(a) Purpose. This section establishes capital planning and prior notice and approval
requirements for capital distributions by certain bank holding companies.
This section also establishes the Board’s process for determining
the stress capital buffer requirement applicable to these bank holding
companies.
(b) Scope and reservation
of authority.
(1) Applicability. Except as provided in paragraph
(c) of this section, this section applies to:
(i) Any top-tier bank holding company
domiciled in the United States with average total consolidated assets
of $100 billion or more ($100 billion asset threshold);
(ii) Any other bank holding company
domiciled in the United States that is made subject to this section,
in whole or in part, by order of the Board;
(iii) Any U.S. intermediate holding
company subject to this section pursuant to 12 CFR 252.153; and
(iv) Any nonbank financial company
supervised by the Board that is made subject to this section pursuant
to a rule or order of the Board.
(2) Average total
consolidated assets. For purposes of this section, average total
consolidated assets means the average of the total consolidated assets
as reported by a bank holding company on its Consolidated Financial
Statements for Holding Companies (FR Y-9C) for the four most recent
consecutive quarters. If the bank holding company has not filed the
FR Y-9C for each of the four most recent consecutive quarters, average
total consolidated assets means the average of the company’s total
consolidated assets, as reported on the company’s FR Y-9C, for the
most recent quarter or consecutive quarters, as applicable. Average
total consolidated assets are measured on the as-of date of the most
recent FR Y-9C used in the calculation of the average.
(3) Ongoing applicability. A bank holding company (including any successor bank holding company)
that is subject to any requirement in this section shall remain subject
to such requirements unless and until its total consolidated assets
fall below $100 billion for each of four consecutive quarters, as
reported on the FR Y-9C and effective on the as-of date of the fourth
consecutive FR Y-9C.
(4) Reservation of authority. Nothing in this
section shall limit the authority of the Federal Reserve to issue
or enforce a capital directive or take any other supervisory or enforcement
action, including an action to address unsafe or unsound practices
or conditions or violations of law.
(5) Rule of construction. Unless the
context otherwise requires, any reference to bank holding company
in this section shall include a U.S. intermediate holding company
and shall include a nonbank financial company supervised by the Board
to the extent this section is made applicable pursuant to a rule or
order of the Board.
(6) Application of this section by order. The
Board may apply this section, in whole or in part, to a bank holding
company by order based on the institution’s size, level of complexity,
risk profile, scope of operations, or financial condition.
(c) Transition periods for certain bank
holding companies.
(1) A bank holding company that meets the $100 billion asset threshold
(as measured under paragraph (b) of this section) on or before September
30 of a calendar year must comply with the requirements of this section
beginning on January 1 of the next calendar year, unless that time
is extended by the Board in writing. Notwithstanding the previous
sentence, the Board will not provide a bank holding company with notice
of its stress capital buffer requirement until the first year in which
the Board conducts an analysis of the bank holding company pursuant
to 12 CFR 252.44.
(2) A bank holding
company that meets the $100 billion asset threshold after September
30 of a calendar year must comply with the requirements of this section
beginning on January 1 of the second calendar year after the bank
holding company meets the $100 billion asset threshold, unless that
time is extended by the Board in writing. Notwithstanding the previous
sentence, the Board will not provide a bank holding company with notice
of its stress capital buffer requirement until the first year in which
the Board conducts an analysis of the bank holding company pursuant
to 12 CFR 252.44.
(3) The Board,
or the appropriate Reserve Bank with the concurrence of the Board,
may require a bank holding company described in paragraph (c)(1) or
(2) of this section to comply with any or all of the requirements
of this section if the Board, or appropriate Reserve Bank with concurrence
of the Board, determines that the requirement is appropriate on a
different date based on the company’s risk profile, scope of operation,
or financial condition and provides prior notice to the company of
the determination.
(d) Definitions. For purposes of this section, the following definitions
apply:
(1) Advanced
approaches means the risk-weighted assets calculation methodologies
at 12 CFR part 217, subpart E, as applicable.
