[Federal Register Volume 83, Number 182 (Wednesday, September 19, 2018)]
[Proposed Rules]
[Pages 47313-47315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20166]



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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 30

[Docket ID OCC-2018-0028]
RIN 1557-AE51


OCC Guidelines Establishing Standards for Recovery Planning by 
Certain Large Insured National Banks, Insured Federal Savings 
Associations, and Insured Federal Branches; Technical Amendments

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Notice of proposed rulemaking; revised guidelines.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) is 
proposing to amend its enforceable guidelines relating to recovery 
planning standards for insured national banks, insured federal savings 
associations, and insured federal branches (Guidelines) to increase the 
average total consolidated assets threshold for applying the Guidelines 
from $50 billion to $250 billion. In addition, the proposed change to 
the Guidelines would decrease from 18 months to 12 months the time 
within which a bank should comply with the Guidelines after the bank 
becomes subject to them. Finally, the proposal would make technical 
amendments to remove outdated compliance dates.

DATES: Comments must be received by November 5, 2018.

ADDRESSES: You may submit comments to the OCC by any of the methods set 
forth below. Commenters are encouraged to submit comments through the 
Federal eRulemaking Portal or email, if possible. Please use the title 
``OCC Guidelines Establishing Standards for Recovery Planning by 
Certain Large Insured National Banks, Insured Federal Savings 
Associations, and Insured Federal Branches'' to facilitate the 
organization and distribution of the comments. You may submit comments 
by any of the following methods:
     Federal eRulemaking Portal--``Regulations.gov'': Go to 
www.regulations.gov. Enter ``Docket ID OCC-2018-0028'' in the Search 
Box and click ``Search.'' Click on ``Comment Now'' to submit public 
comments.
     Click on the ``Help'' tab on the Regulations.gov home page 
to get information on using Regulations.gov, including instructions for 
submitting public comments.
     Email: [email protected].
     Mail: Legislative and Regulatory Activities Division, 
Office of the Comptroller of the Currency, 400 7th Street SW, Suite 3E-
218, Washington, DC 20219.
     Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, 
Washington, DC 20219.
     Fax: (571) 465-4326.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket ID OCC-2018-0028'' in your comment. In general, the OCC will 
enter all comments received into the docket and publish the comments on 
the Regulations.gov website without change, including any business or 
personal information that you provide such as name and address 
information, email addresses, or phone numbers. Comments received, 
including attachments and other supporting materials, are part of the 
public record and subject to public disclosure. Do not include any 
information in your comment or supporting materials that you consider 
confidential or inappropriate for public disclosure.
    You may review comments and other related materials that pertain to 
this rulemaking action by any of the following methods:
     Viewing Comments Electronically: Go to 
www.regulations.gov. Enter ``Docket ID OCC-2018-0028'' in the Search 
box and click ``Search.'' Click on ``Open Docket Folder'' on the right 
side of the screen. Comments and supporting materials can be viewed and 
filtered by clicking on ``View all documents and comments in this 
docket'' and then using the filtering tools on the left side of the 
screen.
     Click on the ``Help'' tab on the Regulations.gov home page 
to get information on using Regulations.gov. The docket may be viewed 
after the close of the comment period in the same manner as during the 
comment period.
     Viewing Comments Personally: You may personally inspect 
comments at the OCC, 400 7th Street SW, Washington, DC 20219. For 
security reasons, the OCC requires that visitors make an appointment to 
inspect comments. You may do so by calling (202) 649-6700 or, for 
persons who are deaf or hearing impaired, TTY, (202) 649-5597. Upon 
arrival, visitors will be required to present valid government-issued 
photo identification and submit to security screening in order to 
inspect comments.

FOR FURTHER INFORMATION CONTACT: Lori Bittner, Large Bank Supervision--
Resolution and Recovery, (202) 649-6210; Andra Shuster, Senior Counsel 
or Rima Kundnani, Attorney, Chief Counsel's Office, (202) 649-5490; or, 
for persons who are deaf or hard of hearing, TTY, (202) 649-5597, 400 
7th Street SW, Washington, DC 20219.

SUPPLEMENTARY INFORMATION: 

I. Background

    The 2008 financial crisis provided valuable lessons about the need 
for financial institutions to have strong risk governance frameworks, 
including plans for how to respond to and recover from the financial 
effects of severe stress. This was particularly true for larger, more 
complex banks in light of systemic risks and contagion effects that 
they pose. In response to these lessons, on September 19, 2016, the OCC 
published the Guidelines establishing minimum standards for recovery 
planning by insured national banks, insured federal savings 
associations, and insured federal branches of foreign banks (banks) 
with average total consolidated assets \1\ equal to or greater than $50 
billion (covered banks).\2\ The Guidelines state that a recovery plan 
should identify (1) quantitative or qualitative indicators of the risk 
or existence of severe stress that reflect a covered bank's particular 
vulnerabilities and (2) a wide range of credible options that a covered 
bank could undertake in response to the stress to restore its financial 
strength and viability.
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    \1\ Average total consolidated assets is defined in the 
Guidelines and means the average total consolidated assets of the 
bank or covered bank as reported on the bank's or covered bank's 
Consolidated Reports of Condition and Income for the four most 
recent consecutive quarters. See 12 CFR 30, Appendix E, paragraph 
I.E.1.
    \2\ 81 FR 66791 (Sep. 29, 2016). The Guidelines were issued 
pursuant to section 39 of the Federal Deposit Insurance Act, 12 
U.S.C. 1831p-1, which authorizes the OCC to prescribe enforceable 
safety and soundness standards.
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    Under the Guidelines, a recovery plan should also address: (1) 
Procedures for escalating decision-making to senior management or the 
board of directors, (2) management reports, and (3) communication 
procedures. In addition, the Guidelines explain how a bank should 
calculate its average total consolidated assets and reserve the OCC's 
authority to apply the Guidelines to a bank below the $50 billion 
threshold if the agency determines a bank is highly complex or 
otherwise presents a heightened risk. Finally, the Guidelines set out 
phased-in compliance dates based on bank size.

