ABA Welcomes Resolution Plan Tailoring Proposals, Urges Refinements

The American Bankers Association, along with the Bank Policy Institute and the Securities Industry and Financial Markets Association, today expressed its support for a proposal from the Federal Reserve and the FDIC, as well as an advance notice of proposed rulemaking from the FDIC, to tailor their resolution planning frameworks for large banking companies and large insured banks.

The changes—proposed separately in April—would extend the living will submission cycle; tailor  content requirements to institutions’ size, complexity and risk profile; and provide streamlined submission options also tailored to institutions. They would “would maintain the strength of resolution plans while reducing the level of unnecessary burdens created by the resolution planning process,” the associations said.

The groups recommended some areas where the Fed and FDIC could refine or clarify the proposal (including timing of agency requests, notifications and deadlines) and the content of the resolution plans (including avoiding overlap with plans for banking companies and their insured subsidiaries). For insured depository institutions submitting living wills, the groups also requested: more transparent categories to ensure covered institutions know what they will need to submit; more transparent and structured engagement and capabilities testing requirements; and a submission schedule coordinated with living wills for parent companies.