On September 29, 2016, the OCC published a final rule adopting enforceable guidelines for recovery planning by insured national banks, insured Federal savings associations and insured Federal branches of foreign banks with at least $50 billion in average total consolidated assets. The guidelines are effective on January 1, 2017, but are subject to phased-in compliance based on an institution's asset size: six months for institutions with $750 billion or more, 12 months for institutions with $100 billion or more but less than $750 billion, and 18 months for institutions with $50 billion or more but less than $100 billion. The guidelines provide a framework for evaluating the financial impact of a severe stress on an institution, and various measures an institution could implement to be able to withstand such a period of stress.
The recovery plan must address the following elements, among others: triggers reflecting the bank's vulnerabilities, recovery options, impact assessments for each option, escalation procedures, communications procedures and any other information that the OCC communicates in writing to the bank regarding the recovery plan. The OCC noted that it has no specific expectations regarding the length or detail of recovery plans, so long as the plan is specific to the characteristics of each institution. The OCC emphasized that recovery plans should be integrated into a bank's risk governance framework, and a bank should coordinate its recovery plan with its holding company's recovery and resolution planning. The guidelines also call for at least annual review of a bank's recovery plan by management and the bank's board, as well as management review after any material event.
The Federal Register publication of the final rule is available at https://occ.gov/news-issuances/news-releases/2016/nr-occ-2016-118a.pdf .
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