# FDIC FIL-46-2023: Notice of Proposed Rulemaking on Resolution Plans Required for Insured Depository Institutions with $100 Billion or More in Total Assets

> Federal · Agency guidance · In force

URL: https://www.frixlaw.com/law-library/statutes/FDIC_FIL23046

## Section

- **Citation:** FDIC FIL-46-2023
- **Heading:** Notice of Proposed Rulemaking on Resolution Plans Required for Insured Depository Institutions with $100 Billion or More in Total Assets
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** FDIC Financial Institution Letters / Notice of Proposed Rulemaking on Resolution Plans Required for Insured Depository Institutions with $100 Billion or More in Total Assets

## Text

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August 29, 2023
MEMORANDUM TO:
The Board of Directors
FROM:
James L. McGraw, Acting Director
Division of Complex Institution Supervision & Resolution
Maureen E. Sweeney, Director
Division of Resolutions and Receiverships
SUBJECT:
Proposed Amendments to 12 C.F.R. § 360.10 –
Notice of Proposed Rulemaking
I.
SUMMARY OF RECOMMENDATIONS:
This Memorandum concerns a notice of proposed rulemaking (“Proposal”) to amend and
restate the current resolution plan rule (“Rule”)1 promulgated by the Federal Deposit Insurance
Corporation (“FDIC”) under authority of the Federal Deposit Insurance Act (“FDI Act”). The
Rule currently requires insured depository institutions (“IDIs”) with $50 billion or more in total
assets (“CIDIs”) periodically to submit resolution plans (“Current Rule Plans”) to the FDIC. The
Proposal is intended to clarify and enhance submission requirements and reflect lessons learned
since the Rule was finalized in 2012. The Proposal includes the following proposed
modifications to the Rule: (1) creating two groups of CIDIs with different submission content
requirements; (2) adjusting required content including with respect to the resolution strategy, and
codifying certain aspects of previously-issued guidance and feedback; (3) establishing a clear,
two-prong standard by which resolution submissions will be assessed; (4) adjusting the
frequency of submissions to a two-year cycle, which will include engagement and capabilities
testing; and (5) introducing an “interim supplement” requiring certain key content elements to be
1 Codified at 12 C.F.R. § 360.10.
rtain aspects of previously-issued guidance and feedback; (3) establishing a clear,
two-prong standard by which resolution submissions will be assessed; (4) adjusting the
frequency of submissions to a two-year cycle, which will include engagement and capabilities
testing; and (5) introducing an “interim supplement” requiring certain key content elements to be
1 Codified at 12 C.F.R. § 360.10.

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provided by all CIDIs in the year between submissions to ensure the availability of updated
information.
Staff recommends that the Board of the FDIC (the “Board”) take the following actions:
A.
Approve the Notice of Proposed Rulemaking, attached to this Memorandum as
Attachment 2, and authorize its publication in the Federal Register for a comment period
ending on November 30, 2023.
B.
Authorize the General Counsel, or designee, and the Executive Secretary, or
designee, to make technical, non-substantive or conforming changes to the draft Federal Register
document to prepare it for publication.
II.
BACKGROUND
The Rule currently requires each CIDI periodically to submit a resolution plan that, in the
event of its failure, should enable the FDIC to resolve the CIDI under the FDI Act. The Rule is
intended to ensure that the FDIC has access to all of the material information it needs to resolve
efficiently a CIDI in the event of its failure.
Since issuing the Rule in 2012, the FDIC and CIDIs have been through multiple plan
submissions, and the FDIC has provided information to CIDIs to improve their submissions. In
2014, the FDIC issued publicly a Board-approved document that provided clarification,
guidance, and direction for the preparation of all subsequent submissions.2 In addition, following
each submission, the FDIC has issued feedback letters to CIDIs that included information about
the expected contents of the subsequent submission
as provided information to CIDIs to improve their submissions. In
2014, the FDIC issued publicly a Board-approved document that provided clarification,
guidance, and direction for the preparation of all subsequent submissions.2 In addition, following
each submission, the FDIC has issued feedback letters to CIDIs that included information about
the expected contents of the subsequent submission. During this period, the Board extended the
period for submissions on multiple occasions, reducing the frequency of submissions from the

2 See FDIC Issues Guidance for the Resolution Plans of Large Banks (Dec. 17, 2014),
https://archive.fdic.gov/view/fdic/4821.

