82 FR 49764 - Annual Stress Test-Technical and Conforming Changes
DEPARTMENT OF THE TREASURY
Comptroller of the Currency Federal Register Volume 82, Issue 207 (October 27, 2017)
Comptroller of the Currency
Federal Register Volume 82, Issue 207 (October 27, 2017)
| Page Range | 49764-49767 | |
| FR Document | 2017-23353 |
[Federal Register Volume 82, Number 207 (Friday, October 27, 2017)] [Proposed Rules] [Pages 49764-49767] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-23353] ======================================================================== Proposed Rules Federal Register ________________________________________________________________________ This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules. ======================================================================== Federal Register / Vol. 82, No. 207 / Friday, October 27, 2017 / Proposed Rules [[Page 49764]] DEPARTMENT OF THE TREASURY Comptroller of the Currency 12 CFR Part 46 [Docket ID. OCC-2017-0021] RIN 1557-AD85 Annual Stress Test--Technical and Conforming Changes AGENCY: Office of the Comptroller of the Currency, Treasury. ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: The Office of the Comptroller of the Currency (OCC) is inviting comment on a proposed rule that would make several revisions to its stress testing rule. The proposed rule would change the range of possible ``as-of'' dates used in the global market shock component to conform to changes recently made by the Board of Governors of the Federal Reserve System (Board) to its stress testing regulations. The proposed rule would also change the transition process for covered institutions with $50 billion or more in assets. Under the proposed rule, a covered institution that becomes an over $50 billion covered institution, as that term is defined in the OCC stress testing regulation, before September 30 would become subject to the requirements applicable to an over $50 billion covered institution beginning on January 1 of the second calendar year after the covered institution becomes an over $50 billion covered institution, and a covered institution that becomes an over $50 billion covered institution after September 30 would become subject to the requirements applicable to an over $50 billion covered institution beginning on January 1 of the third calendar year after the covered institution becomes an over $50 billion covered institution. The proposed rule would also make certain technical changes to clarify the requirements of the OCC's stress testing regulation. DATES: Comments must be received on or before December 26, 2017. ADDRESSES: You may submit comments to the OCC by any of the methods set forth below. Because paper mail in the Washington, DC area and at the OCC is subject to delay, commenters are encouraged to submit comments through the Federal eRulemaking Portal or email, if possible. Please use the title ``Annual Stress Test--Technical and Conforming Changes'' to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods:Federal eRulemaking Portal--``Regulations.gov'': Go to www.regulations.gov. Enter ``Docket ID OCC-2017-0021'' in the Search Box and click ``Search.'' Click on ``Comment Now'' to submit public comments. Click on the ``Help'' tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting public comments. Email: [email protected]. Mail: Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 400 7th Street SW., Suite 3E-218, Washington, DC 20219. Hand Delivery/Courier: 400 7th Street SW., Suite 3E-218, Washington, DC 20219. Fax: (571) 465-4326. Instructions: You must include ``OCC'' as the agency name and ``Docket ID OCC-2017-0021'' in your comment. In general, the OCC will enter all comments received into the docket and publish them on the Regulations.gov Web site without change, including any business or personal information that you provide such as name and address information, email addresses, or phone numbers. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure. You may review comments and other related materials that pertain to this rulemaking action by any of the following methods: Viewing Comments Electronically: Go to www.regulations.gov. Enter ``Docket ID OCC-2017-0021'' in the Search box and click ``Search.'' Click on ``Open Docket Folder'' on the right side of the screen. Comments and supporting materials can be viewed and filtered by clicking on ``View all documents and comments in this docket'' and then using the filtering tools on the left side of the screen. Click on the ``Help'' tab on the Regulations.gov home page to get information on using Regulations.gov. The docket may be viewed after the close of the comment period in the same manner as during the comment period. Viewing Comments Personally: You may personally inspect and photocopy comments at the OCC, 400 7th Street SW., Washington, DC 20219. For security reasons, the OCC requires that visitors make an appointment to inspect comments. You may do so by calling (202) 649- 6700 or, for persons who are deaf or hearing impaired, TTY, (202) 649- 5597. Upon arrival, visitors will be required to present valid government-issued photo identification and submit to security screening in order to inspect and photocopy comments. FOR FURTHER INFORMATION CONTACT: Hein Bogaard, Lead Economic Expert, International Analysis and Banking Condition, (202) 649-5450; Andrew Tschirhart, Financial Analyst, Large Bank Supervision, (202) 649-6210; Kari Falkenborg, Senior Financial Analyst, Midsize and Community Bank Supervision, (312) 917-5000; Henry Barkhausen, Counsel, or Ron Shimabukuro, Senior Counsel, Legislative and Regulatory Activities Division, (202) 649-5490; for persons who are deaf or hearing impaired, TTY, (202) 649-5597. SUPPLEMENTARY INFORMATION: I. Background Section 165(i) of the Dodd-Frank Wall Street Reform and Consumer Protection Act \1\ (``Dodd-Frank Act'') requires two types of stress tests. Section 165(i)(1) requires the Board to conduct annual stress tests of holding companies with $50 billion or more in assets (``supervisory stress tests''). Section 165(i)(2) requires the federal banking agencies to issue regulations requiring financial companies with more than $10 billion in assets to conduct annual stress tests themselves (``company-run stress tests''). In October 2012, the OCC, the Board, and the Federal Deposit Insurance Corporation issued final rules [[Page 49765]] implementing the company-run stress tests. --------------------------------------------------------------------------- \1\ Public Law 111-203, 124 