The U.S. Office of the Comptroller of the Currency (OCC) finalized the revisions to its recovery planning guidelines for large national banks and federal savings associations.
The finalized revisions feature several key changes, including expanding the recovery planning guidelines to apply to banks with at least $100 billion in assets. In addition, they also incorporate a testing standard for recovery plans. Further, the finalized revisions clarify the role of non-financial risk — including operational and strategic risk — in recovery planning.
Also, in response to public comments, the revisions provide covered banks with timeframes in which to comply with the recovery planning guidelines. This includes the development of a testing framework and conducting testing.
The revisions are effective on Jan. 1, 2025, with staggered compliance dates.
The revisions to the recovery planning guidelines are part of the OCC’s effort to ensure that large banks have developed plans to respond to the financial effects of severe stress.
“Large-scale financial crises have demonstrated the destabilizing effect that severe stress can have on financial entities, capital markets, the Federal banking system, and the U.S. and global economies. This is particularly true when a crisis places severe stress on large, complex financial institutions due to the systemic and contagion risks that they pose,” the OCC’s summary in the Federal Register reads.