22648 Federal Register / Vol. 76, No. 78 / Friday, April 22, 2011 / Proposed Rules 

1See generally 12 U.S.C. 5365(d). 

2The ability to undertake advance planning for 

the resolution of any financial institution, from 

small banks to globally active financial companies, 

is a precondition for effective crisis management 

and resolution. 

not require for adjudication the 

presence of essential witnesses, parties, 

or third persons over which the 

settlement process lacks jurisdiction. 

Dated: April 18, 2011. 

John Walsh, 

Acting Comptroller of the Currency. 

[FR Doc. 2011–9821 Filed 4–21–11; 8:45 am] 

BILLING CODE 4810–33–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 252 

[Regulation YY; Docket No. R–1414] 

RIN 7100–AD73 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 381 

RIN 3064–AD77 

Resolution Plans and Credit Exposure 

Reports Required 

AGENCIES: Board of Governors of the 

Federal Reserve System (Board) and 

Federal Deposit Insurance Corporation 

(Corporation). 

ACTION: Proposed rule; request for 

public comment. 

SUMMARY: The Board and the 

Corporation request comment on this 

proposed rule that implements the 

requirements in section 165(d) of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (the ‘‘DoddFrank Act’’) regarding resolution plans 

and credit exposure reports. Section 

165(d) requires each nonbank financial 

company supervised by the Board and 

each bank holding company with assets 

of $50 billion or more to report 

periodically to the Board, the 

Corporation, and the Financial Stability 

Oversight Council (the ‘‘Council’’) the 

plan of such company for rapid and 

orderly resolution in the event of 

material financial distress or failure, and 

the nature and extent of credit 

exposures of such company to 

significant bank holding companies and 

significant nonbank financial companies 

and the nature and extent of the credit 

exposures of significant bank holding 

companies and significant nonbank 

financial companies to such company. 

Section 165(d)(8) of the Dodd-Frank Act 

requires the Board and the Corporation 

to jointly issue final rules implementing 

section 165(d) by not later than January 

21, 2012. 

DATES: Comments should be received on 

or before June 10, 2011. 

ADDRESSES: Comments should be 

directed to: 

Board: You may submit comments, 

identified by Docket No. 1414 and RIN 

no. 7100–AD73, by any of the following 

methods: 

• Agency Web site: http:// 

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov. 

Include docket number in the subject 

line of the message. 

• Fax: (202) 452–3819 or (202) 452– 

3102. 

• Mail: Jennifer J. Johnson, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue, NW., Washington, 

DC 20551. 

All public comments are available from 

the Board’s Web site at http:// 

www.federalreserve.gov/generalinfo/ 

foia/ProposedRegs.cfm as submitted, 

unless modified for technical reasons. 

Accordingly, your comments will not be 

edited to remove any identifying or 

contact information. Public comments 

may also be viewed electronically or in 

paper form in Room MP–500 of the 

Board’s Martin Building (20th and C 

Street, NW.) between 9 a.m. and 5 p.m. 

on weekdays. 

Corporation: You may submit 

comments by any of the following 

methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Agency Web site: http:// 

www.FDIC.gov/regulations/laws/ 

federal/propose.html 

• Mail: Robert E. Feldman, Executive 

Secretary, Attention: Comments/Legal 

ESS, Federal Deposit Insurance 

Corporation, 550 17th Street, NW., 

Washington, DC 20429. 

• Hand Delivered/Courier: The guard 

station at the rear of the 550 17th Street 

Building (located on F Street), on 

business days between 7 a.m. and 5 p.m. 

• E-mail: comments@FDIC.gov. 

Instructions: Comments submitted 

must include ‘‘FDIC’’ and ‘‘RIN 3064– 

AD77.’’ Comments received will be 

posted without change to http:// 

www.FDIC.gov/regulations/laws/ 

federal/propose.html, including any 

personal information provided. 

FOR FURTHER INFORMATION CONTACT: 

Board: Barbara J. Bouchard, Senior 

Associate Director, (202) 452–3072, or 

Avery I. Belka, Counsel, (202) 736–5691, 

Division of Banking Regulation and 

Supervision; or Ann E. Misback, 

Associate General Counsel, (202) 452– 

3788, or Dominic A. Labitzky, Senior 

Attorney, (202) 452–3428, Legal 

Division; Board of Governors of the 

Federal Reserve System, 20th and C 

Streets, NW., Washington, DC 20551. 

Users of Telecommunication Device for 

Deaf (TDD) only, call (202) 263–4869. 

Corporation: Joseph Fellerman, Senior 

Program Analyst, (202) 898–6591, Office 

of Complex Financial Institutions, 

Richard T. Aboussie, Associate General 

Counsel, (703) 562–2452, David N. Wall, 

Assistant General Counsel, (703) 562– 

2440, Mark A. Thompson, Counsel, 

(703) 562–2529, or Mark G. Flanigan, 

Counsel, (202) 898–7426, Legal 

Division. 

SUPPLEMENTARY INFORMATION: 

I. Background 

To promote financial stability, section 

165(d) of the Dodd-Frank Act requires 

each nonbank financial company 

supervised by the Board and each bank 

holding company with total 

consolidated assets of $50 billion or 

more to periodically submit to the 

Board, the Corporation and the Council 

a plan for such company’s rapid and 

orderly resolution in the event of 

material financial distress or failure, and 

a report on the nature and extent of 

credit exposures of such company to 

significant bank holding companies and 

significant nonbank financial companies 

and the nature and extent of credit 

exposures of significant bank holding 

companies and significant nonbank 

financial companies to such company.1

This proposed rule would implement 

the resolution plan and credit exposure 

reporting requirements set forth in 

section 165(d) of the Dodd-Frank Act. 

Section 165(d) provides regulators 

with the ability to conduct advance 

resolution planning for a covered 

company. As demonstrated by the 

Corporation’s experience in failed bank 

resolutions, as well as the Board’s and 

the Corporation’s experience in the 

recent crisis, advance planning is 

critical for an efficient resolution of a 

company subject to the proposed rule.2

Advance planning has long been a 

component of resiliency and recovery 

planning by financial companies. The 

Dodd-Frank Act requires that certain 

financial companies incorporate 

resolution planning into their overall 


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Federal Register / Vol. 76, No. 78 / Friday, April 22, 2011 / Proposed Rules 22649 

3See 12 U.S.C. 5365(d)(1). 

4 12 U.S.C. 5365(d)(8). 

5 12 U.S.C. 3106(a). 

6 12 U.S.C. 5365(b)(2). 

7 If an entity is subject to an insolvency regime 

other than the Bankruptcy Code, the analysis 

should be in reference to that applicable regime. 

business planning processes. In 

preparing for an orderly liquidation of a 

financial company under Title II of the 

Dodd-Frank Act, the Corporation will 

have access to the information included 

in such company’s resolution plan. 

Advance knowledge of and access to 

this information will be a vital element 

in the Corporation’s resolution planning 

for such a company. The resolution plan 

will help regulators to better understand 

a firm’s business and how that entity 

may be resolved, and will also enhance 

the regulators’ understanding of foreign 

operations in an effort to develop a 

comprehensive and coordinated 

resolution strategy for a cross-border 

firm. 

The Dodd-Frank Act requires each 

company covered by the proposed rule 

to produce a resolution plan, or ‘‘living 

will,’’ that includes information 

regarding the manner and extent to 

which any insured depository 

institution affiliated with the company 

is adequately protected from risks 

arising from the activities of any 

nonbank subsidiaries of the company; 

full descriptions of the ownership 

structure, assets, liabilities, and 

contractual obligations of the company; 

identification of the cross-guarantees 

tied to different securities; identification 

of major counterparties; a process for 

determining to whom the collateral of 

the company is pledged; and any other 

information that the Board and the 

Corporation jointly require by rule or 

order.3 The proposed rule would require 

a strategic analysis by the covered 

company of how it can be resolved 

under Title 11 of the U.S. Code (the 

‘‘Bankruptcy Code’’) in a way that would 

not pose systemic risk to the financial 

system. In doing so, the company must 

map its business lines to material legal 

entities and provide integrated analyses 

of its corporate structure; credit and 

other exposures; funding, capital and 

cash flows; the domestic and foreign 

jurisdictions in which it operates; and 

its supporting information systems for 

core business lines and critical 

operations. The credit exposure reports 

required by the statute will also provide 

important information critical to 

ongoing risk management and advance 

planning processes by identifying the 

company’s significant credit exposures 

and other key information across the 

entity and its related entities. 

II. Overview of Proposed Rule 

Section 165(d)(8) of the Dodd-Frank 

Act requires the Board and the 

Corporation to jointly issue rules 

implementing the provisions of section 

165(d) of the Dodd-Frank Act.4 The 

proposed rule applies to each ‘‘Covered 

Company’’, which term includes any 

bank holding company with $50 billion 

or more in total consolidated assets, as 

determined based on the average of the 

company’s four most recent 

Consolidated Financial Statements for 

Bank Holding Companies as reported on 

the Federal Reserve’s FR Y–9C. It also 

includes any foreign bank or company 

that is or is treated as a bank holding 

company under section 8(a) of the 

International Banking Act of 1978 5 and 

that had $50 billion or more in total 

consolidated assets, as determined 

based on the foreign bank’s or 

company’s most recent annual or, as 

applicable, the average of the four most 

recent quarterly Capital and Asset 

Reports for Foreign Banking 

Organizations as reported on the Federal 

Reserve’s Form FR Y–7Q. In addition, a 

‘‘Covered Company’’ includes any 

nonbank financial company that the 

Council has determined under section 

113 of the Dodd-Frank Act must be 

supervised by the Board and for which 

such determination is in effect. 

The Dodd-Frank Act requires that, in 

applying the requirements of section 

165(d) to any foreign nonbank financial 

company supervised by the Board or 

any foreign-based bank holding 

company, the Board give due regard to 

the principle of national treatment and 

equality of competitive opportunity, and 

to take into account the extent to which 

the foreign financial company is subject 

on a consolidated basis to home country 

standards that are comparable to those 

applied to financial companies in the 

United States.6

The proposed rule requires that each 

Covered Company periodically submit 

to the Board and Corporation (i) a plan 

for the rapid and orderly resolution of 

the Covered Company under the 

Bankruptcy Code in the event of 

material financial distress at or failure of 

the Covered Company (‘‘Resolution 

Plan’’); and (ii) a report on the nature 

and extent to which the Covered 

Company has credit exposure to other 

significant nonbank financial companies 

and significant bank holding companies 

and on the nature and extent to which 

other significant nonbank financial 

companies and significant bank holding 

companies have credit exposure to the 

Covered Company (‘‘Credit Exposure 

Report’’). The proposal would establish 

rules and requirements regarding the 

submission and content of a Resolution 

Plan and a Credit Exposure Report, as 

well as procedures and standards for 

review by the Board and Corporation of 

a Resolution Plan. The Board would 

make such reports available to the 

Council upon request. 

Section-by-Section Analysis 

Definitions. Section llll.2 of the 

proposed rule defines certain terms, 

including ‘‘rapid and orderly 

resolution,’’ ‘‘material financial distress,’’ 

‘‘core business lines,’’ ‘‘critical 

operations’’ and ‘‘material entities,’’ 

which are key definitions in the 

proposed rule. 

‘‘Rapid and orderly resolution’’ means 

a reorganization or liquidation of the 

Covered Company (or, in the case of a 

Covered Company that is incorporated 

or organized in a jurisdiction other than 

the United States, the subsidiaries and 

operations of such foreign company that 

are domiciled in the United States) 

under the Bankruptcy Code that can be 

accomplished within a reasonable 

period of time and in a manner that 

substantially mitigates the risk that the 

failure of the Covered Company would 

have serious adverse effects on financial 

stability in the United States.7 Under 

the proposed rule each Resolution Plan 

submitted should provide for the rapid 

and orderly resolution of the Covered 

Company. 