Stat. 1376 (2010). --------------------------------------------------------------------------- The Dodd-Frank Act requires that the OCC and other federal primary financial regulatory agencies issue consistent and comparable regulations to implement the statutory stress testing requirement. In order to fulfill this requirement and minimize regulatory burden, the OCC has worked to ensure that its stress testing regulation remains consistent and comparable to the regulations enacted by other regulatory agencies, including the Board. II. Description of the Proposed Rule A. New Range of Possible As-Of Dates for Trading and Counterparty Scenario Component Under 12 CFR 46.5(c) the OCC may require a covered institution with significant trading activities to include trading and counterparty components in its adverse and severely adverse scenarios. The trading and counterparty position data to be used in this component is as of a date between January 1 and March 1 of a calendar year. On February 3, 2017 the Board issued a final rule that extended this range to run from October 1 of the calendar year preceding the year of the stress test to March 1 of the calendar year of the stress test.\2\ The proposed rule would make the same change to the OCC's stress testing regulation. Extending this range would increase the OCC's flexibility to choose an appropriate as-of date. The OCC continues to coordinate its stress testing program with the Board in order to minimize regulatory burden. --------------------------------------------------------------------------- \2\ 82 FR 9308 (February 3, 2017). --------------------------------------------------------------------------- B. New Applicability Transition and Terminology for Covered Institutions With $50 Billion or More in Assets The proposed rule would change the term ``over $50 billion covered institution'' to ``$50 billion or over covered institution.'' The change would not alter the scope of this defined term and would not change the substantive requirements of the regulation. The new defined term would be a more precise description of the entities included within this category, which includes all national banks and federal savings associations ``with average total consolidated assets . . . that are not less than $50 billion.'' \3\ While the proposed rule would change the defined term ``over $50 billion covered institution'' to ``$50 billion or over covered institution,'' this supplementary information section will continue to use the defined term ``over $50 billion covered institution'' since that is the term used in the current regulatory text. --------------------------------------------------------------------------- \3\ 12 CFR 46.2. --------------------------------------------------------------------------- The proposed rule would also change the transition process for covered institutions that become an ``over $50 billion covered institution.'' On February 3, 2017, the Board issued a final rule that provides additional time for bank holding companies that cross the $50 billion asset threshold close to the April 5 submission date.\4\ The proposed rule would make a parallel amendment to the OCC's stress testing regulation. Under the proposed rule, a national bank or federal savings association that becomes an over $50 billion covered institution in the fourth quarter of a calendar year \5\ would not be subject to the stress testing requirements applicable to over $50 billion covered institutions until the third year after it crosses the asset threshold. For example, if a national bank or federal savings association became an over $50 billion covered institution on September 15, 2017, the institution would be expected to comply with the requirements applicable to over $50 billion covered institutions beginning in 2019 and file the OCC DFAST-14A in April 2019. If a national bank or federal savings association became an over $50 billion covered institution on October 15, 2017, the institution would be required to comply with the stress testing requirements applicable to over $50 billion covered institutions beginning in 2020 and file the OCC DFAST-14A in April 2020. --------------------------------------------------------------------------- \4\ 82 FR 9308 (February 3, 2017). \5\ An institution becomes an over $50 billion covered institution when its average total consolidated assets, as reported on the covered institution's Call Reports, for the four most recent consecutive quarters, equals $50 billion or more. 12 CFR 46.3(a). --------------------------------------------------------------------------- The stress testing timeline and transition process for national banks or federal savings associations which become $10 to $50 billion covered institutions remains unchanged. A national bank or federal savings association that becomes a $10 to $50 billion covered institution on or before March 31 of a given year would be required to conduct its first stress test in the next calendar year. For example, a national bank or federal savings association that becomes a $10 to $50 billion covered institution as of March 31, 2017 would be required to conduct its first stress test in the stress testing cycle beginning January 1, 2018. A national bank or federal savings association that becomes a $10 to $50 billion covered institution after March 31 of a given year would be required to conduct its first stress test in the second calendar year after the date the national bank or federal savings association becomes a covered institution. For example, a national bank or federal savings association that becomes a $10 to $50 billion covered institution on June 30, 2017 would be required to conduct its first stress test in the stress testing cycle beginning January 1, 2019. C. Remove Obsolete Transition Language In 2014 the OCC, in coordination with the Board and Federal Deposit Insurance Corporation, shifted the dates of the annual stress testing cycle by approximately three months.