[Federal Register Volume 76, Number 78 (Friday, April 22, 2011)]
[Proposed Rules]
[Pages 22648-22662]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-9357]


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FEDERAL RESERVE SYSTEM

12 CFR Part 252

[Regulation YY; Docket No. R-1414]
RIN 7100-AD73

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 381

RIN 3064-AD77


Resolution Plans and Credit Exposure Reports Required

AGENCIES: Board of Governors of the Federal Reserve System (Board) and 
Federal Deposit Insurance Corporation (Corporation).

ACTION: Proposed rule; request for public comment.

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SUMMARY: The Board and the Corporation request comment on this proposed 
rule that implements the requirements in section 165(d) of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank 
Act'') regarding resolution plans and credit exposure reports. Section 
165(d) requires each nonbank financial company supervised by the Board 
and each bank holding company with assets of $50 billion or more to 
report periodically to the Board, the Corporation, and the Financial 
Stability Oversight Council (the ``Council'') the plan of such company 
for rapid and orderly resolution in the event of material financial 
distress or failure, and the nature and extent of credit exposures of 
such company to significant bank holding companies and significant 
nonbank financial companies and the nature and extent of the credit 
exposures of significant bank holding companies and significant nonbank 
financial companies to such company. Section 165(d)(8) of the Dodd-
Frank Act requires the Board and the Corporation to jointly issue final 
rules implementing section 165(d) by not later than January 21, 2012.

DATES: Comments should be received on or before June 10, 2011.

ADDRESSES: Comments should be directed to:
    Board: You may submit comments, identified by Docket No. 1414 and 
RIN no. 7100-AD73, by any of the following methods:
     Agency Web site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: regs.comments@federalreserve.gov. Include docket 
number in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.
     Mail: Jennifer J. Johnson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue, 
NW., Washington, DC 20551.

All public comments are available from the Board's Web site at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, 
unless modified for technical reasons. Accordingly, your comments will 
not be edited to remove any identifying or contact information. Public 
comments may also be viewed electronically or in paper form in Room MP-
500 of the Board's Martin Building (20th and C Street, NW.) between 9 
a.m. and 5 p.m. on weekdays.
    Corporation: You may submit comments by any of the following 
methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web site: http://www.FDIC.gov/regulations/laws/federal/propose.html
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th 
Street, NW., Washington, DC 20429.
     Hand Delivered/Courier: The guard station at the rear of 
the 550 17th Street Building (located on F Street), on business days 
between 7 a.m. and 5 p.m.
     E-mail: comments@FDIC.gov.
    Instructions: Comments submitted must include ``FDIC'' and ``RIN 
3064-AD77.'' Comments received will be posted without change to http://www.FDIC.gov/regulations/laws/federal/propose.html, including any 
personal information provided.

FOR FURTHER INFORMATION CONTACT: Board: Barbara J. Bouchard, Senior 
Associate Director, (202) 452-3072, or Avery I. Belka, Counsel, (202) 
736-5691, Division of Banking Regulation and Supervision; or Ann E. 
Misback, Associate General Counsel, (202) 452-3788, or Dominic A. 
Labitzky, Senior Attorney, (202) 452-3428, Legal Division; Board of 
Governors of the Federal Reserve System, 20th and C Streets, NW., 
Washington, DC 20551. Users of Telecommunication Device for Deaf (TDD) 
only, call (202) 263-4869.
    Corporation: Joseph Fellerman, Senior Program Analyst, (202) 898-
6591, Office of Complex Financial Institutions, Richard T. Aboussie, 
Associate General Counsel, (703) 562-2452, David N. Wall, Assistant 
General Counsel, (703) 562-2440, Mark A. Thompson, Counsel, (703) 562-
2529, or Mark G. Flanigan, Counsel, (202) 898-7426, Legal Division.

SUPPLEMENTARY INFORMATION: 

I. Background

    To promote financial stability, section 165(d) of the Dodd-Frank 
Act requires each nonbank financial company supervised by the Board and 
each bank holding company with total consolidated assets of $50 billion 
or more to periodically submit to the Board, the Corporation and the 
Council a plan for such company's rapid and orderly resolution in the 
event of material financial distress or failure, and a report on the 
nature and extent of credit exposures of such company to significant 
bank holding companies and significant nonbank financial companies and 
the nature and extent of credit exposures of significant bank holding 
companies and significant nonbank financial companies to such 
company.\1\ This proposed rule would implement the resolution plan and 
credit exposure reporting requirements set forth in section 165(d) of 
the Dodd-Frank Act.
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    \1\ See generally 12 U.S.C. 5365(d).
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    Section 165(d) provides regulators with the ability to conduct 
advance resolution planning for a covered company. As demonstrated by 
the Corporation's experience in failed bank resolutions, as well as the 
Board's and the Corporation's experience in the recent crisis, advance 
planning is critical for an efficient resolution of a company subject 
to the proposed rule.\2\ Advance planning has long been a component of 
resiliency and recovery planning by financial companies. The Dodd-Frank 
Act requires that certain financial companies incorporate resolution 
planning into their overall

[[Page 22649]]

business planning processes. In preparing for an orderly liquidation of 
a financial company under Title II of the Dodd-Frank Act, the 
Corporation will have access to the information included in such 
company's resolution plan. Advance knowledge of and access to this 
information will be a vital element in the Corporation's resolution 
planning for such a company. The resolution plan will help regulators 
to better understand a firm's business and how that entity may be 
resolved, and will also enhance the regulators' understanding of 
foreign operations in an effort to develop a comprehensive and 
coordinated resolution strategy for a cross-border firm.
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    \2\ The ability to undertake advance planning for the resolution 
of any financial institution, from small banks to globally active 
financial companies, is a precondition for effective crisis 
management and resolution.
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    The Dodd-Frank Act requires each company covered by the proposed 
rule to produce a resolution plan, or ``living will,'' that includes 
information regarding the manner and extent to which any insured 
depository institution affiliated with the company is adequately 
protected from risks arising from the activities of any nonbank 
subsidiaries of the company; full descriptions of the ownership 
structure, assets, liabilities, and contractual obligations of the 
company; identification of the cross-guarantees tied to different 
securities; identification of major counterparties; a process for 
determining to whom the collateral of the company is pledged; and any 
other information that the Board and the Corporation jointly require by 
rule or order.\3\ The proposed rule would require a strategic analysis 
by the covered company of how it can be resolved under Title 11 of the 
U.S. Code (the ``Bankruptcy Code'') in a way that would not pose 
systemic risk to the financial system. In doing so, the company must 
map its business lines to material legal entities and provide 
integrated analyses of its corporate structure; credit and other 
exposures; funding, capital and cash flows; the domestic and foreign 
jurisdictions in which it operates; and its supporting information 
systems for core business lines and critical operations. The credit 
exposure reports required by the statute will also provide important 
information critical to ongoing risk management and advance planning 
processes by identifying the company's significant credit exposures and 
other key information across the entity and its related entities.
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    \3\ See 12 U.S.C. 5365(d)(1).
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II. Overview of Proposed Rule

    Section 165(d)(8) of the Dodd-Frank Act requires the Board and the 
Corporation to jointly issue rules implementing the provisions of 
section 165(d) of the Dodd-Frank Act.\4\ The proposed rule applies to 
each ``Covered Company'', which term includes any bank holding company 
with $50 billion or more in total consolidated assets, as determined 
based on the average of the company's four most recent Consolidated 
Financial Statements for Bank Holding Companies as reported on the 
Federal Reserve's FR Y-9C. It also includes any foreign bank or company 
that is or is treated as a bank holding company under section 8(a) of 
the International Banking Act of 1978 \5\ and that had $50 billion or 
more in total consolidated assets, as determined based on the foreign 
bank's or company's most recent annual or, as applicable, the average 
of the four most recent quarterly Capital and Asset Reports for Foreign 
Banking Organizations as reported on the Federal Reserve's Form FR Y-
7Q. In addition, a ``Covered Company'' includes any nonbank financial 
company that the Council has determined under section 113 of the Dodd-
Frank Act must be supervised by the Board and for which such 
determination is in effect.
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    \4\ 12 U.S.C. 5365(d)(8).
    \5\ 12 U.S.C. 3106(a).
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    The Dodd-Frank Act requires that, in applying the requirements of 
section 165(d) to any foreign nonbank financial company supervised by 
the Board or any foreign-based bank holding company, the Board give due 
regard to the principle of national treatment and equality of 
competitive opportunity, and to take into account the extent to which 
the foreign financial company is subject on a consolidated basis to 
home country standards that are comparable to those applied to 
financial companies in the United States.\6\
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    \6\ 12 U.S.C. 5365(b)(2).
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    The proposed rule requires that each Covered Company periodically 
submit to the Board and Corporation (i) a plan for the rapid and 
orderly resolution of the Covered Company under the Bankruptcy Code in 
the event of material financial distress at or failure of the Covered 
Company (``Resolution Plan''); and (ii) a report on the nature and 
extent to which the Covered Company has credit exposure to other 
significant nonbank financial companies and significant bank holding 
companies and on the nature and extent to which other significant 
nonbank financial companies and significant bank holding companies have 
credit exposure to the Covered Company (``Credit Exposure Report''). 
The proposal would establish rules and requirements regarding the 
submission and content of a Resolution Plan and a Credit Exposure 
Report, as well as procedures and standards for review by the Board and 
Corporation of a Resolution Plan. The Board would make such reports 
available to the Council upon request.

