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For Immediate Release
September 26, 2016
ABA Media Contact: Jeff Sigmund
(202) 663-5439
Follow us on Twitter: @ABABankers​

ABA Statement on Governor Tarullo’s Stress Test Remarks

By Rob Nichols, ABA president and CEO

​          “We appreciate the Fed’s efforts to examine the stress test process and seek improvements.  We welcome indications that forthcoming rules will create a more tailored approach that would allow some regional banks the flexibility they need to meet customer needs and pay dividends that help attract investors to fund future growth.  We’ve long believed CCAR is a bad fit for regional banks, which include different-sized institutions with a variety of business models and unique geographic footprints.  
         “We will carefully evaluate the proposed rule that would implement Governor Tarullo’s ‘stress capital buffer’ concept.  We are concerned that it may not preserve the proper function of a capital buffer – to absorb losses in a stressful period – and instead could impose unnecessarily high capital requirements that would make it harder for banks to make loans that help our economy grow.  

         “This tailored approach is a welcome step, but the statute remains an impediment to truly differentiating between banks based on the complexity of their business models and the true risk they represent to the economy.  Legislation like the bipartisan approach in H.R. 1309 is a step in the right direction.
         “As we have advocated​, the Fed and Congress should turn their attention to evaluating how stress test requirements can be further tailored.  For smaller institutions, the Dodd-Frank stress testing requirements are unnecessary and impose an unreasonable compliance burden.”

The American Bankers Association is the voice of the nation’s $16 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $12 trillion in deposits and extend more than $8 trillion in loans.