[Federal Register Volume 79, Number 47 (Tuesday, March 11, 2014)]
[Rules and Regulations]
[Pages 13498-13515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-05053]


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FEDERAL RESERVE SYSTEM

12 CFR Parts 225 and 252

[Regulations Y and YY; Docket Nos. R-1463 and R-1464; RIN 7100 AE-01 
and AE-02]


Application of the Revised Capital Framework to the Capital Plan 
and Stress Test Rules

AGENCY: Board of Governors of the Federal Reserve System (Board).

ACTION: Final rule.

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SUMMARY: The Board is adopting a final rule to require a bank holding 
company with total consolidated assets of $50 billion or more to 
estimate its tier 1 common ratio using the exiting definition for 
purposes of the Board's capital plan and stress test rules; defer until 
October 1, 2015, the use of the Board's advanced approaches rule for 
purposes of the Board's capital planning and stress testing rules; 
maintain the one-year transition period in the current stress test 
cycle during which bank holding companies and most state member banks 
with more than $10 billion but less than $50 billion in total 
consolidated assets are not required to incorporate the Board's Basel 
III-based revised regulatory capital framework that the Board approved 
on July 2, 2013 (revised capital framework); and make minor, conforming 
changes to the Board's capital plan rule and stress test rules. The 
final rule maintains all the changes to the Board's capital plan rule 
and stress test rules that were required under two interim final rules 
that the Board issued in September 2013, except that under the final 
rule, no banking organization is required to use the advanced 
approaches rule for purposes of the capital planning and stress testing 
rules until 2015.

[[Page 13499]]


DATES: The final rule is effective April 15, 2014.

FOR FURTHER INFORMATION CONTACT: Lisa Ryu, Deputy Associate Director, 
(202) 263-4833, Constance Horsley, Assistant Director, (202) 452-5239, 
Ann McKeehan, Senior Supervisory Financial Analyst, (202) 973-6903, or 
Holly Kirkpatrick, Senior Financial Analyst, (202) 452-2796, Division 
of Banking Supervision and Regulation; Laurie Schaffer, Associate 
General Counsel, (202) 452-2272, Benjamin W. McDonough, Senior Counsel, 
(202) 452-2036, or Christine Graham, Counsel, (202) 452-3005, Legal 
Division, Board of Governors of the Federal Reserve System, 20th Street 
and Constitution Avenue NW., Washington, DC 20551. Users of 
Telecommunication Device for Deaf (TDD) only, call (202) 263-4869.

SUPPLEMENTARY INFORMATION: 

I. Background

A. Revised Capital Framework

    On July 2, 2013, the Board approved the revised capital framework, 
which implemented the Basel III regulatory capital reforms and certain 
changes required by the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act).\1\ The revised capital framework 
introduces a new common equity tier 1 capital ratio and supplementary 
leverage ratio, raises the minimum tier 1 ratio and, for certain 
banking organizations, leverage ratio, implements strict eligibility 
criteria for regulatory capital instruments, and introduces a 
standardized methodology for calculating risk-weighted assets. The new 
minimum regulatory capital ratios and the eligibility criteria for 
regulatory capital instruments began to take effect as of January 1, 
2014, subject to transition provisions, for banking organizations that 
meet the criteria for the advanced approaches rule (advanced approaches 
banking organizations).\2\ All other banking organizations must begin 
to comply with the revised capital framework beginning on January 1, 
2015.
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    \1\ See 12 CFR part 217.
    \2\ A banking organization is subject to the advanced approaches 
rule if it has consolidated assets of at least $250 billion, if it 
has total consolidated on-balance sheet foreign exposures of at 
least $10 billion, or if it elects to apply the advanced approaches 
rule.
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    As the revised regulatory capital framework comes into effect and 
as explained more fully below, banking organizations will be required 
to reflect the requirements of the revised capital framework in their 
capital plans submitted pursuant to the Board's capital plan rule and 
in their stress tests conducted under the Board's rules implementing 
the stress test requirements of the Dodd-Frank Act.

B. Capital Plan Rule

    Pursuant to the Board's capital plan rule and its related 
supervisory process, the Comprehensive Capital Analysis and Review 
(CCAR), the Board assesses the internal capital planning process of a 
bank holding company with total consolidated assets of $50 billion or 
more (large bank holding company) and its ability to maintain 
sufficient capital to continue its operations under expected and 
stressful conditions.\3\ Under the capital plan rule, a large bank 
holding company is required to submit an annual capital plan to the 
Board that contains estimates of its minimum regulatory capital ratios 
and its tier 1 common ratio under expected conditions and a range of 
stressed scenarios over a nine-quarter planning horizon (planning 
horizon).\4\ A capital plan also must include a discussion of how a 
large bank holding company will maintain a pro forma tier 1 common 
ratio above 5 percent under expected conditions and stressed 
scenarios.\5\
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    \3\ See generally 12 CFR 225.8.
    \4\ Id.
    \5\ Id. at Sec.  225.8(d)(2)(i)(B).
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    The preamble to the capital plan rule noted that the Basel III 
framework proposed by the Basel Committee on Bank Supervision includes 
a different definition of tier 1 common capital and that the Board and 
the other federal banking agencies continued to work to implement Basel 
III in the United States.\6\ The capital plan rule's definition of 
``tier 1 common ratio'' states that the definition will remain in 
effect until the Board adopts an alternative tier 1 common ratio 
definition as a minimum regulatory capital ratio.\7\
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    \6\ 76 FR 74631, 74637 (December 1, 2011).
    \7\ Id. at Sec.  225.8(c)(9).
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C. Stress Test Rules

    The Board's stress test rules for large bank holding companies and 
nonbank financial companies supervised by the Board (together, covered 
companies) establish a framework for the Board to conduct annual 
supervisory stress tests to evaluate whether these companies have the 
capital necessary to absorb losses as a result of adverse economic 
conditions and require that these companies conduct semi-annual 
company-run stress tests.\8\ For the supervisory stress tests, the 
Board uses data as of September 30 of each year to assess a covered 
company's capital levels, regulatory capital ratios, and tier 1 common 
ratio over the nine-quarter planning horizon of a given stress test 
cycle.\9\ Similarly, the semi-annual stress tests conducted by a 
covered company require it to report, among other elements, its 
regulatory capital ratios and tier 1 common ratio for each quarter of a 
nine-quarter planning horizon.\10\ The stress test rule for covered 
companies defines the tier 1 common ratio by cross-reference to the 
capital plan rule, which, as previously described, provides that the 
tier 1 common ratio is to remain in effect until the Board adopts an 
alternative tier 1 common ratio definition.\11\
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    \8\ The changes in this final rule would apply to nonbank 
financial companies supervised by the Board once they become subject 
to stress test requirements.
    \9\ 12 CFR 252.44(a).
    \10\ Id. at 252.56(a).
    \11\ Id. at 252.42(r), 252.52(t).
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D. Interim final rules

    On September 30, 2013, the Board published in the Federal Register 
two interim final rules that amended the Board's capital plan rule and 
stress test rules.\12\ The first interim final rule (capital planning 
and stress testing IFR) amended the Board's capital plan rule \13\ and 
stress test rules \14\ to require a bank holding company with total 
consolidated assets of $50 billion or more to estimate its tier 1 
common ratio using the methodology in the Board's Basel I-based capital 
rules (under 12 CFR part 225, Appendix A).\15\ This interim final rule 
also clarified when a banking organization would estimate its minimum 
regulatory capital ratios using the advanced approaches rule for a 
given capital plan and stress test cycle and made minor, technical 
changes to the capital plan rule.\16\ Under the interim final rule, a 
banking organization is required to use the advanced approaches rule in 
its stress testing and capital planning only if the Board notifies the 
banking organization on or before September 30 that it has been 
approved to exit from parallel run under the advanced approaches rule. 
A satisfactory ``parallel run'' under the

[[Page 13500]]

advanced approaches rule is a period of no less than four consecutive 
calendar quarters during which the banking organization complies with 
the qualification requirements of the rule.\17\
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    \12\ 78 FR 59779 (September 30, 2013); 78 FR 59791 (September 
30, 2013).
    \13\ 76 FR 74631 (Dec. 1, 2011) (codified at 12 CFR 225.8).
    \14\ 77 FR 62378 (Oct. 12, 2012) (codified at 12 CFR part 252, 
subparts F and G).
    \15\ See 12 CFR 225.8 (capital plan rule); 12 CFR part 252, 
subpart F (Supervisory Stress Test Requirements for Covered 
Companies); 12 CFR part 252, subpart G (Company-Run Stress Test 
Requirements for Covered Companies).
    \16\ As of January 1, 2014, the advanced approaches rule is 
found at 12 CFR part 217, subpart E. Until December 31, 2013, the 
advanced approaches rule was found at 12 CFR part 208, Appendix F 
(state member banks) and 12 CFR part 225, Appendix G (bank holding 
companies).
    \17\ 12 CFR 217.121(c).
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    The second interim final rule (IFR for $10-$50 billion companies) 
provided a one-year transition period during which bank holding 
companies and most state member banks with more than $10 billion but 
less than $50 billion in total consolidated assets are not required to 
reflect the Board's revised capital framework in their stress tests for 
the stress test cycle that began on October 1, 2013. Instead, for this 
stress test cycle, these companies are required to estimate their pro 
forma capital levels and ratios over the full nine-quarter planning 
horizon using the Board's Basel I-based capital rules.\18\ Like the 
capital planning and stress testing IFR, the IFR for $10-$50 billion 
companies also clarified that a banking organization is required to use 
the advanced approaches rule in its company-run stress testing only if 
the Board notifies the banking organization on or before September 30 
that it has been approved to exit from parallel run under the advanced 
approaches rule.
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    \18\ These capital rules are found at 12 CFR parts 208 and 225, 
Appendix A.
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    In this final rule, the Board is adopting both the capital planning 
and stress testing IFR and the IFR for $10-$50 billion companies in 
final form. The final rule is identical to the interim final rules 
except that the final rule provides an additional year, until October 
1, 2015, for companies that have exited from parallel run to 
incorporate the advanced approaches rule into their capital planning 
and company-run stress tests, and for the Board to incorporate the 
advanced approaches rule in its supervisory stress tests.

II. Comments on the Interim Final Rules

    The Board received two comments on the capital planning and stress 
testing IFR. The comments were both from individuals and encouraged the 
Board to implement the Dodd-Frank Act in a stringent manner. Neither 
commenter provided any specific comments regarding the capital planning 
and stress testing IFR.
    The Board did not receive any comments on the IFR for $10-$50 
billion companies.

III. Summary of the Final Rule

A. Incorporating the Revised Capital Framework Into the Capital Plan 
and Stress Tests Rules

    The capital planning and stress testing IFR clarified that large 
bank holding companies should continue to calculate their tier 1 common 
ratio using the methodology in the Board's Basel I-based capital rules. 
The final rule maintains this requirement.
    Under the final rule, a large bank holding company must project its 
regulatory capital ratios and meet the minimum capital requirements for 
each quarter of the planning horizon in accordance with the minimum 
capital requirements that are in effect for that company during that 
quarter. Accordingly, under the final rule, in the capital planning and 
stress test cycle that begins on October 1, 2014, a large bank holding 
company that is an advanced approaches banking organization is required 
to calculate its common equity tier 1 capital ratio using the revised 
capital framework in every quarter of the nine-quarter planning 
horizon, meet a 4.0 percent minimum in common equity tier 1 capital 
ratio in 2014, and a 4.5 percent minimum common equity tier 1 capital 
ratio in 2015 and 2016. A large bank holding company that is not an 
advanced approaches banking organization is required to calculate its 
common equity tier 1 capital ratio in the capital planning and stress 
test cycle that begins on October 1, 2014, using the Basel I-based 
capital rules in the first quarter of the planning horizon and the 
revised capital framework in the second through ninth quarters of the 
planning horizon, and meet a 4.5 percent minimum common equity tier 1 
capital ratio in 2015 and 2016. A state member bank that is a 
subsidiary of a bank holding company with total consolidated assets of 
$50 billion or more will reflect the revised capital framework in the 
same manner as its bank holding company parent in projecting its 
capital for the upcoming stress test cycle. Table 1 summarizes these 
requirements.

