WASHINGTON (MNI) – The Federal Reserve announced Monday it is
considering delaying the implementation of bank stress tests required by
the Dodd-Frank financial reform act until September of next year, amid
concerns about the proposed timing, and fears the banks would not be
ready. The complete statement follows:
The Federal Reserve Board is considering changes to the
implementation timeline for the annual company-run stress test
requirements required by the Dodd-Frank Wall Street Reform and Consumer
Protection Act. The changes under consideration would delay
implementation until September 2013 for bank holding companies, state
member banks, and savings and loan holding companies with between $10
billion and $50 billion in total consolidated assets.
The Federal Reserve in December 2011 issued a notice of proposed
rulemaking to implement the enhanced prudential standards and early
remediation requirements established under the Dodd-Frank Act. The
December 2011 proposal would require all bank holding companies and
state member banks with more than $10 billion in total consolidated
assets to comply with the requirements to conduct an annual company-run
stress test beginning on the effective date of the final rule. The
December 2011 proposal would also require all savings and loan holding
companies with more than $10 billion in assets to comply with the annual
company-run stress test requirements once those holding companies become
subject to minimum risk-based capital requirements.
A number of commenters on the proposal raised concerns about the
proposed timing of compliance with the company-run stress test
requirements, specifically questioning if all institutions would have
the resources, readiness, and ability to conduct stress tests given the
likely short period between publication of a final rule and the start of
the stress testing process. A key priority in implementing the stress
testing requirements of the Dodd-Frank Act is to ensure that companies
have robust systems and processes to conduct the stress tests. In
response to the concerns expressed in comments, the Board is considering
delaying the effective date of the rule to conduct the annual stress
tests for bank holding companies, state member banks, and savings and
loan holding companies with between $10 billion and $50 billion in total
consolidated assets. The delay under consideration would help ensure
that these companies have sufficient time to develop high-quality stress
testing programs.
As part of efforts among the federal banking agencies to coordinate
the implementation of Dodd-Frank stress testing requirements, the
Federal Reserve has consulted on this proposed implementation delay with
the Office of the Comptroller of the Currency (OCC) and the Federal
Deposit Insurance Corporation (FDIC). The OCC and FDIC are considering
similar changes to timelines included in their proposed rules
implementing Dodd-Frank stress test requirements.
Additional details about the timing and scope of Dodd-Frank stress
test requirements for bank holding companies, state member banks, and
savings and loan holding companies with between $10 billion and $50
billion in total consolidated assets will be included in a forthcoming
final rule.
** MNI Washington Bureau: 202-371-2121 **
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