\6\ The OCC's stress testing regulation continues to include transition language to facilitate this schedule shift. The transition to the new schedule is now complete, and the proposed rule would remove this obsolete transition language. --------------------------------------------------------------------------- \6\ 79 FR 71630 (December 3, 2014). --------------------------------------------------------------------------- III. Request for Comment The OCC requests comment on all aspects of the proposal. IV. Regulatory Analysis Paperwork Reduction Act Under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3520), the OCC may not conduct or sponsor, and a person is not required to respond to, an information collection unless the information collection displays a valid Office of Management and Budget (OMB) control number. This notice of proposed rulemaking amends 12 CFR part 46, which has an approved information collection under the PRA (OMB Control No. 1557- 0319). The amendments proposed today do not introduce any new collections of information, nor do they amend 12 CFR part 46 in a way that modifies the collection of information that OMB has approved. Therefore, this proposal does not require a PRA submission to OMB. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., requires generally that, in connection with a notice of proposed rulemaking, an agency prepare and make available for public comment an initial regulatory flexibility analysis that describes the impact of a proposed rule on small entities. However, the regulatory flexibility analysis otherwise required under the RFA is not required if an agency certifies that the rule will not have a significant economic impact on a substantial number of small entities (defined in regulations promulgated by the Small Business Administration (SBA) to include banking organizations [[Page 49766]] with total assets of less than or equal to $500 million) and publishes its certification and a brief explanatory statement in the Federal Register together with the rule. As discussed in the SUPPLEMENTARY INFORMATION above, the proposed changes will only affect institutions with more than $10 billion in total assets. Therefore, the rule will not affect any small entities. As such, pursuant to section 605(b) of the RFA, the OCC certifies that this proposal would not have a significant economic impact on a substantial number of small entities because no small national banks or federal savings associations would be affected by the proposal. Accordingly, an initial regulatory flexibility analysis is not required. Unfunded Mandates Reform Act The OCC has analyzed the proposed rule under the factors in the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under this analysis, the OCC considered whether the proposed rule includes a federal mandate that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year (adjusted annually for inflation). The OCC has determined that this proposed rule will not result in expenditures by state, local, and tribal governments, or the private sector, of $100 million or more in any one year. Accordingly, this proposal is not subject to section 202 of the UMRA. Riegle Community Development and Regulatory Improvement Act of 1994 The Riegle Community Development and Regulatory Improvement Act of 1994 (RCDRIA) requires that each federal banking agency, in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions, consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, new regulations and amendments to regulations that impose additional reporting, disclosures, or other new requirements on insured depository institutions generally must take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form.\7\ The proposed rule would not impose additional reporting, disclosure, or other requirements; therefore the requirements of the RCDRIA do not apply. --------------------------------------------------------------------------- \7\ 12 U.S.C. 4802. --------------------------------------------------------------------------- Plain Language Section 722 of the Gramm-Leach-Bliley Act requires the federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. The OCC has sought to present the proposed rule in a simple and straightforward manner, and invites comment on the use of plain language. For example: Has the OCC organized the material to suit your needs? If not, how could the OCC present the proposed rule more clearly? Are the requirements in the proposed rule clearly stated? If not, how could the proposed rule be more clearly stated? Do the regulations contain technical language or jargon that is not clear? If so, which language requires clarification? Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes would achieve that? Is this section format adequate? If not, which of the sections should be changed and how? What other changes can the OCC incorporate to make the regulation easier to understand? List of Subjects in 12 CFR Part 46 Banking, Banks, Capital, Disclosures, National banks, Recordkeeping, Risk, Savings associations, Stress test. Authority and Issuance For the reasons set forth in the preamble, the OCC proposes to amend 12 CFR part 46 as follows: PART 46--ANNUAL STRESS TEST 0 1. The authority citation for part 46 continues to read as follows: Authority: 12 U.S.C. 93a; 1463(a)(2); 5365(i)(2); and 5412(b)(2)(B). PART 46--[Amended] 0 2. Remove the phrase ``over $50 billion covered institution'' and add the phrase ``$50 billion or over covered institution'' in its place wherever it appears. 0 3. Section 46.2 is amended by removing the definition of ``over $50 billion covered institution'' and adding the definition for ``$50 billion or over covered institution'' in its place: Sec. 46.2 Definitions. * * * * * $50 billion or over covered institution means a national bank or Federal savings association with average total consolidated assets, calculated as required under this part, that are not less than $50 billion. * * * * * 0 4. Section 46.3 is amended by: 0 a. Removing paragraph (b); 0 b. Redesignating paragraphs (c) through (e) as paragraphs (b) through (d), respectively; and 0 c. Revising newly redesignated paragraphs (b) and (c). The revisions read as follows: Sec. 46.3 Applicability. * * * * * (b) Covered institutions that become subject to stress testing requirements. A national bank or Federal savings association that becomes a $10 to $50 billion covered institution on or before March 31 of a given year shall conduct its first annual stress test under this part in the next calendar year after the date the national bank or Federal savings association becomes a $10 to $50 billion covered institution, unless that time is extended by the OCC in writing. A national bank or Federal savings association that becomes a $10 to $50 billion covered institution after March 31 of a given year shall conduct its first annual stress test under this part in the second calendar year after the calendar year in which the national bank or Federal savings association becomes a $10 to $50 billion covered institution, unless that time is extended by the OCC in