II. Proposed Changes

    Threshold. The OCC noted in the Supplementary Information section 
of the final Guidelines that large, complex institutions should 
undertake recovery

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planning to be able to respond quickly to and recover from the 
financial effects of severe stress on the institution. Based on its 
experience to date in reviewing recovery plans, the OCC believes that 
it is appropriate to raise the threshold for the Guidelines to focus on 
those institutions that present greater systemic risk to the banking 
system. These larger, more complex, and potentially more interconnected 
banks present the types of risks that could benefit most from having 
the types of governance and planning processes that identify and assist 
in responding to significant stress events.
    In addition, at the time the Guidelines were published, the $50 
billion recovery planning threshold was consistent with the scope of 
Federal Deposit Insurance Corporation and Board of Governors of the 
Federal Reserve System regulations \3\ that require systemically 
important financial institutions to prepare resolution plans under 
section 165 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act.\4\ On May 24, 2018, the Economic Growth, Regulatory 
Relief, and Consumer Protection Act (Act) was enacted to promote 
economic growth, provide tailored economic relief, and enhance consumer 
protections.\5\ Section 401 of the Act raises from $50 billion to $250 
billion the section 165 resolution planning threshold.
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    \3\ See 12 CFR 381.2(f) and 243.2(f), respectively. See also 12 
CFR 360.10.
    \4\ Public Law 111-203, 124 Stat. 1376 (July 21, 2010).
    \5\ Public Law 115-174, 132 Stat. 1296 (May 24, 2018).
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    Accordingly, the proposal would increase from $50 billion to $250 
billion the average total consolidated assets threshold at which the 
Guidelines apply to covered banks. This change would reduce the number 
of covered banks to which the Guidelines apply from 25 to 8, based on 
the most recent data available. It would provide necessary and 
appropriate burden relief to the affected banks while retaining the 
requirements for the largest, most complex institutions. Furthermore, 
the proposed increased threshold is consistent with section 401 of the 
Act's increase in the section 165 resolution planning threshold 
applicable to systemically important bank holding companies.
    Compliance Date. Under the current Guidelines, a bank with less 
than $50 billion in average total consolidated assets that subsequently 
becomes a covered bank is required to comply with the Guidelines within 
18 months. The OCC proposes to amend this provision so that a bank that 
has less than $250 billion in average total consolidated assets on the 
effective date of a final rule and subsequently becomes a covered bank 
should comply with the Guidelines within 12 months. Based upon 
supervisory experience, the OCC has observed that 12 months is a 
sufficient period of time for any bank that becomes a covered bank to 
comply with the Guidelines. Finally, the OCC proposes technical 
amendments to remove the compliance dates listed in the current 
Guidelines, as the dates have all passed.

Effective Date

    The proposed Guidelines would have an effective date of October 19, 
2018. The OCC requests comment on the proposed effective date.

Comment Invitation

    The OCC invites comment on all aspects of the proposed revisions to 
the Guidelines.

Regulatory Analysis

Regulatory Flexibility Act

    In general, the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et 
seq.) requires that in connection with a rulemaking, an agency prepare 
and make available for public comment a regulatory flexibility analysis 
that describes the impact of the rule on small entities. Under section 
605(b) of the RFA, this analysis is not required if an agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities and publishes its certification 
and a brief explanatory statement in the Federal Register along with 
its rule.
    As part of its analysis, the OCC considers whether the proposed 
rule will have a significant economic impact on a substantial number of 
small entities, pursuant to the RFA. The OCC currently supervises 
approximately 886 small entities. Because the proposed rule will 
generally have no impact on banks with less than $50 billion in total 
consolidated assets, no OCC-supervised small entities will be affected. 
Therefore, the proposed rule, if implemented, will not have a 
significant economic impact on a substantial number of small entities.

