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FDIC Board approves final rule on large bank resolution planning

The FDIC Board yesterday announced it has approved a final rule to strengthen resolution planning for insured depository institutions (IDIs) with at least $50 billion in total assets. After careful consideration of comments received, the FDIC issued a final rule that incorporates several changes from the agency’s proposed rule published in September of 2023.

Under the rule announced yesterday, the FDIC will require large banks with total assets of at least $100 billion to submit comprehensive resolution plans that meet enhanced standards to support the FDIC’s ability to undertake an efficient and effective resolution under the Federal Deposit Insurance Act should such an institution fail.

The rule will require IDIs with total assets of at least $50 billion but less than $100 billion to submit more limited “informational filings” to assist in their potential resolution. The agency will not require these institutions to develop a resolution strategy and related valuation information as part of their submissions. These institutions are also exempt from submitting certain strategy-related content requirements regarding the institution’s franchise components.

The new rule strengthens the existing IDI resolution planning framework under 12 CFR § 360.10 by requiring a full resolution submission from most covered IDIs every three years with limited supplements filed in the off years. Covered IDIs affiliated with U.S. global systemically important banking organizations must file a full resolution submission every two years.

The final rule will take effect on October 1, 2024, and the first submissions are expected next year.