59194 Federal Register / Vol. 84, No. 212 / Friday, November 1, 2019 / Rules and Regulations
1 12 U.S.C. 5365(d).
2 76 FR 67323 (November 1, 2011).
FEDERAL RESERVE SYSTEM
12 CFR Part 243
[Regulation QQ; Docket No. R–1660]
RIN 7100–AF47
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 381
RIN 3064–AE93
Resolution Plans Required
AGENCY: Board of Governors of the
Federal Reserve System (Board) and
Federal Deposit Insurance Corporation
(Corporation).
ACTION: Final rule.
SUMMARY: The Board and the
Corporation (together, the agencies) are
jointly adopting this final rule
implementing the resolution planning
requirements of section 165(d) of the
Dodd-Frank Wall Street Reform and
Consumer Protection Act (the Dodd-
Frank Act). This final rule is intended
to reflect improvements identified since
the agencies finalized their joint
resolution plan rule in November 2011
(2011 rule) and to address amendments
to the Dodd-Frank Act made by the
Economic Growth, Regulatory Relief,
and Consumer Protection Act
(EGRRCPA). Through this final rule, the
Board is also establishing risk-based
categories for determining the
application of the resolution planning
requirement to certain U.S. and foreign
banking organizations, consistent with
section 401 of EGRRCPA. The final rule
also extends the default resolution plan
filing cycle, allows for more focused
resolution plan submissions, and
improves certain aspects of the
resolution planning rule.
DATES: This rule is effective December
31, 2019.
FOR FURTHER INFORMATION CONTACT:
Board: Mona Elliot, Deputy Associate
Director, (202) 912–4688, Catherine
Tilford, Assistant Director, (202) 452–
5240, Kathryn Ballintine, Lead
Financial Institution Policy Analyst,
(202) 452–2555, or Tudor Rus, Lead
Financial Institution Policy Analyst,
(202) 475–6359, Division of Supervision
and Regulation; or Laurie Schaffer,
Associate General Counsel, (202) 452–
2272, Jay Schwarz, Special Counsel,
(202) 452–2970, Steve Bowne, Senior
Counsel, (202) 452–3900, or Sarah
Podrygula, Attorney, (202) 912–4658,
Legal Division, Board of Governors of
the Federal Reserve System, 20th and C
Streets NW, Washington, DC 20551. For
users of Telecommunications Device for
the Deaf (TDD), (202) 263–4869.
Corporation: Lori J. Quigley, Deputy
Director, Institutions Monitoring Group,
lquigley@fdic.gov; Robert C. Connors,
Associate Director, Large Bank
Supervision Branch, rconnors@fdic.gov;
and Alexandra Steinberg Barrage,
Associate Director, Resolution Strategy
and Policy, Division of Complex
Institution Supervision & Resolution,
abarrage@fdic.gov; or David N. Wall,
Assistant General Counsel, dwall@
fdic.gov; Celia Van Gorder, Supervisory
Counsel, cvangorder@fdic.gov; Dena S.
Kessler, Counsel, dkessler@fdic.gov; or
Ryan M. Rappa, Counsel, rrappa@
fdic.gov, Legal Division, Federal Deposit
Insurance Corporation, 550 17th Street
NW, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Background
B. Overview of the Proposed Rule
II. Overview of Comments
III. Final Rule
A. Identification of Firms Subject to the
Resolution Planning Requirement and
Filing Groups
1. Firms Subject to the Resolution Planning
Requirement
2. Filing Groups and Filing Cycle
B. Resolution Plan Content
1. General Guidance and Firm-Specific
Feedback
2. Material Changes and Extraordinary
Events
3. Full Resolution Plans
4. Waivers of Informational Content
Requirements
5. Targeted Resolution Plans
6. Reduced Resolution Plans
7. Tailored Resolution Plans
C. Critical Operations Methodology and
Reconsideration Process
1. Identification by Covered Companies
and Methodology Requirement
2. Identification by Agencies and Requests
for Reconsideration
D. Clarifications to the 2011 Rule
1. Resolution Strategy for Foreign-Based
Covered Companies
2. Covered Companies in Multi-Tier
Foreign Banking Organization Holding
Companies
3. Removal of the Incompleteness Concept
and Related Review
4. Assessment of New Covered Companies
5. Timing of New Filings, Firms That
Change Filing Categories
6. Clarification of the Mapping
Expectations for Foreign Banking
Organizations
7. Standard of Review
8. Deletion of ‘‘Deficiencies’’ Relating to
Management Information Systems
9. Incorporation by Reference
E. Technical and Conforming Changes
From the Proposal
F. Board Delegation of Authority
IV. Effective Date and Transition Period
V. Impact Analysis
VI. Regulatory Analysis
A. Paperwork Reduction Act
B. Regulatory Flexibility Act
C. Riegle Community Development and
Regulatory Improvement Act of 1994
D. Plain Language
E. The Congressional Review Act
I. Introduction
A. Background
Section 165(d) of the Dodd-Frank
Act 1 and the 2011 rule 2 require certain
financial companies (covered
companies) to report periodically to the
agencies their plans for rapid and
orderly resolution under the U.S.
