Stress Test Improvement Act of 2017

Bill: 115-hr-4293
Sponsor: full_name: Rep. Zeldin, Lee M. [R-NY-1]
Introduced: 2017-11-07
Policy area: Finance and Financial Sector
Subjects: Bank accounts, deposits, capital

Banking and financial institutions regulation

Federal Reserve System

Financial crises and stabilization
Latest action: action_date: 2018-04-12
text: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Summaries:
action_date: 2017-11-07
action_desc: Introduced in House
text: <p><b>Stress Test Improvement Act of 2017</b></p> <p>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&nbsp;regulations regarding specified conditions, methodologies, and models&nbsp;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. </p>

action_date: 2018-03-13
action_desc: Reported to House with amendment(s)
text: <p><b>Stress Test Improvement Act of 2017</b></p> <p>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) establishing limitations on Comprehensive Capital Analysis and Review by the Federal Reserve Board, (2) reducing the frequency of stress testing from semiannual to annual, and (3) otherwise revising provisions related to stress testing. </p>

action_date: 2018-04-11
action_desc: Passed House amended
text: <p><b>Stress Test Improvement Act of 2017</b></p> <p>(Sec. 2) 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) establishing limitations on Comprehensive Capital Analysis and Review by the Federal Reserve Board, (2) reducing the frequency of stress testing from semiannual to annual, and (3) otherwise revising provisions related to stress testing. </p> <p>(Sec. 4) The bill amends the Federal Reserve Act to lower the maximum allowable amount of surplus funds of the Federal Reserve banks.</p>

tv_txt: I 115th CONGRESS 1st Session H. R. 4293 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.

1. Short title This Act may be cited as the Stress Test Improvement Act of 2017 . 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 .

tv_txt: IB Union Calendar No. 451 115th CONGRESS 2d Session H. R. 4293 [Report No. 115–593] IN THE HOUSE OF REPRESENTATIVES November 7, 2017 Mr. Zeldin introduced the following bill; which was referred to the Committee on Financial Services March 13, 2018 Additional sponsors: Mr. David Scott of Georgia and Mr. Gottheimer March 13, 2018 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed Strike out all after the enacting clause and insert the part printed in italic For text of introduced bill, see copy of bill as introduced on November 7, 2017 A BILL To reform the Comprehensive Capital Analysis and Review process, the Dodd-Frank Act Stress Test process, and for other purposes.

1. Short title This Act may be cited as the Stress Test Improvement Act of 2017 . 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)— (i) by striking 3 different and inserting 2 different ; and (ii) by striking , adverse, ; and (B) by adding at the end the following: (C) CCAR requirements (i) 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. (ii) 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) in subparagraph (A), by striking semiannual and inserting annual ; and (B) in subparagraph (C)(ii), by striking 3 different sets of conditions, including baseline, adverse, and inserting 2 different sets of conditions, including baseline . 3. Rule of construction The amendments made by this Act may not be construed to prohibit an appropriate Federal banking agency (as defined in section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 )) from— (1) ensuring the safety and soundness of an entity regulated by such an appropriate Federal banking agency; and (2) ensuring compliance with applicable laws, regulations, and supervisory policies, and the following of appropriate guidance, by an entity regulated by such an appropriate Federal banking agency.

March 13, 2018 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

tv_txt: I 115th CONGRESS 2d Session H. R. 4293 IN THE HOUSE OF REPRESENTATIVES AN ACT To reform the Comprehensive Capital Analysis and Review process, the Dodd-Frank Act Stress Test process, and for other purposes.

1. Short title This Act may be cited as the Stress Test Improvement Act of 2017 . 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)— (i) by striking 3 different and inserting 2 different ; and (ii) by striking , adverse, ; and (B) by adding at the end the following: (C) CCAR requirements (i) 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. (ii) 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) in subparagraph (A), by striking semiannual and inserting annual ; and (B) in subparagraph (C)(ii), by striking 3 different sets of conditions, including baseline, adverse, and inserting 2 different sets of conditions, including baseline . 3. Rule of construction The amendments made by this Act may not be construed to prohibit an appropriate Federal banking agency (as defined in section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 )) from— (1) ensuring the safety and soundness of an entity regulated by such an appropriate Federal banking agency; and (2) ensuring compliance with applicable laws, regulations, and supervisory policies, and the following of appropriate guidance, by an entity regulated by such an appropriate Federal banking agency. 4. Reduction of surplus funds of Federal reserve banks (a) In general Section 7(a)(3)(A) of the Federal Reserve Act ( 12 U.S.C. 289(a)(3)(A) ) is amended by striking $7,500,000,000 and inserting $7,480,000,000 . (b) Effective date Subsection (a) shall take effect on June 1, 2018.

Passed the House of Representatives April 11, 2018. Karen L. Haas, Clerk.

tv_txt: IIB 115th CONGRESS 2d Session H. R. 4293 IN THE SENATE OF THE UNITED STATES April 12, 2018 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To reform the Comprehensive Capital Analysis and Review process, the Dodd-Frank Act Stress Test process, and for other purposes.

1. Short title This Act may be cited as the Stress Test Improvement Act of 2017 . 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)— (i) by striking 3 different and inserting 2 different ; and (ii) by striking , adverse, ; and (B) by adding at the end the following: (C) CCAR requirements (i) 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. (ii) 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) in subparagraph (A), by striking semiannual and inserting annual ; and (B) in subparagraph (C)(ii), by striking 3 different sets of conditions, including baseline, adverse, and inserting 2 different sets of conditions, including baseline . 3. Rule of construction The amendments made by this Act may not be construed to prohibit an appropriate Federal banking agency (as defined in section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 )) from— (1) ensuring the safety and soundness of an entity regulated by such an appropriate Federal banking agency; and (2) ensuring compliance with applicable laws, regulations, and supervisory policies, and the following of appropriate guidance, by an entity regulated by such an appropriate Federal banking agency. 4. Reduction of surplus funds of Federal reserve banks (a) In general Section 7(a)(3)(A) of the Federal Reserve Act ( 12 U.S.C. 289(a)(3)(A) ) is amended by striking $7,500,000,000 and inserting $7,480,000,000 . (b) Effective date Subsection (a) shall take effect on June 1, 2018.

Passed the House of Representatives April 11, 2018. Karen L. Haas, Clerk