Changes in FDIC rule on company-run stress testing effective in late November

A final rule implementing last year’s statutory revisions on company-run stress testing – in this case, for state-chartered, nonmember banks and savings associations that are federally insured – is slated for publication in the Federal Register Thursday and will take effect 30 days after that.

The final rule was approved Oct. 15 by the Federal Deposit Insurance Corp. (FDIC) Board to reflect the provisions of the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S. 2155). A similar rule was adopted by the Office of the Comptroller of the Currency (OCC) earlier this month; Federal Reserve Board action is pending.

The FDIC final rule revises the minimum asset-size threshold for institutions subject to company-run stress testing requirements from $10 billion to $250 billion, revises the frequency of required stress tests by FDIC-supervised institutions (from annual to biennial stress testing), and reduces the number of required stress testing scenarios from three to two (the “adverse” scenario is removed).

The rule is set to take effect on or about Nov. 23.

Company-Run Stress Testing Requirements for FDIC-Supervised State Nonmember Banks and State Savings Associations