On June 20, 2016, US Senators Elizabeth Warren (D-Mass.) and Joe Donnelly (D-Ind.) sent a letter to the Federal Reserve Board and the FDIC encouraging the agencies to use “all statutory tools at their disposal” if banks’ resolution plans, also known as living wills, are found not credible. The Senators expressed concern that, eight years after the financial crisis, and “after a multiyear review process, the living wills of five large banks reveal that the banks are still too vulnerable to weather a major economic storm without threatening the economy.” The Senators further noted that Section 165 of the Dodd-Frank Act provides the Federal Reserve Board and the FDIC “the authority to impose more stringent prudential requirements on, or even ultimately restructure, large financial institutions unable to craft credible resolution plans on their own.”

Earlier this year, the Federal Reserve Board and the FDIC jointly determined that five large financial institutions had submitted living wills that were not credible. The agencies have required those five firms to address the deficiencies and submit revised plans by October 1 of this year.

The text of the letter is available at: http://www.warren.senate.gov/?p=press_release&id=1162