                         Table 1--Common Equity Ratios Applicable to Large Bank Holding Companies in the Capital Plan and Stress Test Cycles That Begins October 1, 2014
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                                     Q4 2014           Q1 2015           Q2 2015           Q3 2015           Q4 2015           Q1 2016           Q2 2016           Q3 2016           Q4 2016
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Advanced approaches bank        Current T1C       Current T1C       Current T1C       Current T1C       Current T1C       Current T1C       Current T1C       Current T1C       Current T1C
 holding companies.              ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%
                                CET1 ratio of     CET1 ratio of     CET1 ratio of     CET1 ratio of     CET1 ratio of     CET1 ratio of     CET1 ratio of     CET1 ratio of     CET1 ratio of
                                 4.0%.             4.5%.             4.5%.             4.5%.             4.5%.             4.5%.             4.5%.             4.5%.             4.5%
Non-advanced approaches bank    Current T1C       Current T1C       Current T1C       Current T1C       Current T1C       Current T1C       Current T1C       Current T1C       Current T1C
 holding companies.              ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%.    ratio of 5.0%
                                                  CET1 ratio of     CET1 ratio of     CET1 ratio of     CET1 ratio of     CET1 ratio of     CET1 ratio of     CET1 ratio of     CET1 ratio of
                                                   4.5%.             4.5%.             4.5%.             4.5%.             4.5%.             4.5%.             4.5%.             4.5%
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    Current T1C ratio: the ratio of a bank holding company's tier 1 
common capital calculated using the definitions under the Board's Basel 
I-based capital rules (i.e., tier 1 capital as defined under Appendix A 
of 12 CFR part 225, less the non-common elements of tier 1 capital, 
over total risk-weighted assets as

[[Page 13501]]

defined under Appendices A and E of 12 CFR part 225).
    CET1 ratio: a bank holding company's common equity tier 1 capital 
ratio as calculated under 12 CFR part 217, including the transition 
provisions of 12 CFR part Sec.  217.300, as applicable within each 
quarter of the capital plan and stress test cycles that begin October 
1, 2014.
    Under the final rule, as under the capital planning and stress 
testing IFR, both large bank holding companies that are subject to the 
advanced approaches rule and large bank holding companies that are not 
subject to the advanced approaches rule must meet a minimum 5.0 percent 
tier 1 common ratio over every quarter of the planning horizon, 
calculate the tier 1 common ratio using the definitions of tier 1 
capital and total risk-weighted assets under the Board's Basel I-based 
capital rules, and not incorporate the new definitions in the revised 
capital framework as part of this calculation. This approach maintains 
consistency with previous capital plan cycles during the multi-year 
phase-in of the new common equity tier 1 capital minimum requirement. 
Once the new minimum common equity tier 1 capital ratio reaches its 
permanent level of 4.5 percent and the deductions from common equity 
tier 1 capital are fully phased-in, the Board expects that the common 
equity tier 1 ratio will be generally more stringent than the tier 1 
common ratio of 5.0 percent for the largest bank holding companies.

B. Transition Period for Revised Capital Framework

    Under the IFR for $10-$50 billion companies, the Board provided 
bank holding companies and state member banks with total consolidated 
assets of more than $10 but less than $50 billion (other than state 
member banks that are subsidiaries of bank holding companies with total 
consolidated assets of $50 billion or more) with a one-year transition 
period to incorporate the revised capital framework into their company-
run stress tests. During this transition period, these companies are 
not required to reflect the revised capital framework in any quarter of 
the nine-quarter planning horizon. The final rule maintains this 
transition period with respect to the current stress test cycle that 
began on October 1, 2013.
    These companies will estimate their pro forma capital levels and 
ratios over the planning horizon using the capital rules under 12 CFR 
part 208, Appendix A (for state member banks) and 12 CFR part 225, 
Appendix A (for bank holding companies) and will not reflect the impact 
of the revised capital framework (12 CFR part 217) in their company-run 
stress tests. In particular, for this stress test cycle, these 
companies will not calculate common equity tier 1 capital as defined in 
the revised capital framework or incorporate the effects of any changes 
to the definition of capital or any changes to the calculation of risk-
weighted assets. Beginning with the stress test cycle that starts on 
October 1, 2014, these companies will be required to reflect the 
revised capital framework in their company-run stress tests, including 
the common equity tier 1 capital requirement. Accordingly, for purposes 
of the stress test cycle that begins on October 1, 2014, each of these 
companies that is subject to the advanced approaches will be required 
to calculate its capital requirements, including the common equity tier 
1 capital ratio, using the revised capital framework in every quarter 
of the nine-quarter planning horizon, and each of these companies that 
is not subject to the advanced approaches will be required to calculate 
its capital requirements using the Basel I-based capital rules in the 
first quarter of the planning horizon and the revised capital 
framework, including the common equity tier 1 capital ratio, in the 
second through ninth quarters of the planning horizon.
    The final rule, like the IFR for $10-$50 billion companies, 
excludes from the one-year transition period state member banks that 
are subsidiaries of bank holding companies with total consolidated 
assets of $50 billion or more. Consistent with the stress test rules 
applicable to their bank holding company parents, these state member 
banks must project their regulatory capital ratios for each quarter of 
the planning horizon in accordance with the minimum capital 
requirements that will be in effect during that quarter.
    The Office of the Comptroller of the Currency and Federal Deposit 
Insurance Company both implemented the Dodd-Frank Act stress testing 
requirements for the stress test cycle that began on October 1, 2013, 
in a similar manner for banks and savings associations under their 
supervision with between $10 and $50 billion in total consolidated 
assets.

C. Parallel Run

    In light of the issuance of the revised capital framework, both 
interim final rules were intended to provide clarity on when a banking 
organization would be required to estimate its minimum regulatory 
capital ratios over the planning horizon using the advanced approaches 
for a given capital planning and stress testing cycle. Without regard 
to the capital planning and stress test rules, an advanced approaches 
banking organization is required to use the advanced approaches to 
calculate its minimum regulatory capital ratios if it has conducted a 
satisfactory parallel run.\19\ The interim final rules provided that 
for purposes of capital planning and stress testing, a banking 
organization must be notified that it has completed a successful 
parallel run by September 30 of a given calendar year in order to be 
required to estimate its capital ratios using the advanced approaches 
for the capital plan or stress test cycle that begins on October 1 of 
that calendar year. The final rule maintains this approach. Thus, the 
final rule provides that a company must be notified that it has 
completed its parallel run by September 30 of a given year in order to 
be required to estimate its capital ratios using the advanced 
approaches for the capital plan or stress test cycle that begins on 
October 1 of that year.
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    \19\ 12 CFR 217.121(d).
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    On February 14, 2014, the Board announced that certain advanced 
approaches banking organizations had completed a successful parallel 
run.\20\ Beginning April 15, 2014, these companies will be required to 
use the advanced approaches rule to calculate their risk-based capital 
requirements consistent with the requirements of the advanced 
approaches rule. However, these companies will not be required to 
calculate capital according to the advanced approaches rule for 
purposes of capital planning and stress testing rules until the October 
1, 2015, cycle.
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    \20\ See Board press release dated February 20, 2014.
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    As described above, the revised capital framework introduces more 
stringent capital requirements, including the 4.5 percent minimum 
common equity tier 1 capital ratio and the increasing deductions that 
will become effective on January 1, 2015. For the largest bank holding 
companies, this common equity tier 1 capital requirement, when fully 
phased in, is generally expected to result in a more stringent capital 
requirement than the capital plan rule's 5.0 percent tier 1 common 
ratio, in part because it incorporates significantly higher deductions 
from capital. The minimum capital requirements will continue to 
increase in stringency until the capital deductions are fully phased in 
in 2018. Large bank holding companies began to reflect these more 
stringent capital requirements in the current capital planning and 
stress test cycle, and all banking organizations subject to capital 
planning and stress testing will be

[[Page 13502]]

required to reflect the more stringent capital requirements in the next 
capital planning and stress test cycle.
    Given the operational complexity associated with incorporating the 
advanced approaches rule in the capital planning and stress testing 
processes, the final rule clarifies that the advanced approaches rule's 
incorporation into the capital plan and stress testing rules will be 
deferred for one year, until October 1, 2015, with respect to any 
banking organization that is notified on or before September 30, 2014, 
that the banking organization may exit from parallel run. The 
transition period will provide the Federal Reserve with sufficient time 
to integrate the advanced approaches into its stress testing processes 
and to provide guidance to advanced approaches banking organizations 
regarding supervisory expectations for integrating the advanced 
approaches into their stress testing and capital planning processes.

D. Technical Changes

    The interim final rule made minor technical changes to the capital 
plan rule. It clarified that a covered company that has not filed the 
FR Y-9C report for the four most recent consecutive quarters will 
calculate its total consolidated assets as reported on the company's 
available FR Y-9C reports for the most recent quarter or consecutive 
quarters. It also clarified that the Board (or the Reserve Bank, with 
concurrence of the Board) may extend the resubmission period for a 
capital plan beyond an initial 60-day extension if the Board or Reserve 
Bank determines that such longer period is appropriate.
    The interim final rule modified the capital plan rule to reflect 
the Board's current practice of publicly disclosing its decision to 
object or not object to a bank holding company's capital plan along 
with a summary of the Board's analyses of that company. The rule 
provides that any disclosure will occur by March 31 of each calendar 
year, unless the Board determines that another date is appropriate. 
With regard to the Board's review of bank holding companies' capital 
plans, the Board expects the summary results largely will be similar to 
the results disclosed in previous CCAR exercises, unless the Board 
determines that different or additional disclosures would be 
appropriate.
    The final rule maintains these minor and technical modifications 
without change. The final rule also deletes references to 12 CFR part 
225, Appendix G, from the capital plan rule and stress test rules, 
because this appendix was removed from the Code of Federal Regulations 
effective January 1, 2014.

IV. Regulatory Analysis

A. Regulatory Flexibility Act Analysis

    The Board has considered the potential impact of the final rule on 
small companies in accordance with the Regulatory Flexibility Act (5 
U.S.C. 603(b)). Based on its analysis and for the reasons stated below, 
the Board believes that the final rule will not have a significant 
economic impact on a substantial number of small entities. 
Nevertheless, the Board is publishing a final regulatory flexibility 
analysis.
    Under regulations issued by the Small Business Administration 
(``SBA''), a small entity includes a depository institution, bank 
holding company, or savings and loan holding company with total assets 
of $500 million or less (a small banking organization). The final rule 
would apply to bank holding companies, savings and loan holding 
companies, and state member banks with total consolidated asset of $10 
billion or more and nonbank financial companies supervised by the 
Board. Companies that would be subject to the interim finale rule 
therefore substantially exceed the $500 million total asset threshold 
at which a company is considered a small company under SBA regulations.
    The Board did not receive any comments on the interim final rules 
regarding their impact on small entities. In light of the foregoing, 
the Board does not believe that the final rule would have a significant 
economic impact on a substantial number of small entities.

B. Solicitation of Comments on Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act required the Federal 
banking agencies to use plain language in all proposed and final rules 
published after January 1, 2000. The Board invited comment on how to 
make the interim final rules easier to understand. The Board did not 
receive any comments on plain language and believes that the final rule 
is clearly written.

C. Paperwork Reduction Act

    This final rule references currently approved collections of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-3520) 
provided for in the capital plan rules. This final rule does not 
introduce any new collections of information nor does it substantively 
modify the collections of information that Office of Management and 
Budget (OMB) has approved. Therefore, no Paperwork Reduction Act 
submissions to OMB are required.

List of Subjects

12 CFR Part 225

    Administrative practice and procedure, Banks, Banking, Capital 
planning, Holding companies, Reporting and recordkeeping requirements, 
Securities, Stress testing.

12 CFR Part 252

    Administrative practice and procedure, Banks, Banking, Capital 
planning, Federal Reserve System, Holding companies, Reporting and 
recordkeeping requirements, Securities, Stress testing.

Authority and Issuance

    For the reasons stated in the Supplementary Information, the Board 
of Governors of the Federal Reserve System amends 12 CFR chapter II as 
follows:

PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL 
(REGULATION Y)

0
1. The authority citation for part 225 continues to read as follows:

    Authority: 2 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1, 
1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310, 3331-3351, 3906, 
3907, and 3909; 15 U.S.C. 1681s, 1681w, 6801 and 6805.

Subpart A--General Provisions

0
2. Revise Sec.  225.8 to read as follows:


Sec.  225.8  Capital planning.