Section-by-Section Analysis

    Definitions. Section --------.2 of the proposed rule defines 
certain terms, including ``rapid and orderly resolution,'' ``material 
financial distress,'' ``core business lines,'' ``critical operations'' 
and ``material entities,'' which are key definitions in the proposed 
rule.
    ``Rapid and orderly resolution'' means a reorganization or 
liquidation of the Covered Company (or, in the case of a Covered 
Company that is incorporated or organized in a jurisdiction other than 
the United States, the subsidiaries and operations of such foreign 
company that are domiciled in the United States) under the Bankruptcy 
Code that can be accomplished within a reasonable period of time and in 
a manner that substantially mitigates the risk that the failure of the 
Covered Company would have serious adverse effects on financial 
stability in the United States.\7\ Under the proposed rule each 
Resolution Plan submitted should provide for the rapid and orderly 
resolution of the Covered Company.
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    \7\ If an entity is subject to an insolvency regime other than 
the Bankruptcy Code, the analysis should be in reference to that 
applicable regime.
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    ``Material financial distress'' with regard to a Covered Company 
means that: (i) The Covered Company has incurred, or is likely to 
incur, losses that will deplete all or substantially all of its 
capital, and there is no reasonable prospect for the company to avoid 
such depletion; (ii) the assets of the Covered Company are, or are 
likely to be, less than its obligations to creditors and others; or 
(iii) the Covered Company is, or is likely to be, unable to pay its 
obligations (other than those subject to a bona fide dispute) in the 
normal course of business.
    Under the proposed rule, each Resolution Plan submitted should 
provide for the rapid and orderly resolution of the Covered Company in 
the event of material financial distress or failure of the Covered 
Company. The Resolution Plan also should take into consideration that 
the event of material financial distress may be idiosyncratic or may 
occur at a time when financial markets, or other significant companies, 
are also under stress.
    ``Core business lines'' means those business lines, including 
associated operations, services, functions and support that, in the 
firm's view, upon

[[Page 22650]]

failure would result in a material loss of revenue, profit, or 
franchise value. The Resolution Plan should address how the resolution 
of the Covered Company will affect the core business lines.
    ``Critical operations'' are those operations, including associated 
services, functions and support that, in the view of the Covered 
Company or as jointly directed by the Board and the Corporation, upon a 
failure of, or discontinuance of such operations, would likely result 
in a disruption to the U.S. economy or financial markets. The 
Resolution Plan should address and provide for the continuation and 
funding of critical operations.
    ``Material entity'' means a subsidiary or foreign office of the 
Covered Company that is significant to the activities of a critical 
operation or core business line.
    Resolution Plan required. Section --------.3 of the proposed rule 
requires each Covered Company to submit a Resolution Plan within 180 
days of the effective date of the final rule, or within 180 days of 
such later date as the company becomes a Covered Company.
    The proposed rule specifies the minimum content of a Resolution 
Plan. The Board and the Corporation recognize that plans will vary by 
company and, in their evaluation of plans, will take into account 
variances among companies in their core business lines, critical 
operations, foreign operations, capital structure, risk, complexity, 
financial activities (including the financial activities of their 
subsidiaries), size and other relevant factors.
    After the initial Resolution Plan is submitted, each Covered 
Company would be required to submit a new Resolution Plan no later than 
90 days after the end of each calendar year.
    A Covered Company would be required to file an updated Resolution 
Plan within a time period specified by the Board and the Corporation, 
but no later than 45 days after any event, occurrence, change in 
conditions or circumstances or change which results in, or could 
reasonably be foreseen to have, a material effect on the Resolution 
Plan of the Covered Company. An update should describe the event, any 
material effects that the event may have on the Resolution Plan and any 
actions the Covered Company has taken or will take to address such 
material effects.
    Material changes may include, but are not limited to, any of the 
following--
    (i) A significant acquisition, or series of such acquisitions, by 
the Covered Company;
    (ii) A significant sale, other divestiture, or series of such 
transactions, by the Covered Company;
    (iii) A discontinuation of the business of, or dissipation of the 
assets of the Covered Company, a material entity, core business line or 
critical operation;
    (iv) The bankruptcy, insolvency of a material entity;
    (v) A material reorganization of the Covered Company;
    (vi) The loss of a material servicing subsidiary or material 
servicing contract;
    (vii) The unavailability or loss of a significant correspondent or 
counterparty relationship, source of funding or liquidity utilized by 
the Covered Company, a material entity, a core business line or 
critical operation;
    (viii) The transfer or relocation of 5 percent or more of the total 
consolidated United States (domestic) assets of the Covered Company to 
a location(s) outside of the United States;
    (ix) A reduction in the market capitalization or book value of the 
consolidated capital of 5 percent or more of the Covered Company as of 
the end of the previous calendar yearend; or
    (x) The transfer, termination, suspension or revocation of any 
material license or other regulatory authorization required to conduct 
a core business line or critical operation.
    The Board and the Corporation jointly may waive a requirement that 
a Covered Company file an update of a Resolution Plan. The Board and 
the Corporation jointly may also require an update for any other 
reason, more frequent submissions or updates, and may extend the time 
period that a Covered Company has to submit its Resolution Plan or 
update.
    The board of directors of the Covered Company would be required to 
approve the initial and each annual Resolution Plan filed. In the case 
of a foreign-based Covered Company, a delegee of the board of the 
directors of such organization may approve the initial Resolution Plan 
and any updates to a Resolution Plan.
    Informational Content of a Resolution Plan. Section --------.4 of 
the proposed rule sets forth the minimum informational content 
requirements of a Resolution Plan. A Covered Company that is domiciled 
in the United States would be required to provide information with 
regard to both its U.S. operations and its foreign operations. A 
foreign-based Covered Company would be required to provide information 
regarding its U.S. operations, an explanation of how resolution 
planning for its U.S. operations is integrated into the foreign-based 
Covered Company's overall contingency planning process, and information 
regarding the interconnections and interdependencies among its U.S. 
operations and its foreign-based operations.
    Each Resolution Plan would be required to contain an executive 
summary, a strategic analysis of the plan's components, a description 
of the Covered Company's corporate governance structure for resolution 
planning, information regarding the Covered Company's overall 
organizational structure and related information, information regarding 
the Covered Company's management information systems, a description of 
interconnections and interdependencies among the Covered Company and 
its material entities, and supervisory and regulatory information.
    The executive summary should summarize the key elements of the 
Covered Company's strategic plan, material changes from the most 
recently filed plan, and any actions taken by the Covered Company to 
improve the effectiveness of the Resolution Plan or remediate or 
otherwise mitigate any material weaknesses or impediments to the 
effective and timely execution of the plan.
    The strategic analysis of how the resolution plan can be 
implemented to facilitate a rapid and orderly resolution is the 
foundation for any credible plan. The strategic analysis should 
describe the Covered Company's critical thinking detailing how, in 
practice, it could be resolved under the Bankruptcy Code. As a result, 
the strategic analysis should include the analytical support for the 
plan, its key assumptions, including any assumptions made concerning 
the economic or financial conditions that would be present at the time 
the Covered Company sought to implement such plan. The strategic 
analysis should include detailed information as to how, in the event of 
material financial distress or failure of the Covered Company, a 
reorganization or liquidation of the Covered Company (or, in the case 
of a Covered Company that is incorporated or organized in a 
jurisdiction other than the United States, the subsidiaries and 
operations of such foreign company that are domiciled in the United 
States) under the Bankruptcy Code could be accomplished within a 
reasonable period of time and in a manner that substantially mitigates 
the risk that the failure of the Covered Company would have serious 
adverse effects on financial stability in the United States. The 
strategic analysis of the Covered Company's resolution plan must also 
identify the range of specific actions to

[[Page 22651]]

be taken by the Covered Company to facilitate a rapid and orderly 
resolution of the Covered Company, its material entities, critical 
operations and core business lines in the event of material financial 
distress or failure of the Covered Company.
    Funding, liquidity, support functions, and other resources, 
including capital resources, should be identified and mapped to the 
Covered Company's material entities, core business lines and critical 
operations. The Covered Company's strategy for maintaining and funding 
the critical operations and core business lines in an environment of 
material financial distress and in the implementation and execution of 
its resolution plan should be provided and mapped to its material 
entities. The Covered Company's strategic analysis should demonstrate 
how such resources would be utilized to facilitate an orderly 
resolution in an environment of material financial distress. The 
Covered Company should also provide its strategy in the event of a 
failure or discontinuation of a material entity, core business line or 
critical operation, and the actions that will be taken by the Covered 
Company to prevent or mitigate any adverse effects of such failure or 
discontinuation on the financial stability of the company and the 
United States. In addition, a Covered Company would be required to 
provide its strategy for ensuring that any insured depository 
institution subsidiary will be adequately protected from risks arising 
from the activities of any nonbank subsidiaries of the Covered Company 
(other than those that are subsidiaries of an insured depository 
institution).
    The analytical mapping of the core business lines and critical 
operations of the Covered Company and the mapping of funding, 
liquidity, critical service support, and other resources to legal 
entities should demonstrate how those core business lines and critical 
operations could be resolved and transferred to potential acquirers. 
This analysis should demonstrate how these critical elements of the 
business operations could survive in an environment of material 
financial distress as well as the failure or insolvency of one or more 
entities within the Covered Company. This is particularly important for 
internal as well as external service level agreements that provide the 
business services essential for continued operation of the Covered 
Company's core business lines and critical operations.
    The description of the Covered Company's corporate governance 
structure for resolution planning should include information regarding 
how resolution planning is integrated into the corporate governance 
structure and processes of the Covered Company, and identify the senior 
management official that is primarily responsible for overseeing the 
development, maintenance, implementation, and filing of the Resolution 
Plan and for the Covered Company's compliance with the proposed rule. 
The requirements in the proposed rule are minimums and the size of the 
corporate governance structure is expected to vary based upon the size 
and complexity of the Covered Company. For the largest and most complex 
companies, it may be necessary to establish a central planning function 
that is headed by a senior management official. Such official would 
report to the Chief Risk Officer or Chief Executive Officer and 
periodic reports on resolution planning would be made to the Covered 
Company's board of directors.
    The information regarding the Covered Company's overall 
organization structure and related information should include a 
hierarchical list of all material entities, jurisdictional and 
ownership information. This information should be mapped to core 
business lines and critical operations. An unconsolidated balance sheet 
for the Covered Company and a consolidating schedule for all entities 
that are subject to consolidation should be provided. The Resolution 
Plan should include information regarding material assets, liabilities, 
derivatives, hedges, capital and funding sources and major 
counterparties. Material assets and liabilities should be mapped to 
material entities along with location information. An analysis of 
whether the bankruptcy of a major counterparty would likely have an 
adverse effect on and result in the material financial distress or 
failure of the Covered Company should also be included. Trading, 
payment, clearing and settlement systems utilized by the Covered 
Company should be identified. The Covered Company would not need to 
identify trading, payment, clearing and settlement systems that are 
immaterial in resolution planning, such as a local check clearing 
house.
    For a Covered Company with foreign operations, the plan should 
identify the extent of the risks related to its foreign operations and 
the Covered Company's strategy for addressing such risks. These 
elements of the Resolution Plan should take into consideration, and 
address through practical responses, the complications created by 
differing national laws, regulations, and policies. This analysis 
should include a mapping of core business lines and critical operations 
to legal entities operating or with assets, liabilities, operations, or 
service providers in foreign jurisdictions. The continued ability to 
maintain core business lines and critical operations in these foreign 
jurisdictions during material financial distress and insolvency 
proceedings should be evaluated and practical steps identified to 
address weaknesses or vulnerabilities.
    The proposed rule requires the Covered Company to provide 
information regarding the management information systems supporting its 
core business lines and critical operations, including information 
regarding the legal ownership of such systems as well as associated 
software, licenses, or other associated intellectual property. The 
analysis and practical steps that are identified by the Covered Company 
should address the continued availability of the key management 
information systems that support core business lines and critical 
operations both within the United States and in foreign jurisdictions.
    The proposed rule also requires the Covered Company to provide a 
description of interconnections and interdependencies among the Covered 
Company and its material entities and affiliates, and among the 
critical operations and core business lines of the Covered Company 
that, if disrupted, would materially affect the funding or operations 
of the Covered Company, its material entities, or its critical 
operations or core business lines. As noted above, the continued 
availability of key services and supporting business operations to core 
business lines and critical operations in an environment of material 
financial distress and after insolvency should be a focus of resolution 
planning. Steps to ensure that service level agreements for such 
services, whether provided by internal or external service providers, 
survive insolvency should be demonstrated in the Resolution Plan.
    The plan should identify the Covered Company's supervisory 
authorities and regulators, including information identifying any 
foreign agency or authority with significant supervisory authority over 
material foreign-based subsidiaries or operations.
    The proposed rule requires the Resolution Plan to include a 
description of the Covered Company's processes and systems to collect, 
maintain, and report the information and other data underlying the 
Resolution Plan. The Resolution Plan should identify any deficiencies 
in such processes and systems and discuss plans to remedy such 
deficiencies. The Covered Company should, within a reasonable

