Bank Capital Plans and Stress Tests: Federal Reserve Board Proposes Rule Revising FR Y-14 Forms to Include CFO Attestation Requirements for Certain Large Bank Holding Companies

Sullivan & Cromwell LLP - September 22, 2015

On September 16, 2015, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) issued a notice of proposed rulemaking (the “Proposal”) that would require the chief financial officer (the “CFO”) of bank holding companies that are overseen by the Federal Reserve’s Large Institution Supervision Coordinating Committee (the “LISCC Firms”) and are required to report on Forms FR Y 14A, FR Y-14Q and FR Y-14M (collectively, the “FR Y-14 Forms”) to make attestations regarding those forms.  The attestations would include that the:

  • actual and projected data reported on the FR Y-14 Forms was prepared in accordance with the applicable Federal Reserve form instructions;
  • actual reported data (as opposed to projections) is “materially correct to the best of [the CFO’s] knowledge”;
  • actual data being reported is subject to internal controls over reporting that “are effective and include those practices necessary to provide reasonable assurance as to the accuracy of [such] data”; and
  • internal controls are “audited annually by internal audit or compliance staff, and are assessed regularly by management of” the LISCC Firm.
In addition, the Proposal would require the CFO of such entities to “agree to report material weaknesses in these internal controls and any material errors or omissions in the data submitted to the Federal Reserve promptly as they are identified.”

The Proposal also addresses certain other changes to the FR Y-14 Forms, including with respect to the scope of information required by the forms.

The FR Y-14 Forms are required to be submitted by top-tier U.S. bank holding companies with $50 billion or more in consolidated assets to provide certain historical and projected financial data in support of the Federal Reserve’s stress testing and capital planning frameworks.

The attestation requirements would become effective on June 30, 2016, meaning that attestations would not be required as part of the 2016 annual capital planning and stress testing cycle.  Other proposed revisions to the FR Y-14 Forms themselves would become effective on December 31, 2015, March 31, 2016 and June 30, 2016.

Comments are due by November 16, 2015.