Re: Notice of Proposed Rulemaking: OCC Guidelines Establishing Standards for Recovery Planning by Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches
Ladies and Gentlemen:
The Bank Policy Institute and the American Bankers Association appreciate the opportunity to comment on the notice of proposed rulemaking issued by the Office of the Comptroller of the Currency entitled OCC Guidelines Establishing Standards for Recovery Planning by Certain Large Insured National Banks, Insured Federal Savings Association, and Insured Federal Branches.
When the OCC first adopted its recovery planning Guidelines in 2016, the OCC stated that "a covered bank may tailor its recovery plan to its unique size, risk profile, activities, and complexity" and provided a number of examples of how the recovery plans of covered banks with different characteristics may vary, including, among others, that "a smaller, less complex bank may have a shorter, less complex recovery plan."
When the OCC subsequently revised the asset threshold for applicability of the Guidelines from $50 billion to $250 billion, the OCC again confirmed that "a covered bank that is less complex or has less risk may tailor its recovery plan under the Guidelines accordingly." As the OCC now proposes to expand the Guidelines by reducing the asset threshold to $100 billion and introducing a testing standard, we urge the OCC to reiterate that all aspects of the Guidelines are designed to, and will, be implemented in a tailored manner. We also urge the OCC not to further expand recovery planning requirements, whether by reducing the asset threshold below $100 billion or otherwise.
The OCC explained that it is proposing to amend the Guidelines to address lessons learned from the March 2023 banking stress and to strengthen the Guidelines based on its almost 10 years of supervisory experience with the Guidelines. Although we understand the rationale for the proposal, we are concerned that, if adopted as proposed, the proposal would revise the Guidelines in ways that would be impracticable to implement.
Download the joint comment letter to read the full text.
