Overview
Title
Agency Information Collection Activities: Information Collection Renewal; Submission for OMB Review; Company-Run Annual Stress Test Reporting Template and Documentation for Covered Institutions With Total Consolidated Assets of $250 Billion or More Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
Agencies
ELI5 AI
The government wants opinions on changes to a big banks' report card to make sure they’re ready for money problems. They want to make the paperwork easier and more like other forms they already use, and they promise to keep people's info secret as much as the law allows.
Summary AI
The Office of the Comptroller of the Currency (OCC) is inviting comments on the proposed renewal of an information collection, as required by the Paperwork Reduction Act. This involves a revision of their annual stress test reporting template for financial institutions with assets of $250 billion or more, under the Dodd-Frank Act. The proposed updates aim to align with existing Federal Reserve reporting forms and exclude outdated or unnecessary components. Public comments are encouraged and can be submitted by various methods outlined in the notice until March 7, 2025.
Abstract
The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995 (PRA). In accordance with the requirements of the PRA, the OCC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC is soliciting comment concerning a revision to its information collection titled, "Company-Run Annual Stress Test Reporting Template and Documentation for Covered Institutions with Total Consolidated Assets of $250 Billion or More under the Dodd-Frank Wall Street Reform and Consumer Protection Act." The OCC also is giving notice that it has sent the collection to OMB for review.
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AnalysisAI
The document is an official notice from the Office of the Comptroller of the Currency (OCC), a part of the U.S. Treasury Department, seeking public feedback on the renewal and revision of an information collection related to financial strength stress tests for large financial institutions. These stress tests are evaluations that ensure banks can handle economic downturns without failing, as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Institutions impacted by this rule are those with total consolidated assets of $250 billion or more.
General Summary
The notice explains the OCC's plan to update the reporting templates used by these large financial institutions for conducting mandatory stress tests. These updates aim to align the OCC's requirements more closely with those of the Federal Reserve to minimize the administrative burden on these institutions. The notice invites public comments, encouraging stakeholders to provide their thoughts on the necessity and utility of the information being collected, as well as suggestions for reducing the burden of the collection process. The deadline for submitting comments is set for March 7, 2025.
Significant Issues and Concerns
One significant concern is the document's lack of detailed explanation regarding how specific burden estimates were calculated. It references the Board's burden estimates but does not provide clarity on the OCC's reasoning or methodology for these calculations. Another potential issue is the overlap in reporting requirements between the OCC and the Federal Reserve Board (FR Y-14A), which could lead to duplication of efforts and increased costs for the banks involved.
The document also contains complex jargon and technical terms such as "CECL Supplemental Schedule" and "FR Y-14A reporting forms," which may not be easily understood by the general public or stakeholders without specialized knowledge. Moreover, the discussion around the confidentiality of submitted information is somewhat vague, potentially leaving stakeholders uncertain about the privacy of their data.
Impact on the Public
Overall, this document may have a limited direct impact on the general public. However, it is important for maintaining a stable financial system, which ultimately affects the economy and the public's financial well-being. Ensuring that large financial institutions can withstand economic stress helps protect people's savings, investments, and access to credit.
Impact on Specific Stakeholders
For the covered financial institutions, the changes can have both positive and negative impacts. The alignment of OCC and Federal Reserve Board requirements aims to reduce redundancy, which can save these institutions time and reduce compliance costs. However, without clear guidance and simplification of the requirements, particularly regarding the confidentiality of submitted information, there could be confusion and additional administrative burden.
Stakeholders, such as financial analysts and institutional compliance officers, may have to swiftly adapt to the revised rules, requiring additional training and adjustments to internal processes. If implemented effectively, these updates could lead to more accurate risk assessments and improved financial stability for these stakeholders, benefiting both the institutions and their customers over the long term.
Financial Assessment
The document published by the Office of the Comptroller of the Currency (OCC) focuses on the Company-Run Annual Stress Test Reporting Template and Documentation for Covered Institutions with Total Consolidated Assets of $250 Billion or More under the Dodd-Frank Wall Street Reform and Consumer Protection Act. This financial threshold emphasizes substantial institutions that are required to undergo stress testing to ensure their financial stability and resilience in challenging economic circumstances.
Overview of Financial References
The document makes several notable references to financial thresholds, specifically emphasizing covered institutions with total consolidated assets of $250 billion or more. This financial benchmark determines which financial companies are required to submit annual stress test reports. By setting this asset threshold, the OCC targets only large-scale institutions, indicating that the stress test requirements are particularly relevant to those significant players in the financial sector whose operations and potential failures could have widespread economic impacts.
Financial Context and Related Issues
The primary financial reference illustrates the stress test requirements and is central to the document’s purpose. This threshold, $250 billion, serves as a delineation point for which institutions the annual stress tests are applicable. Given this financial cut-off, it is implicitly understood that smaller institutions are not subjected to the same rigorous frequency and perhaps costly compliance requirements imposed on larger financial entities.
One of the key issues highlighted in the document is the potential overlap and duplicative nature of reporting requirements. The mention that many institutions with consolidated assets of $250 billion or more are also required to submit reports using the FR Y-14A reporting form introduces concerns about redundant efforts, which could lead to excessive financial and administrative burdens. This overlap could necessitate additional expenditures related to compliance and reporting, detracting from a streamlined regulatory environment.
Additionally, the document lacks specificity in discussing the costs or potential savings stemming from the proposed revisions to the reporting templates. While it generally invites comments on such financial implications, there is no detailed analysis or projection of how these changes could economically impact the institutions. The call for comments on "Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services" indicates recognition of financial considerations but does not provide initial insights from the OCC.
Conclusion
The financial references throughout the document, particularly the emphasis on institutions with $250 billion or more in assets, highlight the scope and significance of the regulation being addressed. However, there is a noted lack of clarity regarding the actual costs or financial burdens associated with compliance, especially for those institutions impacted by both OCC and Federal Reserve Board requirements. Greater transparency and specificity would benefit stakeholders in understanding the financial implications of these regulatory reporting updates.
Issues
• The document does not provide clear justification for the specific burden estimates or how they were calculated beyond referencing updates to the Board's burden estimates.
• There is a potential overlap in reporting requirements between the OCC and the Board, which may lead to unnecessary duplication and excess burden on respondents.
• The document uses jargon and complex language that may be difficult for all stakeholders to thoroughly understand without specialized knowledge, such as 'CECL Supplemental Schedule' and 'FR Y-14A reporting forms'.
• There is no discussion of potential costs or savings associated with the proposed changes to the reporting template beyond the generic invitation for comments.
• The language describing the confidentiality of the information appears vague, stating that information collections will be treated as confidential to the extent permitted by law, without detailing the specific protections or limitations.