(2) Average total nonbank assets means the average of the total nonbank assets, calculated in accordance
with the instructions to the FR Y-9LP, for the four most recent calendar
quarters or, if the bank holding company has not filed the FR Y-9LP
for each of the four most recent calendar quarters, for the most recent
quarter or quarters, as applicable.
(3) Capital action means any issuance of a debt or equity
capital instrument, any capital distribution, and any similar action
that the Federal Reserve determines could impact a bank holding company’s
consolidated capital.
(4) Capital
distribution means a redemption or repurchase of any debt or equity
capital instrument, a payment of common or preferred stock dividends,
a payment that may be temporarily or permanently suspended by the
issuer on any instrument that is eligible for inclusion in the numerator
of any minimum regulatory capital ratio, and any similar transaction
that the Federal Reserve determines to be in substance a distribution
of capital.
(5) Capital plan means a written presentation of a bank holding company’s capital
planning strategies and capital adequacy process that includes the
mandatory elements set forth in paragraph (e)(2) of this section.
(6) Capital plan cycle means
the period beginning on January 1 of a calendar year and ending on
December 31 of that year.
(7) Capital policy means a bank holding company’s written principles
and guidelines used for capital planning, capital issuance, capital
usage and distributions, including internal capital goals; the quantitative
or qualitative guidelines for capital distributions; the strategies
for addressing potential capital shortfalls; and the internal governance
procedures around capital policy principles and guidelines.
(8) Category IV bank holding company means any bank holding company or U.S. intermediate holding company
subject to this section that, as of December 31 of the prior capital
plan cycle, is a Category IV banking organization pursuant to 12 CFR
252.5.
(9) Common equity tier
1 capital has the same meaning as under 12 CFR part 217.
(10) Effective capital distribution
limitations means any limitations on capital distributions
established by the Board by order or regulation, including pursuant
to 12 CFR 217.11, 225.4, 252.63, 252.165, and 263.202, provided that,
for any limitations based on risk-weighted assets, such limitations
must be calculated using the standardized approach, as set forth in
12 CFR part 217, subpart D.
(11) Final planned capital distributions means the planned capital
distributions included in a capital plan that include the adjustments
made pursuant to paragraph (h) of this section, if any.
(12) GSIB surcharge has the same
meaning as under 12 CFR 217.403.
(13) Internal baseline scenario means a scenario that reflects
the bank holding company’s expectation of the economic and financial
outlook, including expectations related to the bank holding company’s
capital adequacy and financial condition.
(14) Internal stress scenario means
a scenario designed by a bank holding company that stresses the specific
vulnerabilities of the bank holding company’s risk profile and operations,
including those related to the bank holding company’s capital adequacy
and financial condition.
(15) Nonbank financial company supervised by the Board means a company
that the Financial Stability Oversight Council has determined under
section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection
Act (12 U.S.C. 5323) shall be supervised by the Board and for which
such determination is still in effect.
(16) Planning horizon means the period of at least nine consecutive
quarters, beginning with the quarter preceding the quarter in which
the bank holding company submits its capital plan, over which the
relevant projections extend.
(17) Regulatory capital ratio means a capital ratio for which the
Board has established minimum requirements for the bank holding company
by regulation or order, including, as applicable, the bank holding
company’s regulatory capital ratios calculated under 12 CFR part 217
and the deductions required under 12 CFR 248.12; except that the bank
holding company shall not use the advanced approaches to calculate
its regulatory capital ratios.
(18) Severely adverse scenario has the same meaning as under 12 CFR
part 252, subpart E.
(19) Stress
capital buffer requirement means the amount calculated under paragraph
(f) of this section.
(20) Supervisory
stress test means a stress test conducted using a severely adverse
scenario and the assumptions contained in 12 CFR part 252, subpart
E.
(21) U.S. intermediate holding
company means the top-tier U.S. company that is required to be
established pursuant to 12 CFR 252.153.
(e) Capital planning requirements and procedures.
(1) Annual capital planning.
(i) A bank holding company must
develop and maintain a capital plan.