[[Page 22652]]

period of time after the effective date of the rule, as determined by 
the Board and the Corporation, be able to demonstrate its capability to 
promptly produce, in a format acceptable to the Board and the 
Corporation, the data underlying the key aspects of the Resolution 
Plan. A Covered Company should also identify any deficiencies in its 
systems and processes to collect, maintain, and report such information 
and discuss its plans to remedy such deficiencies.
    Informational content of a Credit Exposure Report. Section ------
--.5 of the proposed rule requires each Covered Company to submit to 
the Board and the Corporation a Credit Exposure Report on a quarterly 
basis. Each Credit Exposure Report is required to set forth the nature 
and extent of credit exposures of such company to significant bank 
holding companies and significant nonbank financial companies, as well 
as the credit exposures of significant bank holding companies and 
significant nonbank financial companies to such company. The proposed 
rule specifies the credit exposures to be reported.
    A Credit Exposure Report submitted by a Covered Company that is a 
company incorporated or organized in a jurisdiction other than the 
United States (other than a bank holding company) or that is a foreign 
banking organization would be required to include only information with 
respect to its subsidiaries and operations that are domiciled in the 
United States.
    With regard to the proposed content of the Credit Exposure Reports, 
the Board and the Corporation note that there are several other 
initiatives underway or contemplated, such as the data to support the 
Board's single counterparty credit exposure limits and stress testing 
responsibilities under the Dodd-Frank Act. The Board and the 
Corporation will ensure that data collected through these other 
initiatives and the Credit Exposure Report will be coordinated and 
harmonized to the extent possible so as to minimize redundant data 
collections and allow maximum data quality. It is anticipated that 
proposed reporting requirements associated with this and other 
regulations under the Dodd-Frank Act, will be issued for public comment 
later this year and will provide additional clarity around the 
definition of credit exposure for each asset class listed in Sec.  ----
----.5.
    Review of Resolution Plans; resubmission of deficient Resolutions 
Plans. Section --------.6 of the proposed rule sets forth procedures 
regarding the review of Resolution Plans. As proposed, when a Covered 
Company submits a Resolution Plan, the Resolution Plan will be reviewed 
initially to determine whether it appears to contain the elements set 
forth in the proposed rule and is informationally complete. Within 60 
calendar days of receiving a Resolution Plan, the Board and the 
Corporation would determine and acknowledge whether the Resolution Plan 
satisfies the minimum informational requirements and should be accepted 
for further review. If the Board and the Corporation determine that a 
Resolution Plan is informationally incomplete or that substantial 
additional information is necessary to facilitate further review, the 
Board and the Corporation will inform the Covered Company in writing of 
the area(s) in which the Resolution Plan is informationally incomplete 
or with respect to which additional information is required. The 
Covered Company would be required to resubmit an informationally 
complete Resolution Plan, or such additional information as jointly 
requested to facilitate review of the Resolution Plan, no later than 30 
days after receiving such notice or such other time period as the Board 
and Corporation may jointly determine.
    After a Resolution Plan is accepted for review, the Board and 
Corporation would review the plan for its compliance with the 
requirements of the proposed rule. If, following such review, the Board 
and the Corporation jointly determine that the Resolution Plan of a 
Covered Company submitted under this part is not credible or would not 
facilitate an orderly resolution of the Covered Company under the 
Bankruptcy Code, the Board and Corporation would jointly notify the 
Covered Company in writing of such determination. Such notice would 
identify the aspects of the Resolution Plan that the Board and 
Corporation jointly determined to be deficient and request the 
resubmission of a Resolution Plan that remedies the deficiencies of the 
Resolution Plan.
    Within 90 days of receiving such notice of deficiencies, or such 
shorter or longer period as the Board and Corporation may jointly 
determine, a Covered Company would be required to submit a revised 
Resolution Plan to the Board and Corporation that addresses the 
deficiencies jointly identified by the Board and Corporation. The 
revised Resolution Plan would be required to discuss in detail: (i) The 
revisions made by the Covered Company to address the deficiencies 
jointly identified by the Board and the Corporation; (ii) any changes 
to the Covered Company's business operations and corporate structure 
that the Covered Company proposes to undertake to facilitate 
implementation of the revised Resolution Plan (including a timeline for 
the execution of such planned changes); and (iii) why the Covered 
Company believes that the revised Resolution Plan is credible and would 
result in an orderly resolution of the Covered Company under the 
Bankruptcy Code.
    Upon a written request by a Covered Company, the Board and 
Corporation may jointly extend the time to resubmit a revised 
Resolution Plan. Any extension request would have to be supported by a 
written statement of the company describing the basis and justification 
for the request.
    Failure to cure deficiencies on resubmission of a Resolution Plan. 
Section --------.7 provides that, if the Covered Company fails to 
submit a revised Resolution Plan or the Board and the Corporation 
jointly determine that a revised Resolution Plan submitted does not 
adequately remedy the deficiencies identified by the Board and the 
Corporation, then the Board and Corporation may jointly subject a 
Covered Company or any subsidiary of a Covered Company to more 
stringent capital, leverage, or liquidity requirements, or restrictions 
on the growth, activities, or operations. Any such requirements or 
restrictions would apply to the Covered Company or subsidiary, 
respectively, until the Board and the Corporation jointly determine the 
Covered Company has submitted a revised Resolution Plan that adequately 
remedies the deficiencies identified. In addition, if the Covered 
Company fails, within the two-year period beginning on the date on 
which the determination to impose such requirements or restrictions was 
made, to submit a revised Resolution Plan that adequately remedies the 
deficiencies jointly identified by the Board and the Corporation, then 
the Board and Corporation, in consultation with the Council, may 
jointly, by order, direct the Covered Company to divest such assets or 
operations as the Board and Corporation jointly determine necessary to 
facilitate an orderly resolution of the Covered Company under the 
Bankruptcy Code in the event the company were to fail.
    Consultation. Section --------.8 of the proposed rule provides 
that, prior to issuing any notice of deficiencies, determining to 
impose requirements or restrictions on a Covered Company, or issuing a 
divestiture order with respect to a Covered Company that is likely to 
have a significant effect on a functionally regulated subsidiary or a

[[Page 22653]]

depository institution subsidiary of the Covered Company, the Board 
shall consult with each Council member that primarily supervises any 
such subsidiary and may consult with any other Federal, state, or 
foreign supervisor as the Board considers appropriate.
    No limiting effect or private right of action; confidentiality of 
Resolution Plans and Credit Exposure Reports. Section --------.9 of the 
proposed rule provides that a Resolution Plan submitted shall not have 
any binding effect on: (i) A court or trustee in a proceeding commenced 
under the Bankruptcy Code; (ii) a receiver appointed under Title II of 
the Dodd-Frank Act (12 U.S.C. 5381 et seq.); (iii) a bridge financial 
company chartered pursuant to 12 U.S.C. 5390(h); or (iv) any other 
authority that is authorized or required to resolve a Covered Company 
(including any subsidiary or affiliate thereof) under any other 
provision of Federal, state, or foreign law.
    The proposed rule further provides that nothing in the rule would 
create or is intended to create a private right of action based on a 
Resolution Plan prepared or submitted under this part or based on any 
action taken by the Board or the Corporation with respect to any 
Resolution Plan submitted under this part.
    Any Covered Company submitting a Resolution Plan or Credit Exposure 
Report that desires confidential treatment of the information submitted 
would be required to file a request for confidential treatment in the 
manner set forth in the proposed rule.
    Enforcement. Section --------.10 of the proposed rule provides that 
the Board and Corporation may jointly enforce an order jointly issued 
under section --------.7(a) or --------.7(c) of the proposed rule. 
Furthermore, the Board, in consultation with the Corporation, may 
address any violation of the rule by a Covered Company under section 8 
of the Federal Deposit Insurance Act (12 U.S.C. 1818).

III. Request for Comments

    The Board and the Corporation seek comment on all aspects of the 
proposed rule, including the following:

Scope

    Should a Covered Company for purposes of the rule be defined as any 
bank holding company that had $50 billion or more in total consolidated 
assets, based on the average of the Covered Company's four most recent 
Consolidated Financial Statements? Should the average be calculated 
over a shorter period of time (e.g., two quarters)? Why might an 
alternative method for defining the $50 billion asset threshold be more 
appropriate? What alternative approaches to prescribing asset 
thresholds for the purpose of defining a ``Covered Company'' should be 
considered?

Definitions

    1. What terms defined by the proposal require further clarification 
and how should they be defined?
    2. What other terms used in the proposal should the Board and 
Corporation define?

Strategic Analysis

    1. What additional elements of strategic analysis should be 
included in the Covered Company's Resolution Plan? Are there any 
elements listed in the rule that create an unnecessary burden or that 
should not be included in the Covered Company's Resolution Plan?
    2. How can the requirements regarding the strategic analysis be 
improved to provide additional clarity?
    3. What are the types of strategies that should be described 
regarding the manner and extent to which a depository institution could 
be protected from the risks arising from the activities of its nonbank 
affiliates?

Governance

    1. What additional resolution planning governance and oversight 
requirements should the proposed rule include?
    2. What alternative governance requirements might exist that would 
ensure that a Covered Company places adequate importance and attention 
on resolution planning?