‘‘Material financial distress’’ with 

regard to a Covered Company means 

that: (i) The Covered Company has 

incurred, or is likely to incur, losses that 

will deplete all or substantially all of its 

capital, and there is no reasonable 

prospect for the company to avoid such 

depletion; (ii) the assets of the Covered 

Company are, or are likely to be, less 

than its obligations to creditors and 

others; or (iii) the Covered Company is, 

or is likely to be, unable to pay its 

obligations (other than those subject to 

a bona fide dispute) in the normal 

course of business. 

Under the proposed rule, each 

Resolution Plan submitted should 

provide for the rapid and orderly 

resolution of the Covered Company in 

the event of material financial distress 

or failure of the Covered Company. The 

Resolution Plan also should take into 

consideration that the event of material 

financial distress may be idiosyncratic 

or may occur at a time when financial 

markets, or other significant companies, 

are also under stress. 

‘‘Core business lines’’ means those 

business lines, including associated 

operations, services, functions and 

support that, in the firm’s view, upon 


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failure would result in a material loss of 

revenue, profit, or franchise value. The 

Resolution Plan should address how the 

resolution of the Covered Company will 

affect the core business lines. 

‘‘Critical operations’’ are those 

operations, including associated 

services, functions and support that, in 

the view of the Covered Company or as 

jointly directed by the Board and the 

Corporation, upon a failure of, or 

discontinuance of such operations, 

would likely result in a disruption to 

the U.S. economy or financial markets. 

The Resolution Plan should address and 

provide for the continuation and 

funding of critical operations. 

‘‘Material entity’’ means a subsidiary 

or foreign office of the Covered 

Company that is significant to the 

activities of a critical operation or core 

business line. 

Resolution Plan required. Section 

llll.3 of the proposed rule requires 

each Covered Company to submit a 

Resolution Plan within 180 days of the 

effective date of the final rule, or within 

180 days of such later date as the 

company becomes a Covered Company. 

The proposed rule specifies the 

minimum content of a Resolution Plan. 

The Board and the Corporation 

recognize that plans will vary by 

company and, in their evaluation of 

plans, will take into account variances 

among companies in their core business 

lines, critical operations, foreign 

operations, capital structure, risk, 

complexity, financial activities 

(including the financial activities of 

their subsidiaries), size and other 

relevant factors. 

After the initial Resolution Plan is 

submitted, each Covered Company 

would be required to submit a new 

Resolution Plan no later than 90 days 

after the end of each calendar year. 

A Covered Company would be 

required to file an updated Resolution 

Plan within a time period specified by 

the Board and the Corporation, but no 

later than 45 days after any event, 

occurrence, change in conditions or 

circumstances or change which results 

in, or could reasonably be foreseen to 

have, a material effect on the Resolution 

Plan of the Covered Company. An 

update should describe the event, any 

material effects that the event may have 

on the Resolution Plan and any actions 

the Covered Company has taken or will 

take to address such material effects. 

Material changes may include, but are 

not limited to, any of the following— 

(i) A significant acquisition, or series 

of such acquisitions, by the Covered 

Company; 

(ii) A significant sale, other 

divestiture, or series of such 

transactions, by the Covered Company; 

(iii) A discontinuation of the business 

of, or dissipation of the assets of the 

Covered Company, a material entity, 

core business line or critical operation; 

(iv) The bankruptcy, insolvency of a 

material entity; 

(v) A material reorganization of the 

Covered Company; 

(vi) The loss of a material servicing 

subsidiary or material servicing 

contract; 

(vii) The unavailability or loss of a 

significant correspondent or 

counterparty relationship, source of 

funding or liquidity utilized by the 

Covered Company, a material entity, a 

core business line or critical operation; 

(viii) The transfer or relocation of 5 

percent or more of the total consolidated 

United States (domestic) assets of the 

Covered Company to a location(s) 

outside of the United States; 

(ix) A reduction in the market 

capitalization or book value of the 

consolidated capital of 5 percent or 

more of the Covered Company as of the 

end of the previous calendar yearend; or 

(x) The transfer, termination, 

suspension or revocation of any material 

license or other regulatory authorization 

required to conduct a core business line 

or critical operation. 

The Board and the Corporation jointly 

may waive a requirement that a Covered 

Company file an update of a Resolution 

Plan. The Board and the Corporation 

jointly may also require an update for 

any other reason, more frequent 

submissions or updates, and may extend 

the time period that a Covered Company 

has to submit its Resolution Plan or 

update. 

The board of directors of the Covered 

Company would be required to approve 

the initial and each annual Resolution 

Plan filed. In the case of a foreign-based 

Covered Company, a delegee of the 

board of the directors of such 

organization may approve the initial 

Resolution Plan and any updates to a 

Resolution Plan. 

Informational Content of a Resolution 

Plan. Section llll.4 of the proposed 

rule sets forth the minimum 

informational content requirements of a 

Resolution Plan. A Covered Company 

that is domiciled in the United States 

would be required to provide 

information with regard to both its U.S. 

operations and its foreign operations. A 

foreign-based Covered Company would 

be required to provide information 

regarding its U.S. operations, an 

explanation of how resolution planning 

for its U.S. operations is integrated into 

the foreign-based Covered Company’s 

overall contingency planning process, 

and information regarding the 

interconnections and interdependencies 

among its U.S. operations and its 

foreign-based operations. 

Each Resolution Plan would be 

required to contain an executive 

summary, a strategic analysis of the 

plan’s components, a description of the 

Covered Company’s corporate 

governance structure for resolution 

planning, information regarding the 

Covered Company’s overall 

organizational structure and related 

information, information regarding the 

Covered Company’s management 

information systems, a description of 

interconnections and interdependencies 

among the Covered Company and its 

material entities, and supervisory and 

regulatory information. 

The executive summary should 

summarize the key elements of the 

Covered Company’s strategic plan, 

material changes from the most recently 

filed plan, and any actions taken by the 

Covered Company to improve the 

effectiveness of the Resolution Plan or 

remediate or otherwise mitigate any 

material weaknesses or impediments to 

the effective and timely execution of the 

plan. 

The strategic analysis of how the 

resolution plan can be implemented to 

facilitate a rapid and orderly resolution 

is the foundation for any credible plan. 

The strategic analysis should describe 

the Covered Company’s critical thinking 

detailing how, in practice, it could be 

resolved under the Bankruptcy Code. As 

a result, the strategic analysis should 

include the analytical support for the 

plan, its key assumptions, including any 

assumptions made concerning the 

economic or financial conditions that 

would be present at the time the 

Covered Company sought to implement 

such plan. The strategic analysis should 

include detailed information as to how, 

in the event of material financial 

distress or failure of the Covered 

Company, a reorganization or 

liquidation of the Covered Company (or, 

in the case of a Covered Company that 

is incorporated or organized in a 

jurisdiction other than the United 

States, the subsidiaries and operations 

of such foreign company that are 

domiciled in the United States) under 

the Bankruptcy Code could be 

accomplished within a reasonable 

period of time and in a manner that 

substantially mitigates the risk that the 

failure of the Covered Company would 

have serious adverse effects on financial 

stability in the United States. The 

strategic analysis of the Covered 

Company’s resolution plan must also 

identify the range of specific actions to 


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be taken by the Covered Company to 

facilitate a rapid and orderly resolution 

of the Covered Company, its material 

entities, critical operations and core 

business lines in the event of material 

financial distress or failure of the 

Covered Company. 

Funding, liquidity, support functions, 

and other resources, including capital 

resources, should be identified and 

mapped to the Covered Company’s 

material entities, core business lines and 

critical operations. The Covered 

Company’s strategy for maintaining and 

funding the critical operations and core 

business lines in an environment of 

material financial distress and in the 

implementation and execution of its 

resolution plan should be provided and 

mapped to its material entities. The 

Covered Company’s strategic analysis 

should demonstrate how such resources 

would be utilized to facilitate an orderly 

resolution in an environment of material 

financial distress. The Covered 

Company should also provide its 

strategy in the event of a failure or 

discontinuation of a material entity, 

core business line or critical operation, 

and the actions that will be taken by the 

Covered Company to prevent or mitigate 

any adverse effects of such failure or 

discontinuation on the financial 

stability of the company and the United 

States. In addition, a Covered Company 

would be required to provide its strategy 

for ensuring that any insured depository 

institution subsidiary will be adequately 

protected from risks arising from the 

activities of any nonbank subsidiaries of 

the Covered Company (other than those 

that are subsidiaries of an insured 

depository institution). 

The analytical mapping of the core 

business lines and critical operations of 

the Covered Company and the mapping 

of funding, liquidity, critical service 

support, and other resources to legal 

entities should demonstrate how those 

core business lines and critical 

operations could be resolved and 

transferred to potential acquirers. This 

analysis should demonstrate how these 

critical elements of the business 

operations could survive in an 

environment of material financial 

distress as well as the failure or 

insolvency of one or more entities 

within the Covered Company. This is 

particularly important for internal as 

well as external service level agreements 

that provide the business services 

essential for continued operation of the 

Covered Company’s core business lines 

and critical operations. 

The description of the Covered 

Company’s corporate governance 

structure for resolution planning should 

include information regarding how 

resolution planning is integrated into 

the corporate governance structure and 

processes of the Covered Company, and 

identify the senior management official 

that is primarily responsible for 

overseeing the development, 

maintenance, implementation, and 

filing of the Resolution Plan and for the 

Covered Company’s compliance with 

the proposed rule. The requirements in 

the proposed rule are minimums and 

the size of the corporate governance 

structure is expected to vary based upon 

the size and complexity of the Covered 

Company. For the largest and most 

complex companies, it may be necessary 

to establish a central planning function 

that is headed by a senior management 

official. Such official would report to 

the Chief Risk Officer or Chief Executive 

Officer and periodic reports on 

resolution planning would be made to 

the Covered Company’s board of 

directors. 

The information regarding the 

Covered Company’s overall organization 

structure and related information 

should include a hierarchical list of all 

material entities, jurisdictional and 

ownership information. This 

information should be mapped to core 

business lines and critical operations. 

An unconsolidated balance sheet for the 

Covered Company and a consolidating 

schedule for all entities that are subject 

to consolidation should be provided. 

The Resolution Plan should include 

information regarding material assets, 

liabilities, derivatives, hedges, capital 

and funding sources and major 

counterparties. Material assets and 

liabilities should be mapped to material 

entities along with location information. 

An analysis of whether the bankruptcy 

of a major counterparty would likely 

have an adverse effect on and result in 

the material financial distress or failure 

of the Covered Company should also be 

included. Trading, payment, clearing 

and settlement systems utilized by the 

Covered Company should be identified. 

The Covered Company would not need 

to identify trading, payment, clearing 

and settlement systems that are 

immaterial in resolution planning, such 

as a local check clearing house. 

For a Covered Company with foreign 

operations, the plan should identify the 

extent of the risks related to its foreign 

operations and the Covered Company’s 

strategy for addressing such risks. These 

elements of the Resolution Plan should 

take into consideration, and address 

through practical responses, the 

complications created by differing 

national laws, regulations, and policies. 

This analysis should include a mapping 

of core business lines and critical 

operations to legal entities operating or 

with assets, liabilities, operations, or 

service providers in foreign 

jurisdictions. The continued ability to 

maintain core business lines and critical 

operations in these foreign jurisdictions 

during material financial distress and 

insolvency proceedings should be 

evaluated and practical steps identified 

to address weaknesses or 

vulnerabilities. 

The proposed rule requires the 

Covered Company to provide 

information regarding the management 

information systems supporting its core 

business lines and critical operations, 

including information regarding the 

legal ownership of such systems as well 

as associated software, licenses, or other 

associated intellectual property. The 

analysis and practical steps that are 

identified by the Covered Company 

should address the continued 

availability of the key management 

information systems that support core 

business lines and critical operations 

both within the United States and in 

foreign jurisdictions. 

