Federal banking agencies issue proposal on cyber risk management standards

Nearly one month after the New York State Department of Financial Services issued a proposal to establish prescriptive cyber requirements for New York-domiciled financial institutions,1 three three federal banking agencies—the Federal Reserve Board (FRB), Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) (collectively, the “agencies”)—issued an advance notice of proposed rulemaking (ANPR) on enhanced cyber risk management and resilience standards for large banking organizations.2

Specifically, the enhanced standards would apply to US bank holding companies, the US operations of foreign banking organizations, and US savings and loan holdings companies with more than $50 billion in total assets, as well as nonbank financial companies and financial market utilities designed for FRB supervision by the Financial Stability Oversight Council (FSOC), among others.

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FRB, FDIC release public sections of 2016 Resolution Plans of eight US G-SIBs

On October 4, 2016, the Federal Reserve Board (FRB) and Federal Deposit Insurance Corporation (FDIC) (collectively, “the Agencies”) released the public sections of the “targeted submissions” that fulfill the 2016 resolution planning requirement for each of the eight US global systemically important banks (G-SIBs).1 Although these public sections are, on balance, slightly shorter than the 2015 public sections submitted in connection with the last full submissions, they contain significant new details about completed and forthcoming enhancements to resolution planning capabilities to address regulatory concerns.

In April 2016, the Agencies determined that the 2015 plans submitted by five of the eight US G-SIBs were “not credible or would not facilitate an order resolution under the Bankruptcy Code.” These institutions were required to remediate the identified deficiencies by October 1, 2016.2 In addition, the Agencies identified shortcomings in the plans submitted by the remaining three US G-SIBs, which were required to submit plans to address these issues by October 1, 2016.3 The next full plan submissions for all eight US G-SIBs are due by July 1, 2017.

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Agencies propose rule regarding Net Stable Funding Ratio for US banking organizations

House on top of stacked coins

On April 26, 2016, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) (the “Agencies”) approved a proposed rule1 to implement the Net Stable Funding Ratio (NSFR)—a quantitative measure of a company’s one-year funding profile—for certain US bank holding companies (BHCs) and savings and loan holding companies (SLHCs).

The Federal Reserve Board (FRB) is scheduled2 to consider the proposal on May 3, 2016.

The proposed rule would become effective on January 1, 2018 and public comments on the proposal are due by August 5, 2016.

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Agencies re-propose rule regarding incentive-based compensation at financial institutions

On April 21, 2016, the National Credit Union Administration (NCUA) became the first agency to re-propose1 a Dodd-Frank-mandated rule on incentive-based compensation arrangements for covered financial institutions (the original proposed rule was issued in 2011). The Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Housing Finance Agency adopted substantively identical versions of the proposal on April 26, 2016. The remaining two agencies required by Section 956 of Dodd-Frank to jointly issue the rule—the Federal Reserve Board (FRB) and Securities and Exchange Commission (SEC)—are expected to adopt the proposal shortly.
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FRB, FDIC issue feedback on 2015 resolution plans of eight US G-SIBs


Posted by Marlo Karp, Deloitte Advisory Partner on April 15, 2016.

On April 13, 2016, the Federal Reserve Board (FRB) and Federal Deposit Insurance Corporation (FDIC) announced credibility determinations and released firm-specific feedback on the 2015 resolution plans submitted by eight US global systemically important banks (G-SIBs) under Section 165(d) of Dodd-Frank.

In conjunction with this announcement, the FRB and FDIC released guidance for the next full plan submissions for these eight US G-SIBs, which are due by July 1, 2017.

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Dodd-Frank Four Years Later

Dodd-Frank Four Years Later

The fourth anniversary of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) is a perfect opportunity to reflect on the progress that has been made since the Act’s passage in 2010 and to look forward to the required regulations that have to be implemented. The law was a direct response to the financial downturn, and was specifically designed to prevent a similar crisis from happening again. So how are things going so far?

Overall, it’s a mixed bag. Considerable progress toward implementation and reform has been made in some areas, while others are just getting warmed up.

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