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annual requirement provided in the Rule. Experience indicated that a one-year period was
insufficient for the FDIC to review the submissions and develop and disseminate feedback, and
for CIDIs to incorporate that feedback into subsequent submissions.
In 2018, the FDIC announced that the FDIC would be pausing the Current Rule Plan
submission requirement.3 The following spring, the Board formalized this moratorium
(“Moratorium”) on the Rule’s requirements for all CIDIs, pending completion of a new
rulemaking.4 At the time, the FDIC also published an advance notice of proposed rulemaking
(“ANPR”).5 Among other things, the ANPR requested comment on how to tailor and improve
the Rule, including whether requirements should be tiered based on size of the IDI or complexity
factors. It also requested comment on potential enhancement of engagement and capabilities
testing
g completion of a new
rulemaking.4 At the time, the FDIC also published an advance notice of proposed rulemaking
(“ANPR”).5 Among other things, the ANPR requested comment on how to tailor and improve
the Rule, including whether requirements should be tiered based on size of the IDI or complexity
factors. It also requested comment on potential enhancement of engagement and capabilities
testing.
In January 2021, the Board lifted the Moratorium on submissions for CIDIs with $100
billion or more in total assets.6
On July 25, 2021, the FDIC issued the Statement on Resolution Plans for Insured
Depository Institutions (“2021 Statement”), which described how the FDIC planned to
implement certain aspects of the Rule with respect to CIDIs with $100 billion or more in total
assets (“specified CIDIs”).7 Among other things, the 2021 Statement discussed certain content

3 See Keynote Remarks by Jelena McWilliams, Chairman, Federal Deposit Insurance Corporation, to 2018 Annual
Conference of The Clearing House (TCH) and Bank Policy Institute (BPI (Nov. 28, 2018), available at
https://www.fdic.gov/news/speeches/2018/spnov2818.html.
4 See Board Resolution No. 085874 (Apr. 16, 2019); see also Press Release, Fed. Deposit Ins. Corp., FDIC Seeks
Comment on New Approaches to Insured Depository Institution Resolution Planning (Apr. 16, 2019), available at
https://www.fdic.gov/news/press-releases/2019/pr19034.html.
5 See 12 Fed. R. 16620 (Apr. 22, 2019).
6 See Board Resolution No. 086949 (Jan. 19, 2021).
7 See https://www.fdic.gov/resources/resolutions/resolution-authority/idi-statement-06-25-2021.pdf.
d. Deposit Ins. Corp., FDIC Seeks
Comment on New Approaches to Insured Depository Institution Resolution Planning (Apr. 16, 2019), available at
https://www.fdic.gov/news/press-releases/2019/pr19034.html.
5 See 12 Fed. R. 16620 (Apr. 22, 2019).
6 See Board Resolution No. 086949 (Jan. 19, 2021).
7 See https://www.fdic.gov/resources/resolutions/resolution-authority/idi-statement-06-25-2021.pdf.