(ii) A bank holding company must submit
its complete capital plan to the Board and the appropriate Reserve
Bank by April 5 of each calendar year, or such later date as directed
by the Board or by the appropriate Reserve Bank with concurrence of
the Board.
(iii) The bank holding
company’s board of directors or a designated committee thereof must
at least annually and prior to submission of the capital plan under
paragraph (e)(1)(ii) of this section:
(A) Review the robustness of the bank holding
company’s process for assessing capital adequacy;
(B) Ensure that any deficiencies in the bank
holding company’s process for assessing capital adequacy are appropriately
remedied; and
(C) Approve the bank
holding company’s capital plan.
(2) Mandatory
elements of capital plan. A capital plan must contain at least
the following elements:
(i) An assessment of the expected uses and sources of capital over
the planning horizon that reflects the bank holding company’s size,
complexity, risk profile, and scope of operations, assuming both expected
and stressful conditions, including:
(A) Estimates of projected revenues, losses,
reserves, and pro forma capital levels, including regulatory
capital ratios, and any additional capital measures deemed relevant
by the bank holding company, over the planning horizon under a range
of scenarios, including:
(1) If the bank holding company
is a Category IV bank holding company, the Internal baseline scenario
and at least one Internal stress scenario, as well as any additional
scenarios, based on financial conditions or the macroeconomic outlook,
or based on the bank holding company’s financial condition, size,
complexity, risk profile, or activities, or risks to the U.S. economy,
that the Federal Reserve may provide the bank holding company after
giving notice to the bank holding company; or
(2) If the bank holding company is
not a Category IV bank holding company, any scenarios provided by
the Federal Reserve, the Internal baseline scenario, and at least
one Internal stress scenario;
(B) A discussion of the results of any stress
test required by law or regulation, and an explanation of how the
capital plan takes these results into account; and
(C) A description of all planned capital
actions over the planning horizon. Planned capital actions must be
consistent with effective capital distribution limitations, except
as may be adjusted pursuant to paragraph (h) of this section. In determining
whether a bank holding company’s planned capital distributions are
consistent with effective capital distribution limitations, a bank
holding company must assume that:
(1)
Any countercyclical capital buffer amount currently applicable to
the bank holding company remains at the same level, except that the
bank holding company must reflect any increases or decreases in the
countercyclical capital buffer amount that have been announced by
the Board at the times indicated by the Board’s announcement for when
such increases or decreases will take effect; and
(2) Any GSIB surcharge currently applicable
to the bank holding company when the capital plan is submitted remains
at the same level, except that the bank holding company must reflect
any increase in its GSIB surcharge pursuant to 12 CFR 217.403(d)(1),
beginning in the fifth quarter of the planning horizon.
(ii) A detailed description
of the bank holding company’s process for assessing capital adequacy,
including:
(A) A discussion
of how the bank holding company will, under expected and stressful
conditions, maintain capital commensurate with its risks, maintain
capital above the regulatory capital ratios, and serve as a source
of strength to its subsidiary depository institutions;
(B) A discussion of how the bank holding company
will, under expected and stressful conditions, maintain sufficient
capital to continue its operations by maintaining ready access to
funding, meeting its obligations to creditors and other counterparties,
and continuing to serve as a credit intermediary;
(iii) The bank holding company’s
capital policy; and
(iv) A discussion
of any expected changes to the bank holding company’s business plan
that are likely to have a material impact on the bank holding company’s
capital adequacy or liquidity.
(3) Data collection. Upon the request of the Board or appropriate Reserve Bank, the bank
holding company shall provide the Federal Reserve with information
regarding:
(i) The
bank holding company’s financial condition, including its capital;
(ii) The bank holding company’s
structure;
(iii) Amount and risk
characteristics of the bank holding company’s on- and off-balance
sheet exposures, including exposures within the bank holding company’s
trading account, other trading-related exposures (such as counterparty-credit
risk exposures) or other items sensitive to changes in market factors,
including, as appropriate, information about the sensitivity of positions
to changes in market rates and prices;
(iv) The bank holding company’s relevant
policies and procedures, including risk management policies and procedures;
(v) The bank holding company’s
liquidity profile and management;
(vi) The loss, revenue, and expense estimation models used by the
bank holding company for stress scenario analysis, including supporting
documentation regarding each model’s development and validation; and
(vii) Any other relevant qualitative
or quantitative information requested by the Board or by the appropriate
Reserve Bank to facilitate review of the bank holding company’s capital
plan under this section.