The proposed rule also requires the 

Covered Company to provide a 

description of interconnections and 

interdependencies among the Covered 

Company and its material entities and 

affiliates, and among the critical 

operations and core business lines of the 

Covered Company that, if disrupted, 

would materially affect the funding or 

operations of the Covered Company, its 

material entities, or its critical 

operations or core business lines. As 

noted above, the continued availability 

of key services and supporting business 

operations to core business lines and 

critical operations in an environment of 

material financial distress and after 

insolvency should be a focus of 

resolution planning. Steps to ensure that 

service level agreements for such 

services, whether provided by internal 

or external service providers, survive 

insolvency should be demonstrated in 

the Resolution Plan. 

The plan should identify the Covered 

Company’s supervisory authorities and 

regulators, including information 

identifying any foreign agency or 

authority with significant supervisory 

authority over material foreign-based 

subsidiaries or operations. 

The proposed rule requires the 

Resolution Plan to include a description 

of the Covered Company’s processes 

and systems to collect, maintain, and 

report the information and other data 

underlying the Resolution Plan. The 

Resolution Plan should identify any 

deficiencies in such processes and 

systems and discuss plans to remedy 

such deficiencies. The Covered 

Company should, within a reasonable 


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period of time after the effective date of 

the rule, as determined by the Board 

and the Corporation, be able to 

demonstrate its capability to promptly 

produce, in a format acceptable to the 

Board and the Corporation, the data 

underlying the key aspects of the 

Resolution Plan. A Covered Company 

should also identify any deficiencies in 

its systems and processes to collect, 

maintain, and report such information 

and discuss its plans to remedy such 

deficiencies. 

Informational content of a Credit 

Exposure Report. Section llll.5 of 

the proposed rule requires each Covered 

Company to submit to the Board and the 

Corporation a Credit Exposure Report 

on a quarterly basis. Each Credit 

Exposure Report is required to set forth 

the nature and extent of credit 

exposures of such company to 

significant bank holding companies and 

significant nonbank financial 

companies, as well as the credit 

exposures of significant bank holding 

companies and significant nonbank 

financial companies to such company. 

The proposed rule specifies the credit 

exposures to be reported. 

A Credit Exposure Report submitted 

by a Covered Company that is a 

company incorporated or organized in a 

jurisdiction other than the United States 

(other than a bank holding company) or 

that is a foreign banking organization 

would be required to include only 

information with respect to its 

subsidiaries and operations that are 

domiciled in the United States. 

With regard to the proposed content 

of the Credit Exposure Reports, the 

Board and the Corporation note that 

there are several other initiatives 

underway or contemplated, such as the 

data to support the Board’s single 

counterparty credit exposure limits and 

stress testing responsibilities under the 

Dodd-Frank Act. The Board and the 

Corporation will ensure that data 

collected through these other initiatives 

and the Credit Exposure Report will be 

coordinated and harmonized to the 

extent possible so as to minimize 

redundant data collections and allow 

maximum data quality. It is anticipated 

that proposed reporting requirements 

associated with this and other 

regulations under the Dodd-Frank Act, 

will be issued for public comment later 

this year and will provide additional 

clarity around the definition of credit 

exposure for each asset class listed in 

§ llll.5. 

Review of Resolution Plans; 

resubmission of deficient Resolutions 

Plans. Section llll.6 of the 

proposed rule sets forth procedures 

regarding the review of Resolution 

Plans. As proposed, when a Covered 

Company submits a Resolution Plan, the 

Resolution Plan will be reviewed 

initially to determine whether it appears 

to contain the elements set forth in the 

proposed rule and is informationally 

complete. Within 60 calendar days of 

receiving a Resolution Plan, the Board 

and the Corporation would determine 

and acknowledge whether the 

Resolution Plan satisfies the minimum 

informational requirements and should 

be accepted for further review. If the 

Board and the Corporation determine 

that a Resolution Plan is informationally 

incomplete or that substantial 

additional information is necessary to 

facilitate further review, the Board and 

the Corporation will inform the Covered 

Company in writing of the area(s) in 

which the Resolution Plan is 

informationally incomplete or with 

respect to which additional information 

is required. The Covered Company 

would be required to resubmit an 

informationally complete Resolution 

Plan, or such additional information as 

jointly requested to facilitate review of 

the Resolution Plan, no later than 30 

days after receiving such notice or such 

other time period as the Board and 

Corporation may jointly determine. 

After a Resolution Plan is accepted for 

review, the Board and Corporation 

would review the plan for its 

compliance with the requirements of the 

proposed rule. If, following such review, 

the Board and the Corporation jointly 

determine that the Resolution Plan of a 

Covered Company submitted under this 

part is not credible or would not 

facilitate an orderly resolution of the 

Covered Company under the 

Bankruptcy Code, the Board and 

Corporation would jointly notify the 

Covered Company in writing of such 

determination. Such notice would 

identify the aspects of the Resolution 

Plan that the Board and Corporation 

jointly determined to be deficient and 

request the resubmission of a Resolution 

Plan that remedies the deficiencies of 

the Resolution Plan. 

Within 90 days of receiving such 

notice of deficiencies, or such shorter or 

longer period as the Board and 

Corporation may jointly determine, a 

Covered Company would be required to 

submit a revised Resolution Plan to the 

Board and Corporation that addresses 

the deficiencies jointly identified by the 

Board and Corporation. The revised 

Resolution Plan would be required to 

discuss in detail: (i) The revisions made 

by the Covered Company to address the 

deficiencies jointly identified by the 

Board and the Corporation; (ii) any 

changes to the Covered Company’s 

business operations and corporate 

structure that the Covered Company 

proposes to undertake to facilitate 

implementation of the revised 

Resolution Plan (including a timeline 

for the execution of such planned 

changes); and (iii) why the Covered 

Company believes that the revised 

Resolution Plan is credible and would 

result in an orderly resolution of the 

Covered Company under the 

Bankruptcy Code. 

Upon a written request by a Covered 

Company, the Board and Corporation 

may jointly extend the time to resubmit 

a revised Resolution Plan. Any 

extension request would have to be 

supported by a written statement of the 

company describing the basis and 

justification for the request. 

Failure to cure deficiencies on 

resubmission of a Resolution Plan. 

Section llll.7 provides that, if the 

Covered Company fails to submit a 

revised Resolution Plan or the Board 

and the Corporation jointly determine 

that a revised Resolution Plan submitted 

does not adequately remedy the 

deficiencies identified by the Board and 

the Corporation, then the Board and 

Corporation may jointly subject a 

Covered Company or any subsidiary of 

a Covered Company to more stringent 

capital, leverage, or liquidity 

requirements, or restrictions on the 

growth, activities, or operations. Any 

such requirements or restrictions would 

apply to the Covered Company or 

subsidiary, respectively, until the Board 

and the Corporation jointly determine 

the Covered Company has submitted a 

revised Resolution Plan that adequately 

remedies the deficiencies identified. In 

addition, if the Covered Company fails, 

within the two-year period beginning on 

the date on which the determination to 

impose such requirements or 

restrictions was made, to submit a 

revised Resolution Plan that adequately 

remedies the deficiencies jointly 

identified by the Board and the 

Corporation, then the Board and 

Corporation, in consultation with the 

Council, may jointly, by order, direct 

the Covered Company to divest such 

assets or operations as the Board and 

Corporation jointly determine necessary 

to facilitate an orderly resolution of the 

Covered Company under the 

Bankruptcy Code in the event the 

company were to fail. 

Consultation. Section llll.8 of 

the proposed rule provides that, prior to 

issuing any notice of deficiencies, 

determining to impose requirements or 

restrictions on a Covered Company, or 

issuing a divestiture order with respect 

to a Covered Company that is likely to 

have a significant effect on a 

functionally regulated subsidiary or a 


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depository institution subsidiary of the 

Covered Company, the Board shall 

consult with each Council member that 

primarily supervises any such 

subsidiary and may consult with any 

other Federal, state, or foreign 

supervisor as the Board considers 

appropriate. 

No limiting effect or private right of 

action; confidentiality of Resolution 

Plans and Credit Exposure Reports. 

Section llll.9 of the proposed rule 

provides that a Resolution Plan 

submitted shall not have any binding 

effect on: (i) A court or trustee in a 

proceeding commenced under the 

Bankruptcy Code; (ii) a receiver 

appointed under Title II of the DoddFrank Act (12 U.S.C. 5381 et seq.); (iii) 

a bridge financial company chartered 

pursuant to 12 U.S.C. 5390(h); or (iv) 

any other authority that is authorized or 

required to resolve a Covered Company 

(including any subsidiary or affiliate 

thereof) under any other provision of 

Federal, state, or foreign law. 

The proposed rule further provides 

that nothing in the rule would create or 

is intended to create a private right of 

action based on a Resolution Plan 

prepared or submitted under this part or 

based on any action taken by the Board 

or the Corporation with respect to any 

Resolution Plan submitted under this 

part. 

Any Covered Company submitting a 

Resolution Plan or Credit Exposure 

Report that desires confidential 

treatment of the information submitted 

would be required to file a request for 

confidential treatment in the manner set 

forth in the proposed rule. 

Enforcement. Section llll.10 of 

the proposed rule provides that the 

Board and Corporation may jointly 

enforce an order jointly issued under 

section llll.7(a) or llll.7(c) of 

the proposed rule. Furthermore, the 

Board, in consultation with the 

Corporation, may address any violation 

of the rule by a Covered Company under 

section 8 of the Federal Deposit 

Insurance Act (12 U.S.C. 1818). 

III. Request for Comments 

The Board and the Corporation seek 

comment on all aspects of the proposed 

rule, including the following: 

Scope 

Should a Covered Company for 

purposes of the rule be defined as any 

bank holding company that had $50 

billion or more in total consolidated 

assets, based on the average of the 

Covered Company’s four most recent 

Consolidated Financial Statements? 

Should the average be calculated over a 

shorter period of time (e.g., two 

quarters)? Why might an alternative 

method for defining the $50 billion asset 

threshold be more appropriate? What 

alternative approaches to prescribing 

asset thresholds for the purpose of 

defining a ‘‘Covered Company’’ should 

be considered? 

Definitions 

1. What terms defined by the proposal 

require further clarification and how 

should they be defined? 

2. What other terms used in the 

proposal should the Board and 

Corporation define? 

Strategic Analysis 

1. What additional elements of 

strategic analysis should be included in 

the Covered Company’s Resolution 

Plan? Are there any elements listed in 

the rule that create an unnecessary 

burden or that should not be included 

in the Covered Company’s Resolution 

Plan? 

2. How can the requirements 

regarding the strategic analysis be 

improved to provide additional clarity? 

3. What are the types of strategies that 

should be described regarding the 

manner and extent to which a 

depository institution could be 

protected from the risks arising from the 

activities of its nonbank affiliates? 

Governance 

1. What additional resolution 

planning governance and oversight 

requirements should the proposed rule 

include? 

2. What alternative governance 

requirements might exist that would 

ensure that a Covered Company places 

adequate importance and attention on 

resolution planning? 

Informational Elements 

1. What additional informational 

elements should the proposal require as 

part of a Resolution Plan? What 

impediments attend collection and 

production of the informational 

elements identified by the proposal? 

What impediments apply to collection 

and production of additional 

informational elements you have 

identified? 

2. Do the informational elements 

described in the proposal capture the 

correct types of information for 

resolution planning? Are any of the 

informational elements identified in the 

proposal not necessary? 

3. Which of the information elements 

described in the proposal could be 

clarified? 

4. To the extent any of the 

informational elements identified in the 

proposed rule are not readily available, 

identify the burden of or impediment to 

(e.g., technology limits, confidentiality 

concerns, etc.) obtaining and reporting 

such information? What changes could 

the Board and Corporation make to the 

proposal to reduce burdens and 

impediments? 