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requirements and anticipated content exemptions, and noted the expectation of a three-year
submission frequency.
Following issuance of the 2021 Statement, the FDIC notified the specified CIDIs of the
due dates for their next submissions. Twenty-one submissions were received on December 1,
2022; one was submitted on June 30, 2023; and plans for the U.S. global systemically important
banks are due on or before December 1, 2023.8
In recent months, the FDIC resolved Silicon Valley Bank (“SVB”), Signature Bank, and
First Republic Bank (“First Republic”). Initial IDI resolution plans had been received a few
months earlier for SVB and First Republic; Signature had not yet filed a plan. This was SVB’s
initial submission. First Republic had not submitted a plan since 2018, when it was a much
smaller bank.
In developing the proposed modifications, staff incorporated the FDIC’s more than a
decade of experience implementing the Rule, the guidance and feedback provided to CIDIs, the
Current Rule Plan content that has proven most useful to the FDIC in developing resolution
strategies, and lessons learned from the recent resolutions of SVB, Signature Bank, and First
Republic.
Part of the challenge in developing an approach to resolution planning arises from the
wide range of business models and structures among CIDIs. Staff’s development of resolution
strategies for CIDIs, including the assessment of options and trade-offs, benefits from the CIDI’s
knowledge of its own institution, understanding its relevant capabilities, and awareness of the
impediments to executing an orderly resolution of the CIDI
an approach to resolution planning arises from the
wide range of business models and structures among CIDIs. Staff’s development of resolution
strategies for CIDIs, including the assessment of options and trade-offs, benefits from the CIDI’s
knowledge of its own institution, understanding its relevant capabilities, and awareness of the
impediments to executing an orderly resolution of the CIDI. Across the different CIDI business

8 Two additional CIDIs, Northern Trust Company and First-Citizens Bank and Trust Company, have been notified
that they must submit resolution plans on or before December 1, 2024; staff expects that date will be adjusted to
align with the first group of submissions after the revised rule is finalized by appropriate notice consistent with the
amended rule.

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models and structures, there are a variety of factors that increase the challenges and complexity
of a CIDI’s resolution. For example, in general, CIDIs tend to have a more significant proportion
of uninsured deposits as compared to smaller banks, and high ratios of uninsured deposits
increase resolution challenges. SVB, Signature Bank, and First Republic each maintained a
deposit base that was largely uninsured.9
An IDI’s size also can significantly affect the resolution options available to the FDIC,
and be a marker for other resolution challenges, such as organizational complexity. In particular,
as IDIs increase in size, the likelihood of a timely sale to a single acquirer diminishes. While a
closing weekend sale of the whole institution may be an option in some cases, its availability
cannot be assumed given a CIDI’s significant size, complexity, and potential speed of failure.
This is particularly true for the largest CIDIs because the pool of potential acquirers for these
institutions is limited, and the complexity of any possible transaction is increased
rer diminishes. While a
closing weekend sale of the whole institution may be an option in some cases, its availability
cannot be assumed given a CIDI’s significant size, complexity, and potential speed of failure.
This is particularly true for the largest CIDIs because the pool of potential acquirers for these
institutions is limited, and the complexity of any possible transaction is increased. While there
may be a larger pool of potential acquiring institutions for CIDIs with below $100 billion in total
assets and a longer runway with robust pre-planning may improve the likelihood of a closing
weekend whole bank sale, some of these institutions engage in highly complex activities and
pose similar levels of operational complexity as those with over $100 billion in total assets. As
such, these activities must be identified and considered when contemplating resolution strategies.
In developing the Proposal, staff also considered proposed guidance for certain bank
holding companies that submit resolution plans pursuant to Title I of the Dodd-Frank Wall Street
Reform and Consumer Protection Act. Certain CIDIs are within the expected scope of that
guidance. Staff also took into account another notice of proposed rulemaking that would require

9 As of December 31, 2022, SVB reported 94 percent of its domestic deposits were uninsured; its total assets were
approximately $209 billion. Signature Bank reported 90 percent uninsured deposits and total assets of approximately
$110 billion. First Republic reported 68 percent uninsured deposits and total assets of approximately $213 billion.
9 As of December 31, 2022, SVB reported 94 percent of its domestic deposits were uninsured; its total assets were
approximately $209 billion. Signature Bank reported 90 percent uninsured deposits and total assets of approximately
$110 billion. First Republic reported 68 percent uninsured deposits and total assets of approximately $213 billion.