Bankruptcy Code (the Bankruptcy Code)
in the event of material financial
distress or failure. The goal of the Dodd-
Frank Act resolution planning process is
to help ensure that a covered company’s
failure would not have serious adverse
effects on financial stability in the
United States. The Dodd-Frank Act and
the 2011 rule require a covered
company to submit a resolution plan for
review by the agencies. The resolution
planning process requires covered
companies to demonstrate that they
have adequately assessed the challenges
that their structures and business
activities pose to a rapid and orderly
resolution in the event of material
financial distress or failure and that they
have taken action to address those
challenges, including through the
development of capabilities appropriate
to the covered company’s size and
complexity.
Implementation of the 2011 rule has
been an iterative process aimed at
strengthening the resolvability and
resolution planning capabilities of
covered companies. Since finalization of
the 2011 rule, the agencies have
reviewed multiple resolution plan
submissions and have provided
feedback on individual resolution plans
following their review by the agencies
(firm-specific feedback) and guidance
directed to groups of firms (general
guidance) to assist covered companies
in their development of subsequent
resolution plan submissions.
EGRRCPA revised the resolution
planning requirement as part of the
changes the law made to application of
the enhanced prudential standards in
section 165 of the Dodd-Frank Act.
Specifically, EGRRCPA raised the $50
billion minimum asset threshold for
general application of the resolution
planning requirement to $250 billion in
total consolidated assets, and provided
the Board with discretion to apply the
resolution planning requirement to
firms with $100 billion or more and less
than $250 billion in total consolidated
VerDate Sep<11>2014 22:13 Oct 31, 2019 Jkt 250001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\01NOR4.SGM 01NOR4
1 12 U.S.C. 5365(d).
2 76 FR 67323 (November 1, 2011).
FEDERAL RESERVE SYSTEM
12 CFR Part 243
[Regulation QQ; Docket No. R–1660]
RIN 7100–AF47
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 381
RIN 3064–AE93
Resolution Plans Required
AGENCY: Board of Governors of the
Federal Reserve System (Board) and
Federal Deposit Insurance Corporation
(Corporation).
ACTION: Final rule.
SUMMARY: The Board and the
Corporation (together, the agencies) are
jointly adopting this final rule
implementing the resolution planning
requirements of section 165(d) of the
Dodd-Frank Wall Street Reform and
Consumer Protection Act (the Dodd-
Frank Act). This final rule is intended
to reflect improvements identified since
the agencies finalized their joint
resolution plan rule in November 2011
(2011 rule) and to address amendments
to the Dodd-Frank Act made by the
Economic Growth, Regulatory Relief,
and Consumer Protection Act
(EGRRCPA). Through this final rule, the
Board is also establishing risk-based
categories for determining the
application of the resolution planning
requirement to certain U.S. and foreign
banking organizations, consistent with
section 401 of EGRRCPA. The final rule
also extends the default resolution plan
filing cycle, allows for more focused
resolution plan submissions, and
improves certain aspects of the
resolution planning rule.
DATES: This rule is effective December
31, 2019.