    (a) Purpose. This section establishes capital planning and prior 
notice and approval requirements for capital distributions by certain 
bank holding companies.
    (b) Scope and effective date. (1) This section applies to every 
top-tier bank holding company domiciled in the United States:
    (i) With average total consolidated assets of $50 billion or more. 
Average total consolidated assets means the average of the total 
consolidated assets as reported by a bank holding company on its 
Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) 
for the four most recent consecutive quarters. If the bank holding 
company has not filed the FR Y-9C for each of the four most recent 
consecutive quarters, average total consolidated assets means the 
average of the company's total consolidated assets, as reported on the 
company's FR Y-9C, for the most recent quarter or consecutive quarters. 
Average total consolidated assets are measured on the as-of date of the 
most recent FR Y-9C

[[Page 13503]]

used in the calculation of the average; or
    (ii) That is subject to this section, in whole or in part, by order 
of the Board based on the institution's size, level of complexity, risk 
profile, scope of operations, or financial condition.
    (2) Beginning on December 23, 2011, the provisions of this section 
shall apply to any bank holding company that is subject to this section 
pursuant to paragraph (b)(1), provided that:
    (i) Until July 21, 2015, this section will not apply to any bank 
holding company subsidiary of a foreign banking organization that is 
currently relying on Supervision and Regulation Letter SR 01-01 issued 
by the Board (as in effect on May 19, 2010); and
    (ii) A bank holding company that becomes subject to this section 
pursuant to paragraph (b)(1)(i) after the 5th of January of a calendar 
year shall not be subject to the requirements of paragraphs (d)(1)(ii), 
(d)(4), and (f)(1)(iii) of this section until January 1 of the next 
calendar year.
    (3) Notwithstanding any other requirement in this section, for a 
given capital plan cycle:
    (i) Until October 1, 2015, a bank holding company's estimates of 
its pro forma regulatory capital ratios and its pro forma tier 1 common 
ratio over the planning horizon shall not include estimates using the 
advanced approaches; and
    (ii) Beginning October 1, 2015, for a given capital plan cycle 
(including for purposes of the January 5 submission of a capital plan 
under paragraph (d)(1) of this section and any resubmission of the 
capital plan under paragraph (d)(4) of this section during the capital 
plan cycle), a bank holding company's estimates of its pro forma 
regulatory capital ratios and its pro forma tier 1 common ratio over 
the planning horizon shall not include estimates using the advanced 
approaches if the bank holding company is notified on or after the 
first day of that capital plan cycle (October 1) that the bank holding 
company is required to calculate its risk-based capital requirements 
using the advanced approaches.
    (4) Nothing in this section shall limit the authority of the 
Federal Reserve to issue a capital directive or take any other 
supervisory or enforcement action, including action to address unsafe 
or unsound practices or conditions or violations of law.
    (c) Definitions. For purposes of this section, the following 
definitions apply:
    (1) Advanced approaches means the risk-weighted assets calculation 
methodologies at 12 CFR part 217, subpart E, as applicable, and any 
successor regulation.
    (2) Capital action means any issuance of a debt or equity capital 
instrument, any capital distribution, and any similar action that the 
Federal Reserve determines could impact a bank holding company's 
consolidated capital.
    (3) Capital distribution means a redemption or repurchase of any 
debt or equity capital instrument, a payment of common or preferred 
stock dividends, a payment that may be temporarily or permanently 
suspended by the issuer on any instrument that is eligible for 
inclusion in the numerator of any minimum regulatory capital ratio, and 
any similar transaction that the Federal Reserve determines to be in 
substance a distribution of capital.
    (4) Capital plan means a written presentation of a bank holding 
company's capital planning strategies and capital adequacy process that 
includes the mandatory elements set forth in paragraph (d)(2) of this 
section.
    (5) Capital plan cycle means the period beginning on October 1 of a 
calendar year and ending on September 30 of the following calendar 
year.
    (6) Capital policy means a bank holding company's written 
assessment of the principles and guidelines used for capital planning, 
capital issuance, usage and distributions, including internal capital 
goals; the quantitative or qualitative guidelines for dividend and 
stock repurchases; the strategies for addressing potential capital 
shortfalls; and the internal governance procedures around capital 
policy principles and guidelines.
    (7) Minimum regulatory capital ratio means any minimum regulatory 
capital ratio that the Federal Reserve may require of a bank holding 
company, by regulation or order, including, as applicable, the bank 
holding company's tier 1 and supplementary leverage ratios and common 
equity tier 1, tier 1, and total risk-based capital ratios as 
calculated under appendices A, D, and E to this part (12 CFR part 225) 
and 12 CFR part 217, as applicable, including the transition provisions 
at 12 CFR 217.1(f)(4) and 12 CFR 217.300, or any successor regulation.
    (8) Planning horizon means the period of at least nine quarters, 
beginning with the quarter preceding the quarter in which the bank 
holding company submits its capital plan, over which the relevant 
projections extend.
    (9) Tier 1 capital has the same meaning as under appendix A to this 
part or under 12 CFR part 217, as applicable, or any successor 
regulation.
    (10) Tier 1 common capital means tier 1 capital as defined under 
appendix A to this part less the non-common elements of tier 1 capital, 
including perpetual preferred stock and related surplus, minority 
interest in subsidiaries, trust preferred securities and mandatory 
convertible preferred securities.
    (11) Tier 1 common ratio means the ratio of a bank holding 
company's tier 1 common capital to total risk-weighted assets as 
defined under appendices A and E to this part.
    (d) General requirements. (1) Annual capital planning. (i) A bank 
holding company must develop and maintain a capital plan.
    (ii) A bank holding company must submit its complete capital plan 
to the appropriate Reserve Bank and the Board each year by the 5th of 
January, or such later date as directed by the Board or the appropriate 
Reserve Bank, with concurrence of the Board.
    (iii) The bank holding company's board of directors or a designated 
committee thereof must at least annually and prior to submission of the 
capital plan under paragraph (d)(1)(ii) of this section:
    (A) Review the robustness of the bank holding company's process for 
assessing capital adequacy,
    (B) Ensure that any deficiencies in the bank holding company's 
process for assessing capital adequacy are appropriately remedied; and
    (C) Approve the bank holding company's capital plan.
    (2) Mandatory elements of capital plan. A capital plan must contain 
at least the following elements:
    (i) An assessment of the expected uses and sources of capital over 
the planning horizon that reflects the bank holding company's size, 
complexity, risk profile, and scope of operations, assuming both 
expected and stressful conditions, including:
    (A) Estimates of projected revenues, losses, reserves, and pro 
forma capital levels, including any minimum regulatory capital ratios 
(for example, leverage, tier 1 risk-based, and total risk-based capital 
ratios) and any additional capital measures deemed relevant by the bank 
holding company, over the planning horizon under expected conditions 
and under a range of stressed scenarios, including any scenarios 
provided by the Federal Reserve and at least one stressed scenario 
developed by the bank holding company appropriate to its business model 
and portfolios;
    (B) A calculation of the pro forma tier 1 common ratio over the 
planning horizon under expected conditions and under a range of 
stressed scenarios and discussion of how the company will maintain a 
pro forma tier 1 common

[[Page 13504]]

ratio above 5 percent under expected conditions and the stressed 
scenarios required under paragraphs (d)(2)(i)(A) and (ii) of this 
section;
    (C) A discussion of the results of any stress test required by law 
or regulation, and an explanation of how the capital plan takes these 
results into account; and
    (D) A description of all planned capital actions over the planning 
horizon.
    (ii) A detailed description of the bank holding company's process 
for assessing capital adequacy, including:
    (A) A discussion of how the bank holding company will, under 
expected and stressful conditions, maintain capital commensurate with 
its risks, maintain capital above the minimum regulatory capital ratios 
and above a tier 1 common ratio of 5 percent, and serve as a source of 
strength to its subsidiary depository institutions;
    (B) A discussion of how the bank holding company will, under 
expected and stressful conditions, maintain sufficient capital to 
continue its operations by maintaining ready access to funding, meeting 
its obligations to creditors and other counterparties, and continuing 
to serve as a credit intermediary;
    (iii) The bank holding company's capital policy; and
    (iv) A discussion of any expected changes to the bank holding 
company's business plan that are likely to have a material impact on 
the firm's capital adequacy or liquidity.
    (3) Data collection. Upon the request of the Board or appropriate 
Reserve Bank, the bank holding company shall provide the Federal 
Reserve with information regarding:
    (i) The bank holding company's financial condition, including its 
capital;
    (ii) The bank holding company's structure;
    (iii) Amount and risk characteristics of the bank holding company's 
on- and off-balance sheet exposures, including exposures within the 
bank holding company's trading account, other trading-related exposures 
(such as counterparty-credit risk exposures) or other items sensitive 
to changes in market factors, including, as appropriate, information 
about the sensitivity of positions to changes in market rates and 
prices;
    (iv) The bank holding company's relevant policies and procedures, 
including risk management policies and procedures;
    (v) The bank holding company's liquidity profile and management; 
and
    (vi) Any other relevant qualitative or quantitative information 
requested by the Board or the appropriate Reserve Bank to facilitate 
review of the bank holding company's capital plan under this section.
    (4) Re-submission of a capital plan. (i) A bank holding company 
must update and re-submit its capital plan to the appropriate Reserve 
Bank within 30 calendar days of the occurrence of one of the following 
events:
    (A) The bank holding company determines there has been or will be a 
material change in the bank holding company's risk profile, financial 
condition, or corporate structure since the bank holding company 
adopted the capital plan;
    (B) The Board or the appropriate Reserve Bank objects to the 
capital plan; or
    (C) The Board or the appropriate Reserve Bank, with concurrence of 
the Board, directs the bank holding company in writing to revise and 
resubmit its capital plan for any of the following reasons:
    (1) The capital plan is incomplete or the capital plan, or the bank 
holding company's internal capital adequacy process, contains material 
weaknesses;
    (2) There has been or will likely be a material change in the bank 
holding company's risk profile (including a material change in its 
business strategy or any risk exposure), financial condition, or 
corporate structure;
    (3) The stressed scenario(s) developed by the bank holding company 
is not appropriate to its business model and portfolios, or changes in 
financial markets or the macro-economic outlook that could have a 
material impact on a bank holding company's risk profile and financial 
condition require the use of updated scenarios; or
    (4) The capital plan or the condition of the bank holding company 
raise any of the issues described in paragraph (e)(2)(ii) of this 
section.
    (ii) The Board or the appropriate Reserve Bank, with concurrence of 
the Board, may, at its discretion, extend the 30-day period in 
paragraph (d)(4)(i) of this section for up to an additional 60 calendar 
days, or such longer period as the Board or the appropriate Reserve 
Bank, with concurrence of the Board, determines appropriate.
    (iii) Any updated capital plan must satisfy all the requirements of 
this section; however, a bank holding company may continue to rely on 
information submitted as part of a previously submitted capital plan to 
the extent that the information remains accurate and appropriate.
    (e) Review of capital plans by the Federal Reserve; publication of 
summary results. (1) Considerations and inputs. (i) The Board or the 
appropriate Reserve Bank, with concurrence of the Board, will consider 
the following factors in reviewing a bank holding company's capital 
plan:
    (A) The comprehensiveness of the capital plan, including the extent 
to which the analysis underlying the capital plan captures and 
addresses potential risks stemming from activities across the firm and 
the company's capital policy;
    (B) The reasonableness of the bank holding company's assumptions 
and analysis underlying the capital plan and its methodologies for 
reviewing the robustness of its capital adequacy process; and
    (C) The bank holding company's ability to maintain capital above 
each minimum regulatory capital ratio and above a tier 1 common ratio 
of 5 percent on a pro forma basis under expected and stressful 
conditions throughout the planning horizon, including but not limited 
to any stressed scenarios required under paragraph (d)(2)(i)(A) and 
(ii) of this section.
    (ii) The Board or the appropriate Reserve Bank, with concurrence of 
the Board, will also consider the following information in reviewing a 
bank holding company's capital plan:
    (A) Relevant supervisory information about the bank holding company 
and its subsidiaries;
    (B) The bank holding company's regulatory and financial reports, as 
well as supporting data that would allow for an analysis of the bank 
holding company's loss, revenue, and reserve projections;
    (C) As applicable, the Federal Reserve's own pro forma estimates of 
the firm's potential losses, revenues, reserves, and resulting capital 
adequacy under expected and stressful conditions, including but not 
limited to any stressed scenarios required under paragraph (d)(2)(i)(A) 
and (ii) of this section, as well as the results of any stress tests 
conducted by the bank holding company or the Federal Reserve; and
    (D) Other information requested or required by the appropriate 
Reserve Bank or the Board, as well as any other information relevant, 
or related, to the bank holding company's capital adequacy.
    (2) Federal Reserve action on a capital plan. (i) The Board or the 
appropriate Reserve Bank, with concurrence of the Board, will object, 
in whole or in part, to the capital plan or provide the bank holding 
company with a notice of non-objection to the capital plan:

