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From Banking and Finance Law Daily, August 16, 2013

Fed finalizes assessment fees rule for large financial companies

By John M. Pachkowski, J.D.

The Federal Reserve Board has issued a final rule implementing section 318(c) of the Dodd-Frank Act (12 U.S.C. §248(s)) which requires the Fed to collect assessments, fees, and other charges that are equal to the expenses incurred by the agency to carry out its responsibilities with respect bank holding companies and savings and loan holding companies with assets equal to or greater than $50 billion. The final rule will also apply to non-bank financial companies designated by the Financial Stability Oversight Council as posing a potential threat to the country’s financial stability and subject to consolidated supervision by the Fed.

The final rule, which becomes effective Oct. 25, 2013, provides an outline on how the Fed will:

  • determine which companies are 'assessed companies' for each calendar-year assessment period;
  • estimate the total expenses that are necessary or appropriate to carry out the supervisory and regulatory responsibilities to be covered by the assessment;
  • determine the assessment for each assessed company; and
  • bill for and collect the assessment from the assessed companies.

For the 2012 assessment period, the first year for which assessment fees will be collected, the Fed estimates it will collect about $440 million from 70 companies. Each assessed company will be notified of its assessment amount when the final rule becomes effective in late October. Payments for the 2012 assessment period will be due no later than Dec. 15, 2013. The timelines for assessment notification and payment were changed in response to comments submitted to the Fed.

In the preamble to the final rule, the Fed also addressed other concerns raised by commenters regarding the methodology used by the agency for allocating its expenses among assessed companies, as well as how the assessment base is determined. Commenters also criticized the Board’s methodology for assessing Board-supervised nonbank financial companies and SLHCs that are predominantly insurance companies.

RegulatoryActivity: BankHolding DoddFrankAct FederalReserveSystem FinancialStability

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