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the issuance of debt by certain bank holding companies and certain of their subsidiary IDIs.
CIDIs with at least $100 billion in total assets are expected to be in scope for that rulemaking.
Both of these other matters are expected to be presented for the Board’s consideration
contemporaneously with the Proposal.
III.
DISCUSSION
A.
Certain Key Aspects of the Proposal
1.
Creation of Two Filing Groups
The Proposal would retain the Rule’s applicability threshold of $50 billion or more in
total assets. It would divide CIDIs into two filing groups based on the average assets reported in
the institution’s four most recent Reports of Condition and Income. IDIs with $100 billion or
more in total assets would be “Group A CIDIs,” while IDIs with at least $50 billion but less than
$100 billion in total assets would constitute the “Group B CIDIs.” For Group B CIDIs, this
would be a notable change as the Moratorium has remained in place for these CIDIs.
Attachment 3 identifies the current Group A CIDIs and Group B CIDIs.
Under the Proposal, each filing group would be subject to distinct obligations. Group A
CIDIs would be required to submit complete resolution plans containing all content elements
described in the Proposal (“Proposed Rule Resolution Plans”), including two items discussed in
more detail below: (1) a resolution strategy appropriate for the CIDI’s orderly and efficient
resolution and (2) a demonstration of the capabilities necessary to produce valuations that the
FDIC could use to conduct the statutorily required least-cost analysis at the time of an actual
failure
ements
described in the Proposal (“Proposed Rule Resolution Plans”), including two items discussed in
more detail below: (1) a resolution strategy appropriate for the CIDI’s orderly and efficient
resolution and (2) a demonstration of the capabilities necessary to produce valuations that the
FDIC could use to conduct the statutorily required least-cost analysis at the time of an actual
failure. Group B CIDIs would be required to submit an “Informational Filing.” A resolution
strategy and valuation capabilities would not be required for Informational Filings.

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If the Proposal is adopted in a form that requires submissions from some or all Group B
CIDIs, staff would recommend that the Board lift the Moratorium in its entirety concurrently
with approving and adopting the final revised Rule.
2.
Enhancement of Engagement and Capabilities Testing
The Proposal would amend existing requirements to clarify the FDIC’s expectations
regarding engagement between the CIDIs and the FDIC and regarding capabilities testing, with
the objective of enhancing the usefulness of both exercises to the FDIC’s resolution planning.
Staff has found that engagement with a CIDI helps improve staff’s understanding of the
resolution submission’s content and challenges the FDIC may face in resolving the CIDI.
Engagement may also help staff evaluate the current feasibility of implementing a resolution
strategy tailored to the particular CIDI. Capabilities testing would enable the FDIC to confirm
that the CIDI has the capabilities described in a submission and enhance the FDIC’s
understanding of how those capabilities may apply across a range of failure scenarios and
strategic options that the FDIC might undertake in an actual failure. Enhanced engagement and
capabilities testing could also supplement information contained in the submission, thereby
creating knowledge that staff could use to develop more effective resolution strategies for the
particular CIDI or for CIDIs generally
of how those capabilities may apply across a range of failure scenarios and
strategic options that the FDIC might undertake in an actual failure. Enhanced engagement and
capabilities testing could also supplement information contained in the submission, thereby
creating knowledge that staff could use to develop more effective resolution strategies for the
particular CIDI or for CIDIs generally.
For engagement, the Proposal would require the CIDI to provide the FDIC such
information and access to CIDI personnel that the FDIC determines are relevant to any provision
of the Rule. This requirement to engage is similar to the current Rule requirement but establishes
more clearly that such information and personnel access would be at the discretion of the FDIC
and would not be limited as it currently is to information and personnel access “necessary to