[[Page 13505]]

    (A) By March 31 of the calendar year in which a capital plan was 
submitted pursuant to paragraph (d)(1)(ii) of this section, and
    (B) By the date that is 75 calendar days after the date on which a 
capital plan was resubmitted pursuant to paragraph (d)(4) of this 
section.
    (ii) The Board or the appropriate Reserve Bank, with concurrence of 
the Board, may object to a capital plan if it determines that:
    (A) The bank holding company has material unresolved supervisory 
issues, including but not limited to issues associated with its capital 
adequacy process;
    (B) The assumptions and analysis underlying the bank holding 
company's capital plan, or the bank holding company's methodologies for 
reviewing the robustness of its capital adequacy process, are not 
reasonable or appropriate;
    (C) The bank holding company has not demonstrated an ability to 
maintain capital above each minimum regulatory capital ratio and above 
a tier 1 common ratio of 5 percent, on a pro forma basis under expected 
and stressful conditions throughout the planning horizon; or
    (D) The bank holding company's capital planning process or proposed 
capital distributions otherwise constitute an unsafe or unsound 
practice, or would violate any law, regulation, Board order, directive, 
or any condition imposed by, or written agreement with, the Board. In 
determining whether a capital plan or any proposed capital distribution 
would constitute an unsafe or unsound practice, the appropriate Reserve 
Bank would consider whether the bank holding company is and would 
remain in sound financial condition after giving effect to the capital 
plan and all proposed capital distributions.
    (iii) The Board or the appropriate Reserve Bank, with concurrence 
of the Board, will notify the bank holding company in writing of the 
reasons for a decision to object to a capital plan.
    (iv) If the Board or the appropriate Reserve Bank, with concurrence 
of the Board, objects to a capital plan and until such time as the 
Board or the appropriate Reserve Bank, with concurrence of the Board, 
issues a non-objection to the bank holding company's capital plan, the 
bank holding company may not make any capital distribution, other than 
those capital distributions with respect to which the Board or the 
appropriate Reserve Bank has indicated in writing its non-objection.
    (v) The Board may disclose publicly its decision to object or not 
object to a bank holding company's capital plan under this section, 
along with a summary of the Board's analyses of that company. Any 
disclosure under this paragraph (e)(2)(v) will occur by March 31, 
unless the Board determines that a later disclosure date is 
appropriate.
    (3) Request for reconsideration or hearing. Within 10 calendar days 
of receipt of a notice of objection to a capital plan by the Board or 
the appropriate Reserve Bank:
    (i) A bank holding company may submit a written request to the 
Board requesting reconsideration of the objection, including an 
explanation of why reconsideration should be granted. Within 10 
calendar days of receipt of the bank holding company's request, the 
Board will notify the company of its decision to affirm or withdraw the 
objection to the bank holding company's capital plan or a specific 
capital distribution; or
    (ii) As an alternative to paragraph (e)(3)(i) of this section, a 
bank holding company may submit a written request to the Board for a 
hearing. Any hearing shall follow the procedures described in paragraph 
(f)(5)(ii) through (iii) of this section.
    (f) Approval requirements for certain capital actions. (1) 
Circumstances requiring approval. Notwithstanding a notice of non-
objection under paragraph (e)(2)(i) of this section a bank holding 
company may not make a capital distribution under the following 
circumstances, unless it receives approval from the Board or 
appropriate Reserve Bank pursuant to paragraph (f)(4) of this section:
    (i) After giving effect to the capital distribution, the bank 
holding company would not meet a minimum regulatory capital ratio or a 
tier 1 common ratio of at least 5 percent;
    (ii) The Board or the appropriate Reserve Bank, with concurrence of 
the Board, notifies the company in writing that the Federal Reserve has 
determined that the capital distribution would result in a material 
adverse change to the organization's capital or liquidity structure or 
that the company's earnings were materially underperforming 
projections;
    (iii) Except as provided in paragraph (f)(2) of this section, the 
dollar amount of the capital distribution will exceed the amount 
described in the capital plan for which a non-objection was issued 
under this section; or
    (iv) The capital distribution would occur after the occurrence of 
an event requiring resubmission under paragraphs (d)(4)(i)(A) and 
(d)(4)(i)(C) of this section and before the Federal Reserve acted on 
the resubmitted capital plan.
    (2) Exception for well capitalized bank holding companies. (i) A 
bank holding company may make a capital distribution for which the 
dollar amount exceeds the amount described in the capital plan for 
which a non-objection was issued under this section if the following 
conditions are satisfied:
    (A) The bank holding company is, and after the capital distribution 
would remain, well capitalized as defined in Sec.  225.2(r) of 
Regulation Y (12 CFR 225.2(r));
    (B) The bank holding company's performance and capital levels are, 
and after the capital distribution would remain, consistent with its 
projections under expected conditions as set forth in its capital plan 
under this paragraph (d)(2)(i);
    (C) The annual aggregate dollar amount of all capital distributions 
(beginning on April 1 of a calendar year and ending on March 31 of the 
following calendar year) would not exceed the total amounts described 
in the company's capital plan for which the bank holding company 
received a notice of non-objection by more than 1.00 percent multiplied 
by the bank holding company's tier 1 capital, as reported to the 
Federal Reserve on the bank holding company's first quarter FR Y-9C;
    (D) The bank holding company provides the appropriate Reserve Bank 
with notice 15 calendar days prior to a capital distribution that 
includes the elements described in paragraph (f)(3) of this section; 
and
    (E) The Board or the appropriate Reserve Bank, with concurrence of 
the Board, does not object to the transaction proposed in the notice. 
In determining whether to object to the proposed transaction, the Board 
or the appropriate Reserve Bank, with concurrence of the Board, shall 
apply the criteria described in paragraph (f)(4)(iv) of this section.
    (ii) The exception in this paragraph (f)(2) shall not apply if the 
Board or the appropriate Reserve Bank notifies the bank holding company 
in writing that it may not take advantage of this exception.
    (3) Contents of request. (i) A request for a capital distribution 
under this section shall be filed with the appropriate Reserve Bank and 
the Board and shall contain the following information:
    (A) The bank holding company's current capital plan or an 
attestation that there have been no changes to the capital plan since 
it was last submitted to the Federal Reserve;
    (B) The purpose of the transaction;
    (C) A description of the capital distribution, including for 
redemptions

[[Page 13506]]

or repurchases of securities, the gross consideration to be paid and 
the terms and sources of funding for the transaction, and for 
dividends, the amount of the dividend(s); and
    (D) Any additional information requested by the Board or the 
appropriate Reserve Bank (which may include, among other things, an 
assessment of the bank holding company's capital adequacy under a 
revised stress scenario provided by the Federal Reserve, a revised 
capital plan, and supporting data).
    (ii) Any request submitted with respect to a capital distribution 
described in paragraph (f)(1)(i) of this section shall also include a 
plan for restoring the bank holding company's capital to an amount 
above a minimum level within 30 days and a rationale for why the 
capital distribution would be appropriate.
    (4) Approval of certain capital distributions. (i) A bank holding 
company must obtain approval from the Board or the appropriate Reserve 
Bank, with concurrence of the Board, before making a capital 
distribution described in paragraph (f)(1) of this section.
    (ii) A request for a capital distribution under this section must 
be filed with the appropriate Reserve Bank and contain all the 
information set forth in paragraph (f)(3) of this section.
    (iii) The Board or the appropriate Reserve Bank, with concurrence 
of the Board, will act on a request under this paragraph (f)(4) within 
30 calendar days after the receipt of a complete request under 
paragraph (f)(4)(ii) of this section. The Board or the appropriate 
Reserve Bank may, at any time, request additional information that it 
believes is necessary for its decision.
    (iv) In acting on a request under this paragraph, the Board or 
appropriate Reserve Bank will apply the considerations and principles 
in paragraph (e) of this section. In addition, the Board or the 
appropriate Reserve Bank may disapprove the transaction if the bank 
holding company does not provide all of the information required to be 
submitted under paragraphs (f)(3) and (f)(5)(iii) of this section.
    (5) Disapproval and hearing. (i) The Board or the appropriate 
Reserve Bank will notify the bank holding company in writing of the 
reasons for a decision to disapprove any proposed capital distribution. 
Within 10 calendar days after receipt of a disapproval by the Board, 
the bank holding company may submit a written request for a hearing.
    (ii) The Board will order a hearing within 10 calendar days of 
receipt of the request if it finds that material facts are in dispute, 
or if it otherwise appears appropriate. Any hearing conducted under 
this paragraph shall be held in accordance with the Board's Rules of 
Practice for Formal Hearings (12 CFR part 263).
    (iii) At the conclusion of the hearing, the Board will by order 
approve or disapprove the proposed capital distribution on the basis of 
the record of the hearing.

PART 252--ENHANCED PRUDENTIAL STANDARDS (REGULATION YY)

0
3. The authority citation for part 252 continues to read as follows:

    Authority: 12 U.S.C. 321-338a, 1467a(g), 1818, 1831p-1, 1844(b), 
1844(c), 5361, 5365, 5366.

0
4. Subpart B is added to read as follows:
Subpart B--Company-Run Stress Test Requirements for Certain U.S. 
Banking Organizations With Total Consolidated Assets Over $10 Billion 
and Less Than $50 Billion
Sec.
252.10 [Reserved]
252.11 Authority and purpose.
252.12 Definitions.
252.13 Applicability.
252.14 Annual stress test.
252.15 Methodologies and practices.
252.16 Reports of stress test results.
252.17 Disclosure of stress test results.

Subpart B--Company-Run Stress Test Requirements for Certain U.S. 
Banking Organizations With Total Consolidated Assets Over $10 
Billion and Less Than $50 Billion


Sec.  252.10  [Reserved]


Sec.  252.11  Authority and purpose.

    (a) Authority. 12 U.S.C. 321-338a, 1467a(g), 1818, 1831o, 1831p-1, 
1844(b), 1844(c), 3906-3909, 5365.
    (b) Purpose. This subpart implements section 165(i)(2) of the Dodd-
Frank Act (12 U.S.C. 5365(i)(2)), which requires a bank holding company 
with total consolidated assets of greater than $10 billion but less 
than $50 billion and savings and loan holding companies and state 
member banks with total consolidated assets of greater than $10 billion 
to conduct annual stress tests. This subpart also establishes 
definitions of stress test and related terms, methodologies for 
conducting stress tests, and reporting and disclosure requirements.


Sec.  252.12  Definitions.

    For purposes of this subpart, the following definitions apply:
    (a) Advanced approaches means the regulatory capital requirements 
at 12 CFR part 217, subpart E, as applicable, and any successor 
regulation.
    (b) Adverse scenario means a set of conditions that affect the U.S. 
economy or the financial condition of a bank holding company, savings 
and loan holding company, or state member bank that are more adverse 
than those associated with the baseline scenario and may include 
trading or other additional components.
    (c) Asset threshold means--
    (1) For a bank holding company, average total consolidated assets 
of greater than $10 billion but less than $50 billion, and
    (2) For a savings and loan holding company or state member bank, 
average total consolidated assets of greater than $10 billion.
    (d) Average total consolidated assets means the average of the 
total consolidated assets as reported by a bank holding company, 
savings and loan holding company, or state member bank on its 
Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) 
or Consolidated Report of Condition and Income (Call Report), as 
applicable, for the four most recent consecutive quarters. If the bank 
holding company, savings and loan holding company, or state member bank 
has not filed the FR Y-9C or Call Report, as applicable, for each of 
the four most recent consecutive quarters, average total consolidated 
assets means the average of the company's total consolidated assets, as 
reported on the company's FR Y-9C or Call Report, as applicable, for 
the most recent quarter or consecutive quarters. Average total 
consolidated assets are measured on the as-of date of the most recent 
FR Y-9C or Call Report, as applicable, used in the calculation of the 
average.
    (e) Bank holding company has the same meaning as in Sec.  225.2(c) 
of the Board's Regulation Y (12 CFR 225.2(c)).
    (f) Baseline scenario means a set of conditions that affect the 
U.S. economy or the financial condition of a bank holding company, 
savings and loan holding company, or state member bank, and that 
reflect the consensus views of the economic and financial outlook.
    (g) Capital action has the same meaning as in Sec.  225.8(c)(2) of 
the Board's Regulation Y (12 CFR 225.8(c)(2)).
    (h) Covered company subsidiary means a state member bank that is a 
subsidiary of a covered company as defined in subpart F of this part.
    (i) Depository institution has the same meaning as in section 3 of 
the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).

