The Federal Reserve has issued a proposal to establish annual assessments of top-tier bank holding companies and savings and loan holding companies with $50 billion or greater in total consolidated assets and for nonbank financial companies designated by the Financial Stability Oversight Council (“FSOC”) for supervision by the Federal Reserve. The proposed rule released on April 15 describes how the Federal Reserve would determine which companies are assessed, estimate the total expenses that are necessary or appropriate to carry out its supervisory and regulatory responsibilities for such companies, determine the amount of each company’s assessment and bill for and collect the assessments. The proposed rule would implement Section 318 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), which requires the Federal Reserve to collect assessments sufficient to cover the total expenses the Federal Reserve estimates are necessary or appropriate to carry out its supervisory and regulatory responsibilities for large bank and savings and loan holding companies and nonbank financial companies designated by the FSOC. The Federal Reserve plans to collect assessments beginning with the 2012 assessment period. Comments on the proposed rule are due by June 15, 2013.
Nutter Notes: Under the proposed rule, each calendar year would be an assessment period. The Federal Reserve would make the determination for each assessment period in which a company is a bank holding company or savings and loan holding company with total consolidated assets greater than or equal to $50 billion, or a nonbank financial company designated by the FSOC, and therefore subject to assessment, based on information reported by the company on regulatory or other reports to the Federal Reserve. Total assessable assets would include total assets for all activities subject to the Federal Reserve supervisory authority as the consolidated supervisor. For a U.S. company, total assessable assets would be the company’s total consolidated assets of its entire worldwide operations, determined by using an average of the total consolidated assets reported in applicable regulatory reports for the assessment period. The Federal Reserve would notify the companies of the amount of their assessment no later than by July 15 of the year following each assessment period. After an opportunity for appeal, assessed companies would be required to pay their assessments by September 30 of the year following the assessment period. The Federal Reserve announced that it has completed the development of a framework for the estimation of its regulatory oversight expenses and the collection of assessments. The 2012 assessment period would be the first full calendar-year assessment period subsequent to the effective date of Section 318 of the Dodd-Frank Act.