Board of Governors of the Federal Reserve System

Washington, DC 20551

JAN 4 2019

Mr. Peter J. Morgan III

Senior Vice President and

Deputy General Counsel

The Charles Schwab Corporation

211 Main Street

San Francisco, California 94105

Dear Mr. Morgan:

This letter responds to the request dated October 25, 2018, on behalf of The

Charles Schwab Corporation (“CSC”), San Francisco, California, for an extension oftime until

June 30, 2020, to submit an implementation plan to the Board, pursuant to section 217.121(b)(1)

ofthe Board’s Regulation Q, and to begin to comply with the advanced approaches capital

adequacy framework (“advanced approaches rule”) and the related reporting requirements

applicable to banking organizations with total consolidated assets equal to $250 billion or more

(the “$250 billion threshold”).1

As ofJune 30, 2018, CSC reported total consolidated assets of $262 billion,

causing CSC to exceed the $250 billion threshold for application ofthe advanced approaches

rule. Under the Board’s regulations, a banking organization that exceeds the $250 billion

threshold becomes subject to a number of capital, liquidity, and other prudential standards.2 In

particular, within six months of becoming subject to the advanced approaches rule, firms are

required to adopt and file with the Board a written implementation plan addressing how the firm

complies, or plans to comply, with the requirements ofthe advanced approaches rule.3

CSC has represented that completing the implementation plan within the

prescribed regulatory timeframe will be difficult due to the overlap in work already underway on

1 See 12 CFR 217.121(b)(1); 12 CFR 217 subpart E.

2 For example, these standards include the supplementary leverage ratio (12 CFR 217.10(c)(4));

the liquidity coverage ratio rule, or “LCR” rule (12 CFR 249.10); and associated reporting

requirements, including the FFIEC 101 and FR 2052a reports.

3 See 12 CFR 217.121(b)(1).
risk-management projects to address supervisory expectations. CSC further asserts that pursuing

both efforts simultaneously would be costly, inefficient, and burdensome, and that the requested

extension would provide time for staff with relevant expertise to continue to focus their efforts

on CSC’s risk-management framework.4 The extension oftime would not impact CSC’s capital

adequacy.

Acting pursuant to authority delegated by the Board and having considered all

relevant facts, the Secretary ofthe Board has approved CSC’s request for an extension oftime.

Accordingly, CSC is granted an extension oftime, until June 30, 2020, to submit an

implementation plan to the Board, pursuant to section 217.121(b)(1) ofthe Board’s

Regulation Q, and to begin to comply with the advanced approaches rule and FFIEC 101 riskbased capital reporting requirements. This action is based on all the facts ofrecord, including the

information discussed above, and the representations in your submissions. Any material change

in those facts or representations could affect this approval and should be communicated promptly

to Board staff.

This action may be revised or revoked, based on evolving industry standards,

evolving supervisory standards, changed circumstances at the firm, changes to applicable

regulations, or other relevant factors.

Please contact Richard Young, Division of Supervision and Regulation, at (202)

245-4255, if you have any questions.

Very truly yours,

Margaret McCloskey Shanks

Deputy Secretary ofthe Board

cc: John Buchman, Managing Director and Regulatory Counsel, Charles Schwab

Kirsten Muetzel, Director, Federal Reserve Bank of San Francisco

APPROVED UNDER

DELEGATED AUTHORITY

ACTING SECRETARY (DATE) 1-4-18

4 CSC indicates that the request for an extension oftime is limited to the filing of an

implementation plan and compliance with the advanced approaches rule, and that it is not

requesting a deferral of any other regulatory capital related requirements applicable to an

advanced approaches Board-regulated institution.