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H.R. 4293 (115th): Stress Test Improvement Act of 2017


The text of the bill below is as of Apr 12, 2018 (Referred to Senate Committee). The bill was not enacted into law.

Summary of this bill

Source: Republican Policy Committee

H.R. 4293 improves the stress testing process for bank holding companies. Specifically, the bill improves the process by:

  • Requiring certain bank holding companies to conduct company-run stress tests once a year rather than semiannually;
  • Reduces the number of supervisory scenarios from three to two—the baseline and severely adverse scenario;
  • Does away with mid-year stress tests;
  • Prohibits the Federal Reserve from objecting to a bank holding company’s capital plan based on qualitative deficiencies.

The Federal Reserve (Fed) administers a set of “stress tests” to determine the ability of U.S. banks to withstand periods of economic turmoil. Title I of Dodd-Frank requires company-run stress tests for any (bank or nonbank) financial firm …


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