Resolution Planning Requirements: Federal Reserve and FDIC Propose Revisions to Dodd-Frank Resolution Plan Requirements for Foreign and Domestic Banking Organizations; FDIC Seeks Input on Future Approach to Insured Depository Institution Resolution Plans

Sullivan & Cromwell LLP - April 29, 2019

On April 8, 2019, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) proposed for public comment an amended and restated version of the regulation (the “Original Rule”) implementing the resolution planning requirements of section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). On April 16, 2019, the Federal Deposit Insurance Corporation (the “FDIC” and, together with the Federal Reserve, the “Agencies”) followed suit with a substantially identical proposal (together with the Federal Reserve proposal, the “Resolution Plan Proposal”). The Resolution Plan Proposal is intended to (i) address relevant amendments to Dodd-Frank made by the Economic Growth, Regulatory Relief, and Consumer Protection Act and (ii) incorporate lessons learned by the Agencies over the course of multiple Resolution Plan review cycles since the Original Rule first became effective in 2011. 

In addition, on April 16, 2019, the FDIC issued an Advance Notice of Proposed Rulemaking (the “IDI Plan Proposal”) on potential revisions to the FDIC’s existing requirement that certain insured depository institutions (“IDIs”) periodically submit a resolution plan (the “IDI Plan”) to the FDIC (the “IDI Rule”). Most notably, the IDI Plan Proposal solicits comment on how to tailor the requirements of the IDI Rule to reflect differences in size, complexity and other factors among the population of large IDIs, and on whether to increase the current threshold of $50 billion in IDI assets that triggers application of the rule. The FDIC also extended the date by which covered IDIs must submit their next resolution plans to a date to be specified by future rulemaking. The previously applicable plan deadline for IDI filers was July 1, 2020. 

Comments on the Resolution Plan Proposal and the IDI Plan Proposal are due by June 21, 2019.