Informational Elements

    1. What additional informational elements should the proposal 
require as part of a Resolution Plan? What impediments attend 
collection and production of the informational elements identified by 
the proposal? What impediments apply to collection and production of 
additional informational elements you have identified?
    2. Do the informational elements described in the proposal capture 
the correct types of information for resolution planning? Are any of 
the informational elements identified in the proposal not necessary?
    3. Which of the information elements described in the proposal 
could be clarified?
    4. To the extent any of the informational elements identified in 
the proposed rule are not readily available, identify the burden of or 
impediment to (e.g., technology limits, confidentiality concerns, etc.) 
obtaining and reporting such information? What changes could the Board 
and Corporation make to the proposal to reduce burdens and impediments?
    5. Should any informational elements be required to be available on 
an ``on demand'' basis? What impediments apply to making such 
information available on demand?
    6. What is the burden related to producing an unconsolidated 
balance sheet and providing consolidating schedules? What alternatives 
could the Board and Corporation include in the proposal to reduce that 
burden?

Foreign-Based Organizations

    1. The proposal would require foreign companies that are bank 
holding companies or are treated as bank holding companies under the 
International Banking Act and that have at least $50 billion in 
worldwide assets to prepare resolution plans and credit exposure 
reports only with respect to their U.S.-domiciled subsidiaries and 
operations. What are the issues that arise with respect to foreign 
banking organizations that would be subject to the proposed rule? What 
alternative means could the Board and Corporation employ to implement 
the resolution plan and credit exposure report requirements of the 
Dodd-Frank Act with respect to foreign banking organizations?
    2. To the extent that foreign jurisdictions do not impose a 
recovery or resolution plan requirement on a foreign-based Covered 
Company, how should the proposed Resolution Plan related to U.S. 
operations be linked to the contingency planning process of the 
foreign-based Covered Company?

Process

    1. Are the proposed timelines for Resolution Plan and Credit 
Exposure Report submission (i.e., initial, annual and interim updates) 
adequate for the Covered Company to develop and submit the information 
required by the proposed rule? If not, what timelines would be 
appropriate?
    2. With regard to the provision of the proposed rule that would 
require a Covered Company to update its Resolution Plan upon a material 
event, occurrence, or change, should the rule provide greater 
specificity (e.g., in terms of a dollar amount or percentage of assets 
acquired or disposed of in a significant transaction)?
    3. Are there explicit factors the Board and the Corporation should 
consider in determining whether a Resolution Plan

[[Page 22654]]

is not credible or would not facilitate an orderly resolution under 
Bankruptcy Code?

Credit Exposure Reports

    1. Are the elements proposed for inclusion in the Credit Exposure 
Reports sufficiently clear? What further clarification would be 
appropriate? Is there other information that would provide a clearer 
picture of the credit exposures associated with a Covered Company?
    2. Does the proposal adequately capture cross-border exposures?
    3. What other types of credit exposures should be covered by the 
proposed rule?

IV. Solicitation of Comments and Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act (Pub. L. 106-102, 113 
Stat. 1338, 1471, 12 U.S.C. 4809) requires the Federal banking agencies 
to use plain language in all proposed and final rules published after 
January 1, 2000. The Board and the Corporation invite comment on how to 
make the proposed rule easier to understand. For example:
     Is the material organized to suit your needs? If not, how 
could they present the rule more clearly?
     Are the requirements in the rule clearly stated? If not, 
how could the rule be more clearly stated?
     Do the regulations contain technical language or jargon 
that is not clear? If so, which language requires clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the regulation easier to 
understand? If so, what changes would achieve that?
     Is this section format adequate? If not, which of the 
sections should be changed and how?
     What other changes can the agencies incorporate to make 
the regulation easier to understand?

V. Administrative Law Matters

A. Paperwork Reduction Act Analysis

1. Request for Comment on Proposed Information Collection
    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the Board may not conduct or sponsor, 
and the respondent is not required to respond to, an information 
collection unless it displays a currently valid Office of Management 
and Budget (OMB) control number. The Board reviewed the proposed rule 
under the authority delegated to the Board by OMB.
    Comments are invited on:
    (a) Whether the collection of information is necessary for the 
proper performance of the Board's functions, including whether the 
information has practical utility;
    (b) The accuracy of the estimates of the burden of the information 
collection, including the validity of the methodology and assumptions 
used;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of the information collection on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    (e) Estimates of capital or start up costs and costs of operation, 
maintenance, and purchase of services to provide information.
    Comments on the collection of information should be sent to Cynthia 
Ayouch, Acting Federal Reserve Clearance Officer, Division of Research 
and Statistics, Mail Stop 95-A, Board of Governors of the Federal 
Reserve System, Washington, DC 20551, with copies of such comments sent 
to the Office of Management and Budget, Paperwork Reduction Project 
(7100-0202), Washington, DC 20503. You may also submit comments 
electronically, identified by Docket number, by any of the following 
methods:
     Agency Web site: http://www.federalreserve.gov. Follow the 
instructions for submitting comments on the http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: regs.comments@federalreserve.gov. Include docket 
number in the subject line of the message.
2. Proposed Information Collection
    Title of Information Collection: Resolution Plans and Credit 
Exposure Reports.
    Frequency of Response: Varied--some requirements are done at least 
quarterly, some at least annually, and some are event-generated.
    Affected Public: Bank holding companies and foreign banking 
organizations with total consolidated assets of $50 billion or more, 
and nonbank financial companies.
    Abstract: The information collection requirements are found in 
sections 252.3, 252.4, 252.5, and 252.6 of the proposed rule. These 
requirements would implement the resolution plan and credit exposure 
reporting requirements set forth in section 165(d) of the Dodd-Frank 
Act. Since the Board supervises all of the respondents, the Board will 
take all of the paperwork burden associated with this information 
collection.
    Section 252.3 sets forth the requirements for resolution plans to 
be filed initially, annually, and on an interim basis following 
material events. Section 252.4 details the information to be included 
in the resolution plans. Organizational structure information required 
in Section 252.4 may be incorporated by reference to information 
previously reported to the Board (FR Y-6, Annual Report of Bank Holding 
Companies; FR Y-7, Annual Report of Foreign Banking Organizations; and 
FR Y-10, Report of Changes in Organizational Structure; OMB No. 7100-
0297). Section 252.5 details the information to be provided in the 
Credit Exposure Reports. Section 252.6 includes a written request for 
institutions to request an extension of time to resubmit the resolution 
plan where deficiencies have been identified by the agencies.
Estimated Burden
    The burden associated with this collection of information may be 
summarized as follows:
    Number of Respondents: 124.
    Estimated Burden per Respondent: 12,400 hours for initial 
implementation and 2,881 hours annually on an ongoing basis.
    Total Estimated Annual Burden: 1,337,600 hours for initial 
implementation and 267,544 hours on an ongoing basis.

B. Regulatory Flexibility Act Analysis

    In accordance with section 3(a) of the Regulatory Flexibility Act, 
5 U.S.C. 601 et seq. (``RFA''), the Board and the Corporation are 
publishing an initial regulatory flexibility analysis of the proposed 
rule. The RFA requires an agency either to provide an initial 
regulatory flexibility analysis with a proposed rule for which a 
general notice of proposed rulemaking is required or to certify that 
the proposed rule will not have a significant economic impact on a 
substantial number of small entities. Based on its analysis and for the 
reasons stated below, the Board and the Corporation believe that this 
proposed rule will not have a significant economic impact on a 
substantial number of small entities. Nevertheless, the Board and the 
Corporation are publishing an initial regulatory flexibility analysis. 
A final regulatory flexibility analysis will be conducted after 
comments received during the

[[Page 22655]]

public comment period have been considered.
    In accordance with section 165(d) of the Dodd-Frank Act, the Board 
is proposing to add Regulation YY (12 CFR part 252) and the Corporation 
is proposing to add new part 381 (12 CFR part 381) to establish the 
requirements that a Covered Company periodically submit a Resolution 
Plan and a Credit Exposure Report to the Board and Corporation.\8\ The 
proposed rule would also establish the procedures and standards for 
joint review of a Resolution Plan by the Board and Corporation. The 
reasons and justification for the proposed rule are described in the 
Supplementary Information. As further discussed in the Supplementary 
Information, the procedure, standards, and definitions that would be 
established by the proposed rule are relevant to the joint authority of 
the Board and Corporation to implement the Resolution Plan and Credit 
Exposure requirements.
---------------------------------------------------------------------------

    \8\ See 12 U.S.C. 5365(d).
---------------------------------------------------------------------------

    Under regulations issued by the Small Business Administration 
(``SBA''), a ``small entity'' includes those firms within the ``Finance 
and Insurance'' sector with asset sizes that vary from $7 million or 
less in assets to $175 million or less in assets.\9\ The Board and the 
Corporation believe that the Finance and Insurance sector constitutes a 
reasonable universe of firms for these purposes because such firms 
generally engage in activities that are financial in nature. 
Consequently, bank holding companies or nonbank financial companies 
with assets sizes of $175 million or less are small entities for 
purposes of the RFA.
---------------------------------------------------------------------------

    \9\ 13 CFR 121.201.
---------------------------------------------------------------------------

    As discussed in the Supplementary Information, the proposed rule 
applies to a ``Covered Company,'' which includes only bank holding 
companies and foreign banks that are or are treated as a bank holding 
company (``foreign banking organization'') with $50 billion or more in 
total consolidated assets, and nonbank financial companies that the 
Council has determined under section 113 of the Dodd-Frank Act must be 
supervised by the Board and for which such determination is in effect. 
Bank holding companies and foreign banking organizations that are 
subject to the proposed rule therefore substantially exceed the $175 
million asset threshold at which a banking entity is considered a 
``small entity'' under SBA regulations.\10\ The proposed rule would 
apply to a nonbank financial company designated by the Council under 
section 113 of the Dodd-Frank Act regardless of such a company's asset 
size. Although the asset size of nonbank financial companies may not be 
the determinative factor of whether such companies may pose systemic 
risks and would be designated by the Council for supervision by the 
Board, it is an important consideration.\11\ It is therefore unlikely 
that a financial firm that is at or below the $175 million asset 
threshold would be designated by the Council under section 113 of the 
Dodd-Frank Act because material financial distress at such firms, or 
the nature, scope, size, scale, concentration, interconnectedness, or 
mix of it activities, are not likely to pose a threat to the financial 
stability of the United States.
---------------------------------------------------------------------------

    \10\ The Dodd-Frank Act provides that the Board may, on the 
recommendation of the Council, increase the $50 billion asset 
threshold for the application of the resolution plan and credit 
exposure report requirements. See 12 U.S.C. 5365(a)(2)(B). However, 
neither the Board nor the Council has the authority to lower such 
threshold.
    \11\ See 76 FR 4555 (January 26, 2011).
---------------------------------------------------------------------------

    As noted above, because the proposed rule is not likely to apply to 
any company with assets of $175 million or less, if adopted in final 
form, it is not expected to apply to any small entity for purposes of 
the RFA. Moreover, as discussed in the SUPPLEMENTARY INFORMATION, the 
Dodd-Frank Act requires the Board and the Corporation jointly to adopt 
rules implementing the provisions of section 165(d) of the Dodd-Frank 
Act. The Board and the Corporation do not believe that the proposed 
rule duplicates, overlaps, or conflicts with any other Federal rules. 
In light of the foregoing, the Board and the Corporation do not believe 
that the proposed rule, if adopted in final form, would have a 
significant economic impact on a substantial number of small entities 
supervised. Nonetheless, the Board and the Corporation seek comment on 
whether the proposed rule would impose undue burdens on, or have 
unintended consequences for, small organizations, and whether there are 
ways such potential burdens or consequences could be minimized in a 
manner consistent with section 165(d) of the Dodd-Frank Act.

C. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The Corporation has determined that the proposed rule will not 
affect family well-being within the meaning of section 654 of the 
Treasury and General Government Appropriations Act, enacted as part of 
the Omnibus Consolidated and Emergency Supplemental Appropriations Act 
of 1999 (Pub. L. 105-277, 112 Stat. 2681).

Text of the Common Rules (All Agencies)

PART [ ]--RESOLUTION PLANS AND CREDIT EXPOSURE REPORTS.

Sec.

----.1 Authority and scope.
----.2 [Reserved]
----.3 Resolution Plan required.
----.4 Informational content of a Credit Exposure Report.
----.5 Credit Exposure Report required and informational content.
----.6 Review of Resolution Plans; resubmission of deficient 
Resolution Plans.
----.7 Failure to cure deficiencies on resubmission of a Resolution 
Plan.
----.8 Consultation.
----.9 No limiting effect or private right of action; 
confidentiality of Resolution Plans and Credit Exposure Reports.
----.10 Enforcement.

Sec.  ----.1 Authority and scope.

    (a) Authority. This part is issued pursuant to section 165(d)(8) of 
the Dodd-Frank Wall Street Reform and Consumer Protection Act (the 
Dodd-Frank Act) (Pub. L. 111-203, 124 Stat. 1376, 1426-1427), 12 U.S.C. 
5365(d)(8), which requires the Board of Governors of the Federal 
Reserve System (Board) and the Federal Deposit Insurance Corporation 
(Corporation) to jointly issue rules implementing the provisions of 
section 165(d) of the Dodd-Frank Act.
    (b) Scope. This part applies to each Covered Company and:
    (1) Requires that each Covered Company periodically submit to the 
Board and Corporation:
    (i) A report regarding the plan of the Covered Company for rapid 
and orderly resolution under the Bankruptcy Code in the event of 
material financial distress at or failure of the Covered Company 
(Resolution Plan); and
    (ii) A report on the nature and extent to which:
    (A) The Covered Company has credit exposure to other significant 
nonbank financial companies and significant bank holding companies; and
    (B) Other significant nonbank financial companies and significant 
bank holding companies have credit exposure to the Covered Company 
(Credit Exposure Report); and
    (2) Establishes rules and requirements regarding the submission and 
content of a Resolution Plan and a Credit Exposure Report, as well as 
procedures and standards for review by the Board and Corporation of a 
Resolution Plan.

[[Page 22656]]

Sec.  ----.2 [Reserved]

Sec.  ----.3 Resolution Plan required.

    (a) Initial and annual Resolution Plans required. Within 180 days 
of the effective date of this part, or such later date as a company 
becomes a Covered Company, each Covered Company shall submit a 
Resolution Plan to the Board and the Corporation. Thereafter, each 
Covered Company shall submit a Resolution Plan to the Board and the 
Corporation no later than 90 days after the end of each calendar year.
    (b) Interim updates following material events--(1) In general. Each 
Covered Company shall file with the Board and the Corporation an 
updated Resolution Plan within a time period specified by the Board and 
the Corporation, but no later than 45 days after any event, occurrence, 
change in conditions or circumstances or other change which results in, 
or could reasonably be foreseen to have, a material effect on the 
Resolution Plan of the Covered Company.
    (2) Exception. A Covered Company shall not be required to file an 
updated Resolution Plan under paragraph (b)(1) of this section if the 
date on which the Covered Company would be required to submit the 
updated Resolution Plan under paragraph (b)(1) would be within 90 days 
prior to the date on which the Covered Company is required to file an 
annual Resolution Plan under paragraph (a) of this section.
    (c) Authority to require more frequent submissions or extend time 
period. Notwithstanding paragraph (b)(1) of this section, the Board and 
Corporation may jointly:
    (1) Require that a Covered Company submit a Resolution Plan more 
frequently than required pursuant to paragraph (a) of this section, or 
provide an interim update to any Resolution Plan submitted pursuant to 
paragraph (a) under circumstances other than those listed in paragraph 
(b) of this section;
    (2) Extend the time period that a Covered Company has to submit a 
Resolution Plan under paragraphs (a) and (b) of this section; and
    (3) Waive the requirement that a Covered Company submit an update 
to a Resolution Plan.
    (d) Access to information. In order to allow evaluation of the 
Resolution Plan, each Covered Company must provide the Board and the 
Corporation such information and access to personnel of the Covered 
Company as the Board and the Corporation jointly determine during the 
period for reviewing the Resolution Plan is necessary to assess the 
credibility of the Resolution Plan and the ability of the Covered 
Company to implement the Plan. The Agencies will rely to the fullest 
extent possible on examinations conducted by or on behalf of the 
appropriate Federal banking agency for the relevant company.
    (e) Board of directors approval of Resolution Plan. Prior to 
submission of a Resolution Plan under paragraph (a) of this section, 
the Resolution Plan of a Covered Company shall be approved by:
    (1) The board of directors of the Covered Company and noted in the 
minutes; or
    (2) In the case of a foreign-based Covered Company only, a delegee 
acting under the express authority of the board of directors of the 
Covered Company to approve the Resolution Plan.
    (f) Resolution Plans provided to the Council. The Board shall make 
the Resolution Plans and updates submitted by the Covered Company 
pursuant to this section available to the Council upon request.

Sec.  ----.4 Informational Content of a Resolution Plan

    (a) In general.--(1) Domestic Covered Companies. The Resolution 
Plan of a Covered Company that is organized or incorporated in the 
United States shall include the information specified in paragraphs (b) 
through (i) of this section with respect to the subsidiaries and 
operations that are domiciled in the United States as well as the 
foreign subsidiaries, offices, and operations of the Covered Company.
    (2) Foreign-based Covered Companies. The Resolution Plan of a 
Covered Company that is organized or incorporated in a jurisdiction 
other than the United States (other than a bank holding company) or 
that is a foreign banking organization shall include:
    (i) The information specified in paragraphs (b) through (i) of this 
section with respect to the subsidiaries, branches and agencies, and 
critical operations and core business lines, as applicable, that are 
domiciled in the United States or conducted in whole or material part 
in the United States. With respect to the information specified in 
paragraph (g) of this section, the Resolution Plan of a foreign-based 
Covered Company shall also identify, describe in detail, and map to 
legal entity the interconnections and interdependencies among the U.S. 
subsidiaries, branches and agencies, and critical operations and core 
business lines of the foreign-based Covered Company and any foreign-
based affiliate; and
    (ii) A detailed explanation of how resolution planning for the 
subsidiaries, branches and agencies, and critical operations and core 
business lines of the foreign-based Covered Company that are domiciled 
in the United States or conducted in whole or material part in the 
United States is integrated into the foreign-based Covered Company's 
overall resolution or other contingency planning process.
    (3) Required and prohibited assumptions. In preparing its plan for 
rapid and orderly resolution in the event of material financial 
distress or failure required by this part, a Covered Company shall:
    (i) Take into account that such material financial distress or 
failure of the Covered Company may occur at a time when financial 
markets, or other significant companies, are also under stress and that 
the material financial distress of the Covered Company may be the 
result of a range of stresses experienced by the Covered Company; and
    (ii) Not rely on the provision of extraordinary support by the 
United States or any other government to the Covered Company or its 
subsidiaries to prevent the failure of the Covered Company.
    (b) Executive summary. Each Resolution Plan of a Covered Company 
shall include an executive summary describing:
    (1) The key elements of the Covered Company's strategic plan for 
rapid and orderly resolution in the event of material financial 
distress at or failure of the Covered Company.
    (2) Material changes to the Covered Company's Resolution Plan from 
the company's most recently filed Resolution Plan (including an updated 
Resolution Plan submitted under Sec.  ----.3(b).
    (3) Any actions taken by the Covered Company since filing of the 
previous Resolution Plan to improve the effectiveness of the Covered 
Company's Resolution Plan or remediate or otherwise mitigate any 
material weaknesses or impediments to effective and timely execution of 
the Resolution Plan.
    (c) Strategic analysis. Each Resolution Plan shall include a 
strategic analysis describing the Covered Company's plan for rapid and 
orderly resolution in the event of material financial distress or 
failure of the Covered Company. Such analysis shall--
    (1) Include detailed descriptions of the--
    (i) Key assumptions and supporting analysis underlying the Covered 
Company's Resolution Plan, including any assumptions made concerning 
the economic or financial conditions that would be present at the time 
the

[[Page 22657]]