(4) Resubmission of a capital plan.
(i) A bank holding
company must update and resubmit its capital plan to the appropriate
Reserve Bank within 30 calendar days of the occurrence of one of the
following events:
(A)
The bank holding company determines there has been or will be a material
change in the bank holding company’s risk profile, financial condition,
or corporate structure since the bank holding company last submitted
the capital plan to the Board and the appropriate Reserve Bank under
this section; or
(B) The Board, or
the appropriate Reserve Bank with concurrence of the Board, directs
the bank holding company in writing to revise and resubmit its capital
plan for any of the following reasons:
(1)
The capital plan is incomplete or the capital plan, or the bank holding
company’s internal capital adequacy process, contains material weaknesses;
(2) There has been, or will likely
be, a material change in the bank holding company’s risk profile (including
a material change in its business strategy or any risk exposure),
financial condition, or corporate structure;
(3) The Internal stress scenario(s)
are not appropriate for the bank holding company’s business model
and portfolios, or changes in financial markets or the macro-economic
outlook that could have a material impact on a bank holding company’s
risk profile and financial condition require the use of updated scenarios;
or
(ii) The Board, or the appropriate Reserve Bank with concurrence
of the Board, may extend the 30-day period in paragraph (e)(4)(i)
of this section for up to an additional 60 calendar days, or such
longer period as the Board or the appropriate Reserve Bank, with concurrence
of the Board, determines appropriate.
(iii) Any updated capital plan must
satisfy all the requirements of this section; however, a bank holding
company may continue to rely on information submitted as part of a
previously submitted capital plan to the extent that the information
remains accurate and appropriate.
(5) Confidential
treatment of information submitted. The confidentiality of information
submitted to the Board under this section and related materials shall
be determined in accordance with applicable exemptions under the Freedom
of Information Act (5 U.S.C. 552(b)) and the Board’s Rules Regarding
Availability of Information (12 CFR part 261).
(f) Calculation of the stress capital buffer requirement.
(1) General. The Board will determine the stress
capital buffer requirement that applies under 12 CFR 217.11 pursuant
to this paragraph (f). For each bank holding company that is not a
Category IV bank holding company, the Board will calculate the bank
holding company’s stress capital buffer requirement annually. For
each Category IV bank holding company, the Board will calculate the
bank holding company’s stress capital buffer requirement biennially,
occurring in each calendar year ending in an even number, and will adjust
the bank holding company’s stress capital buffer requirement biennially,
occurring in each calendar year ending in an odd number. Notwithstanding
the previous sentence, the Board will calculate the stress capital
buffer requirement of a Category IV bank holding company in a year
ending in an odd number with respect to which that company makes an
election pursuant to 12 CFR 252.44(d)(2)(ii).
(2) Stress capital
buffer requirement calculation. A bank holding company’s stress
capital buffer requirement is equal to the greater of:
(i) The following calculation:
(A) The ratio of a bank
holding company’s common equity tier 1 capital to risk-weighted assets,
as calculated under 12 CFR part 217, subpart D, as of the final quarter
of the previous capital plan cycle, unless otherwise determined by
the Board; minus
(B) The lowest
projected ratio of the bank holding company’s common equity tier 1
capital to risk-weighted assets, as calculated under 12 CFR part 217,
subpart D, in any quarter of the planning horizon under a supervisory
stress test; plus
(C) The ratio
of:
(1) The sum of the bank holding company’s
planned common stock dividends (expressed as a dollar amount) for
each of the fourth through seventh quarters of the planning horizon;
to
(2) The risk-weighted assets
of the bank holding company in the quarter in which the bank holding
company had its lowest projected ratio of common equity tier 1 capital
to risk-weighted assets, as calculated under 12 CFR part 217, subpart
D, in any quarter of the planning horizon under a supervisory stress
test; and
(ii) 2.5 percent.
