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Financial Services

Final Rule Affects Bank Holding Companies

In October, the Federal Reserve System’s Board of Governors has approved a final rule that amends certain parts of the current capital plan and stress test rules for various banking companies. Approved in October, the capital plan rule allows the Federal Reserve to review the internal capital planning procedure of a large bank holding company (BHC) with total consolidated assets of $50 billion or more, and its ability to uphold satisfactory capital to operate under anticipated and stressful conditions.

The stress test rules also require large BHCs to perform yearly and mid-cycle company-run stress tests. Further, under the Comprehensive Capital Assessment and Review program, the Federal Reserve supervises over yearly stress tests of large BHCs.

Additionally, state member banks, and savings and loan holding companies with total consolidated assets over $10 billion, and BHCs possessing total consolidated assets over $10 billion but less than $50 billion have less severe stress test rules.

For insight on how this final rule affects your BHC, state member bank, or savings and loan holding company, contact a member of Cherry Bekaert’s Financial Services industry group.