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assess the credibility of the resolution plan and the ability of the CIDI to implement the
resolution plan.”10
For capabilities testing, under the Proposal, the FDIC could require a CIDI to
demonstrate that it can perform the capabilities described, or required to be described, in a
submission. This would include the CIDI’s ability to provide the information, data, and analysis
underlying the submission, similar to the current requirement in the Rule. The Proposal would
clarify, however, that capabilities testing may require a CIDI to demonstrate any capability
described in the submission or required under the Rule.
3.
Enforcement
The Proposal is also intended to bolster the enforceability of the Rule. Previously, the
FDIC issued guidance for the Rule, the most recent of which is the 2021 Statement, which
superseded all prior guidance. Guidance in any form does not have the force of law and,
therefore, is not enforceable.11 Incorporating into the Rule expectations that have been suggested
in guidance would align FDIC expectations for submissions with an enforceable regulatory
requirement
e. Previously, the
FDIC issued guidance for the Rule, the most recent of which is the 2021 Statement, which
superseded all prior guidance. Guidance in any form does not have the force of law and,
therefore, is not enforceable.11 Incorporating into the Rule expectations that have been suggested
in guidance would align FDIC expectations for submissions with an enforceable regulatory
requirement.
In addition, the Proposal clarifies that if a CIDI fails to resubmit within the prescribed
timeline or if a resubmitted submission fails to adequately address identified weaknesses, the
CIDI could be subject to enforcement action. Lastly, the Proposal clarifies that any violation of
the Rule may, at the FDIC’s discretion, subject a CIDI to enforcement action under section 8 of
the FDI Act, including backup enforcement action pursuant to section 8(t). While the provision

10 12 C.F.R. § 360.10(d)(1).
11 See Statement Clarifying the Role of Supervisory Guidance, 12 C.F.R. § 302, Appendix A (Mar. 2, 2021).

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would add language, it would not constitute a substantive change and would not add to the
FDIC’s existing enforcement authority or power.
4.
Selection of Suitable Submission Cycle
As noted above, experience has shown that an annual submission cycle provides
insufficient time for its component steps of plan development, submission, review, and the
provision of feedback. At the same time, recent experience has underscored the need for timely
information, particularly where the runway to resolution is short. The Proposal balances these
concerns by requiring a comprehensive submission – a Resolution Plan for Group A CIDIs or an
Informational Filing for Group B CIDIs – and an interim supplement on a two-year cycle, rather
than the annual cycle in the Rule or the three-year cycle expectation communicated in the 2021
Statement
timely
information, particularly where the runway to resolution is short. The Proposal balances these
concerns by requiring a comprehensive submission – a Resolution Plan for Group A CIDIs or an
Informational Filing for Group B CIDIs – and an interim supplement on a two-year cycle, rather
than the annual cycle in the Rule or the three-year cycle expectation communicated in the 2021
Statement. Key information would be updated by the interim supplement that would be required
on the one-year anniversary of a CIDI’s most recent comprehensive submission and would be
composed of a limited subset of the content items required in those submissions. Attachment 4
compares the proposed content requirements applicable to each type of filing.
In addition, under the Proposal, the FDIC would retain the authority to set and change the
submission dates, including to shorten or lengthen the period between submissions. The
preamble explains that the FDIC expects to provide timely notice of a different schedule that
accommodates sufficient time for preparation of the submission; historically, the FDIC has
provided advance notice of any such change at least one year before the submission due date.
Staff believes that this amount of notice would provide ample time for a CIDI to develop its
submission under ordinary circumstances, and that, under appropriate conditions, this timeline
could be accelerated.