writing. (c) Ceasing to be a covered institution or changing categories. (1) A covered institution shall remain subject to the stress test requirements based on its applicable category, as defined in Sec. 46.2, unless and until total consolidated assets of the covered institution falls below the relevant size threshold for each of four consecutive quarters as reported by the covered institution's most recent Call Reports. The calculation shall be effective on the ``as of'' date of the fourth consecutive Call Report. (2) Notwithstanding paragraph (c)(1) of this section, a national bank or Federal savings association that becomes a $50 billion or over covered institution, whether by migrating from being a $10 to $50 billion covered institution or by directly becoming a $50 billion or over covered institution, after September 30 of a calendar year [[Page 49767]] must comply with the requirements applicable to a $50 billion or over covered institution beginning on January 1 of the third calendar year after the national bank or Federal savings association becomes a $50 billion or over covered institution, unless that time is extended by the OCC in writing. A national bank or Federal savings association that becomes a $50 billion or over covered institution on or before September 30 of a calendar year must comply with the requirements applicable to a $50 billion or over covered institution beginning on January 1 of the second calendar year after the national bank or Federal savings association becomes a $50 billion or over covered institution, unless that time is extended by the OCC in writing. * * * * * 0 5. Revise Sec. 46.5 to read as follows: Sec. 46.5 Annual stress test. Each covered institution must conduct the annual stress test under this part subject to the following requirements: (a) Financial data. A covered institution must use financial data as of December 31 of the previous calendar year. (b) Scenarios provided by the OCC. In conducting the stress test under this part, each covered institution must use the scenarios provided by the OCC. The scenarios provided by the OCC will reflect a minimum of three sets of economic and financial conditions, including baseline, adverse, and severely adverse scenarios. The OCC will provide a description of the scenarios required to be used by each covered institution no later than February 15 of that calendar year. (c) Significant trading activities. The OCC may require a covered institution with significant trading activities, as determined by the OCC, to include trading and counterparty components in its adverse and severely adverse scenarios. The trading and counterparty position data to be used in this component will be as of a date between October 1 of the previous calendar year and March 1 of that calendar year in which the stress test is performed, and the OCC will communicate a description of the component to the covered institution no later than March 1 of that calendar year. (d) Use of stress test results. The board of directors and senior management of each covered institution must consider the results of the stress tests conducted under this section in the normal course of business, including but not limited to the covered institution's capital planning, assessment of capital adequacy, and risk management practices. 0 6. Section 46.7 is amended by revising paragraphs (a) and (b) to read as follows: Sec. 46.7 Reports to the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System. (a) $10 to $50 billion covered institution. A $10 to $50 billion covered institution must report to the OCC and to the Board of Governors of the Federal Reserve System, on or before July 31, the results of the stress test in the manner and form specified by the OCC. (b) $50 billion or over covered institution. A $50 billion or over covered institution must report to the OCC and to the Board of Governors of the Federal Reserve System, on or before April 5, the results of the stress test in the manner and form specified by the OCC. * * * * * 0 7. Section 46.8 is amended by revising paragraph (a) to read as follows: Sec. 46.8 Publication of disclosures. (a) Publication date. (1) $50 billion or over covered institution. A $50 billion or over covered institution must publish a summary of the results of its annual stress test in the period starting June 15 and ending July 15 provided: (i) Unless the OCC determines otherwise, if the $50 billion or over covered institution is a consolidated subsidiary of a bank holding company or savings and loan holding company subject to supervisory stress tests conducted by the Board of Governors of the Federal Reserve System pursuant to 12 CFR part 252, then within the June 15 to July 15 period such covered institution may not publish the required summary of its annual stress test earlier than the date that the Board of Governors of the Federal Reserve System publishes the supervisory stress test results of the covered bank's parent holding company. (ii) If the Board of Governors of the Federal Reserve System publishes the supervisory stress test results of the covered institution's parent holding company prior to June 15, then such covered institution may publish its stress test results prior to June 15, but no later than July 15, through actual publication by the covered institution or through publication by the parent holding company pursuant to paragraph (b) of this section. (2) $10 to $50 billion covered institution. A $10 to $50 billion covered institution must publish a summary of the results of its annual stress test in the period starting October 15 and ending October 31. * * * * * Dated: October 19, 2017. Keith A. Noreika, Acting Comptroller of the Currency. [FR Doc. 2017-23353 Filed 10-26-17; 8:45 am] BILLING CODE 4810-33-P
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Proposed Rules Federal Register
Vol. 82, No. 207
Friday, October 27, 2017
This section of the FEDERAL REGISTER ADDRESSES: You may submit comments of the screen. Comments and supporting
contains notices to the public of the proposed to the OCC by any of the methods set materials can be viewed and filtered by
issuance of rules and regulations. The forth below. Because paper mail in the clicking on ‘‘View all documents and
purpose of these notices is to give interested Washington, DC area and at the OCC is comments in this docket’’ and then
persons an opportunity to participate in the subject to delay, commenters are using the filtering tools on the left side
rule making prior to the adoption of the final
rules.