FOR FURTHER INFORMATION CONTACT:
Board: Mona Elliot, Deputy Associate
Director, (202) 912–4688, Catherine
Tilford, Assistant Director, (202) 452–
5240, Kathryn Ballintine, Lead
Financial Institution Policy Analyst,
(202) 452–2555, or Tudor Rus, Lead
Financial Institution Policy Analyst,
(202) 475–6359, Division of Supervision
and Regulation; or Laurie Schaffer,
Associate General Counsel, (202) 452–
2272, Jay Schwarz, Special Counsel,
(202) 452–2970, Steve Bowne, Senior
Counsel, (202) 452–3900, or Sarah
Podrygula, Attorney, (202) 912–4658,
Legal Division, Board of Governors of
the Federal Reserve System, 20th and C
Streets NW, Washington, DC 20551. For
users of Telecommunications Device for
the Deaf (TDD), (202) 263–4869.
Corporation: Lori J. Quigley, Deputy
Director, Institutions Monitoring Group,
lquigley@fdic.gov; Robert C. Connors,
Associate Director, Large Bank
Supervision Branch, rconnors@fdic.gov;
and Alexandra Steinberg Barrage,
Associate Director, Resolution Strategy
and Policy, Division of Complex
Institution Supervision & Resolution,
abarrage@fdic.gov; or David N. Wall,
Assistant General Counsel, dwall@
fdic.gov; Celia Van Gorder, Supervisory
Counsel, cvangorder@fdic.gov; Dena S.
Kessler, Counsel, dkessler@fdic.gov; or
Ryan M. Rappa, Counsel, rrappa@
fdic.gov, Legal Division, Federal Deposit
Insurance Corporation, 550 17th Street
NW, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Background
B. Overview of the Proposed Rule
II. Overview of Comments
III. Final Rule
A. Identification of Firms Subject to the
Resolution Planning Requirement and
Filing Groups
1. Firms Subject to the Resolution Planning
Requirement
2. Filing Groups and Filing Cycle
B. Resolution Plan Content
1. General Guidance and Firm-Specific
Feedback
2. Material Changes and Extraordinary
Events
3. Full Resolution Plans
4. Waivers of Informational Content
Requirements
5. Targeted Resolution Plans
6. Reduced Resolution Plans
7. Tailored Resolution Plans
C. Critical Operations Methodology and
Reconsideration Process
1. Identification by Covered Companies
and Methodology Requirement
2. Identification by Agencies and Requests
for Reconsideration
D. Clarifications to the 2011 Rule
1. Resolution Strategy for Foreign-Based
Covered Companies
2. Covered Companies in Multi-Tier
Foreign Banking Organization Holding
Companies
3. Removal of the Incompleteness Concept
and Related Review
4. Assessment of New Covered Companies
5. Timing of New Filings, Firms That
Change Filing Categories
6. Clarification of the Mapping
Expectations for Foreign Banking
Organizations
7. Standard of Review
8. Deletion of ‘‘Deficiencies’’ Relating to
Management Information Systems
9. Incorporation by Reference
E. Technical and Conforming Changes
From the Proposal
F. Board Delegation of Authority
IV. Effective Date and Transition Period
V. Impact Analysis
VI. Regulatory Analysis
A. Paperwork Reduction Act
B. Regulatory Flexibility Act
C. Riegle Community Development and
Regulatory Improvement Act of 1994
D. Plain Language
E. The Congressional Review Act
I. Introduction
A. Background
Section 165(d) of the Dodd-Frank
Act 1 and the 2011 rule 2 require certain
financial companies (covered
companies) to report periodically to the
agencies their plans for rapid and
orderly resolution under the U.S.
Bankruptcy Code (the Bankruptcy Code)
in the event of material financial
distress or failure. The goal of the Dodd-
Frank Act resolution planning process is
to help ensure that a covered company’s
failure would not have serious adverse
effects on financial stability in the
United States. The Dodd-Frank Act and
the 2011 rule require a covered
company to submit a resolution plan for
review by the agencies. The resolution
planning process requires covered
companies to demonstrate that they
have adequately assessed the challenges
that their structures and business
activities pose to a rapid and orderly
resolution in the event of material
financial distress or failure and that they
have taken action to address those
challenges, including through the
development of capabilities appropriate
to the covered company’s size and
complexity.