Covered Company sought to implement such plan;
    (ii) Range of specific actions to be taken by the Covered Company 
to facilitate a rapid and orderly resolution of the Covered Company, 
its material entities, and its critical operations and core business 
lines in the event of material financial distress or failure of the 
Covered Company;
    (iii) Funding, liquidity and capital needs of, and resources 
available to, the Covered Company and its material entities, which 
shall be mapped to its critical operations and core business lines, in 
the ordinary course of business and in the event of material financial 
distress at or failure of the Covered Company;
    (iv) Covered Company's strategy for maintaining operations of, and 
funding for, the Covered Company and its material entities, which shall 
be mapped to its critical operations and core business lines;
    (v) Covered Company's strategy in the event of a failure or 
discontinuation of a material entity, core business line or critical 
operation, and the actions that will be taken by the Covered Company to 
prevent or mitigate any adverse effects of such failure or 
discontinuation on the financial stability of the United States; and
    (vi) Covered Company's strategy for ensuring that any insured 
depository institution subsidiary of the Covered Company will be 
adequately protected from risks arising from the activities of any 
nonbank subsidiaries of the Covered Company (other than those that are 
subsidiaries of an insured depository institution);
    (2) Identify the time period(s) the Covered Company expects would 
be needed for the Covered Company to successfully execute each material 
aspect and step of the Covered Company's plan;
    (3) Identify and describe any potential material weaknesses or 
impediments to effective and timely execution of the Covered Company's 
plan;
    (4) Discuss the actions and steps the Covered Company has taken or 
proposes to take to remediate or otherwise mitigate the weaknesses or 
impediments identified by the Covered Company, including a timeline for 
the proposed remedial or other mitigatory action; and
    (5) Provide a detailed description of the processes the Covered 
Company employs for:
    (i) Determining the current market values and marketability of the 
core business lines, critical operations, and material asset holdings 
of the Covered Company;
    (ii) Assessing the feasibility of the Covered Company's plans 
(including timeframes) for executing any sales, divestitures, 
restructurings, recapitalizations, or other similar actions 
contemplated in the Covered Company's Resolution Plan; and
    (iii) Assessing the impact of any sales, divestitures, 
restructurings, recapitalizations, or other similar actions on the 
value, funding, and operations of the Covered Company, its material 
entities, critical operations and core business lines.
    (d) Corporate governance relating to resolution planning. Each 
Resolution Plan shall:
    (1) Include a detailed description of:
    (i) How resolution planning is integrated into the corporate 
governance structure and processes of the Covered Company;
    (ii) The Covered Company's policies, procedures, and internal 
controls governing preparation and approval of the Covered Company's 
Resolution Plan;
    (iii) The identity and position of the senior management 
official(s) of the Covered Company that is primarily responsible for 
overseeing the development, maintenance, implementation, and filing of 
the Covered Company's Resolution Plan and for the Covered Company's 
compliance with this part; and
    (iv) The nature, extent, and frequency of reporting to senior 
executive officers and the board of directors of the Covered Company on 
the development, maintenance, and implementation of the Covered 
Company's Resolution Plan;
    (2) Describe the capabilities of the Covered Company's processes 
and systems to collect, maintain, and report the information and other 
data underlying the Resolution Plan to senior executive officers and 
the board of directors of the Covered Company;
    (3) Describe the nature, extent, and results of any contingency 
planning or similar exercise conducted by the Covered Company since the 
date of the Covered Company's most recently filed Resolution Plan to 
assess the viability of or improve the Resolution Plan of the Covered 
Company; and
    (4) Identify and describe the relevant risk measures used by the 
Covered Company to report credit risk exposures both internally to its 
senior management and board of directors, as well as any relevant risk 
measures reported externally to investors or to the Covered Company's 
appropriate Federal regulator.
    (e) Organizational structure and related information. Each 
Resolution Plan shall--
    (1) Provide a detailed description of the Covered Company's 
organizational structure, including:
    (i) A hierarchical list of all material legal entities, including 
but not limited to material entities within the Covered Company's 
organization that:
    (A) Identifies the direct holder and the percentage of voting and 
nonvoting equity of each legal entity and foreign office listed; and
    (B) The location, jurisdiction of incorporation, licensing, and key 
management associated with each material legal entity and foreign 
office identified;
    (ii) A mapping of the Covered Company's critical operations and 
core business lines, including material asset holdings and liabilities 
related to such critical operations and core business lines, to 
material entities;
    (2) Provide an unconsolidated balance sheet for the Covered Company 
and a consolidating schedule for all entities that are subject to 
consolidation by the Covered Company;
    (3) Include a description of the material components of the 
liabilities of the Covered Company, its material entities, critical 
operations and core business lines that, at a minimum, separately 
identifies types and amounts of the short-term and long-term 
liabilities, the secured and unsecured liabilities, and subordinated 
liabilities;
    (4) Identify and describe the processes used by the Covered Company 
to:
    (i) Determine to whom the Covered Company has pledged collateral;
    (ii) Identify the person or entity that holds such collateral; and
    (iii) The jurisdiction in which the collateral is located; and, if 
different, the jurisdiction in which the security interest in the 
collateral is enforceable against the Covered Company;
    (5) Describe any material off-balance sheet exposures (including 
guarantees and contractual obligations) of the Covered Company and its 
material entities, including a mapping to its critical operations and 
core business lines;
    (6) Describe the practices of the Covered Company, its material 
entities and its core business lines related to the booking of trading 
and derivatives activities;
    (7) Identify material hedges of the Covered Company, its material 
entities, and its core business lines related to trading and derivative 
activities, including a mapping to legal entity;
    (8) Describe the hedging strategies of the Covered Company;
    (9) Describe the process undertaken by the Covered Company to 
establish exposure limits;

[[Page 22658]]

    (10) Identify the major counterparties of the Covered Company and 
describe the interconnections, interdependencies and relationships with 
such major counterparties;
    (11) Analyze whether the failure of each major counterparty would 
likely have an adverse impact on or result in the material financial 
distress or failure of the Covered Company;
    (12) Identify each system on which the Covered Company conducts a 
material number or value amount of trades. Map membership in each such 
system to the Covered Company's material entities, critical operations 
and core business lines; and
    (13) Identify each payment, clearing, or settlement system of which 
the Covered Company, directly or indirectly, is a member and on which 
the Covered Company conducts a material number or value amount of 
transactions. Map membership in each such system to the Covered 
Company's material entities, critical operations and core business 
lines.
    (f) Management information systems. Each Resolution Plan shall 
include--
    (1) A detailed inventory and description of the key management 
information systems and applications, including systems and 
applications for risk management, accounting, and financial and 
regulatory reporting, used by the Covered Company and its material 
entities, including a mapping to its critical operations and core 
business lines;
    (2) An identification of the legal owner of the systems identified 
in paragraph (f)(1) of this section, service level agreements related 
thereto, and any software and systems licenses or associated 
intellectual property, including a mapping thereof to the material 
entities, critical operations and core business lines of the Covered 
Company that use or rely on such intellectual property;
    (3) An identification of the scope, content, and frequency of the 
key internal reports that senior management of the Covered Company, its 
material entities, critical operations and core business lines use to 
monitor the financial health, risks, and operation of the Covered 
Company, its material entities, critical operations and core business 
lines; and
    (4) A description of the process for the appropriate supervisory or 
regulatory agencies to access the management information systems and 
applications identified in paragraph (f)(1) of this section.
    (g) Interconnections and interdependencies. To the extent not 
elsewhere provided, identify and map to the material entities the 
interconnections and interdependencies among the Covered Company and 
its material entities, and among the critical operations and core 
business lines of the Covered Company that, if disrupted, would 
materially affect the funding or operations of the Covered Company, its 
material entities, or its critical operations or core business lines. 
Such interconnections and interdependencies may include:
    (1) Common or shared personnel, facilities, or systems (including 
information technology platforms, management information systems, risk 
management systems, and accounting and recordkeeping systems);
    (2) Capital, funding, or liquidity arrangements;
    (3) Existing or contingent credit exposures;
    (4) Cross-guarantee arrangements, cross-collateral arrangements, 
cross-default provisions, and cross-affiliate netting agreements;
    (5) Risk transfers; and
    (6) Service level agreements.
    (h) Supervisory and regulatory information. Each Resolution Plan 
shall--
    (1) Identify any:
    (i) Federal, state, or foreign agency or authority with supervisory 
authority or responsibility for ensuring the safety and soundness of 
the Covered Company, its material entities, critical operations and 
core business lines; and
    (ii) Other Federal, state, or foreign agency or authority (other 
than a Federal banking agency) with significant supervisory or 
regulatory authority over the Covered Company, and its material 
entities and critical operations and core business lines.
    (2) Identify any foreign agency or authority responsible for 
resolving a foreign-based material entity and critical operations or 
core business lines of the Covered Company; and
    (3) Include contact information for each agency identified in 
paragraphs (h)(1) and (2) of this section.
    (i) Contact information. Each Resolution Plan shall--
    (1) Identify a senior management official at the Covered Company 
responsible for serving as a point of contact regarding the Resolution 
Plan of the Covered Company; and
    (2) Include contact information for the material entities and 
critical operations and core business lines of the Covered Company.
    (j) Incorporation of previously submitted Resolution Plan 
informational elements by reference. An update to a Resolution Plan 
submitted by a Covered Company under Sec.  ----.3(b) may incorporate by 
reference informational elements (but not strategic analysis or 
executive summary elements) from a Resolution Plan previously submitted 
by the Covered Company to the Board and the Corporation, provided that:
    (1) The Resolution Plan seeking to incorporate informational 
elements by reference clearly indicates:
    (i) The informational element the Covered Company is incorporating 
by reference; and
    (ii) Which of the Covered Company's previously submitted Resolution 
Plan(s) originally contained the information the Covered Company is 
incorporating by reference; and
    (2) The Covered Company certifies that the information the Covered 
Company is incorporating by reference remains accurate.
    (k) Data production capabilities. Within a reasonable period of 
time following the effective date of this part, as jointly determined 
by the Board and the Corporation, the Covered Company shall demonstrate 
its capability to promptly produce, in a format acceptable to the Board 
and the Corporation, the data underlying the key aspects of the 
Resolution Plan of the Covered Company.
    (l) Exemptions. The Board and the Corporation may jointly exempt a 
Covered Company from one or more of the requirements of this section.

Sec.  ----.5 Credit Exposure Report Required and Informational Content

    (a) Quarterly Credit Exposure Report required--(1) In general. No 
later than 30 days after the end of each calendar quarter, each Covered 
Company shall submit to the Board and the Corporation a Credit Exposure 
Report, in the manner and form prescribed by the Board, that contains 
the following information as of the end of the calendar quarter:
    (i) The aggregate credit exposure associated with all extensions of 
credit, including loans, leases, and funded lines of credit, by:
    (A) The Covered Company and its subsidiaries to each significant 
company and its subsidiaries; and
    (B) Each significant company and its subsidiaries to the Covered 
Company and its subsidiaries.
    (ii) The aggregate credit exposure associated with all committed 
but undrawn lines of credit by:
    (A) The Covered Company and its subsidiaries to each significant 
company and its subsidiaries; and
    (B) Each significant company and its subsidiaries to the Covered 
Company and its subsidiaries.

