A group of House Republicans led by Reps. Blaine Luetkemeyer (Mo.) and Keith Rothfus (Pa.) today wrote to Federal Reserve Chairman Janet Yellen urging her to take action to increase the transparency and efficiency of the Fed’s Comprehensive Capital Analysis and Review process for bank holding companies with more than $50 billion in assets, including removing the qualitative assessment process for all CCAR banks. The Fed earlier this year removed the qualitative component for non-complex firms in CCAR with less than $250 billion in assets.
The lawmakers noted that the Fed’s opacity about what CCAR considers forces institutions to overspend and invest excess time in developing models and tests and that the Fed could increase public awareness of what goes into its scenario design for the capital planning exercise.
“We believe it prudent that the Board take into account these concerns and work administratively to create a more transparent, streamlined approach to CCAR,” they said. “Included in those reforms should be institution of a date-certain time frame for the annual release of CCAR instructions, in an effort to impart regularity upon the process, and coordination across agencies on all stress testing efforts, to ensure a consistent process for submission of testing results.”
The Amercian Bankers Association has strongly advocated with regulators and on Capitol Hill for improvements to the CCAR process that will promote efficiency for participating banks without sacrificing contributions to financial stability.