encouraged to submit comments of the screen.
through the Federal eRulemaking Portal • Click on the ‘‘Help’’ tab on the
or email, if possible. Please use the title Regulations.gov home page to get
DEPARTMENT OF THE TREASURY ‘‘Annual Stress Test—Technical and information on using Regulations.gov.
Conforming Changes’’ to facilitate the The docket may be viewed after the
Comptroller of the Currency organization and distribution of the close of the comment period in the same
comments. You may submit comments manner as during the comment period.
12 CFR Part 46 by any of the following methods: • Viewing Comments Personally: You
[Docket ID. OCC–2017–0021]
• Federal eRulemaking Portal— may personally inspect and photocopy
‘‘Regulations.gov’’: Go to comments at the OCC, 400 7th Street
RIN 1557–AD85 www.regulations.gov. Enter ‘‘Docket ID SW., Washington, DC 20219. For
OCC–2017–0021’’ in the Search Box and security reasons, the OCC requires that
Annual Stress Test—Technical and click ‘‘Search.’’ Click on ‘‘Comment visitors make an appointment to inspect
Conforming Changes Now’’ to submit public comments. comments. You may do so by calling
AGENCY: Office of the Comptroller of the • Click on the ‘‘Help’’ tab on the (202) 649–6700 or, for persons who are
Currency, Treasury. Regulations.gov home page to get deaf or hearing impaired, TTY, (202)
ACTION: Proposed rule. information on using Regulations.gov, 649–5597. Upon arrival, visitors will be
including instructions for submitting required to present valid government-
SUMMARY: The Office of the Comptroller public comments. issued photo identification and submit
of the Currency (OCC) is inviting • Email: regs.comments@ to security screening in order to inspect
comment on a proposed rule that would occ.treas.gov. and photocopy comments.
make several revisions to its stress • Mail: Legislative and Regulatory FOR FURTHER INFORMATION CONTACT:
testing rule. The proposed rule would Activities Division, Office of the Hein Bogaard, Lead Economic Expert,
change the range of possible ‘‘as-of’’ Comptroller of the Currency, 400 7th International Analysis and Banking
dates used in the global market shock Street SW., Suite 3E–218, Washington, Condition, (202) 649–5450; Andrew
component to conform to changes DC 20219. Tschirhart, Financial Analyst, Large
recently made by the Board of • Hand Delivery/Courier: 400 7th Bank Supervision, (202) 649–6210; Kari
Governors of the Federal Reserve Street SW., Suite 3E–218, Washington, Falkenborg, Senior Financial Analyst,
System (Board) to its stress testing DC 20219. Midsize and Community Bank
regulations. The proposed rule would • Fax: (571) 465–4326. Supervision, (312) 917–5000; Henry
also change the transition process for Instructions: You must include Barkhausen, Counsel, or Ron
covered institutions with $50 billion or ‘‘OCC’’ as the agency name and ‘‘Docket Shimabukuro, Senior Counsel,
more in assets. Under the proposed rule, ID OCC–2017–0021’’ in your comment. Legislative and Regulatory Activities
a covered institution that becomes an In general, the OCC will enter all Division, (202) 649–5490; for persons
over $50 billion covered institution, as comments received into the docket and who are deaf or hearing impaired, TTY,
that term is defined in the OCC stress publish them on the Regulations.gov (202) 649–5597.
