stress testing cycle (changed from 
October 1) and the following December 31 as the date as of which the 
regulated entity is to identify and use data for testing.\9\ The new 
FRB rule requires large bank holding companies with $50 billion or more 
in total consolidated assets to report their test results not later 
than April 5 \10\ and publicly disclose their summary results by mid-
July.\11\ The new FRB rule also requires U.S. banking institutions with 
total consolidated assets over $10 billion and less than $50 billion to 
report their test results by July 31 and publicly disclose their 
results during the period beginning October 15 and ending October 
31.\12\ Since FHFA measured several of its regulatory dates from 
corresponding dates in the FRB regulation, FHFA is amending its 
regulation to maintain consistency and comparability in stress testing 
regimes.
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    \8\ 79 FR 64025 (October 27, 2014), codified at12 CFR part 252.
    \9\ 12 CFR 252.12(t)(2), See 79 FR at 64046.
    \10\ 12 CFR 252.57(a)(1), See 79 FR at 64054.
    \11\ 12 CFR 252.58(a)(1)(i), requires companies to publicly 
disclose a summary of the stress test results within 15 calendar 
days after the FRB discloses the results of its supervisory stress 
test. The FRB will publicly disclose a summary of the supervisory 
stress test results by June 30 pursuant to 12 CFR 252.46(b)(1). See 
79 FR at 64054.
    \12\ 12 CFR 252.17(a)(3)(iii), See 79 FR at 64049.
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    The final rule realigns FHFA's stress testing rule with those of 
the FRB, Federal Deposit Insurance Corporation (FDIC) and the Office of 
the Comptroller of the Currency (OCC) by modifying: (1) The start date 
of the stress test cycles from October 1 of a calendar year to January 
1 of the following calendar year; (2) the dates regulated entities are 
required to report stress test results to FHFA and the FRB; (3) the 
dates by which the regulated entities are required to publicly disclose 
summaries of the results for the severely adverse scenario; and (4) the 
date by which FHFA is required to issue stress testing scenarios to its 
regulated entities.
    As a result of FHFA's experience through two stress test cycles, 
these amendments also lengthen the time between FRB's issuance of its 
scenarios and FHFA's issuance. The original rule's 15 day period after 
FRB's issuance has proven to be too short to allow appropriate 
analysis, stakeholder input, and adjustment of the scenarios to account 
for the differences in business models between the Enterprises and 
Banks as compared with other regulated institutions conducting Dodd-
Frank stress tests under their regulators' rules. Consequently, FHFA is 
extending the time by which it is required to issue its scenarios to 30 
calendar days following FRB's issuance of its final element of the 
supervisory scenarios.

II. Discussion of Public Comments

    On August 21, 2015, FHFA published in the Federal Register proposed 
amendments to the Dodd-Frank stress testing requirements for the 
regulated entities. The comment period closed on September 21, 2015. 
FHFA did not receive any comments. Therefore, FHFA is adopting as its 
final rule the same rule proposed on August 21, 2015, without any 
change.

III. Summary of the Final Rule

Annual Stress Test--Sec.  1238.3

    Section 1238.3 of the rule changes the ``as of'' date for the data 
used for stress testing from September 30 of that calendar year to 
December 31 of the previous calendar year. As a result of the shift, 
the stress test cycles would begin on January 1, based on data as of 
December 31 of the preceding calendar year. This cycle matches the 
cycle recently adopted by the other Dodd-Frank stress testing 
regulators.
    Section 1238.3(b) lengthens the amount of time by which FHFA 
commits to providing a description of the baseline, adverse, and 
severely adverse scenarios to all regulated entities from within 15 
calendar days to within 30 calendar days after the FRB publishes its 
scenarios. This will provide additional time for FHFA to analyze and 
adjust the scenarios it issues to the Enterprises and Banks.

Required Report to FHFA and the FRB of Stress Test Results and Related 
Information--Sec.  1238.5

    Section 1238.5 changes the date by which stress test results are 
required to be reported to the FRB and FHFA. Instead of February 5 of 
each year, reports are required on or before May 20 for the 
Enterprises. Instead of April 30 of each year, reports are required on 
or before August 31 for the Banks. These changes reflect the shift in 
the stress test cycle and corresponding reporting dates adopted by the 
FRB and other regulators.

Publication of Results by Regulated Entities--Sec.  1238.7

    Section 1238.7 specifies a two week period within which the 
mandatory publication of a summary of the stress test results for the 
severely adverse scenario must occur. Instead of requiring publication 
between April 15 and April 30, the Enterprises must publish between 
August 1 and August 15 of each year. Instead of requiring publication 
between July 15 and July 30, the Banks must publish between November 15 
and November 30 of each year. These changes reflect the shift in the 
stress test cycle and corresponding publication dates adopted by the 
FRB and other regulators.

