OCC Proposes Guidelines to Expand Recovery Planning Requirements to the Largest National Banks

Recovery Planning
Posted by Robert Burns, Deloitte Advisory Director on January 21, 2016.

On December 17, 2015, the Office of the Comptroller of the Currency (OCC) proposed Guidelines to establish standards for recovery planning that would apply to insured national banks, insured federal savings associations, and insured federal branches of foreign banks with more than $50 billion in assets.


Unlike resolution plans, which are statutorily mandated for bank holding companies with over $50 billion in assets and nonbank financial companies supervised by the Federal Reserve Board (FRB) under Sec. 165(d) of Dodd-Frank, recovery plans are not explicitly mandated by Dodd-Frank. Accordingly, the OCC’s proposed Guidelines would be enforced under its authority to prescribe safety and soundness standards in the form of regulations and guidelines.

Currently, only the eight largest US banking organizations in the FRB’s Large Institution Supervision Coordinating Committee portfolio must submit a recovery plan, as required by the FRB’s Supervision and Regulation (SR) Letter 14-8 issued in September 2014. As proposed, the OCC’s Guidelines would substantially increase the number of institutions required to submit a recovery plan.

Overview of the Proposed Guidance

The proposed Guidelines would require each covered institution to develop a recovery plan, which should be commensurate with its size, risk profile and complexity in business and legal structure. Such plan is not intended to duplicate existing planning efforts, but rather to leverage such planning (e.g., capital, stress testing, liquidity, and resolution planning). Institutions already required to develop a firm-wide recovery plan would be able to leverage their existing plan.

Elements of the recovery plan include: (1) an overview of the institution’s organizational and legal entity structure, including its material entities, critical operations, core business lines, and core management information systems, including with respect to interconnections and interdependencies; (2) qualitative or quantitative indicators (i.e., “triggers”) of a risk of, or existence of, a stress event that should be escalated to the board of directors; (3) a range of options that the institution can undertake to restore its financial and operational position; (4) an assessment of each of the options and its impact on the institution; (5) a process for escalating information; (6) identification of reports required by management to make timely decisions; and (7) procedures documenting internal and external stakeholder communication once a trigger has been breached.


The proposal has significant implications for national banks, many of which will be subject to recovery planning requirements for the first time. Covered institutions should begin preparing now rather than waiting until the Guidelines are finalized. In addition, institutions not directly impacted by the Guidelines may also be interested in the proposal, which provides insight into the evolution of recovery planning expectations in the US.

Comments on the OCC’s proposal are due by Feb. 16, 2016. As the comment period ends, Deloitte will continue to monitor developments and issue additional updates as appropriate.

For more information regarding the OCC’s Guidelines, refer to our analysis here.

Robert Burns
Deloitte Advisory Director
Deloitte & Touche LLP

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