One of the chief objectives of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) is to promote financial stability within the United States, without the need for emergency governmental assistance to troubled firms like that provided by the Troubled Asset Relief Program (TARP) in 2008. In fact, the first two titles of the DFA are devoted specifically to that policy objective. Title I establishes the Financial Stability Oversight Council (FSOC)—a council of financial regulators authorized "to identify risks to the financial stability of the United States that could arise from the material financial distress or failure, or ongoing activities, of large, interconnected [financial institutions]" and generally "to respond to emerging threats to the stability of the United States financial system." Title I also establishes a heightened regulatory regime for domestic bank holding companies with $50 billion or more in consolidated assets, certain foreign banks and foreign bank holding companies with $50 billion or more in total consolidated assets, and certain nonbank financial institutions that are designated by a two-thirds vote of the FSOC as potentially systemically significant. These "covered financial institutions" are subject to, among other things, heightened capital requirements and more restrictive leverage ratios than their smaller, less complex peers. Additionally, a pillar of this heightened regulatory regime is that each covered financial institution must submit "credible" plans to the Board of Governors of the Federal Reserve System (FRB) and the Federal Deposit Insurance Corporation (FDIC) detailing how the firm could be quickly resolved in an orderly fashion under the U.S. Bankruptcy Code or other applicable insolvency regime "in the event of a material financial distress or failure." These resolution plans are commonly referred to as "living wills." If a covered financial institution fails to submit a "credible" resolution plan in the discretionary view of both the FRB and FDIC, then the company could be subject to enforcement actions, including the compelled divestiture of certain business lines and assets, as a means to foster its resolvability. The DFA does not explicitly define what it means to be "credible," thus providing the FRB and FDIC considerable discretion to implement the living wills regime. Relatedly, Title II of the DFA establishes a special insolvency regime that could be used if it were determined that the failure or financial distress of a bank or nonbank financial institution poses a systemic threat to the U.S. financial system in spite of the heightened regulatory regime established by DFA, Title I, and related financial laws and regulations. The Title II insolvency regime, called Orderly Liquidation Authority (OLA), would be administered by the FDIC. Under OLA, the FDIC generally would have to liquidate the failed firm within five years, and, although public funds could be used initially, the cost of the resolution ultimately is intended to be paid for through the assets of the failed company or, if necessary, post-hoc assessments on surviving covered financial institutions. A financial firm generally can only be subject to OLA if: two-third of the FRB and either two-thirds of the Board of Directors of the FDIC, two-thirds of the Securities and Exchange Commission, or the Director of the Federal Insurance Office vote to recommend the appointment to OLA based on a series of statutory standards, including an evaluation of the impact that the company's failure would have on financial stability; and the Secretary of the Treasury determines, among other things, that the institution is "in default or in danger of default," that "the failure of the financial company and its resolution under otherwise applicable Federal or State law would have serious adverse effects on financial stability in the United States," and " no viable private sector alternative is available .... " In other words, OLA is statutorily structured as a fallback alternative to the normally applicable insolvency regimes, such as the U.S. Bankruptcy Code, and is to be triggered only under extraordinary circumstances. The living wills regime theoretically could play a crucial role in avoiding the need to employ OLA or some other extraordinary governmental action. This living wills regime requires large, complex, or otherwise systemically significant financial firms, in coordination with federal regulators, to design detailed roadmaps for utilizing—and to modify corporate, contractual, and other legal structures to make it easier to utilize—normal resolution regimes if these firms become insolvent or in danger of default. Covered financial institutions' initial living wills were required to be submitted in several waves, beginning in July 2012. Over 130 institutions have filed at least one resolution plan with regulators. Each of the 11 largest financial firms in the United States, which each hold more than $250 billion in nonbank assets, has filed at least two resolution plans. Table 1 sheds some light on the size, make-up, and