testing regulation, before September 30 Web site without change, including any SUPPLEMENTARY INFORMATION:
would become subject to the business or personal information that
requirements applicable to an over $50 you provide such as name and address I. Background
billion covered institution beginning on information, email addresses, or phone Section 165(i) of the Dodd-Frank Wall
January 1 of the second calendar year numbers. Comments received, including Street Reform and Consumer Protection
after the covered institution becomes an attachments and other supporting Act 1 (‘‘Dodd-Frank Act’’) requires two
over $50 billion covered institution, and materials, are part of the public record types of stress tests. Section 165(i)(1)
a covered institution that becomes an and subject to public disclosure. Do not requires the Board to conduct annual
over $50 billion covered institution after include any information in your stress tests of holding companies with
September 30 would become subject to comment or supporting materials that $50 billion or more in assets
the requirements applicable to an over you consider confidential or (‘‘supervisory stress tests’’). Section
$50 billion covered institution inappropriate for public disclosure. 165(i)(2) requires the federal banking
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
beginning on January 1 of the third You may review comments and other agencies to issue regulations requiring
calendar year after the covered related materials that pertain to this financial companies with more than $10
institution becomes an over $50 billion rulemaking action by any of the billion in assets to conduct annual stress
covered institution. The proposed rule following methods: tests themselves (‘‘company-run stress
would also make certain technical • Viewing Comments Electronically: tests’’). In October 2012, the OCC, the
changes to clarify the requirements of Go to www.regulations.gov. Enter Board, and the Federal Deposit
the OCC’s stress testing regulation. ‘‘Docket ID OCC–2017–0021’’ in the Insurance Corporation issued final rules
DATES: Comments must be received on Search box and click ‘‘Search.’’ Click on
or before December 26, 2017. ‘‘Open Docket Folder’’ on the right side 1 Public Law 111–203, 124 Stat. 1376 (2010).
VerDate Sep<11>2014 16:36 Oct 26, 2017 Jkt 244001 PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 E:\FR\FM\27OCP1.SGM 27OCP1](https://thefederalregister.org/doc/82_FR_49971/page/1.svg)
![49766 Federal Register / Vol. 82, No. 207 / Friday, October 27, 2017 / Proposed Rules
with total assets of less than or equal to form.7 The proposed rule would not the definition for ‘‘$50 billion or over
$500 million) and publishes its impose additional reporting, disclosure, covered institution’’ in its place:
certification and a brief explanatory or other requirements; therefore the
statement in the Federal Register requirements of the RCDRIA do not § 46.2 Definitions.
together with the rule. apply. * * * * *
As discussed in the SUPPLEMENTARY $50 billion or over covered institution
INFORMATION above, the proposed Plain Language means a national bank or Federal
changes will only affect institutions Section 722 of the Gramm-Leach- savings association with average total
with more than $10 billion in total Bliley Act requires the federal banking consolidated assets, calculated as
assets. Therefore, the rule will not affect agencies to use plain language in all required under this part, that are not
any small entities. As such, pursuant to proposed and final rules published after less than $50 billion.
section 605(b) of the RFA, the OCC January 1, 2000. The OCC has sought to * * * * *
certifies that this proposal would not present the proposed rule in a simple ■ 4. Section 46.3 is amended by:
have a significant economic impact on and straightforward manner, and invites ■ a. Removing paragraph (b);
a substantial number of small entities comment on the use of plain language. ■ b. Redesignating paragraphs (c)
because no small national banks or For example: through (e) as paragraphs (b) through
federal savings associations would be • Has the OCC organized the material (d), respectively; and
affected by the proposal. Accordingly, to suit your needs? If not, how could the ■ c. Revising newly redesignated
an initial regulatory flexibility analysis OCC present the proposed rule more paragraphs (b) and (c).
is not required. clearly? The revisions read as follows:
Unfunded Mandates Reform Act • Are the requirements in the § 46.3 Applicability.
proposed rule clearly stated? If not, how * * * * *
The OCC has analyzed the proposed could the proposed rule be more clearly
rule under the factors in the Unfunded (b) Covered institutions that become
stated? subject to stress testing requirements. A
Mandates Reform Act of 1995 (UMRA)
• Do the regulations contain technical national bank or Federal savings
(2 U.S.C. 1532). Under this analysis, the
language or jargon that is not clear? If association that becomes a $10 to $50
OCC considered whether the proposed
so, which language requires billion covered institution on or before
rule includes a federal mandate that
clarification? March 31 of a given year shall conduct
may result in the expenditure by state,
• Would a different format (grouping its first annual stress test under this part
local, and tribal governments, in the
and order of sections, use of headings, in the next calendar year after the date
aggregate, or by the private sector, of
paragraphing) make the regulation the national bank or Federal savings
$100 million or more in any one year
(adjusted annually for inflation). The easier to understand? If so, what association becomes a $10 to $50 billion
OCC has determined that this proposed changes would achieve that? covered institution, unless that time is
rule will not result in expenditures by • Is this section format adequate? If extended by the OCC in writing. A
state, local, and tribal governments, or not, which of the sections should be national bank or Federal savings
the private sector, of $100 million or changed and how? association that becomes a $10 to $50
more in any one year. Accordingly, this • What other changes can the OCC billion covered institution after March
proposal is not subject to section 202 of incorporate to make the regulation 31 of a given year shall conduct its first
the UMRA. easier to understand? annual stress test under this part in the
List of Subjects in 12 CFR Part 46 second calendar year after the calendar
Riegle Community Development and year in which the national bank or
Regulatory Improvement Act of 1994 Banking, Banks, Capital, Disclosures, Federal savings association becomes a
The Riegle Community Development National banks, Recordkeeping, Risk, $10 to $50 billion covered institution,
and Regulatory Improvement Act of Savings associations, Stress test. unless that time is extended by the OCC
1994 (RCDRIA) requires that each Authority and Issuance in writing.