[[Page 13507]]

    (j) Foreign banking organization has the same meaning as in Sec.  
211.21(o) of the Board's Regulation K (12 CFR 211.21(o)).
    (k) Planning horizon means the period of at least nine quarters, 
beginning on the first day of a stress test cycle (on October 1) over 
which the relevant projections extend.
    (l) Pre-provision net revenue means the sum of net interest income 
and non-interest income less expenses before adjusting for loss 
provisions.
    (m) Provision for loan and lease losses means the provision for 
loan and lease losses as reported by the bank holding company, savings 
and loan holding company, or state member bank on the FR Y-9C or Call 
Report, as appropriate.
    (n) Regulatory capital ratio means a capital ratio for which the 
Board established minimum requirements for the company by regulation or 
order, including, as applicable, a company's tier 1 and supplementary 
leverage ratio and common equity tier 1, tier 1, and total risk-based 
capital ratios as calculated under the Board's regulations, including 
appendices A, D, and E to 12 CFR part 225, appendices A, B, and E to 12 
CFR part 208, and 12 CFR part 217, as applicable, including the 
transition provisions at 12 CFR 217.1(f)(4) and 12 CFR 217.300, or any 
successor regulation. For state member banks other than covered company 
subsidiaries and for all bank holding companies, for the stress test 
cycle that commences on October 1, 2013, regulatory capital ratios must 
be calculated pursuant to the regulatory capital framework set forth in 
12 CFR part 225, appendix A, and not the regulatory capital framework 
set forth in 12 CFR part 217.
    (o) Savings and loan holding company has the same meaning as in 
Sec.  238.2(m) of the Board's Regulation LL (12 CFR 238.2(m)).
    (p) Scenarios are those sets of conditions that affect the U.S. 
economy or the financial condition of a bank holding company, savings 
and loan holding company, or state member bank that the Board annually 
determines are appropriate for use in the company-run stress tests, 
including, but not limited to, baseline, adverse, and severely adverse 
scenarios.
    (q) Severely adverse scenario means a set of conditions that affect 
the U.S. economy or the financial condition of a bank holding company, 
savings and loan holding company, or state member bank and that overall 
are more severe than those associated with the adverse scenario and may 
include trading or other additional components.
    (r) State member bank has the same meaning as in Sec.  208.2(g) of 
the Board's Regulation H (12 CFR 208.2(g)).
    (s) Stress test means a process to assess the potential impact of 
scenarios on the consolidated earnings, losses, and capital of a bank 
holding company, savings and loan holding company, or state member bank 
over the planning horizon, taking into account the current condition, 
risks, exposures, strategies, and activities.
    (t) Stress test cycle means the period between October 1 of a 
calendar year and September 30 of the following calendar year.
    (u) Subsidiary has the same meaning as in Sec.  225.2(o) the 
Board's Regulation Y (12 CFR 225.2(o)).


Sec.  252.13  Applicability.

    (a) Compliance date for bank holding companies and state member 
banks that meet the asset threshold on or before December 31, 2012. (1) 
Bank holding companies--(i) In general. Except as provided in paragraph 
(a)(1)(ii) of this section, a bank holding company that meets the asset 
threshold on or before December 31, 2012, must comply with the 
requirements of this subpart beginning with the stress test cycle that 
commences on October 1, 2013, unless that time is extended by the Board 
in writing.\1\
---------------------------------------------------------------------------

    \1\ See Sec.  252.12(c).
---------------------------------------------------------------------------

    (ii) SR Letter 01-01. A U.S.-domiciled bank holding company that is 
a subsidiary of a foreign banking organization that is currently 
relying on Supervision and Regulation Letter SR 01-01 issued by the 
Board (as in effect on May 19, 2010) must comply with the requirements 
of this subpart beginning with the stress test cycle that commences on 
October 1, 2015, unless that time is extended by the Board in writing.
    (2) State member banks. (i) A state member bank that meets the 
asset threshold as of November 15, 2012, and is a subsidiary of a bank 
holding company that participated in the 2009 Supervisory Capital 
Assessment Program, or a successor to such bank holding company, must 
comply with the requirements of this subpart beginning with the stress 
test cycle that commences on November 15, 2012, unless that time is 
extended by the Board in writing.
    (ii) A state member bank that meets the asset threshold on or 
before December 31, 2012, and is not described in paragraph (a)(2)(i) 
of this section must comply with the requirements of this subpart 
beginning with the stress test cycle that commences on October 1, 2013, 
unless that time is extended by the Board in writing.\2\
---------------------------------------------------------------------------

    \2\ See Sec.  252.12(c).
---------------------------------------------------------------------------

    (b) Compliance date for bank holding companies and state member 
banks that meet the asset threshold after December 31, 2012. A bank 
holding company or state member bank that meets the asset threshold 
after December 31, 2012, must comply with the requirements of this 
subpart beginning with the stress test cycle that commences in the 
calendar year after the year in which the company meets the asset 
threshold, unless that time is extended by the Board in writing.
    (c) Compliance date for savings and loan holding companies. (1) A 
savings and loan holding company that meets the asset threshold on or 
before the date on which it is subject to minimum regulatory capital 
requirements must comply with the requirements of this subpart 
beginning with the stress test cycle that commences in the calendar 
year after the year in which the company becomes subject to the Board's 
minimum regulatory capital requirements, unless the Board accelerates 
or extends the compliance date.
    (2) A savings and loan holding company that meets the asset 
threshold after the date on which it is subject to minimum regulatory 
capital requirements must comply with the requirements of this subpart 
beginning with the stress test cycle that commences in the calendar 
year after the year in which the company becomes subject to the Board's 
minimum regulatory capital requirements, unless that time is extended 
by the Board in writing.
    (d) Ongoing application. A bank holding company, savings and loan 
holding company, or state member bank that meets the asset threshold 
will remain subject to the requirements of this subpart unless and 
until its total consolidated assets fall below $10 billion for each of 
four consecutive quarters, as reported on the FR Y-9C or Call Report, 
as applicable. The calculation will be effective on the as-of date of 
the fourth consecutive FR Y-9C or Call Report, as applicable.
    (e) Interaction with 12 CFR part 252, subpart F. Notwithstanding 
paragraph (d) of this section, a bank holding company or savings and 
loan holding company that becomes a covered company as defined in 
subpart F of this part and conducts a stress test pursuant to that 
subpart is not subject to the requirements of this subpart.
    (f) Advanced approaches. Notwithstanding any other requirement

[[Page 13508]]

in this section, for a given stress test cycle:
    (1) Until October 1, 2015, a bank holding company, savings and loan 
holding company, or state member bank's estimates of its pro forma 
regulatory capital ratios over the planning horizon shall not include 
estimates using the advanced approaches; and
    (2) Beginning October 1, 2015, a bank holding company, savings and 
loan holding company, or state member bank's estimates of its pro forma 
regulatory capital ratios over the planning horizon shall not include 
estimates using the advanced approaches if the company is notified on 
or after the first day of that stress test cycle (October 1) that it is 
required to calculate its risk-based capital requirements using the 
advanced approaches.


Sec.  252.14  Annual stress test.

    (a) General requirements. (1) Savings and loan holding companies 
with average total consolidated assets of $50 billion or more and state 
member banks that are covered company subsidiaries. A savings and loan 
holding company with average total consolidated assets of $50 billion 
or more or a state member bank that is a covered company subsidiary or 
must conduct a stress test by January 5 of each calendar year based on 
data as of September 30 of the preceding calendar year, unless the time 
or the as-of date is extended by the Board in writing.
    (2) Bank holding companies, savings and loan holding companies with 
total consolidated assets of less than $50 billion, and state member 
banks that are not covered company subsidiaries. Except as provided in 
paragraph (a)(1), a bank holding company, savings and loan holding 
company, or state member bank must conduct a stress test by March 31 of 
each calendar year using financial statement data as of September 30 of 
the preceding calendar year, unless the time or the as-of date is 
extended by the Board in writing.
    (b) Scenarios provided by the Board. (1) In general. In conducting 
a stress test under this section, a bank holding company, savings and 
loan holding company, or state member bank must use the scenarios 
provided by the Board. Except as provided in paragraphs (b)(2) and (3) 
of this section, the Board will provide a description of the scenarios 
to each bank holding company, savings and loan holding company, or 
state member bank no later than November 15 of that calendar year.
    (2) Additional components. (i) The Board may require a bank holding 
company, savings and loan holding company, or state member bank with 
significant trading activity, as determined by the Board and specified 
in the Capital Assessments and Stress Testing report (FR Y-14), to 
include a trading and counterparty component in its adverse and 
severely adverse scenarios in the stress test required by this section. 
The Board may also require a state member bank that is subject to 12 
CFR part 208, appendix E and that is a subsidiary of a bank holding 
company subject to paragraph (b)(2)(i) of this section or Sec.  
252.54(b)(2)(i) to include a trading and counterparty component in the 
state member bank's adverse and severely adverse scenarios in the 
stress test required by this section. The data used in this component 
will be as of a date between October 1 and December 1 of that calendar 
year selected by the Board, and the Board will communicate the as-of 
date and a description of the component to the company no later than 
December 1 of the calendar year.
    (ii) The Board may require a bank holding company, savings and loan 
holding company, or state member bank to include one or more additional 
components in its adverse and severely adverse scenarios in the stress 
test required by this section based on the company's financial 
condition, size, complexity, risk profile, scope of operations, or 
activities, or risks to the U.S. economy.
    (3) Additional scenarios. The Board may require a bank holding 
company, savings and loan holding company, or state member bank to 
include one or more additional scenarios in the stress test required by 
this section based on the company's financial condition, size, 
complexity, risk profile, scope of operations, or activities, or risks 
to the U.S. economy.
    (4) Notice and response. If the Board requires a bank holding 
company, savings and loan holding company, or state member bank to 
include one or more additional components in its adverse and severely 
adverse scenarios under paragraph (b)(2)(ii) of this section or to use 
one or more additional scenarios under paragraph (b)(3) of this 
section, the Board will notify the company in writing no later than 
September 30. The notification will include a general description of 
the additional component(s) or additional scenario(s) and the basis for 
requiring the company to include the additional component(s) or 
additional scenario(s). Within 14 calendar days of receipt of a 
notification under this paragraph, the bank holding company, savings 
and loan holding company, or state member bank may request in writing 
that the Board reconsider the requirement that the company include the 
additional component(s) or additional scenario(s), including an 
explanation as to why the reconsideration should be granted. The Board 
will respond in writing within 14 calendar days of receipt of the 
company's request. The Board will provide the bank holding company, 
savings and loan holding company, or state member bank with a 
description of any additional component(s) or additional scenario(s) by 
December 1.


Sec.  252.15  Methodologies and practices.

    (a) Potential impact on capital. In conducting a stress test under 
Sec.  252.14, for each quarter of the planning horizon, a bank holding 
company, savings and loan holding company, or state member bank must 
estimate the following for each scenario required to be used:
    (1) Losses, pre-provision net revenue, provision for loan and lease 
losses, and net income; and
    (2) The potential impact on pro forma regulatory capital levels and 
pro forma capital ratios (including regulatory capital ratios and any 
other capital ratios specified by the Board), incorporating the effects 
of any capital actions over the planning horizon and maintenance of an 
allowance for loan losses appropriate for credit exposures throughout 
the planning horizon.
    (b) Assumptions regarding capital actions. In conducting a stress 
test under Sec.  252.14, a bank holding company or savings and loan 
holding company is required to make the following assumptions regarding 
its capital actions over the planning horizon--
    (1) For the first quarter of the planning horizon, the bank holding 
company or savings and loan holding company must take into account its 
actual capital actions as of the end of that quarter; and
    (2) For each of the second through ninth quarters of the planning 
horizon, the bank holding company or savings and loan holding company 
must include in the projections of capital--
    (i) Common stock dividends equal to the quarterly average dollar 
amount of common stock dividends that the company paid in the previous 
year (that is, the first quarter of the planning horizon and the 
preceding three calendar quarters);
    (ii) Payments on any other instrument that is eligible for 
inclusion in the numerator of a regulatory capital ratio equal to the 
stated dividend, interest, or principal due on such instrument during 
the quarter; and
    (iii) An assumption of no redemption or repurchase of any capital 
instrument

[[Page 13509]]

that is eligible for inclusion in the numerator of a regulatory capital 
ratio.
    (c) Controls and oversight of stress testing processes. (1) In 
general. The senior management of a bank holding company, savings and 
loan holding company, or state member bank must establish and maintain 
a system of controls, oversight, and documentation, including policies 
and procedures, that are designed to ensure that its stress testing 
processes are effective in meeting the requirements in this subpart. 
These policies and procedures must, at a minimum, describe the 
company's stress testing practices and methodologies, and processes for 
validating and updating the company's stress test practices and 
methodologies consistent with applicable laws, regulations, and 
supervisory guidance.
    (2) Oversight of stress testing processes. The board of directors, 
or a committee thereof, of a bank holding company, savings and loan 
holding company, or state member bank must approve and review the 
policies and procedures of the stress testing processes as frequently 
as economic conditions or the condition of the company may warrant, but 
no less than annually. The board of directors and senior management of 
the bank holding company, savings and loan holding company, or state 
member bank must receive a summary of the results of the stress test 
conducted under this section.
    (3) Role of stress testing results. The board of directors and 
senior management of a bank holding company, savings and loan holding 
company, or state member bank must consider the results of the stress 
test in the normal course of business, including but not limited to, 
the banking organization's capital planning, assessment of capital 
adequacy, and risk management practices.