complexity of these 11 financial institutions. As is discussed in greater detail below, all 11 of these companies' plans, in spite of the fact that some of them span tens of thousands of pages, have fallen short of the minimum requirements of DFA Section 165(d) in the view of the FRB and FDIC. These 11 firms' next living wills are due July 2015. If any of these plans is determined to be insufficient, then the FRB and FDIC have expressed their intent "to use their [enforcement] authority under section 165(d)," which eventually could include the power to require an institution "to divest certain assets or operations ... to facilitate an orderly resolution.... " This report reviews the legal structure of the DFA's living will requirements, pursuant to both DFA Section 165(d) and the regulations and guidance issued jointly by the FRB and FDIC; explains the August 2014 joint announcement of the FRB and FDIC regarding the inadequacies of the 2013 living wills filed by the 11 largest, most complex financial institutions in the country; analyzes the steps that the FRB and FDIC have suggested that these companies could take to rectify the common shortcomings in resolution plans filed thus far; and discusses the enforcement tools the FRB and FDIC may utilize against firms that fail to submit "credible" resolution plans. This report focuses on the legal aspects of the DFA living wills regime and how the FRB and FDIC are administering the regime. Policy issues, although raised at times, generally are outside its scope. In particular, this report takes no stance on whether or not the living wills regime, specifically, or DFA, Titles I and II, generally, actually promote financial stability, or whether the steps that the FRB and FDIC have recommended that covered financial institutions take to improve their resolvability would in fact do so. It also should be noted that this report concentrates on the FRB's and FDIC's interpretation and implementation of the living wills regime because these two regulators are empowered to implement DFA Section 165(d) by law, as it currently exists. Congress, of course, has broad discretion to pass legislation modifying the existing regime. In fact, there are bills in the 113 th Congress that would change how financial institutions are regulated to promote the financial stability of the United States. For example, H.R. 46 and S. 20 , the Financial Takeover Repeal Act of 2013, would repeal the DFA in its entirety, including the provisions designed to promote financial stability in Titles I and II. On December 2, 2014, the House of Representatives approved H.R. 5421 , the Financial Institution Bankruptcy Act of 2014, which would amend the Bankruptcy Code "in order to facilitate the resolution of an insolvent financial institution in bankruptcy." H.R. 5421 appears to be intended to eliminate the need for OLA. A similar bill, S. 1861 , the Taxpayer Protection and Responsible Resolution Act, would make changes to the Bankruptcy Code to facilitate the resolution of financial institutions, while also explicitly repealing DFA Title II. H.R. 1450 / S. 685 , the Too Big to Fail, Too Big to Exist Act, would require the Secretary of the Treasury to identify all financial institutions it considers to be "too big to fail," and within one year of such designation, "break up [these] entities ... so that their failure would no longer cause a catastrophic effect on the United States or global economy without taxpayer bailout." And as a final example, H.R. 613 , the Systemic Risk Mitigation Act, would among other things, require every bank holding company with $50 billion or more in consolidated assets to hold long-term, subordinated debt of the value of at least 15% of its total consolidated assets. As is discussed more fully below, increasing long-term, unsecured debt arguably could help promote the long-term viability of the firm and, if the firm actually fails, help absorb some of its losses. DFA Section 165(d) requires certain banks and bank holding companies with greater than $50 billion in assets and nonbank financial institutions designated by the FSOC for heightened prudential regulation by the FRB (together, "covered financial institutions") to submit plans to the FRB and FDIC detailing how the companies would be resolved in an orderly and swift fashion under the Bankruptcy Code (or other applicable insolvency regime) if the companies failed or otherwise suffered significant financial trouble. Pursuant to DFA Section 165(d), the plans must include information about how affiliated insured depository institutions are buffered from the activities of the nonbank subsidiaries of the company; detailed information regarding the company's obligations, liabilities, and assets; a list of the company's significant counterparties; a list of entities with rights to collateral backing the company's existing obligations; a list of any cross-guarantees linked to security agreements; detailed information regarding the company's ownership structure; and "any other information that the [FRB and FDIC] jointly require by rule or order."