FRB Issues Final Rule to Modify for Capital Planning and Stress Testing Regulations

The Board of Governors of the Federal Reserve System (“FRB”) issued a final rule to modify capital planning and stress testing regulations, and released instructions for the 2015 capital planning cycle.

The final rule adjusts the due date for bank holding companies (“BHCs”) with total consolidated assets of $50 billion or more to submit their capital plans and stress test results. For the 2015 capital plan cycle, such BHCs are required to submit capital plans on or before January 5, 2015, unchanged from prior years. For subsequent cycles, beginning in 2016, participating BHCs will be required to submit their capital plans and stress testing results to the Federal Reserve on or before April 5.

The final rule is largely identical to the proposed rule, with a few key adjustments made in response to public comments. In particular, the final rule adopts the existing limitation on a BHC’s ability to make capital distributions to the extent that the BHC’s actual capital issuances are less than the amount indicated in its capital plan.

See: FRB Final Amendments to Capital Plan and Stress Test Rules; FRB Summary Instructions and Guidance for 2015 Capital Planning and Stress Testing Cycle; FRB Press Release.