Implementation of the 2011 rule has
been an iterative process aimed at
strengthening the resolvability and
resolution planning capabilities of
covered companies. Since finalization of
the 2011 rule, the agencies have
reviewed multiple resolution plan
submissions and have provided
feedback on individual resolution plans
following their review by the agencies
(firm-specific feedback) and guidance
directed to groups of firms (general
guidance) to assist covered companies
in their development of subsequent
resolution plan submissions.
EGRRCPA revised the resolution
planning requirement as part of the
changes the law made to application of
the enhanced prudential standards in
section 165 of the Dodd-Frank Act.
Specifically, EGRRCPA raised the $50
billion minimum asset threshold for
general application of the resolution
planning requirement to $250 billion in
total consolidated assets, and provided
the Board with discretion to apply the
resolution planning requirement to
firms with $100 billion or more and less
than $250 billion in total consolidated
VerDate Sep<11>2014 22:13 Oct 31, 2019 Jkt 250001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\01NOR4.SGM 01NOR4
59195Federal Register / Vol. 84, No. 212 / Friday, November 1, 2019 / Rules and Regulations
3 EGRRCPA also provides that any bank holding
company, regardless of asset size, that has been
identified as a U.S. global systemically important
bank (U.S. GSIB) under the Board’s U.S. GSIB
surcharge rule shall be considered a bank holding
company with $250 billion or more in total
consolidated assets for purposes of the application
of the resolution planning requirement. EGRRCPA
section 401(f), Public Law 115 174, 132 Stat. 1296.
4 12 U.S.C. 5365(a); EGRRCPA section
401(a)(1)(B)(iii) (to be codified at 12 U.S.C.
5365(a)(2)(C)). See also EGRRCPA section 401(g).
5 84 FR 21600 (May 14, 2019).
6 Prudential Standards for Large Bank Holding
Companies and Savings and Loan Holding
Companies, 83 FR 61408 (November 29, 2018). The
Board’s final rule is published elsewhere in this
issue of the Federal Register and is also available
on the Board’s website at https://
www.federalreserve.gov/aboutthefed/
boardmeetings/files/tailoring-rule-fr-notice-
20191010a2.pdf.
7 Prudential Standards for Large Foreign Banking
Organizations; Revisions to Proposed Prudential
Standards for Large Domestic Bank Holding
Companies and Savings and Loan Holding
Companies, 84 FR 21988 (May 15, 2019). The
Board’s final rule is published elsewhere in this
issue of the Federal Register and is also available
on the Board’s website at https://
www.federalreserve.gov/aboutthefed/
boardmeetings/files/tailoring-rule-fr-notice-
20191010a2.pdf.
8 Combined U.S. assets means the sum of the
consolidated assets of each top-tier U.S. subsidiary
of the foreign banking organization (excluding any
section 2(h)(2) company as defined in section
2(h)(2) of the Bank Holding Company Act (12 U.S.C.
1841(h)(2)), if applicable) and the total assets of
each U.S. branch and U.S. agency of the foreign
banking organization, as reported by the foreign
banking organization on the FR Y–7Q.
9 The combined U.S. operations of a foreign
banking organization include any U.S. subsidiaries
(including any U.S. intermediate holding company),
U.S. branches, and U.S. agencies. In addition, for
a foreign banking organization that is not required
to form a U.S. intermediate holding company,
combined U.S. operations refer to its U.S. branch
and agency network and the U.S. subsidiaries of the
foreign banking organization (excluding any section
2(h)(2) company as defined in section 2(h)(2) of the
Bank Holding Company Act (12 U.S.C. 1841(h)(2),
if applicable) and any subsidiaries of such U.S.
subsidiaries.
assets.3 The threshold increase occurs in
two stages. Immediately on the date of
EGRRCPA’s enactment, firms with total
consolidated assets of less than $100
billion (for foreign banking
organizations, $100 billion in total
global assets) were no longer subject to
the resolution planning requirement.
