FDIC Modifies Resolution Plan Rules

The FDIC today outlined a modified approach to implementing its rule requiring insured depository institutions with $100 billion or more in total assets to submit resolution plans.

The FDIC’s announcement had been expected, following a 2018 federal legislation promoting tailoring of financial regulations put in place following the 2008 financial crisis. The modified implementation rules extend the resolution plan submission frequency to a three-year cycle and provide new details on the FDIC’s intended engagement with the affected firms and the capabilities testing it will require from them throughout the filing cycle.

The new approach also exempts filers from some content requirements that have been less useful to the FDIC or are obtainable through other supervisory channels. In addition, on a case-by-case basis, the FDIC plans to exempt filers from certain content requirements based on its evaluation of how useful the information would be in planning a resolution of the IDI in question. Each filer will receive a letter from the FDIC that specifies exempted plan content and the due date for the next filing.

Resolution plans will be submitted in two groups, with the first group consisting of IDIs whose top-tier parent company is not a U.S. global systemically important bank or a Category II banking organization under the Federal Reserve’s tailored enhanced prudential standards, Regulation YY.

The second group will be all other IDIs with $100 billion or more in total assets. For institutions with less than $100 billion in total assets, the moratorium on submission of IDI plans announced in November 2018 remains in effect.