Sec.  252.16  Reports of stress test results.

    (a) Reports to the Board of stress test results. (1) Savings and 
loan holding companies with average total consolidated assets of $50 
billion or more and state member banks that are covered company 
subsidiaries. A savings and loan holding company with average total 
consolidated assets of $50 billion or more or a state member bank that 
is a covered company subsidiary must report the results of the stress 
test to the Board by January 5 of each calendar year in the manner and 
form prescribed by the Board, unless that time is extended by the Board 
in writing.
    (2) Bank holding companies, savings and loan holding companies, and 
state member banks. Except as provided in paragraph (a)(1) of this 
section, a bank holding company, savings and loan holding company, or 
state member bank must report the results of the stress test to the 
Board by March 31 of each calendar year in the manner and form 
prescribed by the Board, unless that time is extended by the Board in 
writing.
    (b) Contents of reports. The report required under paragraph (a) of 
this section must include, under the baseline scenario, adverse 
scenario, severely adverse scenario, and any other scenario required 
under Sec.  252.14(b)(3), a description of the types of risks being 
included in the stress test; a summary description of the methodologies 
used in the stress test; and, for each quarter of the planning horizon, 
estimates of aggregate losses, pre-provision net revenue, provision for 
loan and lease losses, net income, and regulatory capital ratios. In 
addition, the report must include an explanation of the most 
significant causes for the changes in regulatory capital ratios and any 
other information required by the Board. This paragraph will remain 
applicable until such time as the Board issues a reporting form to 
collect the results of the stress test required under Sec.  252.14.
    (c) Confidential treatment of information submitted. The 
confidentiality of information submitted to the Board under this 
subpart and related materials shall be determined in accordance with 
applicable exemptions under the Freedom of Information Act (5 U.S.C. 
552(b)) and the Board's Rules Regarding Availability of Information (12 
CFR part 261).


Sec.  252.17  Disclosure of stress test results.

    (a) Public disclosure of results. (1) In general. (i) Except as 
provided in paragraph (a)(1)(ii) or (b)(2) of this section, a bank 
holding company, savings and loan holding company, or state member bank 
must disclose a summary of the results of the stress test in the period 
beginning on June 15 and ending on June 30 unless that time is extended 
by the Board in writing.
    (ii) Except as provided in paragraph (b)(2) of this section, a 
state member bank that is a covered company subsidiary or a savings and 
loan holding company with average total consolidated assets of $50 
billion or more must disclose a summary of the results of the stress 
test in the period beginning on March 15 and ending on March 31, unless 
that time is extended by the Board in writing.
    (2) Initial disclosure. A bank holding company, savings and loan 
holding company, or state member bank that has total consolidated 
assets of less than $50 billion on or before December 31, 2012, must 
comply with the requirements of this section beginning with the stress 
test cycle commencing on October 1, 2014.
    (3) Disclosure method. The summary required under this section may 
be disclosed on the Web site of a bank holding company, savings and 
loan holding company, or state member bank, or in any other forum that 
is reasonably accessible to the public.
    (b) Summary of results. (1) Bank holding companies and savings and 
loan holding companies. A bank holding company or savings and loan 
holding company must disclose, at a minimum, the following information 
regarding the severely adverse scenario:
    (i) A description of the types of risks included in the stress 
test;
    (ii) A summary description of the methodologies used in the stress 
test;
    (iii) Estimates of--
    (A) Aggregate losses;
    (B) Pre-provision net revenue;
    (C) Provision for loan and lease losses;
    (D) Net income; and
    (E) Pro forma regulatory capital ratios and any other capital 
ratios specified by the Board;
    (iv) An explanation of the most significant causes for the changes 
in regulatory capital ratios; and
    (v) With respect to a stress test conducted by an insured 
depository institution subsidiary of the bank holding company or 
savings and loan holding company pursuant to section 165(i)(2) of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act, changes in 
regulatory capital ratios and any other capital ratios specified by the 
Board of the depository institution subsidiary over the planning 
horizon, including an explanation of the most significant causes for 
the changes in regulatory capital ratios.
    (2) State member banks that are subsidiaries of bank holding 
companies. A state member bank that is a subsidiary of a bank holding 
company will satisfy the public disclosure requirements under section 
165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection 
Act when the bank holding company publicly discloses summary results of 
its stress test pursuant to this section or Sec.  252.58, unless the 
Board determines that the disclosures at the holding company level do 
not adequately capture the potential impact of the scenarios on the 
capital of the state member bank. In this case, the state member bank 
must make the same disclosure as required by paragraph (b)(3) of this 
section.
    (3) State member banks that are not subsidiaries of bank holding 
companies.

[[Page 13510]]

A state member bank that is not a subsidiary of a bank holding company 
must disclose, at a minimum, the following information regarding the 
severely adverse scenario:
    (i) A description of the types of risks being included in the 
stress test;
    (ii) A summary description of the methodologies used in the stress 
test;
    (iii) Estimates of--
    (A) Aggregate losses;
    (B) Pre-provision net revenue
    (C) Provision for loan and lease losses;
    (D) Net income; and
    (E) Pro forma regulatory capital ratios and any other capital 
ratios specified by the Board; and
    (iv) An explanation of the most significant causes for the changes 
in regulatory capital ratios.
    (c) Content of results. (1) The disclosure of aggregate losses, 
pre-provision net revenue, provision for loan and lease losses, and net 
income that is required under paragraph (b) of this section must be on 
a cumulative basis over the planning horizon.
    (2) The disclosure of pro forma regulatory capital ratios and any 
other capital ratios specified by the Board that is required under 
paragraph (b) of this section must include the beginning value, ending 
value and minimum value of each ratio over the planning horizon.

0
5. Subpart E is added to read as follows:
Subpart E--Supervisory Stress Test Requirements for U.S. Bank Holding 
Companies With $50 Billion or More in Total Consolidated Assets and 
Nonbank Financial Companies Supervised by the Board
Sec.
252.40 [Reserved].
252.41 Authority and purpose.
252.42 Definitions.
252.43 Applicability.
252.44 Annual analysis conducted by the Board.
252.45 Data and information required to be submitted in support of 
the Board's analyses.
252.46 Review of the Board's analysis; publication of summary 
results.
252.47 Use requirement.

Subpart E--Supervisory Stress Test Requirements for U.S. Bank 
Holding Companies With $50 Billion or More in Total Consolidated 
Assets and Nonbank Financial Companies Supervised by the Board


Sec.  252.40  [Reserved].


Sec.  252.41  Authority and purpose.

    (a) Authority. 12 U.S.C. 321-338a, 1467a(g), 1818, 1831p-1, 
1844(b), 1844(c), 5361, 5365, 5366.
    (b) Purpose. This subpart implements section 165(i)(1) of the Dodd-
Frank Act (12 U.S.C. 5365(i)(1)), which requires the Board to conduct 
annual analyses of nonbank financial companies supervised by the Board 
and bank holding companies with $50 billion or more in total 
consolidated assets to evaluate whether such companies have the 
capital, on a total consolidated basis, necessary to absorb losses as a 
result of adverse economic conditions.


Sec.  252.42  Definitions.

    For purposes of this subpart, the following definitions apply:
    (a) Advanced approaches means the risk-weighted assets calculation 
methodologies at 12 CFR part 217, subpart E, as applicable, and any 
successor regulation.
    (b) Adverse scenario means a set of conditions that affect the U.S. 
economy or the financial condition of a covered company that are more 
adverse than those associated with the baseline scenario and may 
include trading or other additional components.
    (c) Average total consolidated assets means the average of the 
total consolidated assets as reported by a bank holding company on its 
Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) 
for the four most recent consecutive quarters. If the bank holding 
company has not filed the FR Y-9C for each of the four most recent 
consecutive quarters, average total consolidated assets means the 
average of the company's total consolidated assets, as reported on the 
company's FR Y-9C, for the most recent quarter or consecutive quarters. 
Average total consolidated assets are measured on the as-of date of the 
most recent FR Y-9C used in the calculation of the average.
    (d) Bank holding company has the same meaning as in Sec.  225.2(c) 
of the Board's Regulation Y (12 CFR 225.2(c)).
    (e) Baseline scenario means a set of conditions that affect the 
U.S. economy or the financial condition of a covered company and that 
reflect the consensus views of the economic and financial outlook.
    (f) Covered company means:
    (1) A bank holding company (other than a foreign banking 
organization) with average total consolidated assets of $50 billion or 
more; and
    (2) A nonbank financial company supervised by the Board.
    (g) Depository institution has the same meaning as in section 3 of 
the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).
    (h) Foreign banking organization has the same meaning as in Sec.  
211.21(o) of the Board's Regulation K (12 CFR 211.21(o)).
    (i) Nonbank financial company supervised by the Board means a 
nonbank financial company that the Financial Stability Oversight 
Council has determined under section 113 of the Dodd-Frank Act (12 
U.S.C. 5323) shall be supervised by the Board and for which such 
determination is still in effect.
    (j) Planning horizon means the period of at least nine quarters, 
beginning on the first day of a stress test cycle (on October 1) over 
which the relevant projections extend.
    (k) Pre-provision net revenue means the sum of net interest income 
and non-interest income less expenses before adjusting for loss 
provisions.
    (l) Provision for loan and lease losses means the provision for 
loan and lease losses as reported by the covered company on the FR Y-
9C.
    (m) Regulatory capital ratio means a capital ratio for which the 
Board established minimum requirements for the company by regulation or 
order, including, as applicable, the company's tier 1 and supplementary 
leverage ratios and common equity tier 1, tier 1, and total risk-based 
capital ratios as calculated under appendices A, D, and E to this part 
(12 CFR part 225) and 12 CFR part 217, as applicable, including the 
transition provisions at 12 CFR 217.1(f)(4) and 12 CFR 217.300, or any 
successor regulation.
    (n) Scenarios are those sets of conditions that affect the U.S. 
economy or the financial condition of a covered company that the Board 
annually determines are appropriate for use in the supervisory stress 
tests, including, but not limited to, baseline, adverse, and severely 
adverse scenarios.
    (o) Severely adverse scenario means a set of conditions that affect 
the U.S. economy or the financial condition of a covered company and 
that overall are more severe than those associated with the adverse 
scenario and may include trading or other additional components.
    (p) Stress test cycle means the period between October 1 of a 
calendar year and September 30 of the following calendar year.
    (q) Subsidiary has the same meaning as in Sec.  225.2(o) the 
Board's Regulation Y (12 CFR 225.2).
    (r) Tier 1 common ratio has the same meaning as in the Board's 
Regulation Y (12 CFR 225.8).


Sec.  252.43  Applicability.