federal banking agency, in determining (c) Ceasing to be a covered institution
the effective date and administrative For the reasons set forth in the or changing categories. (1) A covered
compliance requirements for new preamble, the OCC proposes to amend institution shall remain subject to the
regulations that impose additional 12 CFR part 46 as follows: stress test requirements based on its
reporting, disclosure, or other applicable category, as defined in § 46.2,
PART 46—ANNUAL STRESS TEST
requirements on insured depository unless and until total consolidated
institutions, consider, consistent with ■ 1. The authority citation for part 46 assets of the covered institution falls
principles of safety and soundness and continues to read as follows: below the relevant size threshold for
the public interest, any administrative each of four consecutive quarters as
Authority: 12 U.S.C. 93a; 1463(a)(2);
burdens that such regulations would reported by the covered institution’s
5365(i)(2); and 5412(b)(2)(B).
place on depository institutions, most recent Call Reports. The
including small depository institutions, PART 46—[Amended] calculation shall be effective on the ‘‘as
and customers of depository of’’ date of the fourth consecutive Call
institutions, as well as the benefits of ■ 2. Remove the phrase ‘‘over $50 Report.
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
such regulations. In addition, new billion covered institution’’ and add the (2) Notwithstanding paragraph (c)(1)
regulations and amendments to phrase ‘‘$50 billion or over covered of this section, a national bank or
regulations that impose additional institution’’ in its place wherever it Federal savings association that
reporting, disclosures, or other new appears. becomes a $50 billion or over covered
requirements on insured depository ■ 3. Section 46.2 is amended by institution, whether by migrating from
institutions generally must take effect removing the definition of ‘‘over $50 being a $10 to $50 billion covered
on the first day of a calendar quarter billion covered institution’’ and adding institution or by directly becoming a
that begins on or after the date on which $50 billion or over covered institution,
the regulations are published in final 7 12 U.S.C. 4802. after September 30 of a calendar year
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![Federal Register / Vol. 82, No. 207 / Friday, October 27, 2017 / Proposed Rules 49767
must comply with the requirements planning, assessment of capital period starting October 15 and ending
applicable to a $50 billion or over adequacy, and risk management October 31.
covered institution beginning on practices. * * * * *
January 1 of the third calendar year after ■ 6. Section 46.7 is amended by revising
Dated: October 19, 2017.
the national bank or Federal savings paragraphs (a) and (b) to read as follows:
Keith A. Noreika,
association becomes a $50 billion or
over covered institution, unless that § 46.7 Reports to the Office of the Acting Comptroller of the Currency.
Comptroller of the Currency and the Board [FR Doc. 2017–23353 Filed 10–26–17; 8:45 am]
time is extended by the OCC in writing. of Governors of the Federal Reserve
A national bank or Federal savings System.
BILLING CODE 4810–33–P
association that becomes a $50 billion or
(a) $10 to $50 billion covered
over covered institution on or before
institution. A $10 to $50 billion covered
September 30 of a calendar year must CONSUMER PRODUCT SAFETY
institution must report to the OCC and
comply with the requirements COMMISSION
to the Board of Governors of the Federal
applicable to a $50 billion or over
covered institution beginning on Reserve System, on or before July 31, [Docket No. CPSC–2017–0043]
January 1 of the second calendar year the results of the stress test in the
manner and form specified by the OCC. 16 CFR Part 1112
after the national bank or Federal
(b) $50 billion or over covered
savings association becomes a $50 CPSC Acceptance of Third Party
billion or over covered institution, institution. A $50 billion or over
Laboratories: Revision to the Notice of
unless that time is extended by the OCC covered institution must report to the
Requirements for Prohibitions of
in writing. OCC and to the Board of Governors of
Children’s Toys and Child Care
the Federal Reserve System, on or before
* * * * * Articles Containing Specified
April 5, the results of the stress test in
■ 5. Revise § 46.5 to read as follows: Phthalates
the manner and form specified by the
§ 46.5 Annual stress test. OCC. AGENCY: Consumer Product Safety
Each covered institution must * * * * * Commission.
