On October 17, 2014, the Federal Reserve Board issued a final rule modifying the regulations for capital planning and stress testing, and released summary instructions and guidance for the 2015 annual comprehensive capital analysis and review (“CCAR”). The final rule adjusts the timing for bank holding companies (“BHCs”) with total consolidated assets of $50 billion or more to submit their capital plans and stress results. For the 2015 capital plan cycle, BHCs are required to submit capital plans on or before January 5, 2015. From 2016, BHCs required  to submit capital plans and stress test results must submit those plans on or before April 5. In addition to the change in submission timing, the final rule includes modifications and clarifications to the existing capital plan and stress test rules. In particular, the final rule limits 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.

The summary CCAR instructions highlight a number of new elements to provide guidance on supervisory expectations around a BHC’s capital adequacy process and capital plan submissions, and also clarify how BHC subsidiaries of foreign banking organizations should incorporate compliance with intermediate holding company requirements into their capital plan projections. For the first time, the CCAR instructions also include a discussion of common strengths and shortcomings identified in prior year capital plan submissions.

The instructions for the 2015 capital planning cycle are available at:

http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20141017a1.pdf      

and the final rules amending the Capital Plan and Stress Test Rules are available at:

http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20141017a2.pdf.