FDIC Seeks Comment on New Approaches to Insured Depository Institution Resolution Planning
The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) today approved an Advance Notice of Proposed Rulemaking (ANPR) seeking comment on ways to tailor and improve the agency’s rule requiring certain insured depository institutions (IDIs) to submit resolution plans (the “IDI Rule”).
“Both the FDIC and the banks subject to the IDI Rule have learned a lot about resolution planning over the past several years, and my hope is that we can build on this experience to make the process more efficient and more effective,” said FDIC Chairman Jelena McWilliams.
The FDIC is undertaking a comprehensive review of the IDI Rule. Advanced resolution planning is critically important for the largest IDIs to ensure the FDIC has timely access to information it would need to execute a resolution under the Federal Deposit Insurance Act. The ANPR seeks comment on ways to make the process more efficient and less time consuming without diminishing its benefits.
The IDI Rule currently requires IDIs with more than $50 billion in assets to submit resolution plans that should enable the FDIC to resolve the institution in the event of insolvency. Among other issues, the agency is considering revising the $50 billion threshold for application of the rule and tiering the rule’s requirements based on the size, complexity, or other characteristic of an IDI. The agency is also seeking feedback on ways to streamline plan submissions for larger, more complex firms and on whether to replace plan submissions with periodic engagement and capabilities testing for smaller, less complex firms that are subject to the rule.
The FDIC Board also voted to delay the next round of submissions under the IDI Rule until the rulemaking process has been completed.
Comments on the ANPR will be accepted for 60 days after publication in the Federal Register.
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s banks and savings associations, 5,406 as of December 31, 2018. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars—insured financial institutions fund its operations.
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