[[Page 22659]]

    (iii) The aggregate credit exposure associated with all deposits 
and money placements by:
    (A) The Covered Company and its subsidiaries with each significant 
company and its subsidiaries; and
    (B) Each significant company and its subsidiaries with the Covered 
Company and its subsidiaries.
    (iv) The aggregate credit exposure associated with (on both a gross 
and net basis) of all repurchase agreements between the Covered Company 
and its subsidiaries and each significant company and its subsidiaries;
    (v) The aggregate credit exposure associated with all reverse 
repurchase agreements (on both a gross and net basis) between the 
Covered Company and its subsidiaries and each significant company and 
its subsidiaries;
    (vi) The aggregate credit exposure associated with all securities 
borrowing transactions (on both a gross and net basis) between the 
Covered Company and its subsidiaries and each significant company and 
its subsidiaries;
    (vii) The aggregate credit exposure associated with all securities 
lending transactions (on both a gross and net basis) between the 
Covered Company and its subsidiaries and each significant company and 
its subsidiaries;
    (viii) The aggregate credit exposure associated with all 
guarantees, acceptances, or letters of credit (including endorsement or 
standby letters of credit) issued by:
    (A) The Covered Company and its subsidiaries on behalf of each 
significant company and its subsidiaries;
    (B) Each significant company and its subsidiaries on behalf of the 
Covered Company and its subsidiaries;
    (ix) The aggregate credit exposure associated with all purchases of 
or investments, as of the last day of the reporting quarter, in 
securities issued by each significant company or its subsidiaries by 
the Covered Company and its subsidiaries;
    (x) The aggregate credit exposure associated with all counterparty 
credit exposure (on both a gross and net basis) in connection with a 
derivative transaction between the Covered Company and its subsidiaries 
and each significant company and its subsidiaries;
    (xi) A description of the systems and processes that the Covered 
Company uses to:
    (A) Collect and aggregate the data underlying the Credit Exposure 
Report; and
    (B) Produce and file the Credit Exposure Report;
    (xii) The credit exposure associated with intra-day credit 
extended, as specified by paragraph (a)(1)(i) of this section, by the 
Covered Company to each significant company and its subsidiaries during 
the prior quarter; and
    (xiii) Any other transactions that result in credit exposure 
between a Covered Company and its subsidiaries and each significant 
company and its subsidiaries that the Board, by order or regulation, 
determines to be appropriate.
    (2) Application to foreign-based organizations. A Credit Exposure 
Report submitted by a Covered Company that is a company incorporated or 
organized in a jurisdiction other than the United States (other than a 
bank holding company) or that is a foreign banking organization shall 
include the information described in paragraph (a)(1) of this section 
only with respect to the subsidiaries, offices, and operations that are 
domiciled in the United States.
    (b) Credit Exposure Reports provided to the Council. The Board 
shall make the Credit Exposure Reports submitted by the Covered Company 
pursuant to this section available to the Council upon request.
    (c) No limiting effect. Nothing in this section limits the 
authority of the Board to obtain reports from a Covered Company under 
other provisions of law, including pursuant to section 5(c) of the Bank 
Holding Company Act, as amended (12 U.S.C. 1844(c)), or section 161 of 
the Dodd-Frank Act (12 U.S.C. 5361).
    (d) Adjustment to timing. The Board may:
    (1) Require that a Covered Company submit a Credit Exposure Report 
more frequently than required pursuant to paragraph (a) of this 
section; and
    (2) Extend the time period that a Covered Company has to submit a 
Credit Exposure Report.

Sec.  ----.6 Review of Resolution Plans; Resubmission of Deficient 
Resolution Plans

    (a) Acceptance of submission and review--
    (1) Within 60 calendar days of receiving a Resolution Plan under 
Sec.  ----.3(a), the Board and the Corporation shall jointly:
    (i) Determine whether a Resolution Plan submitted pursuant to Sec.  
----.3(a) satisfies the minimum informational requirements of Sec.  --
--.4; and
    (ii) Either acknowledge acceptance of the plan for review or return 
the Resolution Plan if the Board and Corporation jointly determine that 
it is incomplete or that substantial additional information is required 
to facilitate review of the Resolution Plan.
    (2) If the Board and Corporation jointly determine that a 
Resolution Plan is informationally incomplete or that substantial 
additional information is necessary to facilitate review of the 
Resolution Plan:
    (i) The Board and Corporation shall jointly inform the Covered 
Company in writing of the area(s) in which the Resolution Plan is 
informationally incomplete or with respect to which additional 
information is required; and
    (ii) The Covered Company shall resubmit an informationally complete 
Resolution Plan or such additional information as jointly requested to 
facilitate review of the Resolution Plan no later than 30 days after 
receiving the notice described in paragraph (a)(2)(i) of this section, 
or such other time period as the Board and Corporation may jointly 
determine.
    (b) Joint determination regarding deficient Resolution Plans. If 
the Board and Corporation jointly determine that the Resolution Plan of 
a Covered Company submitted under Sec.  ----.3(a) is not credible or 
would not facilitate an orderly resolution of the Covered Company under 
the Bankruptcy Code, the Board and Corporation shall jointly notify the 
Covered Company in writing of such determination. Any joint notice 
provided under this paragraph shall identify the aspects of the 
Resolution Plan that the Board and Corporation jointly determined to be 
deficient.
    (c) Resubmission of a Resolution Plan. Within 90 days of receiving 
a notice of deficiencies issued pursuant to paragraph (b) of this 
section, or such shorter or longer period as the Board and Corporation 
may jointly determine, a Covered Company shall submit a revised 
Resolution Plan to the Board and Corporation that addresses the 
deficiencies jointly identified by the Board and Corporation, and that 
discusses in detail:
    (1) The revisions made by the Covered Company to address the 
deficiencies jointly identified by the Board and the Corporation;
    (2) Any changes to the Covered Company's business operations and 
corporate structure that the Covered Company proposes to undertake to 
facilitate implementation of the revised Resolution Plan (including a 
timeline for the execution of such planned changes); and
    (3) Why the Covered Company believes that the revised Resolution 
Plan is credible and would result in an orderly resolution of the 
Covered Company under the Bankruptcy Code.

[[Page 22660]]

    (d) Extension of time to resubmit Resolution Plan. Upon a written 
request by a Covered Company, the Board and Corporation may jointly 
extend the time to resubmit a Resolution Plan under paragraph (c) of 
this section. Each extension request shall be supported by a written 
statement of the company describing the basis and justification for the 
request.

Sec. --------.7 Failure to Cure Deficiencies on Resubmission of a 
Resolution Plan

    (a) In general. The Board and Corporation may jointly determine 
that a Covered Company or any subsidiary of a Covered Company shall be 
subject to more stringent capital, leverage, or liquidity requirements, 
or restrictions on the growth, activities, or operations of the Covered 
Company or the subsidiary if:
    (1) The Covered Company fails to submit a revised Resolution Plan 
under Sec.  ------.6(c) within the required time period; or
    (2) The Board and the Corporation jointly determine that a revised 
Resolution Plan submitted under Sec.  ------.6(c) does not adequately 
remedy the deficiencies jointly identified by the Board and the 
Corporation under Sec.  ------.6(b).
    (b) Duration of requirements of restrictions. Any requirements or 
restrictions imposed on a Covered Company or a subsidiary thereof 
pursuant to paragraph (a) of this section shall cease to apply to the 
Covered Company or subsidiary, respectively, on the date that the Board 
and the Corporation jointly determine the Covered Company has submitted 
a revised Resolution Plan that adequately remedies the deficiencies 
jointly identified by the Board and the Corporation under Sec.  ----
--.6(b).
    (c) Divestiture. The Board and Corporation, in consultation with 
the Council, may jointly, by order, direct the Covered Company to 
divest such assets or operations as are jointly identified by the Board 
and Corporation if:
    (1) The Board and Corporation have jointly determined that the 
Covered Company or a subsidiary thereof shall be subject to 
requirements or restrictions pursuant to paragraph (a) of this section; 
and
    (2) The Covered Company has failed, within the 2-year period 
beginning on the date on which the determination to impose such 
requirements or restrictions under paragraph (a) of this section was 
made, to submit a revised Resolution Plan that adequately remedies the 
deficiencies jointly identified by the Board and the Corporation under 
Sec.  ------.6(b); and
    (3) The Board and Corporation jointly determine that the 
divestiture of such assets or operations is necessary to facilitate an 
orderly resolution of the Covered Company under the Bankruptcy Code in 
the event the company was to fail.

Sec. --------.8 Consultation

    Prior to issuing any notice of deficiencies under Sec.  ------
--.6(b), determining to impose requirements or restrictions under Sec.  
--------.7(a), or issuing a divestiture order pursuant to Sec.  ------
--.7(c) with respect to a Covered Company that is likely to have a 
significant impact on a functionally regulated subsidiary or a 
depository institution subsidiary of the Covered Company, the Board--
    (a) Shall consult with each Council member that primarily 
supervises any such subsidiary; and
    (b) May consult with any other Federal, state, or foreign 
supervisor as the Board considers appropriate.

Sec.  --------.9 No Limiting effect or private right of action; 
confidentiality of Resolution Plans and Credit Exposure Reports

    (a) No limiting effect on bankruptcy or other resolution 
proceedings. A Resolution Plan submitted pursuant to this part shall 
not have any binding effect on:
    (1) A court or trustee in a proceeding commenced under the 
Bankruptcy Code;
    (2) A receiver appointed under Title II of the Dodd-Frank Act (12 
U.S.C. 5381 et seq.);
    (3) A bridge financial company chartered pursuant to 12 U.S.C. 
5390(h); or
    (4) Any other authority that is authorized or required to resolve a 
Covered Company (including any subsidiary or affiliate thereof) under 
any other provision of Federal, state, or foreign law.
    (b) No private right of action. Nothing in this part creates or is 
intended to create a private right of action based on a Resolution Plan 
prepared or submitted under this part or based on any action taken by 
the Board or the Corporation with respect to any Resolution Plan 
submitted under this part.
    (c) Request for confidential treatment of Resolution Plans and 
Credit Exposure Reports. Any Covered Company submitting a Resolution 
Plan or Credit Exposure Report pursuant to this part that desires 
confidential treatment of the information submitted pursuant to 5 
U.S.C. 552(b)(4) and the Corporation's Disclosure of Information Rules 
(12 CFR part 309), the Board's Rules Regarding Availability of 
Information (12 CFR part 261), and the Council's Rules of Organization 
and related policies shall file a request for confidential treatment in 
accordance with those rules.

Sec.  --------.10 Enforcement

    The Board and Corporation may jointly enforce an order jointly 
issued by the Board and Corporation under Sec.  --------.7(a) or Sec.  
--------.7(c) of this part. The Board, in consultation with the 
Corporation, may take action to address any violation of this part by a 
Covered Company under section 8 of the Federal Deposit Insurance Act 
(12 U.S.C. 1818).

[END OF COMMON TEXT]

List of Subjects

12 CFR Part 252

    Administrative practice and procedure, Banks, banking, Federal 
Reserve System, Holding companies, Reporting and recordkeeping 
requirements.

12 CFR Part 381

    Administrative practice and procedure, Banks, banking, Holding 
companies, Reporting and recordkeeping requirements.