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B.
Other Aspects of the Proposal
The Proposal includes the following additional proposed modifications to the Rule as
interpreted by prior guidance.
1.
Credibility
The Proposal contains credibility criteria that would update and clarify the objectives and
standards of review under the Rule, which would in turn facilitate the FDIC’s ability to
determine the credibility of a submission. The Proposal sets out a two-prong approach to
credibility
s the following additional proposed modifications to the Rule as
interpreted by prior guidance.
1.
Credibility
The Proposal contains credibility criteria that would update and clarify the objectives and
standards of review under the Rule, which would in turn facilitate the FDIC’s ability to
determine the credibility of a submission. The Proposal sets out a two-prong approach to
credibility. The first prong applies only to an “identified strategy” and therefore, as discussed
below, applies only to the Proposed Rule Resolution Plans to be submitted by Group A CIDIs.
Prong one provides that a submission is not credible if its identified strategy would not provide
timely access to insured deposits, maximize value from the sale or disposition of assets,
minimize any losses realized by creditors of the CIDI in resolution, and address potential risks of
adverse effects on U.S. economic conditions or financial stability.
The second prong applies to the submissions of both Group A CIDIs and Group B CIDIs.
Under this prong, a submission is not credible if the information and analysis in it are not
supported with observable and verifiable capabilities and data, and reasonable projections, or if
the CIDI fails to comply in any material respect with the requirements of the Proposal. This
second prong is similar to the standard of review under the current Rule, which provides that a
Current Rule Plan is credible “if its strategies for resolving the CIDI, and the detailed
information required by this section, are well-founded and based on information and data related
to the CIDI that are observable or otherwise verifiable and employ reasonable projections from
current and historical conditions within the broader financial markets.”12 Staff believes that the

12 12 C.F.R. § 360.10(c)(4)(i).
CIDI, and the detailed
information required by this section, are well-founded and based on information and data related
to the CIDI that are observable or otherwise verifiable and employ reasonable projections from
current and historical conditions within the broader financial markets.”12 Staff believes that the

12 12 C.F.R. § 360.10(c)(4)(i).

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proposed change to the credibility standard is appropriate and will be helpful to CIDIs in the
development of their submissions as it more clearly sets forth the expectation with respect to the
identified strategy, the supporting information and analysis, and the required capabilities.
2.
Strategy
The content requirements under the current Rule include several “strategy”
components.13 Over the years, these provisions have been a source of confusion that the FDIC
has addressed on multiple occasions through guidance and feedback. In considering prior
submissions that have been most useful to the FDIC, staff concluded that certain strategic
approaches to resolution, while feasible under certain circumstances, did not provide the depth of
information and the optionality that best supports the FDIC in the resolution of a CIDI. This is
particularly true because a future failure scenario likely will be materially different than the one
developed for the resolution plan submission. Building on this experience, the Proposal would
require each Group A CIDI to provide an “identified strategy” that the FDIC could implement to
effect the Group A CIDI’s resolution. This requirement includes the development of a strategy
that must describe the resolution from the point of failure through sale or disposition of the
CIDI’s franchise and must meet the first prong of the credibility standard
n this experience, the Proposal would
require each Group A CIDI to provide an “identified strategy” that the FDIC could implement to
effect the Group A CIDI’s resolution. This requirement includes the development of a strategy
that must describe the resolution from the point of failure through sale or disposition of the
CIDI’s franchise and must meet the first prong of the credibility standard. The Proposal would
establish as the default identified strategy one that would provide for the establishment and
stabilization of a BDI and an exit strategy from the BDI, such as a multiple acquirer exit; an
orderly wind down of certain business lines and asset sales; or an exit via restructuring and
subsequent initial public offering or other capital markets transaction, or another exit strategy
appropriate to the size, structure and complexity of the CIDI (“BDI Strategy”). While