(3) Recalculation
of stress capital buffer requirement. If a bank holding company
resubmits its capital plan pursuant to paragraph (e)(4) of this section,
the Board may recalculate the bank holding company’s stress capital
buffer requirement. The Board will provide notice of whether the bank
holding company’s stress capital buffer requirement will be recalculated
within 75 calendar days after the date on which the capital plan is
resubmitted, unless the Board provides notice to the company that
it is extending the time period.
(4) Adjustment of stress capital buffer
requirement. In each calendar year in which the Board does not
calculate a Category IV bank holding company’s stress capital buffer
requirement pursuant to paragraph (f)(1) of this section, the Board
will adjust the Category IV bank holding company’s stress capital
buffer requirement to be equal to the result of the calculation set
forth in paragraph (f)(2) of this section, using the same values that
were used to calculate the stress capital buffer requirement most
recently provided to the bank holding company, except that the value
used in paragraph (f)(2)(i)(C)(1) of this section will be equal
to the bank holding company’s planned common stock dividends (expressed
as a dollar amount) for each of the fourth through seventh quarters
of the planning horizon as set forth in the capital plan submitted
by the bank holding company in the calendar year in which the Board
adjusts the bank holding company’s stress capital buffer requirement.
(g) Review of capital plans
by the Federal Reserve. The Board, or the appropriate Reserve
Bank with concurrence of the Board, will consider the following factors
in reviewing a bank holding company’s capital plan:
(1) The comprehensiveness of the capital
plan, including the extent to which the analysis underlying the capital
plan captures and addresses potential risks stemming from activities
across the bank holding company and the bank holding company’s capital
policy;
(2) The reasonableness of
the bank holding company’s capital plan, the assumptions and analysis
underlying the capital plan, and the robustness of its capital adequacy
process;
(3) Relevant supervisory
information about the bank holding company and its subsidiaries;
(4) The bank holding company’s regulatory
and financial reports, as well as supporting data that would allow
for an analysis of the bank holding company’s loss, revenue, and reserve
projections;
(5) The results of
any stress tests conducted by the bank holding company or the Federal
Reserve; and
(6) Other information
requested or required by the Board or the appropriate Reserve Bank,
as well as any other information relevant, or related, to the bank
holding company’s capital adequacy.
(h) Federal Reserve notice of stress capital buffer
requirement; final planned capital distributions.
(1) Notice. The Board will provide a bank holding company with notice of its
stress capital buffer requirement and an explanation of the results
of the supervisory stress test. Unless otherwise determined by the
Board, notice will be provided by June 30 of the calendar year in
which the capital plan was submitted pursuant to paragraph (e)(1)(ii)
of this section or within 90 calendar days of receiving notice that
the Board will recalculate the bank holding company’s stress capital
buffer requirement pursuant to paragraph (f)(3) of this section.
(2) Response
to notice.
(i) Request for reconsideration of stress
capital buffer requirement. A bank holding company may request
reconsideration of a stress capital buffer requirement provided under
paragraph (h)(1) of this section. To request reconsideration of a
stress capital buffer requirement, a bank holding company must submit
to the Board a request pursuant to paragraph (i) of this section.