5. Should any informational elements 

be required to be available on an ‘‘on 

demand’’ basis? What impediments 

apply to making such information 

available on demand? 

6. What is the burden related to 

producing an unconsolidated balance 

sheet and providing consolidating 

schedules? What alternatives could the 

Board and Corporation include in the 

proposal to reduce that burden? 

Foreign-Based Organizations 

1. The proposal would require foreign 

companies that are bank holding 

companies or are treated as bank 

holding companies under the 

International Banking Act and that have 

at least $50 billion in worldwide assets 

to prepare resolution plans and credit 

exposure reports only with respect to 

their U.S.-domiciled subsidiaries and 

operations. What are the issues that 

arise with respect to foreign banking 

organizations that would be subject to 

the proposed rule? What alternative 

means could the Board and Corporation 

employ to implement the resolution 

plan and credit exposure report 

requirements of the Dodd-Frank Act 

with respect to foreign banking 

organizations? 

2. To the extent that foreign 

jurisdictions do not impose a recovery 

or resolution plan requirement on a 

foreign-based Covered Company, how 

should the proposed Resolution Plan 

related to U.S. operations be linked to 

the contingency planning process of the 

foreign-based Covered Company? 

Process 

1. Are the proposed timelines for 

Resolution Plan and Credit Exposure 

Report submission (i.e., initial, annual 

and interim updates) adequate for the 

Covered Company to develop and 

submit the information required by the 

proposed rule? If not, what timelines 

would be appropriate? 

2. With regard to the provision of the 

proposed rule that would require a 

Covered Company to update its 

Resolution Plan upon a material event, 

occurrence, or change, should the rule 

provide greater specificity (e.g., in terms 

of a dollar amount or percentage of 

assets acquired or disposed of in a 

significant transaction)? 

3. Are there explicit factors the Board 

and the Corporation should consider in 

determining whether a Resolution Plan 


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22654 Federal Register / Vol. 76, No. 78 / Friday, April 22, 2011 / Proposed Rules 

is not credible or would not facilitate an 

orderly resolution under Bankruptcy 

Code? 

Credit Exposure Reports 

1. Are the elements proposed for 

inclusion in the Credit Exposure 

Reports sufficiently clear? What further 

clarification would be appropriate? Is 

there other information that would 

provide a clearer picture of the credit 

exposures associated with a Covered 

Company? 

2. Does the proposal adequately 

capture cross-border exposures? 

3. What other types of credit 

exposures should be covered by the 

proposed rule? 

IV. Solicitation of Comments and Use of 

Plain Language 

Section 722 of the Gramm-LeachBliley Act (Pub. L. 106–102, 113 Stat. 

1338, 1471, 12 U.S.C. 4809) requires the 

Federal banking agencies to use plain 

language in all proposed and final rules 

published after January 1, 2000. The 

Board and the Corporation invite 

comment on how to make the proposed 

rule easier to understand. For example: 

• Is the material organized to suit 

your needs? If not, how could they 

present the rule more clearly? 

• Are the requirements in the rule 

clearly stated? If not, how could the rule 

be more clearly stated? 

• Do the regulations contain technical 

language or jargon that is not clear? If 

so, which language requires 

clarification? 

• Would a different format (grouping 

and order of sections, use of headings, 

paragraphing) make the regulation 

easier to understand? If so, what 

changes would achieve that? 

• Is this section format adequate? If 

not, which of the sections should be 

changed and how? 

• What other changes can the 

agencies incorporate to make the 

regulation easier to understand? 

V. Administrative Law Matters 

A. Paperwork Reduction Act Analysis 

1. Request for Comment on Proposed 

Information Collection 

In accordance with the requirements 

of the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Board 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 Board reviewed the 

proposed rule under the authority 

delegated to the Board by OMB. 

Comments are invited on: 

(a) Whether the collection of 

information is necessary for the proper 

performance of the Board’s functions, 

including whether the information has 

practical utility; 

(b) The accuracy of the estimates of 

the burden of the information 

collection, including the validity of the 

methodology and assumptions used; 

(c) Ways to enhance the quality, 

utility, and clarity of the information to 

be collected; 

(d) Ways to minimize the burden of 

the information collection on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology; 

and 

(e) Estimates of capital or start up 

costs and costs of operation, 

maintenance, and purchase of services 

to provide information. 

Comments on the collection of 

information should be sent to Cynthia 

Ayouch, Acting Federal Reserve 

Clearance Officer, Division of Research 

and Statistics, Mail Stop 95–A, Board of 

Governors of the Federal Reserve 

System, Washington, DC 20551, with 

copies of such comments sent to the 

Office of Management and Budget, 

Paperwork Reduction Project (7100– 

0202), Washington, DC 20503. You may 

also submit comments electronically, 

identified by Docket number, by any of 

the following methods: 

• Agency Web site: http:// 

www.federalreserve.gov. Follow the 

instructions for submitting comments 

on the http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov. 

Include docket number in the subject 

line of the message. 

2. Proposed Information Collection 

Title of Information Collection: 

Resolution Plans and Credit Exposure 

Reports. 

Frequency of Response: Varied—some 

requirements are done at least quarterly, 

some at least annually, and some are 

event-generated. 

Affected Public: Bank holding 

companies and foreign banking 

organizations with total consolidated 

assets of $50 billion or more, and 

nonbank financial companies. 

Abstract: The information collection 

requirements are found in sections 

252.3, 252.4, 252.5, and 252.6 of the 

proposed rule. These requirements 

would implement the resolution plan 

and credit exposure reporting 

requirements set forth in section 165(d) 

of the Dodd-Frank Act. Since the Board 

supervises all of the respondents, the 

Board will take all of the paperwork 

burden associated with this information 

collection. 

Section 252.3 sets forth the 

requirements for resolution plans to be 

filed initially, annually, and on an 

interim basis following material events. 

Section 252.4 details the information to 

be included in the resolution plans. 

Organizational structure information 

required in Section 252.4 may be 

incorporated by reference to information 

previously reported to the Board 

(FR Y–6, Annual Report of Bank 

Holding Companies; FR Y–7, Annual 

Report of Foreign Banking 

Organizations; and FR Y–10, Report of 

Changes in Organizational Structure; 

OMB No. 7100–0297). Section 252.5 

details the information to be provided in 

the Credit Exposure Reports. Section 

252.6 includes a written request for 

institutions to request an extension of 

time to resubmit the resolution plan 

where deficiencies have been identified 

by the agencies. 

Estimated Burden 

The burden associated with this 

collection of information may be 

summarized as follows: 

Number of Respondents: 124. 

Estimated Burden per Respondent: 

12,400 hours for initial implementation 

and 2,881 hours annually on an ongoing 

basis. 

Total Estimated Annual Burden: 

1,337,600 hours for initial 

implementation and 267,544 hours on 

an ongoing basis. 

B. Regulatory Flexibility Act Analysis 

In accordance with section 3(a) of the 

Regulatory Flexibility Act, 5 U.S.C. 601 

et seq. (‘‘RFA’’), the Board and the 

Corporation are publishing an initial 

regulatory flexibility analysis of the 

proposed rule. The RFA requires an 

agency either to provide an initial 

regulatory flexibility analysis with a 

proposed rule for which a general notice 

of proposed rulemaking is required or to 

certify that the proposed rule will not 

have a significant economic impact on 

a substantial number of small entities. 

Based on its analysis and for the reasons 

stated below, the Board and the 

Corporation believe that this proposed 

rule will not have a significant 

economic impact on a substantial 

number of small entities. Nevertheless, 

the Board and the Corporation are 

publishing an initial regulatory 

flexibility analysis. A final regulatory 

flexibility analysis will be conducted 

after comments received during the 


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Federal Register / Vol. 76, No. 78 / Friday, April 22, 2011 / Proposed Rules 22655 

8See 12 U.S.C. 5365(d). 

9 13 CFR 121.201. 

10The Dodd-Frank Act provides that the Board 

may, on the recommendation of the Council, 

increase the $50 billion asset threshold for the 

application of the resolution plan and credit 

exposure report requirements. See 12 U.S.C. 

5365(a)(2)(B). However, neither the Board nor the 

Council has the authority to lower such threshold. 11See 76 FR 4555 (January 26, 2011). 

public comment period have been 

considered. 

In accordance with section 165(d) of 

the Dodd-Frank Act, the Board is 

proposing to add Regulation YY (12 CFR 

part 252) and the Corporation is 

proposing to add new part 381 (12 CFR 

part 381) to establish the requirements 

that a Covered Company periodically 

submit a Resolution Plan and a Credit 

Exposure Report to the Board and 

Corporation.8 The proposed rule would 

also establish the procedures and 

standards for joint review of a 

Resolution Plan by the Board and 

Corporation. The reasons and 

justification for the proposed rule are 

described in the Supplementary 

Information. As further discussed in the 

Supplementary Information, the 

procedure, standards, and definitions 

that would be established by the 

proposed rule are relevant to the joint 

authority of the Board and Corporation 

to implement the Resolution Plan and 

Credit Exposure requirements. 

Under regulations issued by the Small 

Business Administration (‘‘SBA’’), a 

‘‘small entity’’ includes those firms 

within the ‘‘Finance and Insurance’’ 

sector with asset sizes that vary from $7 

million or less in assets to $175 million 

or less in assets.9 The Board and the 

Corporation believe that the Finance 

and Insurance sector constitutes a 

reasonable universe of firms for these 

purposes because such firms generally 

engage in activities that are financial in 

nature. Consequently, bank holding 

companies or nonbank financial 

companies with assets sizes of $175 

million or less are small entities for 

purposes of the RFA. 

As discussed in the Supplementary 

Information, the proposed rule applies 

to a ‘‘Covered Company,’’ which 

includes only bank holding companies 

and foreign banks that are or are treated 

as a bank holding company (‘‘foreign 

banking organization’’) with $50 billion 

or more in total consolidated assets, and 

nonbank financial companies that the 

Council has determined under section 

113 of the Dodd-Frank Act must be 

supervised by the Board and for which 

such determination is in effect. Bank 

holding companies and foreign banking 

organizations that are subject to the 

proposed rule therefore substantially 

exceed the $175 million asset threshold 

at which a banking entity is considered 

a ‘‘small entity’’ under SBA 

regulations.10 The proposed rule would 

apply to a nonbank financial company 

designated by the Council under section 

113 of the Dodd-Frank Act regardless of 

such a company’s asset size. Although 

the asset size of nonbank financial 

companies may not be the determinative 

factor of whether such companies may 

pose systemic risks and would be 

designated by the Council for 

supervision by the Board, it is an 

important consideration.11 It is therefore 

unlikely that a financial firm that is at 

or below the $175 million asset 

threshold would be designated by the 

Council under section 113 of the DoddFrank Act because material financial 

distress at such firms, or the nature, 

scope, size, scale, concentration, 

interconnectedness, or mix of it 

activities, are not likely to pose a threat 

to the financial stability of the United 

States. 

As noted above, because the proposed 

rule is not likely to apply to any 

company with assets of $175 million or 

less, if adopted in final form, it is not 

expected to apply to any small entity for 

purposes of the RFA. Moreover, as 

discussed in the SUPPLEMENTARY

INFORMATION, the Dodd-Frank Act 

requires the Board and the Corporation 

jointly to adopt rules implementing the 

provisions of section 165(d) of the 

Dodd-Frank Act. The Board and the 

Corporation do not believe that the 

proposed rule duplicates, overlaps, or 

conflicts with any other Federal rules. 

