Banks’ federal deposit insurer proposes stress-test rule changes, rescinds obsolete rules for state savings associations

The Federal Deposit Insurance Corp. (FDIC) is proposing changes to its stress-testing rules to conform to similar changes made previously by the Federal Reserve and the Office of the Comptroller of the Currency (OCC). The changes affect terminology as well as the time for transitioning to rules applicable to “over $50 billion” covered banks.

Under the proposed rule, a covered bank that becomes an over $50 billion covered bank on or before Sept. 30 would become subject to the requirements applicable to an over $50 billion covered bank beginning on Jan. 1 of the second calendar year after that change occurs. If this migration to an over $50 billion covered bank occurs after Sept. 30, the bank would become subject to the requirements applicable to an over $50 billion covered bank beginning on Jan. 1 of the third calendar year after the migration.

The proposed rule would also change the range of possible “as-of” dates used in the trading and counterparty position data stress-testing component. Additionally, it would make certain technical changes to clarify the requirements of the FDIC’s stress testing regulation and to eliminate obsolete provisions.

One of the other changes affects how the regulation differentiates between covered banks under and over $50 billion in assets. The proposed rule would change the defined term “over $50 billion covered bank” to “$50 billion or over covered bank.” This would be a more precise description of the entities included within this category.

The proposed rule is scheduled for publication in the Federal Register April 2; a 60-day comment period applies.

The FDIC is also rescinding two rules of the previous Office of Thrift Supervision. The rules, regarding consumer protection in sales of insurance and on minimum security procedures, are rescinded 30 days after publication in the Federal Register (also scheduled April 2). The FDIC is also incorporating the requirements into its own rules for state savings associations.

FDIC Proposed Rule, Annual Stress Test

FDIC Final Rule, Consumer Protection Sales of Insurance (rescinded)

FDIC Final Rule, Minimum Security Procedures (rescinded)

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