Eighteen months after the date of
EGRRCPA’s enactment, the threshold
increases to $250 billion in total
consolidated assets. However,
EGRRCPA provides the Board with the
authority to apply resolution planning
requirements to firms with $100 billion
or more and less than $250 billion in
total consolidated assets. Specifically,
under section 165(a)(2)(C) of the Dodd-
Frank Act, as revised by EGRRCPA, the
Board may, by order or rule, apply the
resolution planning requirement to any
firm or firms with total consolidated
assets of $100 billion (for foreign
banking organizations, $100 billion in
total global assets) or more.4
In May 2019, the agencies invited
comment on a proposal to amend and
restate the 2011 rule (the proposed rule
or proposal).5 The proposed rule was
intended to address amendments to the
Dodd-Frank Act made by the EGRRCPA
and improve certain aspects of the 2011
rule based on the agencies’ experience
implementing the 2011 rule since its
adoption. The agencies are now
finalizing the proposed rule, with
certain changes based on public
comments on the proposed rule, as
described in detail below.
The Board’s Tailoring Rules
Consistent with section 401 of
EGRRCPA, the Board finalized two
separate proposals to revise the
framework for determining the
prudential standards that should apply
to large U.S. banking organizations
(domestic tailoring rule) 6 and to large
foreign banking organizations (FBO
tailoring rule 7 and together with the
domestic tailoring rule, the tailoring
rules). Among other provisions, the
tailoring rules identify distinct
standards applicable to firms for the
purpose of calibrating requirements.
The tailoring categories established in
the tailoring rules are as follows:
• Category I standards will apply to:
Æ Global systemically important bank
holding companies (U.S. GSIBs),
• Category II standards will apply to:
Æ U.S. firms that are not subject to
Category I standards with (a) $700
billion or more in average total
consolidated assets, or (b) $100 billion
or more in average total consolidated
assets that have $75 billion or more in
average cross-jurisdictional activity, and
Æ Foreign banking organizations with
(a) $700 billion or more in average
combined U.S. assets,8 or (b) $100
billion or more in average combined
U.S. assets that have $75 billion or more
in average cross-jurisdictional activity
measured based on the foreign banking
organization’s combined U.S.
operations.9
• Category III standards will apply to:
Æ U.S. firms that are not subject to
Category I or Category II standards with
(a) $250 billion or more in average total
consolidated assets, or (b) $100 billion
or more in average total consolidated
assets that have $75 billion or more in
any of the following risk-based
indicators: Average total nonbank
assets, average weighted short-term
wholesale funding, or average off-
balance sheet exposure, and
Æ Foreign banking organizations that
are not subject to Category II standards
with (a) $250 billion or more in average
combined U.S. assets, or (b) $100 billion
or more in average combined U.S. assets
that have $75 billion or more in any of
the following risk-based indicators
measured based on the combined U.S.
operations: Average total nonbank
assets, average weighted short-term
wholesale funding, or average off-
balance sheet exposure and
• Category IV standards will apply to:
Æ U.S. firms with $100 billion or
more in average total consolidated
assets that do not meet any of the
thresholds specified for Categories I
through III, and
Æ Foreign banking organizations with
$100 billion or more in average
combined U.S. assets that do not meet
any of the thresholds specified for
Categories II or III.
These categories form the basis for the
final rule’s framework for imposing
resolution planning requirements, with
adjustments where appropriate. The
categories are also used to tailor the
content of the resolution planning
requirements, taking into account
covered companies’ particular
geographic footprints, operations, and
activities, as described below.
B. Overview of the Proposed Rule
Under the proposed rule, resolution
planning requirements would have
applied to (1) those firms that are
statutorily required to submit resolution
plans (i.e., U.S. and foreign banking
organizations with $250 billion or more
in total consolidated assets, the U.S.
