Fed Revises Capital Planning Requirements for Banks Under $250B

The Federal Reserve today issued a final rule that will exempt many regional banks from the complex qualitative requirements of its annual Comprehensive Capital Analysis and Review, or CCAR, process. The rule takes effect for the 2017 CCAR cycle — which began on Jan. 1 — for bank holding companies with between $50 billion and $250 billion in assets. CCAR instructions and scenarios for 2017 will be released later this week.

As the American Bankers Association recommended in its comment letter, the Fed offered additional clarity on the supervisory review process, specifying that it plans to conduct its reviews “in a manner similar to existing supervisory programs,” including a “first day letter” in advance and sufficient lead time to provide information and address findings. The Fed also said it will provide large and noncomplex firms with “several months’ advance notice” of focus areas in the capital plan.

While welcoming this refinement of the stress test program for those banks affected by the rule, ABA will continue to encourage the Federal Reserve to consider expanding these reforms to other banks. For more information, contact ABA’s Hugh Carney or Barry Mills.