On September 10, the Office of the Comptroller of the Currency (“OCC”) published proposed revisions to its information collecting regulations related to the Dodd-Frank Act’s “stress test” for large national banks and federal savings associations.
Section 165(i)(2) of the Act requires certain financial institutions, including national banks and federal savings associations that have at least $10 billion in total consolidated assets (“covered institutions”), to conduct annual “stress tests” and report the findings to the Federal Reserve System and the institution’s primary governing regulatory agency. In July, the Fed proposed changes to its stress test rules, including revisions to almost twenty schedules that must be completed by covered institutions with over $50 billion in total consolidated assets, and changes to the institutions’ filing deadlines. The OCC’s proposed revisions would bring its reporting requirements in line with the Fed’s proposed requirements.
Among other revisions, the OCC recommended changes to certain data items on its reporting templates to “enhance [its ability] to analyze the validity and integrity of firms’ projections.” It proposed numerous edits to the Summary Schedule that would, among other things, affect the way covered institutions report information concerning their realized gains and losses on certain securities and their trading incremental default losses. The OCC’s proposed revisions would also require disclosure of additional details on the Summary Schedule about settlements related to the covered institutions’ representation and warranty liabilities for residential mortgage loans, and for the loans covered by those settlements. The OCC also proposed revisions to the Scenario Schedule to clarify the definitions of scenario variables collected on the schedule and used in projection methodologies. It further proposed revisions to the Regulatory Capital Instruments, Regulatory Capital Transitions, and Counterparty Credit Risk Schedules.
The OCC invited comments on whether the continued collection of information is necessary and practical, the costs and burdens associated with collecting the information sought, suggestions on how to minimize any burdens, and ways to enhance the quality and clarity of the collected information. The notice and comment period closes November 10, 2014.