• Federal Banking Agencies Consider Changes to Stress-Test Implementation Timeline

The federal banking agencies announced on August 27 that they are considering changes to the implementation timeline for the annual company-run stress test requirements required by the Dodd-Frank Act. The changes would delay implementation until September 2013 for bank holding companies, state member banks, and savings and loan holding companies with between $10 billion and $50 billion in total consolidated assets.

Nutter Notes: The agencies issued proposed rules in December 2011 to implement the enhanced regulatory capital standards and early remediation requirements established under the Dodd-Frank Act. The proposal would generally require depository institutions and depository institution holding companies with more than $10 billion in total consolidated assets to comply with the requirements to conduct a company-run stress test annually after the final rule becomes effective.

  • GAO Reports on Effects of Dodd-Frank Act on Community Banks

A report issued by the Government Accountability Office (“GAO”) on September 13 acknowledged that some of the Dodd-Frank Act’s provisions impose additional requirements on community banks and credit unions that could affect them disproportionately relative to larger banks, but that the full impact of the Dodd-Frank Act on community banks remains uncertain.

Nutter Notes: The report notes that significant provisions of the Dodd-Frank Act, such as the mortgage reforms, have not yet been fully implemented and may impose additional requirements and costs on all banks. The report concluded that it is difficult to know for certain which provisions will impact community banks disproportionately because rules implementing mortgage reforms and other key provisions of the act have not been finalized.