(ii) Adjustments to planned capital distributions. Within two business
days of receipt of notice of a stress capital buffer requirement under
paragraph (h)(1) or (i)(5) of this section, as applicable, a bank
holding company must:
(A) Determine whether the planned capital distributions for the fourth
through seventh quarters of the planning horizon under the Internal
baseline scenario would be consistent with effective capital distribution
limitations assuming the stress capital buffer requirement provided
by the Board under paragraph (h)(1) or (i)(5) of this section, as
applicable, in place of any stress capital buffer requirement in effect;
and
(1) If the planned capital distributions
for the fourth through seventh quarters of the planning horizon under
the Internal baseline scenario would not be consistent with effective
capital distribution limitations assuming the stress capital buffer
requirement provided by the Board under paragraph (h)(1) or (i)(5)
of this section, as applicable, in place of any stress capital buffer
requirement in effect, the bank holding company must adjust its planned
capital distributions such that its planned capital distributions
would be consistent with effective capital distribution limitations
assuming the stress capital buffer requirement provided by the Board
under paragraph (h)(1) or (i)(5) of this section, as applicable, in
place of any stress capital buffer requirement in effect; or
(2) If the planned capital distributions
for the fourth through seventh quarters of the planning horizon under
the Internal baseline scenario would be consistent with effective
capital distribution limitations assuming the stress capital buffer
requirement provided by the Board under paragraph (h)(1) or (i)(5)
of this section, as applicable, in place of any stress capital buffer
requirement in effect, the bank holding company may adjust its planned
capital distributions. A bank holding company may not adjust its planned
capital distributions to be inconsistent with the effective capital
distribution limitations assuming the stress capital buffer requirement
provided by the Board under paragraph (h)(1) or (i)(5) of this section,
as applicable; and
(B) Notify the Board of any adjustments made to planned capital distributions
for the fourth through seventh quarters of the planning horizon under
the Internal baseline scenario.
(3) Final planned
capital distributions. The Board will consider the planned capital
distributions, including any adjustments made pursuant to paragraph
(h)(2)(ii) of this section, to be the bank holding company’s final
planned capital distributions on the later of:
(i) The expiration of the time for requesting
reconsideration under paragraph (i) of this section; and
(ii) The expiration of the time for
adjusting planned capital distributions pursuant to paragraph (h)(2)(ii)
of this section.
(4) Effective date of final stress capital buffer
requirement.
(i) The Board will provide a bank holding company with its final
stress capital buffer requirement and confirmation of the bank holding
company’s final planned capital distributions by August 31 of the
calendar year that a capital plan was submitted pursuant to paragraph
(e)(1)(ii) of this section, unless otherwise determined by the Board.
A stress capital buffer requirement will not be considered final so
as to be agency action subject to judicial review under 5 U.S.C. 704
during the pendency of a request for reconsideration made pursuant
to paragraph (i) of this section or before the time for requesting
reconsideration has expired.
(ii) Unless otherwise determined by the Board, a bank holding company’s
final planned capital distributions and final stress capital buffer
requirement shall:
(A)
Be effective on October 1 of the calendar year in which a capital
plan was submitted pursuant to paragraph (e)(1)(ii) of this section;
and
(B) Remain in effect until superseded.
(5) Publication. With respect to any bank holding
company subject to this section, the Board may disclose publicly any
or all of the following:
(i) The stress capital buffer requirement
provided to a bank holding company under paragraph (h)(1) or (i)(5)
of this section;
(ii) Adjustments
made pursuant to paragraph (h)(2)(ii);
(iii) A summary of the results of the
supervisory stress test; and
(iv) Other information.
(i) Administrative remedies; request for reconsideration. The following requirements and procedures apply to any request under
this paragraph (i):
(1) General. To request reconsideration of
a stress capital buffer requirement, provided under paragraph (h)
of this section, a bank holding company must submit a written request
for reconsideration.
(2) Timing of request. A request for reconsideration
of a stress capital buffer requirement, provided under paragraph (h)
of this section, must be received within 15 calendar days of receipt
of a notice of a bank holding company’s stress capital buffer requirement.
(3) Contents
of request.
(i) A request for reconsideration must include a detailed explanation
of why reconsideration should be granted (that is, why a stress capital
buffer requirement should be reconsidered). With respect to any information
that was not previously provided to the Federal Reserve in the bank
holding company’s capital plan, the request should include an explanation
of why the information should be considered.
(ii) A request for reconsideration may
include a request for an informal hearing on the bank holding company’s
request for reconsideration.
(4) Hearing.
(i) The Board
may, in its sole discretion, order an informal hearing if the Board
finds that a hearing is appropriate or necessary to resolve disputes
regarding material issues of fact.
(ii) An informal hearing shall be held within 30 calendar days of
a request, if granted, provided that the Board may extend this period
upon notice to the requesting party.
