The Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation issued final supervisory guidance regarding stress-testing practices at banking organizations with total consolidated assets of more than $10 billion.
The guidance does not implement the stress testing requirements in the Dodd-Frank Wall Street Reform and Consumer Protection Act or in the Federal Reserve Board’s capital plan rule that apply to certain companies, as those requirements have been or are being implemented through separate proposals by the respective agencies. However, the agencies expect that banking organizations with total consolidated assets of more than $10 billion would follow the principles set forth in the guidance–as well as other relevant supervisory guidance–when conducting stress testing in accordance with the Dodd-Frank Act, the capital plan rule, and other statutory or regulatory requirements.
The federal banking agencies also issued a joint statement to clarify expectations for stress testing by community banks–banks, savings associations, and bank and savings and loan holding companies with $10 billion or less in total assets. The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of Currency clarified that community banks are not required or expected to conduct the types of stress testing required of larger organizations.