Alert March 19, 2013

OCC Issues Proposed Reporting Requirements for Annual Stress Tests of Covered Financial Institutions with Consolidated Assets of $10 Billion to $50 Billion

The OCC issued a notice of proposed information collection (the “Proposal”) seeking comments on annual stress test reporting requirements for covered financial institutions with consolidated assets of $10 billion to $50 billion (“Mid-Sized Covered FIs”).  Under Section 165(i)(2) of the Dodd-Frank Act certain financial companies with consolidated assets between $10 billion and $50 billion are required to conduct annual stress tests, and the primary federal financial regulatory agency (the OCC, FDIC or FRB) for the applicable company  is required to issue regulations implementing the stress test requirements.  In October 2012, the OCC, FDIC and FRB issued separate regulations implementing the stress test requirements for Mid-Sized Covered FIs, see the discussion of the FDIC’s implementing final rule in the October 16, 2012 Financial Services Alert.  The Proposal describes the annual stress testing reporting requirements and includes copies of reporting templates for Mid-Sized Covered FIs.  The OCC’s implementing regulation concerning annual stress test requirements for covered financial institutions with more than $50 billion in consolidated assets was issued separately by the OCC in August 2012.  The OCC stated that the reporting templates involve “quantitative projections of balance sheet, capital, losses, and income across three or more macroeconomic scenarios, along with qualitative information on methodologies used.”  Comments on the Proposal are due by May 10, 2013.