GSIBs, and any non-bank financial
company designated by the Financial
Stability Oversight Council (Council) for
supervision by the Board) and (2) firms
with total consolidated assets of $100
billion or more and less than $250
billion that would have been subject to
Category II or III standards under the
notices of proposed rulemaking for the
tailoring rules. In particular, the Board
would have applied resolution planning
requirements to firms with total
consolidated assets of $100 billion or
more and less than $250 billion that
would have had $75 billion or more in
any of the following four risk-based
indicators: Cross-jurisdictional activity,
nonbank assets, weighted short-term
wholesale funding, or off-balance-sheet
exposure. In the case of a foreign
banking organization, resolution
planning requirements would only have
applied if the firm also had combined
U.S. assets equal to $100 billion or
more, and the risk-based indicators
would have been measured based on the
firm’s combined U.S. operations.
The proposed rule would have
divided firms subject to resolution
VerDate Sep<11>2014 22:13 Oct 31, 2019 Jkt 250001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 E:\FR\FM\01NOR4.SGM 01NOR4
3 EGRRCPA also provides that any bank holding
company, regardless of asset size, that has been
identified as a U.S. global systemically important
bank (U.S. GSIB) under the Board’s U.S. GSIB
surcharge rule shall be considered a bank holding
company with $250 billion or more in total
consolidated assets for purposes of the application
of the resolution planning requirement. EGRRCPA
section 401(f), Public Law 115 174, 132 Stat. 1296.
4 12 U.S.C. 5365(a); EGRRCPA section
401(a)(1)(B)(iii) (to be codified at 12 U.S.C.
5365(a)(2)(C)). See also EGRRCPA section 401(g).
5 84 FR 21600 (May 14, 2019).
6 Prudential Standards for Large Bank Holding
Companies and Savings and Loan Holding
Companies, 83 FR 61408 (November 29, 2018). The
Board’s final rule is published elsewhere in this
issue of the Federal Register and is also available
on the Board’s website at https://
www.federalreserve.gov/aboutthefed/
boardmeetings/files/tailoring-rule-fr-notice-
20191010a2.pdf.
7 Prudential Standards for Large Foreign Banking
Organizations; Revisions to Proposed Prudential
Standards for Large Domestic Bank Holding
Companies and Savings and Loan Holding
Companies, 84 FR 21988 (May 15, 2019). The
Board’s final rule is published elsewhere in this
issue of the Federal Register and is also available
on the Board’s website at https://
www.federalreserve.gov/aboutthefed/
boardmeetings/files/tailoring-rule-fr-notice-
20191010a2.pdf.
8 Combined U.S. assets means the sum of the
consolidated assets of each top-tier U.S. subsidiary
of the foreign banking organization (excluding any
section 2(h)(2) company as defined in section
2(h)(2) of the Bank Holding Company Act (12 U.S.C.
1841(h)(2)), if applicable) and the total assets of
each U.S. branch and U.S. agency of the foreign
banking organization, as reported by the foreign
banking organization on the FR Y–7Q.
9 The combined U.S. operations of a foreign
banking organization include any U.S. subsidiaries
(including any U.S. intermediate holding company),
U.S. branches, and U.S. agencies. In addition, for
a foreign banking organization that is not required
to form a U.S. intermediate holding company,
combined U.S. operations refer to its U.S. branch
and agency network and the U.S. subsidiaries of the
foreign banking organization (excluding any section
2(h)(2) company as defined in section 2(h)(2) of the
Bank Holding Company Act (12 U.S.C. 1841(h)(2),
if applicable) and any subsidiaries of such U.S.
subsidiaries.
assets.3 The threshold increase occurs in
two stages. Immediately on the date of
EGRRCPA’s enactment, firms with total
consolidated assets of less than $100
billion (for foreign banking
organizations, $100 billion in total
global assets) were no longer subject to
the resolution planning requirement.
Eighteen months after the date of
EGRRCPA’s enactment, the threshold
increases to $250 billion in total
consolidated assets. However,
EGRRCPA provides the Board with the
authority to apply resolution planning
requirements to firms with $100 billion
or more and less than $250 billion in
total consolidated assets. Specifically,
under section 165(a)(2)(C) of the Dodd-
Frank Act, as revised by EGRRCPA, the
Board may, by order or rule, apply the
resolution planning requirement to any
firm or firms with total consolidated
assets of $100 billion (for foreign
banking organizations, $100 billion in
total global assets) or more.4
In May 2019, the agencies invited
comment on a proposal to amend and
restate the 2011 rule (the proposed rule
or proposal).5 The proposed rule was
intended to address amendments to the
Dodd-Frank Act made by the EGRRCPA
and improve certain aspects of the 2011
rule based on the agencies’ experience
implementing the 2011 rule since its
adoption. The agencies are now
finalizing the proposed rule, with
certain changes based on public
comments on the proposed rule, as
described in detail below.
