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From Banking and Finance Law Daily, September 18, 2018

OCC proposal would raise recovery planning standards threshold to $250 billion

By Stephanie K. Mann, J.D.

The Office of the Comptroller of the Currency is seeking comments on its proposal to amend its enforceable guidelines relating to recovery planning standards for insured national banks, insured federal savings associations, and insured federal branches. The proposed rule would increase the average total consolidated assets threshold for applying the guidelines from $50 billion to $250 billion. In addition, the proposed change would decrease from 18 months to 12 months the time within which a bank should comply with the guidelines after the bank becomes subject to them. Finally, the proposal would make technical amendments to remove outdated compliance dates. All comments must be received by Nov. 5, 2018.

The guidelines were passed to ensure that large, complex institutions should initiate a recovery plan so that they would be able to respond quickly to and recover from the financial effects of severe stress on the institution. The OCC stated that, after careful analysis, it now believes that it is appropriate to raise the threshold and focus only on those institutions that present greater systemic risk to the banking system. The OCC expects the number of covered banks to which the guidelines apply to drop from 25 to eight.

The proposal is also consistent with the Federal Deposit Insurance Corporation and Federal Reserve Board’s resolution planning threshold, which was raised from $50 billion to $250 billion in response to the Economic Growth, Regulatory Relief, and Consumer Protection Act.

Compliance date. The OCC is also proposing that any bank that has less than $250 billion in average total consolidated assets on the effective date of the final rule but subsequently becomes a covered bank must come into compliance within 12 months, instead of the previous 18-month grace period. Finally, the OCC has proposed technical amendments to remove the compliance dates listed in the current guidelines, as the dates have all passed.

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