conduct the annual stress test under this ■ 7. Section 46.8 is amended by revising ACTION: Notice of proposed rulemaking.
part subject to the following paragraph (a) to read as follows:
requirements: SUMMARY: This notice of proposed
(a) Financial data. A covered § 46.8 Publication of disclosures. rulemaking (NPR) would update the
institution must use financial data as of (a) Publication date. (1) $50 billion or existing notice of requirements (NOR)
December 31 of the previous calendar over covered institution. A $50 billion for prohibitions of children’s toys and
year. or over covered institution must publish child care articles containing specified
(b) Scenarios provided by the OCC. In a summary of the results of its annual phthalates that provide the criteria and
conducting the stress test under this stress test in the period starting June 15 process for Commission acceptance of
part, each covered institution must use and ending July 15 provided: accreditation pursuant to the Consumer
the scenarios provided by the OCC. The (i) Unless the OCC determines Product Safety Act (CPSA). The
scenarios provided by the OCC will otherwise, if the $50 billion or over proposed NOR would revise the current
reflect a minimum of three sets of covered institution is a consolidated NOR to be consistent with the final
economic and financial conditions, subsidiary of a bank holding company phthalates rule, which is published
including baseline, adverse, and or savings and loan holding company elsewhere in this same issue of the
severely adverse scenarios. The OCC subject to supervisory stress tests Federal Register and will be codified in
will provide a description of the conducted by the Board of Governors of the Code of Federal Regulations (CFR).
scenarios required to be used by each the Federal Reserve System pursuant to DATES: Submit comments by January 10,
covered institution no later than 12 CFR part 252, then within the June 2018.
February 15 of that calendar year. 15 to July 15 period such covered ADDRESSES: You may submit comments,
(c) Significant trading activities. The institution may not publish the required identified by Docket No. CPSC–2017–
OCC may require a covered institution summary of its annual stress test earlier 0043, by any of the following methods:
with significant trading activities, as than the date that the Board of Electronic Submissions: Submit
determined by the OCC, to include Governors of the Federal Reserve electronic comments to the Federal
trading and counterparty components in System publishes the supervisory stress eRulemaking Portal at: http://
its adverse and severely adverse test results of the covered bank’s parent www.regulations.gov. Follow the
scenarios. The trading and counterparty holding company. instructions for submitting comments.
position data to be used in this (ii) If the Board of Governors of the The Commission does not accept
component will be as of a date between Federal Reserve System publishes the comments submitted by electronic mail
October 1 of the previous calendar year supervisory stress test results of the (email), except through
and March 1 of that calendar year in covered institution’s parent holding www.regulations.gov. The Commission
which the stress test is performed, and company prior to June 15, then such encourages you to submit electronic
the OCC will communicate a covered institution may publish its comments by using the Federal
description of the component to the stress test results prior to June 15, but
asabaliauskas on DSKBBXCHB2PROD with PROPOSALS
eRulemaking Portal, as described above.
covered institution no later than March no later than July 15, through actual Written Submissions: Submit written
1 of that calendar year. publication by the covered institution or submissions by mail/hand delivery/
(d) Use of stress test results. The board through publication by the parent courier to: Office of the Secretary,
of directors and senior management of holding company pursuant to paragraph Consumer Product Safety Commission,
each covered institution must consider (b) of this section. Room 820, 4330 East West Highway,
the results of the stress tests conducted (2) $10 to $50 billion covered Bethesda, MD 20814; telephone (301)
under this section in the normal course institution. A $10 to $50 billion covered 504–7923.
of business, including but not limited to institution must publish a summary of Instructions: All submissions received
the covered institution’s capital the results of its annual stress test in the must include the agency name and
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Document Created: 2017-10-27 02:06:15
Document Modified: 2017-10-27 02:06:15
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Proposed rule. | |
| Dates | Comments must be received on or before December 26, 2017. | |
| Contact | Hein Bogaard, Lead Economic Expert, International Analysis and Banking Condition, (202) 649-5450; Andrew Tschirhart, Financial Analyst, Large Bank Supervision, (202) 649-6210; Kari Falkenborg, Senior Financial Analyst, Midsize and Community Bank Supervision, (312) 917-5000; Henry Barkhausen, Counsel, or Ron Shimabukuro, Senior Counsel, Legislative and Regulatory Activities Division, (202) 649-5490; for persons who are deaf or hearing impaired, TTY, (202) 649-5597. | |
| FR Citation | 82 FR 49764 | |
| RIN Number | 1557-AD85 | |
| CFR Associated | Banking; Banks; Capital; Disclosures; National Banks; Recordkeeping; Risk; Savings Associations and Stress Test |
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