Paperwork Reduction Act of 1995

    This notice of proposed rulemaking includes changes to an approved 
collection of information pursuant to the provisions of the Paperwork 
Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). In accordance 
with PRA, the OCC may not conduct or sponsor, and an organization is 
not required to respond to, an information collection unless the 
information collection displays a currently valid Office of Management 
and Budget (OMB) control number. The OCC submitted the information 
collections contained in the notice of proposed rulemaking to OMB for 
review and approval, pursuant to 44 U.S.C. 3506 and section 1320.11 of 
the OMB implementing regulations (5 CFR part 1320).
    The Guidelines found in 12 CFR part 30, appendix E, sections II.B., 
II.C., and III contain information collection requirements previously 
approved by OMB. Section II.B. specifies the elements of the recovery 
plan, including an overview of the covered bank; triggers; options for 
recovery; impact assessments; escalation procedures; management 
reports; and communication procedures. Section II.C. addresses the 
relationship of the plan to other covered bank processes and 
coordination with other plans, including the processes and plans of its 
bank holding company. Section III outlines management's and the board's 
responsibilities. The threshold triggering these requirements is being 
changed under this notice of proposed rulemaking, resulting in a 
reduction in the number of respondents under this collection.
    The following revised information collection was submitted to OMB 
for review.
    Title: OCC Guidelines Establishing Standards for Recovery Planning 
by Certain Large Insured National Banks, Insured Federal Savings 
Associations, and Insured Federal Branches.
    OMB Control No.: 1557-0333.
    Frequency of Response: On occasion.
    Affected Public: Businesses or other for-profit organizations.
    Burden Estimates:
    Total Number of Respondents: 8 National Banks.
    Total Burden per Respondent: 7,543 hours.
    Total Burden for Collection: 60,344 hours.
    Comments are invited on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the OCC's 
functions, including whether the information has practical utility; (2) 
the accuracy of the OCC's estimate of the burden of the proposed 
information collection, including the cost of compliance; (3) ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and (4) ways to minimize the burden of information 
collection on respondents, including through the use of automated 
collection techniques or other forms of information technology.

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Unfunded Mandates Reform Act of 1995

    The OCC analyzed the proposed rule under the factors set forth in 
the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under 
this analysis, the OCC considered whether the proposed rule includes a 
Federal mandate that may result in the expenditure by State, local, and 
Tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year (adjusted for inflation). The OCC has 
determined that the proposed rule does not impose new mandates. 
Therefore, we conclude that the proposed rule will not result in an 
expenditure of $100 million or more annually by state, local, and 
tribal governments, or by the private sector.

Plain Language

    Section 722 of the Gramm-Leach-Bliley Act requires the OCC to use 
plain language in all proposed and final rules published after January 
1, 2000. The OCC invites comment on how to make this proposed rule 
easier to understand.
    For example:
     Has the OCC organized the material to inform your needs? 
If not, how could the OCC present the proposed rule more clearly?
     Are the requirements in the proposed rule clearly stated? 
If not, how could the proposal be more clearly stated?
     Does the proposed regulation contain technical language or 
jargon that is not clear? If so, which language requires clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the proposed regulation easier to 
understand? If so, what changes would achieve that?
     Is this section format adequate? If not, which of the 
sections should be changed and how?
     What other changes can the OCC incorporate to make the 
proposed regulation easier to understand?

List of Subjects in 12 CFR Part 30

    Banks, Banking, Consumer protection, National banks, Privacy, 
Safety and soundness, Reporting and recordkeeping requirements.

Office of the Comptroller of the Currency

12 CFR Chapter I

Authority and Issuance

    For the reasons set forth in the preamble, and under the authority 
of 12 U.S.C. 93a, chapter I of title 12 of the Code of Federal 
Regulations is proposed to be amended as follows:

PART 30--SAFETY AND SOUNDESS STANDARDS

0
1. The authority citation for Part 30 continues to read as follows:

    Authority: 12 U.S.C. 1, 93a, 371, 1462a, 1463, 1464, 1467a, 
1818, 1828, 1831p-1, 1881-1884, 3102(b) and 5412(b)(2)(B); 15 U.S.C. 
1681s, 1681w, 6801, and 6805(b)(1).

0
2. Appendix E to part 30 is amended by:
0
a. Removing the phrase ``$50 billion'' and adding in its place the 
phrase ``$250 billion'' everywhere that it appears;
0
b. Revising section I.B.1;
0
c. Removing section I.B.2 and I.B.3;
0
d. Redesignating the current section I.B.4 as I.B.2 and removing 
``January 1, 2017'' and adding in its place the words ``[EFFECTIVE 
DATE]'';
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e. In newly designated section I.B.4, removing the phrase ``18 months'' 
and adding in its place the phrase ``12 months''.
    The revisions read as follows:

Appendix E to Part 30--OCC Guidelines Establishing Standards for 
Recovery Planning by Certain Large Insured National Banks, Insured 
Federal Savings Associations, and Insured Federal Branches

* * * * *

I. Introduction

* * * * *

B. Compliance Date

    1. A covered bank with average total consolidated assets, 
calculated according to paragraph I.E.1. of this appendix, equal to 
or greater than $250 billion as of [EFFECTIVE DATE] should be in 
compliance with this appendix on [EFFECTIVE DATE].
* * * * *

    Dated: September 11, 2018.
Joseph M. Otting,
Comptroller of the Currency.

[FR Doc. 2018-20166 Filed 9-18-18; 8:45 am]
 BILLING CODE 4810-33-P