Dfast

Blackline: Dodd-Frank Act Stress Test

Supervisory Guidance for Mid-sized Banking Organizations

Final (March 2014) vs. Proposed (July 2013)

I. Introduction

In October 2012, the U.S. Federal banking agencies (“agencies”) issued the Dodd-Frank

Act stress test rules 1 requiring companies with total consolidated assets of more than $10

billion to conduct annual company-run stress tests pursuant to section 165(i)(2) of the

Dodd-Frank Wall Street Reform and Consumer Protection Act (“DFA”). 2 This guidance

outlines key supervisory expectations for companies with total consolidated assets of

more than $10 billion but less than $50 billion that are required to conduct DFA stress

tests (collectively “companies” or “$10-50 billion companies”). 3 As discussed further

below, it builds upon the interagency stress testing guidance issued in May 2012 for

companies with more than $10 billion in total consolidated assets (“May 2012 stress

testing guidance”), that set forth general principles for a satisfactory stress testing

framework. 4

The supervisory expectations described in this guidance are tailored to the $10-50 billion

companies, similar to the manner in which the requirements in the DFA stress test rules

required under the Dodd-Frank Act were tailored for this set of companies. 5 The

1

See 77 FR 61238 (October 9, 2012) (OCC), 77 FR 62396 (October 12, 2012) (Board: Annual

Company-Run Stress Test Requirements for Banking Organizations with Total Consolidated Assets over

$10 Billion Other than Covered Companies), and 77 FR 62417 (October 15, 2012) (FDIC).

2

Public LawPub. L. 111-203, 124 Stat. 1376 (2010). Each entity that meets the applicability

criteria must conduct a separate stress test and provide a separate submission. For example, both a bank

holding company between $10-50 billion in assets and its subsidiary bank with between $10-50 billion in

assets must conduct a separate stress test; however, if a subsidiary bank of a $10-50 billion bank...