IV. Coordination With the FRB and the Federal Insurance Office

    In accordance with section 165(i)(2)(C) of the Dodd-Frank Act, (12 
U.S.C. 5365(i)(2)(C)), FHFA has coordinated with both the FRB and the 
Federal Insurance Office (FIO). On October 27, 2014, the FRB published 
a final rule covering ``bank holding compan[ies] with total 
consolidated assets of greater than $10 billion but less than $50 
billion and savings and loan holding companies and state member banks 
with total consolidated assets of greater than $10 billion,'' \13\ and 
large bank holding companies and non-bank financial companies, also 
known as ``covered companies'' \14\; the FDIC issued its final rule on 
November 21, 2014,\15\ and the OCC issued its final rule on December 3, 
2014.\16\ Although FHFA's final rule would not be identical to those of 
the FRB, the FDIC, and the OCC, it is consistent and comparable with 
them.
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    \13\ 12 CFR part 252, subpart B, See 79 FR at 64045.
    \14\ 12 CFR part 252, subpart F, See 79 FR at 64051.
    \15\ 79 FR 69365 (November 21, 2014), codified at 12 CFR part 
325.
    \16\ 79 FR 71630 (December 3, 2014), codified at 12 CFR part 46.

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[[Page 73092]]

V. Differences Between the Banks and the Enterprises

    Section 1313(f) of the Safety and Soundness Act requires the 
Director to consider the differences between the Banks and the 
Enterprises whenever promulgating regulations that affect the Banks. In 
developing the amendments to this rule, FHFA considered the differences 
between the Banks and the Enterprises, but also adhered to the 
statutory mandate that the regulation be ``consistent and comparable'' 
with the regulations of the other agencies. In implementing the 
regulation, FHFA will define scenarios for the regulated entities, 
bearing in mind the key risk exposures at each regulated entity.
    In the final rule, FHFA requires different timeframes for reporting 
stress test results for the Enterprises versus the Banks. For the 
Enterprises, FHFA sets the dates for reporting stress test results to 
the regulator, the FRB, and the public in proximity to similar dates in 
the other agencies' rules for institutions with over $50 billion in 
assets. Reporting dates for all the Banks, regardless of size, are set 
in proximity to similar dates for institutions with less than $50 
billion in assets. As a result, the Banks have over three additional 
months to report results to FHFA, the FRB, and the public.

VI. Paperwork Reduction Act

    The final rule does not contain any collections of information 
pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et 
seq.). Therefore, FHFA has not submitted any information to the Office 
of Management and Budget for review.

VII. Regulatory Flexibility Act

    The final rule applies only to the regulated entities, which do not 
come within the meaning of small entities as defined in the Regulatory 
Flexibility Act (see 5 U.S.C. 601(6)). Therefore, in accordance with 
section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 605(b)), the 
General Counsel of FHFA certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities.

List of Subjects in 12 CFR Part 1238

    Administrative practice and procedure, Capital, Federal Home Loan 
Banks, Government-sponsored enterprises, Regulated entities, Reporting 
and recordkeeping requirements, Stress test.

Authority and Issuance

    For the reasons stated in the preamble, and under the authority of 
12 U.S.C. 4513, 4526, and 5365(i), FHFA amends part 1238 of title 12 of 
the Code of Federal Regulations as follows:

PART 1238--STRESS TESTING OF REGULATED ENTITIES

0
1. The authority citation for part 1238 continues to read as follows:

    Authority:  12 U.S.C. 5365(i); 12 U.S.C. 4513, 4526, 4612; and 
12 U.S.C. 1426.


0
2. Amend Sec.  1238.3 by revising paragraphs (a)(1) and (b) to read as 
follows:


Sec.  1238.3  Annual stress test.

    (a) * * *
    (1) Shall complete an annual stress test of itself based on its 
data as of December 31 of the preceding calendar year;
* * * * *
    (b) Scenarios provided by FHFA. In conducting its annual stress 
tests under this section, each regulated entity must use scenarios 
provided by FHFA, which shall be generally consistent with and 
comparable to those established by the FRB, that reflect a minimum of 
three sets of economic and financial conditions, including a baseline, 
adverse, and severely adverse scenario. Not later than 30 days after 
the FRB publishes its scenarios, FHFA will issue to all regulated 
entities a description of the baseline, adverse, and severely adverse 
scenarios that each regulated entity shall use to conduct its annual 
stress tests under this part.

0
3. Amend Sec.  1238.5 by revising paragraph (a) to read as follows:


Sec.  1238.5  Required report to FHFA and the FRB of stress test 
results and related information.

    (a) Report required for stress tests. On or before May 20 of each 
year, the Enterprises must report the results of the stress tests 
required under Sec.  1238.3 to FHFA, and to the FRB, in accordance with 
paragraph (b) of this section; and on or before August 31 of each year, 
the Banks must report the results of the stress tests required under 
Sec.  1238.3 to FHFA, and to the FRB, in accordance with paragraph (b) 
of this section;
* * * * *

0
4. Amend Sec.  1238.7 by revising paragraph (a) to read as follows:


Sec.  1238.7  Publication of results by regulated entities.

    (a) Public disclosure of results required for stress tests of 
regulated entities. The Enterprises must disclose publicly a summary of 
the stress test results for the severely adverse scenario not earlier 
than August 1 and not later than August 15 of each year. Each Bank must 
disclose publicly a summary of the stress test results for the severely 
adverse scenario not earlier than November 15 and not later than 
November 30 of each year. The summary may be published on the regulated 
entity's Web site or in any other form that is reasonably accessible to 
the public;
* * * * *

    Dated: November 11, 2015.
Melvin L. Watt,
Director, Federal Housing Finance Agency.
[FR Doc. 2015-29861 Filed 11-23-15; 8:45 am]
 BILLING CODE 8070-01-P
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