    (a) Compliance date for bank holding companies that are covered 
companies as of November 15, 2012. (1) In general. Except as provided 
in paragraph (a)(2) or (a)(3) of this section, a bank holding company 
that is a covered company as

[[Page 13511]]

of November 15, 2012, must comply with the requirements of this subpart 
beginning with the stress test cycle that commences on October 1, 2013, 
unless that time is extended by the Board in writing.
    (2) 2009 Supervisory Capital Assessment Program. A bank holding 
company that participated in the 2009 Supervisory Capital Assessment 
Program, or a successor to such a bank holding company, must comply 
with the requirements of this subpart beginning with the stress test 
cycle that commences on November 15, 2012, unless that time is extended 
by the Board in writing.
    (3) SR Letter 01-01. A U.S.-domiciled bank holding company that is 
a covered company as of November 15, 2012, and is a subsidiary of a 
foreign banking organization that is currently relying on Supervision 
and Regulation Letter SR 01-01 issued by the Board (as in effect on May 
19, 2010) must comply with the requirements of this subpart beginning 
with the stress test cycle that commences on October 1, 2015, unless 
that time is extended by the Board in writing.
    (b) Compliance date for institutions that become covered companies 
after November 15, 2012. (1) Bank holding companies. A bank holding 
company that becomes a covered company after November 15, 2012, must 
comply with the requirements of this subpart beginning with the stress 
test cycle that commences in the calendar year after the year in which 
the bank holding company becomes a covered company, unless that time is 
extended by the Board in writing.
    (2) Nonbank financial companies supervised by the Board. A company 
that becomes a nonbank financial company supervised by the Board must 
comply with the requirements of this subpart beginning with the stress 
test cycle that commences in the calendar year after the year in which 
the company first becomes subject to the Board's minimum regulatory 
capital requirements, unless the Board accelerates or extends the 
compliance date.
    (c) Ongoing application. A bank holding company that is a covered 
company will remain subject to the requirements of this subpart unless 
and until its total consolidated assets fall below $50 billion for each 
of four consecutive quarters, as reported on the FR Y-9C. The 
calculation will be effective on the as-of date of the fourth 
consecutive FR Y-9C.
    (d) Advanced approaches. Notwithstanding any other requirement in 
this section, for a given stress test cycle:
    (1) Until October 1, 2015, the Board's analysis a covered company's 
capital in a given stress test cycle will not include estimates using 
the advanced approaches; and
    (2) Beginning October 1, 2015, the Board's analysis of a covered 
company's capital in a given stress test cycle will not include 
estimates using the advanced approaches if the covered company is 
notified on or after the first day of that stress test cycle (October 
1) that the covered company is required to calculate its risk-based 
capital requirements using the advanced approaches.


Sec.  252.44  Annual analysis conducted by the Board.

    (a) In general. (1) On an annual basis, the Board will conduct an 
analysis of each covered company's capital, on a total consolidated 
basis, taking into account all relevant exposures and activities of 
that covered company, to evaluate the ability of the covered company to 
absorb losses in specified economic and financial conditions.
    (2) The analysis will include an assessment of the projected 
losses, net income, and pro forma capital levels and regulatory capital 
ratios, tier 1 common ratio, and other capital ratios for the covered 
company and use such analytical techniques that the Board determines 
are appropriate to identify, measure, and monitor risks of the covered 
company that may affect the financial stability of the United States.
    (3) In conducting the analyses, the Board will coordinate with the 
appropriate primary financial regulatory agencies and the Federal 
Insurance Office, as appropriate.
    (b) Economic and financial scenarios related to the Board's 
analysis. The Board will conduct its analysis under this section using 
a minimum of three different scenarios, including a baseline scenario, 
adverse scenario, and severely adverse scenario. The Board will notify 
covered companies of the scenarios that the Board will apply to conduct 
the analysis for each stress test cycle by no later than November 15 of 
each year, except with respect to trading or any other components of 
the scenarios and any additional scenarios that the Board will apply to 
conduct the analysis, which will be communicated by no later than 
December 1.


Sec.  252.45  Data and information required to be submitted in support 
of the Board's analyses.

    (a) Regular submissions. Each covered company must submit to the 
Board such data, on a consolidated basis, that the Board determines is 
necessary in order for the Board to derive the relevant pro forma 
estimates of the covered company over the planning horizon under the 
scenarios described in Sec.  252.44(b).
    (b) Additional submissions required by the Board. The Board may 
require a covered company to submit any other information on a 
consolidated basis that the Board deems necessary in order to:
    (1) Ensure that the Board has sufficient information to conduct its 
analysis under this subpart; and
    (2) Project a company's pre-provision net revenue, losses, 
provision for loan and lease losses, and net income; and, pro forma 
capital levels, regulatory capital ratios, tier 1 common ratio, and any 
other capital ratio specified by the Board under the scenarios 
described in Sec.  252.44(b).
    (c) Confidential treatment of information submitted. The 
confidentiality of information submitted to the Board under this 
subpart and related materials shall be determined in accordance with 
the Freedom of Information Act (5 U.S.C. 552(b)) and the Board's Rules 
Regarding Availability of Information (12 CFR part 261).


Sec.  252.46  Review of the Board's analysis; publication of summary 
results.

    (a) Review of results. Based on the results of the analysis 
conducted under this subpart, the Board will conduct an evaluation to 
determine whether the covered company has the capital, on a total 
consolidated basis, necessary to absorb losses and continue its 
operation by maintaining ready access to funding, meeting its 
obligations to creditors and other counterparties, and continuing to 
serve as a credit intermediary under baseline, adverse and severely 
adverse scenarios, and any additional scenarios.
    (b) Communication of results to covered companies. The Board will 
convey to a covered company a summary of the results of the Board's 
analyses of such covered company within a reasonable period of time, 
but no later than March 31.
    (c) Publication of results by the Board. By March 31 of each 
calendar year, the Board will disclose a summary of the results of the 
Board's analyses of a covered company.


Sec.  252.47  Use requirement.

    (a) In general. The board of directors and senior management of 
each covered company must consider the results of the analysis 
conducted by the Board under this subpart, as appropriate:
    (1) As part of the covered company's capital plan and capital 
planning process, including when making

[[Page 13512]]

changes to the covered company's capital structure (including the level 
and composition of capital);
    (2) When assessing the covered company's exposures, concentrations, 
and risk positions; and
    (3) In the development or implementation of any plans of the 
covered company for recovery or resolution.
    (b) Resolution plan updates. Each covered company must update its 
resolution plan as the Board determines appropriate, based on the 
results of the Board's analyses of the covered company under this 
subpart.

0
6. Subpart F is revised to read as follows:
Subpart F--Company-Run Stress Test Requirements for U.S. Bank Holding 
Companies With $50 Billion or More in Total Consolidated Assets and 
Nonbank Financial Companies Supervised by the Board
Sec.
252.50 [Reserved]
252.51 Authority and purpose.
252.52 Definitions.
252.53 Applicability.
252.54 Annual stress test.
252.55 Mid-cycle stress test.
252.56 Methodologies and practices.
252.57 Reports of stress test results.
252.58 Disclosure of stress test results.

Subpart F--Company-Run Stress Test Requirements for U.S. Bank 
Holding Companies With $50 Billion or More in Total Consolidated 
Assets and Nonbank Financial Companies Supervised by the Board


Sec.  252.50  [Reserved].


Sec.  252.51  Authority and purpose.

    (a) Authority. 12 U.S.C. 321-338a, 1467a(g), 1818, 1831p-1, 
1844(b), 1844(c), 5361, 5365, 5366.
    (b) Purpose. This subpart implements section 165(i)(2) of the Dodd-
Frank Act (12 U.S.C. 5365(i)(2)), which requires a covered company to 
conduct annual and semi-annual stress tests. This subpart also 
establishes definitions of stress test and related terms, methodologies 
for conducting stress tests, and reporting and disclosure requirements.


Sec.  252.52  Definitions.

    For purposes of this subpart, the following definitions apply:
    (a) Advanced approaches means the risk-weighted assets calculation 
methodologies at 12 CFR part 217, subpart E, as applicable, and any 
successor regulation.
    (b) Adverse scenario means a set of conditions that affect the U.S. 
economy or the financial condition of a covered company that are more 
adverse than those associated with the baseline scenario and may 
include trading or other additional components.
    (c) Average total consolidated assets means the average of the 
total consolidated assets as reported by a bank holding company on its 
Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) 
for the four most recent consecutive quarters. If the bank holding 
company has not filed the FR Y-9C for each of the four most recent 
consecutive quarters, average total consolidated assets means the 
average of the company's total consolidated assets, as reported on the 
company's FR Y-9C, for the most recent quarter or consecutive quarters. 
Average total consolidated assets are measured on the as-of date of the 
most recent FR Y-9C used in the calculation of the average.
    (d) Bank holding company has the same meaning as in Sec.  225.2(c) 
of the Board's Regulation Y (12 CFR 225.2(c)).
    (e) Baseline scenario means a set of conditions that affect the 
U.S. economy or the financial condition of a covered company and that 
reflect the consensus views of the economic and financial outlook.
    (f) Capital action has the same meaning as in Sec.  225.8(c)(2) of 
the Board's Regulation Y (12 CFR 225.8(c)(2)).
    (g) Covered company means:
    (1) A bank holding company (other than a foreign banking 
organization) with average total consolidated assets of $50 billion or 
more; and
    (2) A nonbank financial company supervised by the Board.
    (h) Depository institution has the same meaning as in section 3 of 
the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).
    (i) Foreign banking organization has the same meaning as in Sec.  
211.21(o) of the Board's Regulation K (12 CFR 211.21(o)).
    (j) Nonbank financial company supervised by the Board means a 
nonbank financial company that the Financial Stability Oversight 
Council has determined under section 113 of the Dodd-Frank Act (12 
U.S.C. 5323) shall be supervised by the Board and for which such 
determination is still in effect.
    (k) Planning horizon means the period of at least nine quarters, 
beginning on the first day of a stress test cycle (on October 1 or 
April 1, as appropriate) over which the relevant projections extend.
    (l) Pre-provision net revenue means the sum of net interest income 
and non-interest income less expenses before adjusting for loss 
provisions.
    (m) Provision for loan and lease losses means the provision for 
loan and lease losses as reported by the covered company on the FR Y-
9C.
    (n) Regulatory capital ratio means a capital ratio for which the 
Board established minimum requirements for the company by regulation or 
order, including, as applicable, the company's tier 1 and supplementary 
leverage ratios and common equity tier 1, tier 1, and total risk-based 
capital ratios as calculated under appendices A, D, and E to this part 
(12 CFR part 225) and 12 CFR part 217, as applicable, including the 
transition provisions at 12 CFR 217.1(f)(4) and 12 CFR 217.300, or any 
successor regulation.
    (o) Scenarios are those sets of conditions that affect the U.S. 
economy or the financial condition of a covered company that the Board, 
or with respect to the mid-cycle stress test required under Sec.  
252.55, the covered company, annually determines are appropriate for 
use in the company-run stress tests, including, but not limited to, 
baseline, adverse, and severely adverse scenarios.
    (p) Severely adverse scenario means a set of conditions that affect 
the U.S. economy or the financial condition of a covered company and 
that overall are more severe than those associated with the adverse 
scenario and may include trading or other additional components.
    (q) Stress test means a process to assess the potential impact of 
scenarios on the consolidated earnings, losses, and capital of a 
covered company over the planning horizon, taking into account its 
current condition, risks, exposures, strategies, and activities.
    (r) Stress test cycle means the period between October 1 of a 
calendar year and September 30 of the following calendar year.
    (s) Subsidiary has the same meaning as in Sec.  225.2(o) the 
Board's Regulation Y (12 CFR 225.2).
    (t) Tier 1 common ratio has the same meaning as in Sec.  225.8 of 
the Board's Regulation Y (12 CFR 225.8).


Sec.  252.53  Applicability.

    (a) Compliance date for bank holding companies that are covered 
companies as of November 15, 2012. (1) In general. Except as provided 
in paragraph (a)(2) or (a)(3) of this section, a bank holding company 
that is a covered company as of November 15, 2012, must comply with the 
requirements of this subpart beginning with the stress test cycle 
commencing on October 1, 2013, unless that time is extended by the 
Board in writing.

