FDIC to resume requiring resolution plans from institutions with $100 billion or more

The federal bank deposit insurer on Tuesday announced it is resuming a long-paused requirement for resolution plan submissions for insured depository institutions (IDIs) with $100 billion or more in assets.

The Federal Deposit Insurance Corp. (FDIC), in a statement on action taken during Tuesday’s closed board meeting, said no firm will be required to submit a resolution plan without at least 12 months advance notice provided to the firm.

The agency noted that in November 2018, FDIC Board Chairman Jelena McWilliams announced the agency’s plan to revise the IDI Rule and that the next round of resolution plans submitted pursuant to that rule would not be required until the rulemaking process was complete. In April 2019, the board issued an advance notice of proposed rulemaking (ANPR) to seek comments on modifications to the IDI Rule and adopted a resolution extending the due date for future plan submissions pending completion of the rulemaking process.

The board on Tuesday said it was resuming the resolution plan requirement in light of the passage of time from the last submission as well as the “uncertain economic outlook.”

The statement issued Tuesday noted the plans announced last May for the FDIC to engage in targeted engagement and capabilities testing related to resolution planning with select firms on an as-needed basis. “This approach was consistent with the approach envisioned under the ANPR. While the FDIC will resume the requirement that IDIs with $100 billion or more in assets submit resolution plans, the FDIC intends to continue with targeted, periodic engagement and capabilities testing,” it said.

The statement said more details will be provided in coming weeks related to the modified approach, including efforts to streamline content requirements for IDI plan submissions and emphasize periodic engagement. “This modified approach will provide greater utility for the agency in planning for a resolution and is expected to be less burdensome on institutions subject to the rule,” it said.

“The FDIC believes resolution planning is critical to ensuring orderly resolutions, as reflected by the FDIC’s ongoing engagement with firms and its decision today to resume IDI plan submissions,” the statement said.

FDIC statement on lifting of insured depository institution plan moratorium