13 See 12 C.F.R. § 360.10(c)(2)(vi) & (vii).

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recognizing that this approach may not be taken in all circumstances, the BDI Strategy provides
information and analysis that would support this option if needed.
At the same time, the FDIC recognizes that for some firms an alternative strategy, such as
a payout and liquidation of the bank or transferring some but not all business lines and assets to a
BDI and liquidating others in a receivership, may be more appropriate for the businesses and
organizational structure of a particular Group A CIDI. The Proposal would permit the use of an
identified strategy other than the BDI Strategy if the alternative strategy meets certain specified
criteria.14 The Proposal would require any strategy to include meaningful optionality for
execution across a range of scenarios. Under the Proposal, however, a CIDI would not be
permitted to use as its identified strategy a closing weekend sale of the franchise to one or more
acquirers
se of an
identified strategy other than the BDI Strategy if the alternative strategy meets certain specified
criteria.14 The Proposal would require any strategy to include meaningful optionality for
execution across a range of scenarios. Under the Proposal, however, a CIDI would not be
permitted to use as its identified strategy a closing weekend sale of the franchise to one or more
acquirers. While such a transaction poses the least execution risk for the FDIC, and is often the
least disruptive and most efficient, it may not be available, particularly for the largest CIDIs of
$100 billion or more in total assets, and particularly where the runway for contingency planning
for resolution is short. The development of this strategy is less useful to the FDIC in the event
that option is not available, as it does not provide the robust information, capabilities and
analysis to allow for development and execution of alternative strategies.
The Proposal does not require that the Group B CIDIs provide an identified strategy. The
relatively smaller size of Group B CIDIs expands the pool of possible purchasers and increases
the likelihood of a sale of the franchise as a whole. Typically, an acquiring institution is the same
size or greater than the failing IDI. For assets that are not sold to an assuming institution, most
asset classes would not have a protracted sales timeline based on market absorption rate (daily
trading volume or total market capital). Moreover, private capital for certain asset classes are

14 The Proposal would not permit any identified strategy to be based upon the sale of substantially all assets and
liabilities over closing weekend.
ost
asset classes would not have a protracted sales timeline based on market absorption rate (daily
trading volume or total market capital). Moreover, private capital for certain asset classes are

14 The Proposal would not permit any identified strategy to be based upon the sale of substantially all assets and
liabilities over closing weekend.

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more likely to be raised and would not require significant financing. Overall, Group B CIDIs
should experience fewer limitations on market absorption or acquisition size given the overall
size of the balance sheet, and would be less likely to require a longer term BDI to facilitate a
multiple acquirer exit. For Group B CIDIs, the focus of the Informational Filing will support
such a resolution, and the development of an identified strategy will be less important.
3.
Failure Scenario
Staff has observed through years of reviewing Current Rule Plans that assumptions about
the condition of the CIDI when it fails determine to a large extent the usefulness of a resolution
strategy across a range of scenarios. Accordingly, the Proposal would add detail to the Rule
concerning the failure scenario. Specifically, the Proposal would require the identified strategy to
be based on a failure scenario that demonstrates that the CIDI is experiencing material financial
distress. The Proposal also provides detail about conditions that must be assumed. The Proposal
would retain the current Rule requirement for an identified strategy, as interpreted by the 2021
Statement, concerning the macroeconomic conditions at the time of failure15 and add the
required assumption that the CIDI’s U.S. parent company is in resolution
he CIDI is experiencing material financial
distress. The Proposal also provides detail about conditions that must be assumed. The Proposal
would retain the current Rule requirement for an identified strategy, as interpreted by the 2021
Statement, concerning the macroeconomic conditions at the time of failure15 and add the
required assumption that the CIDI’s U.S. parent company is in resolution. In addition, because
the likely failure scenarios for each CIDI may differ due to divergent business models, balance
sheets, and risks, the Proposal includes flexibility for the FDIC to develop specific failure
scenario assumptions, with respect to macroeconomic conditions or the precipitating cause of
failure, for individual CIDIs, for specific cohorts of Group A CIDIs, or for all Group A CIDIs in
future submissions.

15 An identified strategy must assume that failure occurs under severely adverse economic conditions, as developed
by the Board of Governors of the Federal Reserve System pursuant to 12 U.S.C. § 5365(i)(1)(B).

