Alert August 28, 2012

OCC, FDIC and FRB Announce They are Considering a Delay in Implementation Timeline for Stress Testing by Covered Financial Institutions with Assets Between $10 Billion and $50 Billion

The OCC, FDIC and FRB (the “Agencies”) each separately announced that they are considering a delay of the implementation timeline for the annual capital-adequacy stress testing requirement under Section 165 of the Dodd-Frank Act for banks and other covered financial institutions (“Covered Financial Institutions”) with consolidated assets between $10 billion and $50 billion.  The Agencies’ announcements (e.g., the OCC’s announcement available here) did not request public comment.  A discussion of the proposed version of the FDIC’s rule concerning stress tests for Covered Financial Institutions with assets between $10 billion and $50 billion (the “Proposed Rule”) was included in the January 24, 2012 Financial Services Alert.  Should the Agencies take the contemplated action, the stress testing implementation requirement for $10 billion to $50 billion Covered Financial Institutions would be delayed approximately one year to a date in September 2013.  The Agencies said that the delay would be intended to “help ensure that all covered institutions have sufficient time to develop sound stress testing programs.”  Covered Financial Institutions with consolidated assets in excess of $50 billion are still expected to be required to begin conducting annual stress tests in 2012.