In light of the foregoing, the Board and 

the Corporation do not believe that the 

proposed rule, if adopted in final form, 

would have a significant economic 

impact on a substantial number of small 

entities supervised. Nonetheless, the 

Board and the Corporation seek 

comment on whether the proposed rule 

would impose undue burdens on, or 

have unintended consequences for, 

small organizations, and whether there 

are ways such potential burdens or 

consequences could be minimized in a 

manner consistent with section 165(d) 

of the Dodd-Frank Act. 

C. The Treasury and General 

Government Appropriations Act, 1999— 

Assessment of Federal Regulations and 

Policies on Families 

The Corporation has determined that 

the proposed rule will not affect family 

well-being within the meaning of 

section 654 of the Treasury and General 

Government Appropriations Act, 

enacted as part of the Omnibus 

Consolidated and Emergency 

Supplemental Appropriations Act of 

1999 (Pub. L. 105–277, 112 Stat. 2681). 

Text of the Common Rules (All 

Agencies) 

PART [ ]—RESOLUTION PLANS AND 

CREDIT EXPOSURE REPORTS. 

Sec. 

ll.1 Authority and scope. 

ll.2 [Reserved] 

ll.3 Resolution Plan required. 

ll.4 Informational content of a Credit 

Exposure Report. 

ll.5 Credit Exposure Report required and 

informational content. 

ll.6 Review of Resolution Plans; 

resubmission of deficient Resolution 

Plans. 

ll.7 Failure to cure deficiencies on 

resubmission of a Resolution Plan. 

ll.8 Consultation. 

ll.9 No limiting effect or private right of 

action; confidentiality of Resolution 

Plans and Credit Exposure Reports. 

ll.10 Enforcement. 

§ ll.1 Authority and scope. 

(a) Authority. This part is issued 

pursuant to section 165(d)(8) of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (the DoddFrank Act) (Pub. L. 111–203, 124 Stat. 

1376, 1426–1427), 12 U.S.C. 5365(d)(8), 

which requires the Board of Governors 

of the Federal Reserve System (Board) 

and the Federal Deposit Insurance 

Corporation (Corporation) to jointly 

issue rules implementing the provisions 

of section 165(d) of the Dodd-Frank Act. 

(b) Scope. This part applies to each 

Covered Company and: 

(1) Requires that each Covered 

Company periodically submit to the 

Board and Corporation: 

(i) A report regarding the plan of the 

Covered Company for rapid and orderly 

resolution under the Bankruptcy Code 

in the event of material financial 

distress at or failure of the Covered 

Company (Resolution Plan); and 

(ii) A report on the nature and extent 

to which: 

(A) The Covered Company has credit 

exposure to other significant nonbank 

financial companies and significant 

bank holding companies; and 

(B) Other significant nonbank 

financial companies and significant 

bank holding companies have credit 

exposure to the Covered Company 

(Credit Exposure Report); and 

(2) Establishes rules and requirements 

regarding the submission and content of 

a Resolution Plan and a Credit Exposure 

Report, as well as procedures and 

standards for review by the Board and 

Corporation of a Resolution Plan. 


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22656 Federal Register / Vol. 76, No. 78 / Friday, April 22, 2011 / Proposed Rules 

§ ll.2 [Reserved] 

§ ll.3 Resolution Plan required. 

(a) Initial and annual Resolution 

Plans required. Within 180 days of the 

effective date of this part, or such later 

date as a company becomes a Covered 

Company, each Covered Company shall 

submit a Resolution Plan to the Board 

and the Corporation. Thereafter, each 

Covered Company shall submit a 

Resolution Plan to the Board and the 

Corporation no later than 90 days after 

the end of each calendar year. 

(b) Interim updates following material 

events—(1) In general. Each Covered 

Company shall file with the Board and 

the Corporation an updated Resolution 

Plan within a time period specified by 

the Board and the Corporation, but no 

later than 45 days after any event, 

occurrence, change in conditions or 

circumstances or other change which 

results in, or could reasonably be 

foreseen to have, a material effect on the 

Resolution Plan of the Covered 

Company. 

(2) Exception. A Covered Company 

shall not be required to file an updated 

Resolution Plan under paragraph (b)(1) 

of this section if the date on which the 

Covered Company would be required to 

submit the updated Resolution Plan 

under paragraph (b)(1) would be within 

90 days prior to the date on which the 

Covered Company is required to file an 

annual Resolution Plan under paragraph 

(a) of this section. 

(c) Authority to require more frequent 

submissions or extend time period. 

Notwithstanding paragraph (b)(1) of this 

section, the Board and Corporation may 

jointly: 

(1) Require that a Covered Company 

submit a Resolution Plan more 

frequently than required pursuant to 

paragraph (a) of this section, or provide 

an interim update to any Resolution 

Plan submitted pursuant to paragraph 

(a) under circumstances other than 

those listed in paragraph (b) of this 

section; 

(2) Extend the time period that a 

Covered Company has to submit a 

Resolution Plan under paragraphs (a) 

and (b) of this section; and 

(3) Waive the requirement that a 

Covered Company submit an update to 

a Resolution Plan. 

(d) Access to information. In order to 

allow evaluation of the Resolution Plan, 

each Covered Company must provide 

the Board and the Corporation such 

information and access to personnel of 

the Covered Company as the Board and 

the Corporation jointly determine 

during the period for reviewing the 

Resolution Plan is necessary to assess 

the credibility of the Resolution Plan 

and the ability of the Covered Company 

to implement the Plan. The Agencies 

will rely to the fullest extent possible on 

examinations conducted by or on behalf 

of the appropriate Federal banking 

agency for the relevant company. 

(e) Board of directors approval of 

Resolution Plan. Prior to submission of 

a Resolution Plan under paragraph (a) of 

this section, the Resolution Plan of a 

Covered Company shall be approved by: 

(1) The board of directors of the 

Covered Company and noted in the 

minutes; or 

(2) In the case of a foreign-based 

Covered Company only, a delegee acting 

under the express authority of the board 

of directors of the Covered Company to 

approve the Resolution Plan. 

(f) Resolution Plans provided to the 

Council. The Board shall make the 

Resolution Plans and updates submitted 

by the Covered Company pursuant to 

this section available to the Council 

upon request. 

§ ll.4 Informational Content of a 

Resolution Plan 

(a) In general.—(1) Domestic Covered 

Companies. The Resolution Plan of a 

Covered Company that is organized or 

incorporated in the United States shall 

include the information specified in 

paragraphs (b) through (i) of this section 

with respect to the subsidiaries and 

operations that are domiciled in the 

United States as well as the foreign 

subsidiaries, offices, and operations of 

the Covered Company. 

(2) Foreign-based Covered 

Companies. The Resolution Plan of a 

Covered Company that is organized or 

incorporated in a jurisdiction other than 

the United States (other than a bank 

holding company) or that is a foreign 

banking organization shall include: 

(i) The information specified in 

paragraphs (b) through (i) of this section 

with respect to the subsidiaries, 

branches and agencies, and critical 

operations and core business lines, as 

applicable, that are domiciled in the 

United States or conducted in whole or 

material part in the United States. With 

respect to the information specified in 

paragraph (g) of this section, the 

Resolution Plan of a foreign-based 

Covered Company shall also identify, 

describe in detail, and map to legal 

entity the interconnections and 

interdependencies among the U.S. 

subsidiaries, branches and agencies, and 

critical operations and core business 

lines of the foreign-based Covered 

Company and any foreign-based 

affiliate; and 

(ii) A detailed explanation of how 

resolution planning for the subsidiaries, 

branches and agencies, and critical 

operations and core business lines of the 

foreign-based Covered Company that are 

domiciled in the United States or 

conducted in whole or material part in 

the United States is integrated into the 

foreign-based Covered Company’s 

overall resolution or other contingency 

planning process. 

(3) Required and prohibited 

assumptions. In preparing its plan for 

rapid and orderly resolution in the 

event of material financial distress or 

failure required by this part, a Covered 

Company shall: 

(i) Take into account that such 

material financial distress or failure of 

the Covered Company may occur at a 

time when financial markets, or other 

significant companies, are also under 

stress and that the material financial 

distress of the Covered Company may be 

the result of a range of stresses 

experienced by the Covered Company; 

and 

(ii) Not rely on the provision of 

extraordinary support by the United 

States or any other government to the 

Covered Company or its subsidiaries to 

prevent the failure of the Covered 

Company. 

(b) Executive summary. Each 

Resolution Plan of a Covered Company 

shall include an executive summary 

describing: 

(1) The key elements of the Covered 

Company’s strategic plan for rapid and 

orderly resolution in the event of 

material financial distress at or failure of 

the Covered Company. 

(2) Material changes to the Covered 

Company’s Resolution Plan from the 

company’s most recently filed 

Resolution Plan (including an updated 

Resolution Plan submitted under 

§ ll.3(b). 

(3) Any actions taken by the Covered 

Company since filing of the previous 

Resolution Plan to improve the 

effectiveness of the Covered Company’s 

Resolution Plan or remediate or 

otherwise mitigate any material 

weaknesses or impediments to effective 

and timely execution of the Resolution 

Plan. 

(c) Strategic analysis. Each Resolution 

Plan shall include a strategic analysis 

describing the Covered Company’s plan 

for rapid and orderly resolution in the 

event of material financial distress or 

failure of the Covered Company. Such 

analysis shall— 

(1) Include detailed descriptions of 

the— 

(i) Key assumptions and supporting 

analysis underlying the Covered 

Company’s Resolution Plan, including 

any assumptions made concerning the 

economic or financial conditions that 

would be present at the time the 


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Covered Company sought to implement 

such plan; 

(ii) Range of specific actions to be 

taken by the Covered Company to 

facilitate a rapid and orderly resolution 

of the Covered Company, its material 

entities, and its critical operations and 

core business lines in the event of 

material financial distress or failure of 

the Covered Company; 

(iii) Funding, liquidity and capital 

needs of, and resources available to, the 

Covered Company and its material 

entities, which shall be mapped to its 

critical operations and core business 

lines, in the ordinary course of business 

and in the event of material financial 

distress at or failure of the Covered 

Company; 

(iv) Covered Company’s strategy for 

maintaining operations of, and funding 

for, the Covered Company and its 

material entities, which shall be 

mapped to its critical operations and 

core business lines; 

(v) Covered Company’s strategy in the 

event of a failure or discontinuation of 

a material entity, core business line or 

critical operation, and the actions that 

will be taken by the Covered Company 

to prevent or mitigate any adverse 

effects of such failure or discontinuation 

on the financial stability of the United 

States; and 

(vi) Covered Company’s strategy for 

ensuring that any insured depository 

institution subsidiary of the Covered 

Company will be adequately protected 

from risks arising from the activities of 

any nonbank subsidiaries of the Covered 

Company (other than those that are 

subsidiaries of an insured depository 

institution); 

(2) Identify the time period(s) the 

Covered Company expects would be 

needed for the Covered Company to 

successfully execute each material 

aspect and step of the Covered 

Company’s plan; 

(3) Identify and describe any potential 

material weaknesses or impediments to 

effective and timely execution of the 

Covered Company’s plan; 

(4) Discuss the actions and steps the 

Covered Company has taken or proposes 

to take to remediate or otherwise 

mitigate the weaknesses or impediments 

identified by the Covered Company, 

including a timeline for the proposed 

remedial or other mitigatory action; and 

(5) Provide a detailed description of 

the processes the Covered Company 

employs for: 

(i) Determining the current market 

values and marketability of the core 

business lines, critical operations, and 

material asset holdings of the Covered 

Company; 

(ii) Assessing the feasibility of the 

Covered Company’s plans (including 

timeframes) for executing any sales, 

divestitures, restructurings, 

recapitalizations, or other similar 

actions contemplated in the Covered 

Company’s Resolution Plan; and 

(iii) Assessing the impact of any sales, 

divestitures, restructurings, 

recapitalizations, or other similar 

actions on the value, funding, and 

operations of the Covered Company, its 

material entities, critical operations and 

core business lines. 