The Board’s Tailoring Rules
Consistent with section 401 of
EGRRCPA, the Board finalized two
separate proposals to revise the
framework for determining the
prudential standards that should apply
to large U.S. banking organizations
(domestic tailoring rule) 6 and to large
foreign banking organizations (FBO
tailoring rule 7 and together with the
domestic tailoring rule, the tailoring
rules). Among other provisions, the
tailoring rules identify distinct
standards applicable to firms for the
purpose of calibrating requirements.
The tailoring categories established in
the tailoring rules are as follows:
• Category I standards will apply to:
Æ Global systemically important bank
holding companies (U.S. GSIBs),
• Category II standards will apply to:
Æ U.S. firms that are not subject to
Category I standards with (a) $700
billion or more in average total
consolidated assets, or (b) $100 billion
or more in average total consolidated
assets that have $75 billion or more in
average cross-jurisdictional activity, and
Æ Foreign banking organizations with
(a) $700 billion or more in average
combined U.S. assets,8 or (b) $100
billion or more in average combined
U.S. assets that have $75 billion or more
in average cross-jurisdictional activity
measured based on the foreign banking
organization’s combined U.S.
operations.9
• Category III standards will apply to:
Æ U.S. firms that are not subject to
Category I or Category II standards with
(a) $250 billion or more in average total
consolidated assets, or (b) $100 billion
or more in average total consolidated
assets that have $75 billion or more in
any of the following risk-based
indicators: Average total nonbank
assets, average weighted short-term
wholesale funding, or average off-
balance sheet exposure, and
Æ Foreign banking organizations that
are not subject to Category II standards
with (a) $250 billion or more in average
combined U.S. assets, or (b) $100 billion
or more in average combined U.S. assets
that have $75 billion or more in any of
the following risk-based indicators
measured based on the combined U.S.
operations: Average total nonbank
assets, average weighted short-term
wholesale funding, or average off-
balance sheet exposure and
• Category IV standards will apply to:
Æ U.S. firms with $100 billion or
more in average total consolidated
assets that do not meet any of the
thresholds specified for Categories I
through III, and
Æ Foreign banking organizations with
$100 billion or more in average
combined U.S. assets that do not meet
any of the thresholds specified for
Categories II or III.
These categories form the basis for the
final rule’s framework for imposing
resolution planning requirements, with
adjustments where appropriate. The
categories are also used to tailor the
content of the resolution planning
requirements, taking into account
covered companies’ particular
geographic footprints, operations, and
activities, as described below.
B. Overview of the Proposed Rule
Under the proposed rule, resolution
planning requirements would have
applied to (1) those firms that are
statutorily required to submit resolution
plans (i.e., U.S. and foreign banking
organizations with $250 billion or more
in total consolidated assets, the U.S.
GSIBs, and any non-bank financial
company designated by the Financial
Stability Oversight Council (Council) for
supervision by the Board) and (2) firms
with total consolidated assets of $100
billion or more and less than $250
billion that would have been subject to
Category II or III standards under the
notices of proposed rulemaking for the
tailoring rules. In particular, the Board
would have applied resolution planning
requirements to firms with total
consolidated assets of $100 billion or
more and less than $250 billion that
would have had $75 billion or more in
any of the following four risk-based
indicators: Cross-jurisdictional activity,
nonbank assets, weighted short-term
wholesale funding, or off-balance-sheet
exposure. In the case of a foreign
banking organization, resolution
planning requirements would only have
applied if the firm also had combined
U.S. assets equal to $100 billion or
more, and the risk-based indicators
would have been measured based on the
firm’s combined U.S. operations.
The proposed rule would have
divided firms subject to resolution
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