Reg relief law drives proposed changes to OFR fee rules affecting BHCs, others

Bank holding companies (BHCs) that have less than $250 billion in consolidated assets and are not defined as global systemically important banking organizations (G-SIBs) would no longer be assessed fees for Treasury’s Office of Financial Research (OFR) under a proposed rule aimed at implementing changes made under the 2018 regulatory relief law.

The proposal, issued by the Treasury Department with a Dec. 4 public comment deadline, is aimed in part to implement provisions of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S. 2155). Boiled down, the proposed rule would:

  • raise from $50 billion to $250 billion the consolidated-asset threshold for BHCs subject to the fees;
  • subject any BHC – regardless of asset size – that is a G-SIB to fee assessments;
  • continue to require fees of nonbank financial companies supervised by the Federal Reserve Board;
  • simplify the method for determining “assessable assets” of foreign banking organizations (FBOs) by specifying that the calculation of a foreign banking organization’s total assessable assets would be based on the data reported in the FR Y-7Q; and
  • move up by one month the “determination date” for the statutorily required semiannual OFR fee assessments.

The semiannual assessment determination dates would be revised under the proposed rule from March 31 to April 30; and from Oct. 31 to Nov. 30.

The fees were first required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), which also created the OFR. The OFR was established within Treasury to support the Financial Stability Oversight Council (FSOC) and its member agencies. Among the OFR’s key duties are:

  • collecting data on behalf of the FSOC and proving such data to the FSOC and member agencies;
  • standardizing the types and formats of data reported and collected;
  • performing research;
  • developing tools for risk measurement and monitoring; and
  • reporting to Congress and the public on the OFR’s assessment of significant financial market developments and potential emerging threats to U.S. financial stability.

The OFR’s expenses include those of the FSOC and certain expenses of the Federal Deposit Insurance Corp. (FDIC) related to its “clawback” authority. (That authority allows the FDIC to recoup compensation from any senior executives or directors found responsible, either through fraud or negligence, for the failure of any covered financial companies.)

The proposal is in Monday’s Federal Register.

Reg lookup: Assessment of Fees on Certain Bank Holding Companies and Nonbank Financial Companies Supervised by the Federal Reserve Board To Cover the Expenses of the Financial Research Fund

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