(d) Corporate governance relating to 

resolution planning. Each Resolution 

Plan shall: 

(1) Include a detailed description of: 

(i) How resolution planning is 

integrated into the corporate governance 

structure and processes of the Covered 

Company; 

(ii) The Covered Company’s policies, 

procedures, and internal controls 

governing preparation and approval of 

the Covered Company’s Resolution 

Plan; 

(iii) The identity and position of the 

senior management official(s) of the 

Covered Company that is primarily 

responsible for overseeing the 

development, maintenance, 

implementation, and filing of the 

Covered Company’s Resolution Plan 

and for the Covered Company’s 

compliance with this part; and 

(iv) The nature, extent, and frequency 

of reporting to senior executive officers 

and the board of directors of the 

Covered Company on the development, 

maintenance, and implementation of the 

Covered Company’s Resolution Plan; 

(2) Describe the capabilities of the 

Covered Company’s processes and 

systems to collect, maintain, and report 

the information and other data 

underlying the Resolution Plan to senior 

executive officers and the board of 

directors of the Covered Company; 

(3) Describe the nature, extent, and 

results of any contingency planning or 

similar exercise conducted by the 

Covered Company since the date of the 

Covered Company’s most recently filed 

Resolution Plan to assess the viability of 

or improve the Resolution Plan of the 

Covered Company; and 

(4) Identify and describe the relevant 

risk measures used by the Covered 

Company to report credit risk exposures 

both internally to its senior management 

and board of directors, as well as any 

relevant risk measures reported 

externally to investors or to the Covered 

Company’s appropriate Federal 

regulator. 

(e) Organizational structure and 

related information. Each Resolution 

Plan shall— 

(1) Provide a detailed description of 

the Covered Company’s organizational 

structure, including: 

(i) A hierarchical list of all material 

legal entities, including but not limited 

to material entities within the Covered 

Company’s organization that: 

(A) Identifies the direct holder and 

the percentage of voting and nonvoting 

equity of each legal entity and foreign 

office listed; and 

(B) The location, jurisdiction of 

incorporation, licensing, and key 

management associated with each 

material legal entity and foreign office 

identified; 

(ii) A mapping of the Covered 

Company’s critical operations and core 

business lines, including material asset 

holdings and liabilities related to such 

critical operations and core business 

lines, to material entities; 

(2) Provide an unconsolidated balance 

sheet for the Covered Company and a 

consolidating schedule for all entities 

that are subject to consolidation by the 

Covered Company; 

(3) Include a description of the 

material components of the liabilities of 

the Covered Company, its material 

entities, critical operations and core 

business lines that, at a minimum, 

separately identifies types and amounts 

of the short-term and long-term 

liabilities, the secured and unsecured 

liabilities, and subordinated liabilities; 

(4) Identify and describe the processes 

used by the Covered Company to: 

(i) Determine to whom the Covered 

Company has pledged collateral; 

(ii) Identify the person or entity that 

holds such collateral; and 

(iii) The jurisdiction in which the 

collateral is located; and, if different, the 

jurisdiction in which the security 

interest in the collateral is enforceable 

against the Covered Company; 

(5) Describe any material off-balance 

sheet exposures (including guarantees 

and contractual obligations) of the 

Covered Company and its material 

entities, including a mapping to its 

critical operations and core business 

lines; 

(6) Describe the practices of the 

Covered Company, its material entities 

and its core business lines related to the 

booking of trading and derivatives 

activities; 

(7) Identify material hedges of the 

Covered Company, its material entities, 

and its core business lines related to 

trading and derivative activities, 

including a mapping to legal entity; 

(8) Describe the hedging strategies of 

the Covered Company; 

(9) Describe the process undertaken 

by the Covered Company to establish 

exposure limits; 


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(10) Identify the major counterparties 

of the Covered Company and describe 

the interconnections, interdependencies 

and relationships with such major 

counterparties; 

(11) Analyze whether the failure of 

each major counterparty would likely 

have an adverse impact on or result in 

the material financial distress or failure 

of the Covered Company; 

(12) Identify each system on which 

the Covered Company conducts a 

material number or value amount of 

trades. Map membership in each such 

system to the Covered Company’s 

material entities, critical operations and 

core business lines; and 

(13) Identify each payment, clearing, 

or settlement system of which the 

Covered Company, directly or 

indirectly, is a member and on which 

the Covered Company conducts a 

material number or value amount of 

transactions. Map membership in each 

such system to the Covered Company’s 

material entities, critical operations and 

core business lines. 

(f) Management information systems. 

Each Resolution Plan shall include— 

(1) A detailed inventory and 

description of the key management 

information systems and applications, 

including systems and applications for 

risk management, accounting, and 

financial and regulatory reporting, used 

by the Covered Company and its 

material entities, including a mapping 

to its critical operations and core 

business lines; 

(2) An identification of the legal 

owner of the systems identified in 

paragraph (f)(1) of this section, service 

level agreements related thereto, and 

any software and systems licenses or 

associated intellectual property, 

including a mapping thereof to the 

material entities, critical operations and 

core business lines of the Covered 

Company that use or rely on such 

intellectual property; 

(3) An identification of the scope, 

content, and frequency of the key 

internal reports that senior management 

of the Covered Company, its material 

entities, critical operations and core 

business lines use to monitor the 

financial health, risks, and operation of 

the Covered Company, its material 

entities, critical operations and core 

business lines; and 

(4) A description of the process for the 

appropriate supervisory or regulatory 

agencies to access the management 

information systems and applications 

identified in paragraph (f)(1) of this 

section. 

(g) Interconnections and 

interdependencies. To the extent not 

elsewhere provided, identify and map to 

the material entities the 

interconnections and interdependencies 

among the Covered Company and its 

material entities, and among the critical 

operations and core business lines of the 

Covered Company that, if disrupted, 

would materially affect the funding or 

operations of the Covered Company, its 

material entities, or its critical 

operations or core business lines. Such 

interconnections and interdependencies 

may include: 

(1) Common or shared personnel, 

facilities, or systems (including 

information technology platforms, 

management information systems, risk 

management systems, and accounting 

and recordkeeping systems); 

(2) Capital, funding, or liquidity 

arrangements; 

(3) Existing or contingent credit 

exposures; 

(4) Cross-guarantee arrangements, 

cross-collateral arrangements, crossdefault provisions, and cross-affiliate 

netting agreements; 

(5) Risk transfers; and 

(6) Service level agreements. 

(h) Supervisory and regulatory 

information. Each Resolution Plan 

shall— 

(1) Identify any: 

(i) Federal, state, or foreign agency or 

authority with supervisory authority or 

responsibility for ensuring the safety 

and soundness of the Covered 

Company, its material entities, critical 

operations and core business lines; and 

(ii) Other Federal, state, or foreign 

agency or authority (other than a 

Federal banking agency) with significant 

supervisory or regulatory authority over 

the Covered Company, and its material 

entities and critical operations and core 

business lines. 

(2) Identify any foreign agency or 

authority responsible for resolving a 

foreign-based material entity and critical 

operations or core business lines of the 

Covered Company; and 

(3) Include contact information for 

each agency identified in paragraphs 

(h)(1) and (2) of this section. 

(i) Contact information. Each 

Resolution Plan shall— 

(1) Identify a senior management 

official at the Covered Company 

responsible for serving as a point of 

contact regarding the Resolution Plan of 

the Covered Company; and 

(2) Include contact information for the 

material entities and critical operations 

and core business lines of the Covered 

Company. 

(j) Incorporation of previously 

submitted Resolution Plan 

informational elements by reference. An 

update to a Resolution Plan submitted 

by a Covered Company under §ll.3(b) 

may incorporate by reference 

informational elements (but not strategic 

analysis or executive summary 

elements) from a Resolution Plan 

previously submitted by the Covered 

Company to the Board and the 

Corporation, provided that: 

(1) The Resolution Plan seeking to 

incorporate informational elements by 

reference clearly indicates: 

(i) The informational element the 

Covered Company is incorporating by 

reference; and 

(ii) Which of the Covered Company’s 

previously submitted Resolution Plan(s) 

originally contained the information the 

Covered Company is incorporating by 

reference; and 

(2) The Covered Company certifies 

that the information the Covered 

Company is incorporating by reference 

remains accurate. 

(k) Data production capabilities. 

Within a reasonable period of time 

following the effective date of this part, 

as jointly determined by the Board and 

the Corporation, the Covered Company 

shall demonstrate its capability to 

promptly produce, in a format 

acceptable to the Board and the 

Corporation, the data underlying the key 

aspects of the Resolution Plan of the 

Covered Company. 

(l) Exemptions. The Board and the 

Corporation may jointly exempt a 

Covered Company from one or more of 

the requirements of this section. 

§ ll.5 Credit Exposure Report 

Required and Informational Content 

(a) Quarterly Credit Exposure Report 

required—(1) In general. No later than 

30 days after the end of each calendar 

quarter, each Covered Company shall 

submit to the Board and the Corporation 

a Credit Exposure Report, in the manner 

and form prescribed by the Board, that 

contains the following information as of 

the end of the calendar quarter: 

(i) The aggregate credit exposure 

associated with all extensions of credit, 

including loans, leases, and funded 

lines of credit, by: 

(A) The Covered Company and its 

subsidiaries to each significant company 

and its subsidiaries; and 

(B) Each significant company and its 

subsidiaries to the Covered Company 

and its subsidiaries. 

(ii) The aggregate credit exposure 

associated with all committed but 

undrawn lines of credit by: 

(A) The Covered Company and its 

subsidiaries to each significant company 

and its subsidiaries; and 

(B) Each significant company and its 

subsidiaries to the Covered Company 

and its subsidiaries. 


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(iii) The aggregate credit exposure 

associated with all deposits and money 

placements by: 

(A) The Covered Company and its 

subsidiaries with each significant 

company and its subsidiaries; and 

(B) Each significant company and its 

subsidiaries with the Covered Company 

and its subsidiaries. 

(iv) The aggregate credit exposure 

associated with (on both a gross and net 

basis) of all repurchase agreements 

between the Covered Company and its 

subsidiaries and each significant 

company and its subsidiaries; 

(v) The aggregate credit exposure 

associated with all reverse repurchase 

agreements (on both a gross and net 

basis) between the Covered Company 

and its subsidiaries and each significant 

company and its subsidiaries; 

(vi) The aggregate credit exposure 

associated with all securities borrowing 

transactions (on both a gross and net 

basis) between the Covered Company 

and its subsidiaries and each significant 

company and its subsidiaries; 

(vii) The aggregate credit exposure 

associated with all securities lending 

transactions (on both a gross and net 

basis) between the Covered Company 

and its subsidiaries and each significant 

company and its subsidiaries; 

(viii) The aggregate credit exposure 

associated with all guarantees, 

acceptances, or letters of credit 

(including endorsement or standby 

letters of credit) issued by: 

(A) The Covered Company and its 

subsidiaries on behalf of each 

significant company and its 

subsidiaries; 

(B) Each significant company and its 

subsidiaries on behalf of the Covered 

Company and its subsidiaries; 

(ix) The aggregate credit exposure 

associated with all purchases of or 

investments, as of the last day of the 

reporting quarter, in securities issued by 

each significant company or its 

subsidiaries by the Covered Company 

and its subsidiaries; 

(x) The aggregate credit exposure 

associated with all counterparty credit 

exposure (on both a gross and net basis) 

in connection with a derivative 

transaction between the Covered 

Company and its subsidiaries and each 

significant company and its 

subsidiaries; 

(xi) A description of the systems and 

processes that the Covered Company 

uses to: 

(A) Collect and aggregate the data 

underlying the Credit Exposure Report; 

and 

(B) Produce and file the Credit 

Exposure Report; 

(xii) The credit exposure associated 

with intra-day credit extended, as 

specified by paragraph (a)(1)(i) of this 

section, by the Covered Company to 

each significant company and its 

subsidiaries during the prior quarter; 

and 

(xiii) Any other transactions that 

result in credit exposure between a 

Covered Company and its subsidiaries 

and each significant company and its 

subsidiaries that the Board, by order or 

regulation, determines to be 

appropriate. 