[[Page 13513]]

    (2) 2009 Supervisory Capital Assessment Program. A bank holding 
company that participated in the 2009 Supervisory Capital Assessment 
Program, or a successor to such a bank holding company, must comply 
with the requirements of this subpart beginning with the stress test 
cycle commencing on November 15, 2012, unless that time is extended by 
the Board in writing.
    (3) SR Letter 01-01. A U.S.-domiciled bank holding company that is 
a covered company as of November 15, 2012, and is a subsidiary of a 
foreign banking organization that is currently relying on Supervision 
and Regulation Letter SR 01-01 issued by the Board (as in effect on May 
19, 2010) must comply with the requirements of this subpart beginning 
with the stress test cycle commencing on October 1, 2015, unless that 
time is extended by the Board in writing.
    (b) Compliance date for institutions that become covered companies 
after November 15, 2012. (1) Bank holding companies. A bank holding 
company that becomes a covered company after November 15, 2012, must 
comply with the requirements of this subpart beginning with the stress 
test cycle that commences in the calendar year after the year in which 
the bank holding company becomes a covered company, unless that time is 
extended by the Board in writing.
    (2) Nonbank financial companies supervised by the Board. A company 
that becomes a nonbank financial company supervised by the Board must 
comply with the requirements of this subpart beginning with the stress 
test cycle that commences in the calendar year after the year in which 
company first becomes subject to the Board's minimum regulatory capital 
requirements, unless the Board accelerates or extends the compliance 
date.
    (c) Ongoing application. A bank holding company that is a covered 
company will remain subject to the requirements of this subpart unless 
and until its total consolidated assets fall below $50 billion for each 
of four consecutive quarters, as reported on the FR Y-9C. The 
calculation will be effective on the as-of date of the fourth 
consecutive FR Y-9C.
    (d) Advanced approaches. Notwithstanding any other requirement in 
this section, for a given capital plan cycle:
    (1) Until October 1, 2015, a covered company's estimates of its pro 
forma regulatory capital ratios and the estimate of its pro forma tier 
1 common ratio over the planning horizon shall not include estimates 
using the advanced approaches; and
    (2) Beginning October 1, 2015, for a given stress test cycle, a 
covered company's estimates of its pro forma regulatory capital ratios 
and the estimate of its pro forma tier 1 common ratio over the planning 
horizon shall not include estimates using the advanced approaches if 
the company is notified on or after the first day of that stress test 
cycle (October 1) that it is required to calculate its risk-based 
capital requirements using the advanced approaches.


Sec.  252.54  Annual stress test.

    (a) In general. A covered company must conduct an annual stress 
test by January 5 during each stress test cycle based on data as of 
September 30 of the preceding calendar year, unless the time or the as-
of date is extended by the Board in writing.
    (b) Scenarios provided by the Board. (1) In general. In conducting 
a stress test under this section, a covered company must use the 
scenarios provided by the Board. Except as provided in paragraphs 
(b)(2) and (b)(3) of this section, the Board will provide a description 
of the scenarios to each covered company no later than November 15 of 
that calendar year.
    (2) Additional components. (i) The Board may require a covered 
company with significant trading activity, as determined by the Board 
and specified in the Capital Assessments and Stress Testing report (FR 
Y-14), to include a trading and counterparty component in its adverse 
and severely adverse scenarios in the stress test required by this 
section. The data used in this component will be as of a date between 
October 1 and December 1 of that calendar year selected by the Board, 
and the Board will communicate the as-of date and a description of the 
component to the company no later than December 1 of the calendar year.
    (ii) The Board may require a covered company to include one or more 
additional components in its adverse and severely adverse scenarios in 
the stress test required by this section based on the company's 
financial condition, size, complexity, risk profile, scope of 
operations, or activities, or risks to the U.S. economy.
    (3) Additional scenarios. The Board may require a covered company 
to use one or more additional scenarios in the stress test required by 
this section based on the company's financial condition, size, 
complexity, risk profile, scope of operations, or activities, or risks 
to the U.S. economy.
    (4) Notice and response. If the Board requires a covered company to 
include one or more additional components in its adverse and severely 
adverse scenarios under paragraph (b)(2)(ii) of this section or to use 
one or more additional scenarios under paragraph (b)(3) of this 
section, the Board will notify the company in writing no later than 
September 30. The notification will include a general description of 
the additional component(s) or additional scenario(s) and the basis for 
requiring the company to include the additional component(s) or 
additional scenario(s). Within 14 calendar days of receipt of a 
notification under this paragraph, the covered company may request in 
writing that the Board reconsider the requirement that the company 
include the additional component(s) or additional scenario(s), 
including an explanation as to why the reconsideration should be 
granted. The Board will respond in writing within 14 calendar days of 
receipt of the company's request. The Board will provide the covered 
company with a description of any additional component(s) or additional 
scenario(s) by December 1.


Sec.  252.55  Mid-cycle stress test.

    (a) Mid-cycle stress test requirement. In addition to the stress 
test required under Sec.  252.54, a covered company must conduct a 
stress test by July 5 during each stress test cycle based on data as of 
March 31 of that calendar year, unless the time or the as-of date is 
extended by the Board in writing.
    (b) Scenarios related to mid-cycle stress tests. (1) In general. A 
covered company must develop and employ a minimum of three scenarios, 
including a baseline scenario, adverse scenario, and severely adverse 
scenario, that are appropriate for its own risk profile and operations, 
in conducting the stress test required by this section.
    (2) Additional components. The Board may require a covered company 
to include one or more additional components in its adverse and 
severely adverse scenarios in the stress test required by this section 
based on the company's financial condition, size, complexity, risk 
profile, scope of operations, or activities, or risks to the U.S. 
economy.
    (3) Additional scenarios. The Board may require a covered company 
to use one or more additional scenarios in the stress test required by 
this section based on the company's financial condition, size, 
complexity, risk profile, scope of operations, or activities, or risks 
to the U.S. economy.

[[Page 13514]]

    (4) Notice and response. If the Board requires a covered company to 
include one or more additional components in its adverse and severely 
adverse scenarios under paragraph (b)(2) of this section or one or more 
additional scenarios under paragraph (b)(3) of this section, the Board 
will notify the company in writing no later than March 31. The 
notification will include a general description of the additional 
component(s) or additional scenario(s) and the basis for requiring the 
company to include the additional component(s) or additional 
scenario(s). Within 14 calendar days of receipt of a notification under 
this paragraph, the covered company may request in writing that the 
Board reconsider the requirement that the company include the 
additional component(s) or additional scenario(s), including an 
explanation as to why the reconsideration should be granted. The Board 
will respond in writing within 14 calendar days of receipt of the 
company's request. The Board will provide the covered company with a 
description of any additional component(s) or additional scenario(s) by 
June 1.


Sec.  252.56  Methodologies and practices.

    (a) Potential impact on capital. In conducting a stress test under 
Sec. Sec.  252.54 and 252.55, for each quarter of the planning horizon, 
a covered company must estimate the following for each scenario 
required to be used:
    (1) Losses, pre-provision net revenue, provision for loan and lease 
losses, and net income; and
    (2) The potential impact on pro forma regulatory capital levels and 
pro forma capital ratios (including regulatory capital ratios, the tier 
1 common ratio, and any other capital ratios specified by the Board), 
incorporating the effects of any capital actions over the planning 
horizon and maintenance of an allowance for loan losses appropriate for 
credit exposures throughout the planning horizon.
    (b) Assumptions regarding capital actions. In conducting a stress 
test under Sec. Sec.  252.54 and 252.55, a covered company is required 
to make the following assumptions regarding its capital actions over 
the planning horizon--
    (1) For the first quarter of the planning horizon, the covered 
company must take into account its actual capital actions as of the end 
of that quarter; and
    (2) For each of the second through ninth quarters of the planning 
horizon, the covered company must include in the projections of 
capital:
    (i) Common stock dividends equal to the quarterly average dollar 
amount of common stock dividends that the company paid in the previous 
year (that is, the first quarter of the planning horizon and the 
preceding three calendar quarters);
    (ii) Payments on any other instrument that is eligible for 
inclusion in the numerator of a regulatory capital ratio equal to the 
stated dividend, interest, or principal due on such instrument during 
the quarter; and
    (iii) An assumption of no redemption or repurchase of any capital 
instrument that is eligible for inclusion in the numerator of a 
regulatory capital ratio.
    (c) Controls and oversight of stress testing processes. (1) In 
general. The senior management of a covered company must establish and 
maintain a system of controls, oversight, and documentation, including 
policies and procedures, that are designed to ensure that its stress 
testing processes are effective in meeting the requirements in this 
subpart. These policies and procedures must, at a minimum, describe the 
covered company's stress testing practices and methodologies, and 
processes for validating and updating the company's stress test 
practices and methodologies consistent with applicable laws, 
regulations, and supervisory guidance. Policies of covered companies 
must also describe processes for scenario development for the mid-cycle 
stress test required under Sec.  252.55.
    (2) Oversight of stress testing processes. The board of directors, 
or a committee thereof, of a covered company must approve and review 
the policies and procedures of the stress testing processes as 
frequently as economic conditions or the condition of the covered 
company may warrant, but no less than annually. The board of directors 
and senior management of the covered company must receive a summary of 
the results of any stress test conducted under this subpart.
    (3) Role of stress testing results. The board of directors and 
senior management of each covered company must consider the results of 
the analysis it conducts under this subpart, as appropriate:
    (i) As part of the covered company's capital plan and capital 
planning process, including when making changes to the covered 
company's capital structure (including the level and composition of 
capital);
    (ii) When assessing the covered company's exposures, 
concentrations, and risk positions; and
    (iii) In the development or implementation of any plans of the 
covered company for recovery or resolution.


Sec.  252.57  Reports of stress test results.

    (a) Reports to the Board of stress test results. (1) A covered 
company must report the results of the stress test required under Sec.  
252.54 to the Board by January 5 of each calendar year in the manner 
and form prescribed by the Board, unless that time is extended by the 
Board in writing.
    (2) A covered company must report the results of the stress test 
required under Sec.  252.55 to the Board by July 5 of each calendar 
year in the manner and form prescribed by the Board, unless that time 
is extended by the Board in writing.
    (b) Confidential treatment of information submitted. The 
confidentiality of information submitted to the Board under this 
subpart and related materials shall be determined in accordance with 
applicable exemptions under the Freedom of Information Act (5 U.S.C. 
552(b)) and the Board's Rules Regarding Availability of Information (12 
CFR part 261).


Sec.  252.58  Disclosure of stress test results.

    (a) Public disclosure of results. (1) In general. (i) A covered 
company must disclose a summary of the results of the stress test 
required under Sec.  252.54 in the period beginning on March 15 and 
ending on March 31, unless that time is extended by the Board in 
writing.
    (ii) A covered company must disclose a summary of the results of 
the stress test required under Sec.  252.55 in the period beginning on 
September 15 and ending on September 30, unless that time is extended 
by the Board in writing.
    (2) Disclosure method. The summary required under this section may 
be disclosed on the Web site of a covered company, or in any other 
forum that is reasonably accessible to the public.
    (b) Summary of results. A covered company must disclose, at a 
minimum, the following information regarding the severely adverse 
scenario:
    (1) A description of the types of risks included in the stress 
test;
    (2) A general description of the methodologies used in the stress 
test, including those employed to estimate losses, revenues, provision 
for loan and lease losses, and changes in capital positions over the 
planning horizon;
    (3) Estimates of--
    (i) Pre-provision net revenue and other revenue;
    (ii) Provision for loan and lease losses, realized losses or gains 
on available-for-sale and held-to-maturity securities, trading and 
counterparty losses, and other losses or gains;
    (iii) Net income before taxes;

[[Page 13515]]

    (iv) Loan losses (dollar amount and as a percentage of average 
portfolio balance) in the aggregate and by subportfolio, including: 
domestic closed-end first-lien mortgages; domestic junior lien 
mortgages and home equity lines of credit; commercial and industrial 
loans; commercial real estate loans; credit card exposures; other 
consumer loans; and all other loans; and
    (v) Pro forma regulatory capital ratios and the tier 1 common ratio 
and any other capital ratios specified by the Board;
    (4) An explanation of the most significant causes for the changes 
in regulatory capital ratios and the tier 1 common ratio; and
    (5) With respect to a stress test conducted pursuant to section 
165(i)(2) of the Dodd-Frank Act by an insured depository institution 
that is a subsidiary of the covered company and that is required to 
disclose a summary of its stress tests results under applicable 
regulations, changes in regulatory capital ratios and any other capital 
ratios specified by the Board of the depository institution subsidiary 
over the planning horizon, including an explanation of the most 
significant causes for the changes in regulatory capital ratios.
    (c) Content of results. (1) The following disclosures required 
under paragraph (b) of this section must be on a cumulative basis over 
the planning horizon:
    (i) Pre-provision net revenue and other revenue;
    (ii) Provision for loan and lease losses, realized losses/gains on 
available-for-sale and held-to-maturity securities, trading and 
counterparty losses, and other losses or gains;
    (iii) Net income before taxes; and
    (iv) Loan losses in the aggregate and by subportfolio.
    (2) The disclosure of pro forma regulatory capital ratios, the tier 
1 common ratio, and any other capital ratios specified by the Board 
that is required under paragraph (b) of this section must include the 
beginning value, ending value, and minimum value of each ratio over the 
planning horizon.

0
7. Subparts G and H are removed and reserved.

0
8. Subparts J through U are added and reserved.

    By order of the Board of Governors of the Federal Reserve 
System, March 4, 2014.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2014-05053 Filed 3-10-14; 8:45 am]
BILLING CODE 6210-01-P