FDIC Proposes Tailoring ‘Living Will’ Requirements for Large Banks

The FDIC today sought public feedback on potential changes to its resolution planning framework for financial companies’ bank subsidiaries with over $50 billion in assets. The agency outlined three approaches under consideration: creating tiered requirements for so-called living wills based on bank size and complexity; revising the frequency and required content of plan submissions, including eliminating living wills submissions altogether for some smaller and less complex banks; and improving communication between the FDIC and banks on resolution planning.

The proposed changes broadly align with changes to resolution planning proposed last week by the Federal Reserve—and also approved by the FDIC today—that would apply to bank holding companies. They in turn build on the Fed’s framework, proposed in October, for U.S. firms with more than $100 billion in assets, which would establish four categories of firms subject to different requirements.

The FDIC also joined the Fed in proposing to extend the treatment put forth last fall for capital and liquidity to the U.S. subsidiaries of foreign banking organizations and their U.S. subsidiaries. Comments on the FDIC’s advance notice of proposed rulemaking on resolution planning are due 60 days after it is published in the Federal Register. For more information, contact ABA’s Hu Benton.