(2) Application to foreign-based 

organizations. A Credit Exposure Report 

submitted by a Covered Company that is 

a company incorporated or organized in 

a jurisdiction other than the United 

States (other than a bank holding 

company) or that is a foreign banking 

organization shall include the 

information described in paragraph 

(a)(1) of this section only with respect 

to the subsidiaries, offices, and 

operations that are domiciled in the 

United States. 

(b) Credit Exposure Reports provided 

to the Council. The Board shall make 

the Credit Exposure Reports submitted 

by the Covered Company pursuant to 

this section available to the Council 

upon request. 

(c) No limiting effect. Nothing in this 

section limits the authority of the Board 

to obtain reports from a Covered 

Company under other provisions of law, 

including pursuant to section 5(c) of the 

Bank Holding Company Act, as 

amended (12 U.S.C. 1844(c)), or section 

161 of the Dodd-Frank Act (12 U.S.C. 

5361). 

(d) Adjustment to timing. The Board 

may: 

(1) Require that a Covered Company 

submit a Credit Exposure Report more 

frequently than required pursuant to 

paragraph (a) of this section; and 

(2) Extend the time period that a 

Covered Company has to submit a 

Credit Exposure Report. 

§ ll.6 Review of Resolution Plans; 

Resubmission of Deficient Resolution 

Plans 

(a) Acceptance of submission and 

review— 

(1) Within 60 calendar days of 

receiving a Resolution Plan under 

§ ll.3(a), the Board and the 

Corporation shall jointly: 

(i) Determine whether a Resolution 

Plan submitted pursuant to §ll.3(a) 

satisfies the minimum informational 

requirements of § ll.4; and 

(ii) Either acknowledge acceptance of 

the plan for review or return the 

Resolution Plan if the Board and 

Corporation jointly determine that it is 

incomplete or that substantial 

additional information is required to 

facilitate review of the Resolution Plan. 

(2) If the Board and Corporation 

jointly determine that a Resolution Plan 

is informationally incomplete or that 

substantial additional information is 

necessary to facilitate review of the 

Resolution Plan: 

(i) The Board and Corporation shall 

jointly inform the Covered Company in 

writing of the area(s) in which the 

Resolution Plan is informationally 

incomplete or with respect to which 

additional information is required; and 

(ii) The Covered Company shall 

resubmit an informationally complete 

Resolution Plan or such additional 

information as jointly requested to 

facilitate review of the Resolution Plan 

no later than 30 days after receiving the 

notice described in paragraph (a)(2)(i) of 

this section, or such other time period 

as the Board and Corporation may 

jointly determine. 

(b) Joint determination regarding 

deficient Resolution Plans. If the Board 

and Corporation jointly determine that 

the Resolution Plan of a Covered 

Company submitted under §ll.3(a) is 

not credible or would not facilitate an 

orderly resolution of the Covered 

Company under the Bankruptcy Code, 

the Board and Corporation shall jointly 

notify the Covered Company in writing 

of such determination. Any joint notice 

provided under this paragraph shall 

identify the aspects of the Resolution 

Plan that the Board and Corporation 

jointly determined to be deficient. 

(c) Resubmission of a Resolution Plan. 

Within 90 days of receiving a notice of 

deficiencies issued pursuant to 

paragraph (b) of this section, or such 

shorter or longer period as the Board 

and Corporation may jointly determine, 

a Covered Company shall submit a 

revised Resolution Plan to the Board 

and Corporation that addresses the 

deficiencies jointly identified by the 

Board and Corporation, and that 

discusses in detail: 

(1) The revisions made by the Covered 

Company to address the deficiencies 

jointly identified by the Board and the 

Corporation; 

(2) Any changes to the Covered 

Company’s business operations and 

corporate structure that the Covered 

Company proposes to undertake to 

facilitate implementation of the revised 

Resolution Plan (including a timeline 

for the execution of such planned 

changes); and 

(3) Why the Covered Company 

believes that the revised Resolution Plan 

is credible and would result in an 

orderly resolution of the Covered 

Company under the Bankruptcy Code. 


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(d) Extension of time to resubmit 

Resolution Plan. Upon a written request 

by a Covered Company, the Board and 

Corporation may jointly extend the time 

to resubmit a Resolution Plan under 

paragraph (c) of this section. Each 

extension request shall be supported by 

a written statement of the company 

describing the basis and justification for 

the request. 

§llll.7 Failure to Cure 

Deficiencies on Resubmission of a 

Resolution Plan 

(a) In general. The Board and 

Corporation may jointly determine that 

a Covered Company or any subsidiary of 

a Covered Company shall be subject to 

more stringent capital, leverage, or 

liquidity requirements, or restrictions 

on the growth, activities, or operations 

of the Covered Company or the 

subsidiary if: 

(1) The Covered Company fails to 

submit a revised Resolution Plan under 

§ ___.6(c) within the required time 

period; or 

(2) The Board and the Corporation 

jointly determine that a revised 

Resolution Plan submitted under 

§ ___.6(c) does not adequately remedy 

the deficiencies jointly identified by the 

Board and the Corporation under 

§ ___.6(b). 

(b) Duration of requirements of 

restrictions. Any requirements or 

restrictions imposed on a Covered 

Company or a subsidiary thereof 

pursuant to paragraph (a) of this section 

shall cease to apply to the Covered 

Company or subsidiary, respectively, on 

the date that the Board and the 

Corporation jointly determine the 

Covered Company has submitted a 

revised Resolution Plan that adequately 

remedies the deficiencies jointly 

identified by the Board and the 

Corporation under § ___.6(b). 

(c) Divestiture. The Board and 

Corporation, in consultation with the 

Council, may jointly, by order, direct 

the Covered Company to divest such 

assets or operations as are jointly 

identified by the Board and Corporation 

if: 

(1) The Board and Corporation have 

jointly determined that the Covered 

Company or a subsidiary thereof shall 

be subject to requirements or 

restrictions pursuant to paragraph (a) of 

this section; and 

(2) The Covered Company has failed, 

within the 2-year period beginning on 

the date on which the determination to 

impose such requirements or 

restrictions under paragraph (a) of this 

section was made, to submit a revised 

Resolution Plan that adequately 

remedies the deficiencies jointly 

identified by the Board and the 

Corporation under § ___.6(b); and 

(3) The Board and Corporation jointly 

determine that the divestiture of such 

assets or operations is necessary to 

facilitate an orderly resolution of the 

Covered Company under the 

Bankruptcy Code in the event the 

company was to fail. 

§llll.8 Consultation 

Prior to issuing any notice of 

deficiencies under §llll.6(b), 

determining to impose requirements or 

restrictions under §llll.7(a), or 

issuing a divestiture order pursuant to 

§ llll.7(c) with respect to a Covered 

Company that is likely to have a 

significant impact on a functionally 

regulated subsidiary or a depository 

institution subsidiary of the Covered 

Company, the Board— 

(a) Shall consult with each Council 

member that primarily supervises any 

such subsidiary; and 

(b) May consult with any other 

Federal, state, or foreign supervisor as 

the Board considers appropriate. 

§ llll.9 No Limiting effect or 

private right of action; confidentiality 

of Resolution Plans and Credit 

Exposure Reports 

(a) No limiting effect on bankruptcy or 

other resolution proceedings. A 

Resolution Plan submitted pursuant to 

this part shall not have any binding 

effect on: 

(1) A court or trustee in a proceeding 

commenced under the Bankruptcy 

Code; 

(2) A receiver appointed under Title 

II of the Dodd-Frank Act (12 U.S.C. 5381 

et seq.); 

(3) A bridge financial company 

chartered pursuant to 12 U.S.C. 5390(h); 

or 

(4) Any other authority that is 

authorized or required to resolve a 

Covered Company (including any 

subsidiary or affiliate thereof) under any 

other provision of Federal, state, or 

foreign law. 

(b) No private right of action. Nothing 

in this part creates or is intended to 

create a private right of action based on 

a Resolution Plan prepared or submitted 

under this part or based on any action 

taken by the Board or the Corporation 

with respect to any Resolution Plan 

submitted under this part. 

(c) Request for confidential treatment 

of Resolution Plans and Credit Exposure 

Reports. Any Covered Company 

submitting a Resolution Plan or Credit 

Exposure Report pursuant to this part 

that desires confidential treatment of the 

information submitted pursuant to 5 

U.S.C. 552(b)(4) and the Corporation’s 

Disclosure of Information Rules (12 CFR 

part 309), the Board’s Rules Regarding 

Availability of Information (12 CFR part 

261), and the Council’s Rules of 

Organization and related policies shall 

file a request for confidential treatment 

in accordance with those rules. 

§ llll.10 Enforcement 

The Board and Corporation may 

jointly enforce an order jointly issued by 

the Board and Corporation under 

§ llll.7(a) or § llll.7(c) of this 

part. The Board, in consultation with 

the Corporation, may take action to 

address any violation of this part by a 

Covered Company under section 8 of 

the Federal Deposit Insurance Act (12 

U.S.C. 1818). 

[END OF COMMON TEXT] 

List of Subjects 

12 CFR Part 252 

Administrative practice and 

procedure, Banks, banking, Federal 

Reserve System, Holding companies, 

Reporting and recordkeeping 

requirements. 

12 CFR Part 381 

Administrative practice and 

procedure, Banks, banking, Holding 

companies, Reporting and 

recordkeeping requirements. 

Adoption of Common Rule 

The adoption of the proposed 

common rules by the agencies, as 

modified by agency-specific text, is set 

forth below: 

Board of Governors of the Federal 

Reserve System 

12 CFR Chapter II 

Authority and Issuance 

For the reasons stated in the 

Supplementary Information, the Board 

of Governors of the Federal Reserve 

System proposes to add the text of the 

common rule as set forth at the end of 

the Supplementary Information as Part 

252 to Chapter II of Title 12, modified 

as follows: 

PART 252—BANK HOLDING 

COMPANIES AND CHANGE IN BANK 

CONTROL (REGULATION YY) 

1. The authority citation for part 252 

is added to read as follows: 

Authority: 12 U.S.C. 5365. 

2. Add § 252.2 to read as follows: 

§ 252.2 Definitions. 

For purposes of this part: 

(a) Bankruptcy Code means Title 11 of 

the United States Code. 


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(b) Core business lines means those 

business lines of the Covered Company, 

including associated operations, 

services, functions and support, that, in 

the view of the Covered Company, upon 

failure would result in a material loss of 

revenue, profit, or franchise value. 

(c) Council means the Financial 

Stability Oversight Council established 

by section 111 of the Dodd-Frank Act 

(12 U.S.C. 5321). 

(d) Covered Company. (1) In general. 

A ‘‘Covered Company’’ means: 

(i) Any nonbank financial company 

supervised by the Board; 

(ii) Any bank holding company, as 

that term is defined in section 2 of the 

Bank Holding Company Act, as 

amended (12 U.S.C. 1841), and the 

Board’s Regulation Y (12 CFR part 225), 

that had $50 billion or more in total 

consolidated assets, as determined 

based on the average of the company’s 

four most recent Consolidated Financial 

Statements for Bank Holding Companies 

as reported on the Federal Reserve’s 

Form FR Y–9C; and 

(iii) Any foreign bank or company that 

is a bank holding company or is treated 

as a bank holding company under 

section 8(a) of the International Banking 

Act of 1978 (12 U.S.C. 3106(a)) and that 

had $50 billion or more in total 

consolidated assets, as determined 

based on the foreign bank’s or 

company’s most recent annual or, as 

applicable, the average of the four most 

recent quarterly Capital and Asset 

Reports for Foreign Banking 

Organizations as reported on the Federal 

Reserve’s Form FR Y–7Q. 

