Title: Stress Test Improvement Act of 2017
Policy area: Finance and Financial Sector

Summary:
Stress Test Improvement Act of 2017
This bill amends the Dodd-Frank Wall Street Reform and Consumer Protection Act to modify testing requirements applicable to bank holding companies and certain nonbank financial companies, including by: (1) requiring the Federal Reserve Board (FRB) to revise its regulations regarding specified conditions, methodologies, and models for stress testing; (2) establishing limitations on Comprehensive Capital Analysis and Review by the FRB; and (3) reducing the frequency of stress testing from semiannual to annual.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4293 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 4293

 To reform the Comprehensive Capital Analysis and Review process, the 
      Dodd-Frank Act Stress Test process, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 7, 2017

  Mr. Zeldin introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To reform the Comprehensive Capital Analysis and Review process, the 
      Dodd-Frank Act Stress Test process, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Stress Test Improvement Act of 
2017''.

SEC. 2. CCAR AND DFAST REFORMS.

    Section 165(i) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (12 U.S.C. 5365(i)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (B)--
                            (i) by amending clause (i) to read as 
                        follows:
                            ``(i) shall--
                                    ``(I) issue regulations, after 
                                providing for public notice and 
                                comment, that provide for at least 3 
                                different sets of conditions under 
                                which the evaluation required by this 
                                subsection shall be conducted, 
                                including baseline, adverse, and 
                                severely adverse, and methodologies, 
                                including models used to estimate 
                                losses on certain assets, and the Board 
                                of Governors shall not carry out any 
                                such evaluation until 60 days after 
                                such regulations are issued; and
                                    ``(II) provide copies of such 
                                regulations to the Comptroller General 
                                of the United States and the Panel of 
                                Economic Advisors of the Congressional 
                                Budget Office before publishing such 
                                regulations;'';
                            (ii) in clause (iv), by striking ``and'' at 
                        the end;
                            (iii) in clause (v), by striking the period 
                        and inserting the following: ``, including any 
                        results of a resubmitted test;''; and
                            (iv) by adding at the end the following:
                            ``(vi) shall, in establishing the severely 
                        adverse condition under clause (i), provide 
                        detailed consideration of the model's effects 
                        on financial stability and the cost and 
                        availability of credit;
                            ``(vii) shall, in developing the models and 
                        methodologies and providing them for notice and 
                        comment under this subparagraph, publish a 
                        process to test the models and methodologies 
                        for their potential to magnify systemic and 
                        institutional risks instead of facilitating 
                        increased resiliency;
                            ``(viii) shall design and publish a process 
                        to test and document the sensitivity and 
                        uncertainty associated with the model system's 
                        data quality, specifications, and assumptions; 
                        and
                            ``(ix) shall communicate the range and 
                        sources of uncertainty surrounding the models 
                        and methodologies.''; and
                    (B) by adding at the end the following:
                    ``(C) CCAR requirements.--
                            ``(i) Parameters and consequences 
                        applicable to ccar.--The requirements of 
                        subparagraph (B) shall apply to CCAR.
                            ``(ii) Two-year limitation.--The Board of 
                        Governors may not subject a company to CCAR 
                        more than once every two years.
                            ``(iii) Mid-cycle resubmission.--If a 
                        company receives a quantitative objection to, 
                        or otherwise desires to amend the company's 
                        capital plan, the company may file a new 
                        streamlined plan at any time after a capital 
                        planning exercise has been completed and before 
                        a subsequent capital planning exercise.
                            ``(iv) Limitation on qualitative capital 
                        planning objections.--In carrying out CCAR, the 
                        Board of Governors may not object to a 
                        company's capital plan on the basis of 
                        qualitative deficiencies in the company's 
                        capital planning process.
                            ``(v) Company inquiries.--The Board of 
                        Governors shall establish and publish 
                        procedures for responding to inquiries from 
                        companies subject to CCAR, including 
                        establishing the time frame in which such 
                        responses will be made, and make such 
                        procedures publicly available.
                            ``(vi) CCAR defined.--For purposes of this 
                        subparagraph and subparagraph (E), the term 
                        `CCAR' means the Comprehensive Capital Analysis 
                        and Review established by the Board of 
                        Governors.''; and
            (2) in paragraph (2)(A), by striking ``semiannual'' and 
        inserting ``annual''.
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