Adoption of Common Rule

    The adoption of the proposed common rules by the agencies, as 
modified by agency-specific text, is set forth below:

Board of Governors of the Federal Reserve System

    12 CFR Chapter II

Authority and Issuance

    For the reasons stated in the Supplementary Information, the Board 
of Governors of the Federal Reserve System proposes to add the text of 
the common rule as set forth at the end of the Supplementary 
Information as Part 252 to Chapter II of Title 12, modified as follows:

PART 252--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL 
(REGULATION YY)

    1. The authority citation for part 252 is added to read as follows:

    Authority:  12 U.S.C. 5365.

    2. Add Sec.  252.2 to read as follows:


Sec.  252.2   Definitions.

    For purposes of this part:
    (a) Bankruptcy Code means Title 11 of the United States Code.

[[Page 22661]]

    (b) Core business lines means those business lines of the Covered 
Company, including associated operations, services, functions and 
support, that, in the view of the Covered Company, upon failure would 
result in a material loss of revenue, profit, or franchise value.
    (c) Council means the Financial Stability Oversight Council 
established by section 111 of the Dodd-Frank Act (12 U.S.C. 5321).
    (d) Covered Company. (1) In general. A ``Covered Company'' means:
    (i) Any nonbank financial company supervised by the Board;
    (ii) Any bank holding company, as that term is defined in section 2 
of the Bank Holding Company Act, as amended (12 U.S.C. 1841), and the 
Board's Regulation Y (12 CFR part 225), that had $50 billion or more in 
total consolidated assets, as determined based on the average of the 
company's four most recent Consolidated Financial Statements for Bank 
Holding Companies as reported on the Federal Reserve's Form FR Y-9C; 
and
    (iii) Any foreign bank or company that is a bank holding company or 
is treated as a bank holding company under section 8(a) of the 
International Banking Act of 1978 (12 U.S.C. 3106(a)) and that had $50 
billion or more in total consolidated assets, as determined based on 
the foreign bank's or company's most recent annual or, as applicable, 
the average of the four most recent quarterly Capital and Asset Reports 
for Foreign Banking Organizations as reported on the Federal Reserve's 
Form FR Y-7Q.
    (2) Asset threshold for bank holding companies and foreign banking 
organizations. The Board may, pursuant to a recommendation of the 
Council, raise any asset threshold specified in paragraph (d)(1)(ii) or 
(iii) of this section.
    (3) Exclusion. A bridge financial company chartered pursuant to 12 
U.S.C. 5390(h) shall not be deemed to be a Covered Company hereunder.
    (e) Critical operations means those operations of the Covered 
Company, including associated services, functions and support, that, in 
the view of the Covered Company or as jointly directed by the Board and 
the Corporation, upon a failure of, or discontinuance of such 
operations, would likely result in a disruption to the U.S. economy or 
financial markets.
    (f) Functionally regulated subsidiary has the same meaning as in 
section 5(c)(5) of the Bank Holding Company Act, as amended (12 U.S.C. 
1844(c)(5)).
    (g) Material entity means a subsidiary or foreign office of the 
Covered Company that is significant to the activities of a critical 
operation or core business line (as defined in this part).
    (h) Material financial distress with regard to a Covered Company 
means that:
    (1) The Covered Company has incurred, or is likely to incur, losses 
that will deplete all or substantially all of its capital, and there is 
no reasonable prospect for the company to avoid such depletion;
    (2) The assets of the Covered Company are, or are likely to be, 
less than its obligations to creditors and others; or
    (3) The Covered Company is, or is likely to be, unable to pay its 
obligations (other than those subject to a bona fide dispute) in the 
normal course of business.
    (i) Nonbank financial company supervised by the Board means a 
nonbank financial company or other company that the Council has 
determined under section 113 of the Dodd-Frank Act (12 U.S.C. 5323) 
shall be supervised by the Board and for which such determination is 
still in effect.
    (j) Rapid and orderly resolution means a reorganization or 
liquidation of the Covered Company (or, in the case of a Covered 
Company that is incorporated or organized in a jurisdiction other than 
the United States, the subsidiaries and operations of such foreign 
company that are domiciled in the United States) under the Bankruptcy 
Code that can be accomplished within a reasonable period of time and in 
a manner that substantially mitigates the risk that the failure of the 
Covered Company would have serious adverse effects on financial 
stability in the United States.
    (k) Significant bank holding company has the meaning given to such 
term by Sec.  225.302(c) of the Board's Regulation Y (12 CFR 
225.302(c)).
    (l) Significant company means a significant bank holding company or 
a significant nonbank financial company.
    (m) Significant nonbank financial company has the meaning given to 
such term by Sec.  225.302(b) of the Board's Regulation Y (12 CFR 
225.302(b)).

Federal Deposit Insurance Corporation

    12 CFR Chapter III

Authority and Issuance

    For the reasons set forth in the Supplementary Information, the 
Federal Deposit Insurance Corporation proposes to add the text of the 
common rule as set forth at the end of the Supplementary Information as 
Part 381 to Chapter III of Title 12, Code of Federal Regulations, 
modified as follows:

PART 381--RESOLUTION PLANS AND CREDIT EXPOSURE REPORTS

    3. The authority citation for part 381 is added to read as follows:

    Authority:  12 U.S.C. 5365(d).

    4. Add Sec.  381.2 to read as follows:


Sec.  381.2  Definitions.

    For purposes of this part:
    (a) Bankruptcy Code means Title 11 of the United States Code.
    (b) Company includes any bank, corporation, general or limited 
partnership, limited liability company, association or similar 
organization or business trust. The term company does not include any 
organization, the majority of the voting securities of which are owned 
by the United States or any state.
    (c) Core business lines means those business lines of the Covered 
Company, including associated operations, services, functions and 
support, that, in the view of the Covered Company, upon failure would 
result in a material loss of revenue, profit, or franchise value.
    (d) Council means the Financial Stability Oversight Council 
established by section 111 of the Dodd-Frank Act (12 U.S.C. 5321).
    (e) Covered Company--(1) In general. A ``Covered Company'' means:
    (i) Any nonbank financial company supervised by the Board;
    (ii) Any bank holding company, as that term is defined in section 2 
of the Bank Holding Company Act, as amended (12 U.S.C. 1841), and the 
Board's Regulation Y (12 CFR part 225), that had $50 billion or more in 
total consolidated assets, as determined based on the average of the 
company's four most recent Consolidated Financial Statements for Bank 
Holding Companies as reported on the Federal Reserve's FR Y-9C; and
    (iii) Any foreign bank or company that is a bank holding company or 
is treated as a bank holding company under section 8(a) of the 
International Banking Act of 1978 (12 U.S.C. 3106(a)) and that had $50 
billion or more in total consolidated assets, as determined based on 
the foreign bank's or company's most recent annual or, as applicable, 
the average of the four most recent quarterly Capital and Asset Reports 
for Foreign Banking Organizations as reported on the Federal Reserve's 
Form FR Y-7Q.
    (2) Asset threshold for bank holding companies and foreign banking 
organizations. The Board may, pursuant to a recommendation of the 
Council, raise any asset threshold specified in paragraph (e)(1)(ii) or 
(iii) of this section.

[[Page 22662]]

    (3) Exclusion. A bridge financial company chartered pursuant to 12 
U.S.C. 5390(h) shall not be deemed to be a Covered Company hereunder.
    (f) Critical operations means those operations of the Covered 
Company, including associated services, functions and support, that, in 
the view of the Covered Company or as jointly directed by the Board and 
the Corporation, upon a failure of, or discontinuance of such 
operations, would likely result in a disruption to the U.S. economy or 
financial markets.
    (g) Depository institution has the same meaning as in section 
3(c)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)(1)) and 
includes a state-licensed uninsured branch, agency, or commercial 
lending subsidiary of a foreign bank.
    (h) Foreign banking organization means:
    (1) A foreign bank, as defined in section 1(b)(7) of the 
International Banking Act of 1978 (12 U.S.C. 3101(7)), that:
    (i) Operates a branch, agency, or commercial lending company 
subsidiary in the United States;
    (ii) Controls a bank in the United States; or (iii) Controls an 
Edge corporation acquired after March 5, 1987; and
    (2) Any company of which the foreign bank is a subsidiary.
    (i) Functionally regulated subsidiary has the same meaning as in 
section 5(c)(5) of the Bank Holding Company Act, as amended (12 U.S.C. 
1844(c)(5)).
    (j) Material entity means a subsidiary or foreign office of the 
Covered Company that is significant to the activities of a critical 
operation or core business line (as defined in this part).
    (k) Material financial distress with regard to a Covered Company 
means that:
    (1) The Covered Company has incurred, or is likely to incur, losses 
that will deplete all or substantially all of its capital, and there is 
no reasonable prospect for the company to avoid such depletion;
    (2) The assets of the Covered Company are, or are likely to be, 
less than its obligations to creditors and others; or
    (3) The Covered Company is, or is likely to be, unable to pay its 
obligations (other than those subject to a bona fide dispute) in the 
normal course of business.
    (l) Nonbank financial company supervised by the Board means a 
nonbank financial company or other company that the Council has 
determined under section 113 of the Dodd-Frank Act (12 U.S.C. 5323) 
shall be supervised by the Board and for which such determination is 
still in effect.
    (m) Rapid and orderly resolution means a reorganization or 
liquidation of the Covered Company (or, in the case of a Covered 
Company that is incorporated or organized in a jurisdiction outside the 
United States, the subsidiaries and operations of such foreign company 
that are domiciled in the United States) under the Bankruptcy Code that 
can be accomplished within a reasonable period of time and in a manner 
that substantially mitigates the risk that the failure of the Covered 
Company would have serious adverse effects on financial stability in 
the United States.
    (n) Significant bank holding company has the meaning given such 
term by rule of the Board pursuant to section 102(a)(7) of the Dodd-
Frank Act, 12 U.S.C. 5311(a)(7).
    (o) Significant company means a significant bank holding company or 
a significant nonbank financial company.
    (p) Significant nonbank financial company has the meaning given 
such term by rule of the Board pursuant to section 102(a)(7) of the 
Dodd-Frank Act, 12 U.S.C. 5311(a)(7).
    (q) Subsidiary means a bank or other company that is controlled by 
another company and an indirect subsidiary is a bank or other company 
that is controlled by a subsidiary of a company.

    By order of the Board of Governors of the Federal Reserve 
System, April 8, 2011.
Jennifer J. Johnson,
Secretary of the Board.
    Dated at Washington, DC, this 29th day of March 2011.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2011-9357 Filed 4-21-11; 8:45 am]
BILLING CODE 6210-01-P