(2) Asset threshold for bank holding 

companies and foreign banking 

organizations. The Board may, pursuant 

to a recommendation of the Council, 

raise any asset threshold specified in 

paragraph (d)(1)(ii) or (iii) of this 

section. 

(3) Exclusion. A bridge financial 

company chartered pursuant to 12 

U.S.C. 5390(h) shall not be deemed to be 

a Covered Company hereunder. 

(e) Critical operations means those 

operations of the Covered Company, 

including associated services, functions 

and support, that, in the view of the 

Covered Company or as jointly directed 

by the Board and the Corporation, upon 

a failure of, or discontinuance of such 

operations, would likely result in a 

disruption to the U.S. economy or 

financial markets. 

(f) Functionally regulated subsidiary 

has the same meaning as in section 

5(c)(5) of the Bank Holding Company 

Act, as amended (12 U.S.C. 1844(c)(5)). 

(g) Material entity means a subsidiary 

or foreign office of the Covered 

Company that is significant to the 

activities of a critical operation or core 

business line (as defined in this part). 

(h) Material financial distress with 

regard to a Covered Company means 

that: 

(1) The Covered Company has 

incurred, or is likely to incur, losses that 

will deplete all or substantially all of its 

capital, and there is no reasonable 

prospect for the company to avoid such 

depletion; 

(2) The assets of the Covered 

Company are, or are likely to be, less 

than its obligations to creditors and 

others; or 

(3) The Covered Company is, or is 

likely to be, unable to pay its obligations 

(other than those subject to a bona fide 

dispute) in the normal course of 

business. 

(i) Nonbank financial company 

supervised by the Board means a 

nonbank financial company or other 

company that the Council has 

determined under section 113 of the 

Dodd-Frank Act (12 U.S.C. 5323) shall 

be supervised by the Board and for 

which such determination is still in 

effect. 

(j) Rapid and orderly resolution 

means a reorganization or liquidation of 

the Covered Company (or, in the case of 

a Covered Company that is incorporated 

or organized in a jurisdiction other than 

the United States, the subsidiaries and 

operations of such foreign company that 

are domiciled in the United States) 

under the Bankruptcy Code that can be 

accomplished within a reasonable 

period of time and in a manner that 

substantially mitigates the risk that the 

failure of the Covered Company would 

have serious adverse effects on financial 

stability in the United States. 

(k) Significant bank holding company 

has the meaning given to such term by 

§ 225.302(c) of the Board’s Regulation Y 

(12 CFR 225.302(c)). 

(l) Significant company means a 

significant bank holding company or a 

significant nonbank financial company. 

(m) Significant nonbank financial 

company has the meaning given to such 

term by § 225.302(b) of the Board’s 

Regulation Y (12 CFR 225.302(b)). 

Federal Deposit Insurance Corporation 

12 CFR Chapter III 

Authority and Issuance 

For the reasons set forth in the 

Supplementary Information, the Federal 

Deposit Insurance Corporation proposes 

to add the text of the common rule as 

set forth at the end of the 

Supplementary Information as Part 381 

to Chapter III of Title 12, Code of 

Federal Regulations, modified as 

follows: 

PART 381—RESOLUTION PLANS AND 

CREDIT EXPOSURE REPORTS 

3. The authority citation for part 381 

is added to read as follows: 

Authority: 12 U.S.C. 5365(d). 

4. Add § 381.2 to read as follows: 

§ 381.2 Definitions. 

For purposes of this part: 

(a) Bankruptcy Code means Title 11 of 

the United States Code. 

(b) Company includes any bank, 

corporation, general or limited 

partnership, limited liability company, 

association or similar organization or 

business trust. The term company does 

not include any organization, the 

majority of the voting securities of 

which are owned by the United States 

or any state. 

(c) Core business lines means those 

business lines of the Covered Company, 

including associated operations, 

services, functions and support, that, in 

the view of the Covered Company, upon 

failure would result in a material loss of 

revenue, profit, or franchise value. 

(d) Council means the Financial 

Stability Oversight Council established 

by section 111 of the Dodd-Frank Act 

(12 U.S.C. 5321). 

(e) Covered Company—(1) In general. 

A ‘‘Covered Company’’ means: 

(i) Any nonbank financial company 

supervised by the Board; 

(ii) Any bank holding company, as 

that term is defined in section 2 of the 

Bank Holding Company Act, as 

amended (12 U.S.C. 1841), and the 

Board’s Regulation Y (12 CFR part 225), 

that had $50 billion or more in total 

consolidated assets, as determined 

based on the average of the company’s 

four most recent Consolidated Financial 

Statements for Bank Holding Companies 

as reported on the Federal Reserve’s FR 

Y–9C; and 

(iii) Any foreign bank or company that 

is a bank holding company or is treated 

as a bank holding company under 

section 8(a) of the International Banking 

Act of 1978 (12 U.S.C. 3106(a)) and that 

had $50 billion or more in total 

consolidated assets, as determined 

based on the foreign bank’s or 

company’s most recent annual or, as 

applicable, the average of the four most 

recent quarterly Capital and Asset 

Reports for Foreign Banking 

Organizations as reported on the Federal 

Reserve’s Form FR Y–7Q. 

(2) Asset threshold for bank holding 

companies and foreign banking 

organizations. The Board may, pursuant 

to a recommendation of the Council, 

raise any asset threshold specified in 

paragraph (e)(1)(ii) or (iii) of this 

section. 


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22662 Federal Register / Vol. 76, No. 78 / Friday, April 22, 2011 / Proposed Rules 

(3) Exclusion. A bridge financial 

company chartered pursuant to 

12 U.S.C. 5390(h) shall not be deemed 

to be a Covered Company hereunder. 

(f) Critical operations means those 

operations of the Covered Company, 

including associated services, functions 

and support, that, in the view of the 

Covered Company or as jointly directed 

by the Board and the Corporation, upon 

a failure of, or discontinuance of such 

operations, would likely result in a 

disruption to the U.S. economy or 

financial markets. 

(g) Depository institution has the same 

meaning as in section 3(c)(1) of the 

Federal Deposit Insurance Act 

(12 U.S.C. 1813(c)(1)) and includes a 

state-licensed uninsured branch, 

agency, or commercial lending 

subsidiary of a foreign bank. 

(h) Foreign banking organization 

means: 

(1) A foreign bank, as defined in 

section 1(b)(7) of the International 

Banking Act of 1978 (12 U.S.C. 3101(7)), 

that: 

(i) Operates a branch, agency, or 

commercial lending company 

subsidiary in the United States; 

(ii) Controls a bank in the United 

States; or (iii) Controls an Edge 

corporation acquired after March 5, 

1987; and 

(2) Any company of which the foreign 

bank is a subsidiary. 

(i) Functionally regulated subsidiary 

has the same meaning as in section 

5(c)(5) of the Bank Holding Company 

Act, as amended (12 U.S.C. 1844(c)(5)). 

(j) Material entity means a subsidiary 

or foreign office of the Covered 

Company that is significant to the 

activities of a critical operation or core 

business line (as defined in this part). 

(k) Material financial distress with 

regard to a Covered Company means 

that: 

(1) The Covered Company has 

incurred, or is likely to incur, losses that 

will deplete all or substantially all of its 

capital, and there is no reasonable 

prospect for the company to avoid such 

depletion; 

(2) The assets of the Covered 

Company are, or are likely to be, less 

than its obligations to creditors and 

others; or 

(3) The Covered Company is, or is 

likely to be, unable to pay its obligations 

(other than those subject to a bona fide 

dispute) in the normal course of 

business. 

(l) Nonbank financial company 

supervised by the Board means a 

nonbank financial company or other 

company that the Council has 

determined under section 113 of the 

Dodd-Frank Act (12 U.S.C. 5323) shall 

be supervised by the Board and for 

which such determination is still in 

effect. 

(m) Rapid and orderly resolution 

means a reorganization or liquidation of 

the Covered Company (or, in the case of 

a Covered Company that is incorporated 

or organized in a jurisdiction outside 

the United States, the subsidiaries and 

operations of such foreign company that 

are domiciled in the United States) 

under the Bankruptcy Code that can be 

accomplished within a reasonable 

period of time and in a manner that 

substantially mitigates the risk that the 

failure of the Covered Company would 

have serious adverse effects on financial 

stability in the United States. 

(n) Significant bank holding company 

has the meaning given such term by rule 

of the Board pursuant to section 

102(a)(7) of the Dodd-Frank Act, 

12 U.S.C. 5311(a)(7). 

(o) Significant company means a 

significant bank holding company or a 

significant nonbank financial company. 

(p) Significant nonbank financial 

company has the meaning given such 

term by rule of the Board pursuant to 

section 102(a)(7) of the Dodd-Frank Act, 

12 U.S.C. 5311(a)(7). 

(q) Subsidiary means a bank or other 

company that is controlled by another 

company and an indirect subsidiary is 

a bank or other company that is 

controlled by a subsidiary of a company. 

By order of the Board of Governors of the 

Federal Reserve System, April 8, 2011. 

Jennifer J. Johnson, 

Secretary of the Board. 

Dated at Washington, DC, this 29th day of 

March 2011. 

By order of the Board of Directors. 

Federal Deposit Insurance Corporation. 

Robert E. Feldman, 

Executive Secretary. 

[FR Doc. 2011–9357 Filed 4–21–11; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL RESERVE BOARD 

12 CFR Chapter II 

[Docket No. OP–1416] 

Notice of Intent To Apply Certain 

Supervisory Guidance to Savings and 

Loan Holding Companies 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Notice of intent and request for 

comments. 

SUMMARY: The Board of Governors of the 

Federal Reserve System (‘‘Board’’) 

invites comment on its intention to 

apply certain elements of its 

consolidated supervisory program 

currently applicable to bank holding 

companies to savings and loan holding 

companies (‘‘SLHCs’’) after assuming 

supervisory responsibility for SLHCs in 

July 2011. The Dodd-Frank Wall Street 

Reform and Consumer Protection Act of 

2010 transfers supervisory functions 

related to SLHCs and their nondepository subsidiaries to the Board on 

July 21, 2011. 

DATES: Comments must be submitted on 

or before May 23, 2011. 

ADDRESSES: You may submit comments 

by any of the following methods: 

• Agency Web Site: http:// 

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov. 

Include docket number in the subject 

line of the message. 

• FAX: 202/452–3819 or 202/452– 

3102. 

• Mail: Jennifer J. Johnson, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue, NW., Washington, 

DC 20551. 

All public comments are available 

from the Board’s Web site at http:// 

www.federalreserve.gov/generalinfo/ 

foia/ProposedRegs.cfm as submitted, 

unless modified for technical reasons. 

Accordingly, your comments will not be 

edited to remove any identifying or 

contact information. Public comments 

may also be viewed electronically or in 

paper form in Room MP–500 of the 

Board’s Martin Building (20th and C 

Streets, NW.) between 9 a.m. and 5 p.m. 

on weekdays. 

FOR FURTHER INFORMATION CONTACT: 

Kathleen O’Day, Deputy General 

Counsel, (202–452–3786), or Amanda K. 

Allexon, Counsel, (202) 452–3818, Legal 

Division; Anna Lee Hewko, Assistant 

Director, (202) 530–6260, T. Kirk 

Odegard, Manager, (202) 530–6225, or 

Kristin B. Bryant, Supervisory Financial 

Analyst, (202) 452–3670, Division of 

Banking Supervision and Regulation, 

Board of Governors of the Federal 

Reserve System, 20th and C Streets, 

NW., Washington, DC 20551. 

Telecommunications Device for the Deaf 

(TDD) users may contact (202–263– 

4869). 

SUPPLEMENTARY INFORMATION: 

Background 

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act of 2010 


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