(5) Response
to request. Within 30 calendar days of receipt of the bank holding
company’s request for reconsideration of its stress capital buffer
requirement submitted under paragraph (i)(2) of this section or within
30 days of the conclusion of an informal hearing conducted under paragraph
(i)(4) of this section, the Board will notify the company of its decision
to affirm or modify the bank holding company’s stress capital buffer
requirement, provided that the Board may extend this period upon notice
to the bank holding company.
(6) Distributions during the pendency of a request
for reconsideration. During the pendency of the Board’s decision
under paragraph (i)(5) of this section, the bank holding company may
make capital distributions that are consistent with effective distribution
limitations, unless prior approval is required under paragraph (j)(1)
of this section.
(j) Approval
requirements for certain capital actions.
(1) Circumstances
requiring approval—Resubmission of a capital plan. Unless it
receives prior approval pursuant to paragraph (j)(3) of this section,
a bank holding company may not make a capital distribution (excluding
any capital distribution arising from the issuance of a capital instrument
eligible for inclusion in the numerator of a regulatory capital ratio)
if the capital distribution would occur after the occurrence of an
event requiring resubmission under paragraph (e)(4)(i)(A) or (B) of
this section.
(2) Contents of request. A request for a capital
distribution under this section must contain the following information:
(i) The bank holding
company’s capital plan or a discussion of changes to the bank holding
company’s capital plan since it was last submitted to the Federal
Reserve;
(ii) The purpose of
the transaction;
(iii) A description
of the capital distribution, including for redemptions or repurchases
of securities, the gross consideration to be paid and the terms and
sources of funding for the transaction, and for dividends, the amount
of the dividend(s); and
(iv)
Any additional information requested by the Board or the appropriate
Reserve Bank (which may include, among other things, an assessment
of the bank holding company’s capital adequacy under a severely adverse
scenario, a revised capital plan, and supporting data).
(3) Approval
of certain capital distributions.
(i) The Board, or the appropriate Reserve
Bank with concurrence of the Board, will act on a request for prior
approval of a capital distribution within 30 calendar days after the
receipt of all the information required under paragraph (j)(2) of
this section.
(ii) In acting
on a request for prior approval of a capital distribution, the Board,
or appropriate Reserve Bank with concurrence of the Board, will apply
the considerations and principles in paragraph (g) of this section,
as appropriate. In addition, the Board, or the appropriate Reserve
Bank with concurrence of the Board, may disapprove the transaction
if the bank holding company does not provide all of the information
required to be submitted under paragraph (j)(2) of this section.
(4) Disapproval and hearing.
(i) The Board, or the appropriate
Reserve Bank with concurrence of the Board, will notify the bank holding
company in writing of the reasons for a decision to disapprove any
proposed capital distribution. Within 15 calendar days after receipt
of a disapproval by the Board, the bank holding company may submit
a written request for a hearing.
(ii) The Board may, in its sole discretion, order an informal hearing
if the Board finds that a hearing is appropriate or necessary to resolve
disputes regarding material issues of fact. An informal hearing shall
be held within 30 calendar days of a request, if granted, provided
that the Board may extend this period upon notice to the requesting
party.
(iii) Written notice of
the final decision of the Board shall be given to the bank holding
company within 60 calendar days of the conclusion of any informal
hearing ordered by the Board, provided that the Board may extend this
period upon notice to the requesting party.
(iv) While the Board’s decision is pending
and until such time as the Board, or the appropriate Reserve Bank
with concurrence of the Board, approves the capital distribution at
issue, the bank holding company may not make such capital distribution.
(k) Post notice
requirement. A bank holding company must notify the Board and
the appropriate Reserve Bank within 15 days of making a capital distribution
if:
(1) The capital distribution
was approved pursuant to paragraph (j)(3) of this section; or
(2) The dollar amount of
the capital distribution will exceed the dollar amount of the bank
holding company’s final planned capital distributions, as measured
on an aggregate basis beginning in the fourth quarter of the planning
horizon through the quarter at issue.