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4.
Valuation Capabilities that Facilitate the Least-Cost Test

The Rule requires a Current Rule Plan to “describe how the strategies for the separation
of the CIDI and its subsidiaries from its parent company’s organization and sale or disposition of
deposit franchise, core business lines and major assets can be demonstrated to be the least costly
to the Deposit Insurance Fund of all possible methods for resolving the CIDI.”16 Over the years,
CIDIs have struggled to understand and meet this requirement
be how the strategies for the separation
of the CIDI and its subsidiaries from its parent company’s organization and sale or disposition of
deposit franchise, core business lines and major assets can be demonstrated to be the least costly
to the Deposit Insurance Fund of all possible methods for resolving the CIDI.”16 Over the years,
CIDIs have struggled to understand and meet this requirement. Staff has concluded that the
requirement has failed to meet its potential for informing the FDIC’s resolution planning and, if
needed, resolution implementation.17 Accordingly, the Proposal would replace this provision
with the requirement that a Group A CIDI demonstrate the capabilities necessary to produce
valuations that the FDIC can use to conduct the statutorily required least-cost analysis at the time
of an actual failure.18 To demonstrate these valuation capabilities, a Group A CIDI would be
required to describe its valuation process in its submission and provide as an appendix a
valuation analysis that includes a range of quantitative estimates of value. Under the Proposal,
the FDIC would require valuations that would support the evaluation of a range of possible
resolution options, including the impact on value if not all deposits were transferred to a BDI or
acquirer, and the impact on value in a multiple acquirer exit as compared to a sale of the
institution as a whole. While these capabilities would be evaluated under the second prong of the
credibility standard under the Proposal, the FDIC would not make a credibility determination as
to the identified strategy based on the valuation information provided in response to this
requirement.

16 12 C.F.R. § 360.10(c)(2)(vii).
17 The FDIC has not expected Current Rule Plans to include this information since 2017.
18 See 12 U.S.C. § 1823(c)(4).
ty standard under the Proposal, the FDIC would not make a credibility determination as
to the identified strategy based on the valuation information provided in response to this
requirement.

16 12 C.F.R. § 360.10(c)(2)(vii).
17 The FDIC has not expected Current Rule Plans to include this information since 2017.
18 See 12 U.S.C. § 1823(c)(4).

15

The valuation capabilities requirement described above would not apply to
Group B CIDIs. As the Group B CIDIs are not required to provide an identified strategy based
upon a failure scenario, the informational filings submitted by the Group B CIDIs will not
include the scenario analysis necessary to the demonstration of valuation capabilities as required
in the Proposal.
5.
Approach to Capabilities
Group A CIDIs must demonstrate the capabilities with respect to valuations, as described
above. In addition, the Proposal would require all CIDIs to be able to demonstrate that they have
the capabilities necessary to support the information and analysis provided in the submission,
and that the capabilities necessary to ensure continuity of critical services and that franchise
components are separable and marketable. To facilitate the marketing of franchise components,
the Proposal specifically asks that the submission describe the CIDI’s current capabilities and
processes to provide access to or establish a virtual data room promptly in the run-up to or upon
failure of the bank. This approach more clearly and directly addresses the expectation that the
strategy and analysis in the submissions be actionable. The current Rule contains references to
certain necessary capabilities but the Rule does not require CIDIs to demonstrate the existence of
specific capabilities in their submissions.
6
ish a virtual data room promptly in the run-up to or upon
failure of the bank. This approach more clearly and directly addresses the expectation that the
strategy and analysis in the submissions be actionable. The current Rule contains references to
certain necessary capabilities but the Rule does not require CIDIs to demonstrate the existence of
specific capabilities in their submissions.
6.
Content Requirements
In an effort to collect information that would more effectively prepare the FDIC to
resolve a CIDI and to facilitate all CIDIs having key resolvability capabilities, the Proposal
would make several additional changes to the information a CIDI must provide in its submission.

16

Many of the proposed content requirement modifications are familiar to CIDIs as the
FDIC previously issued them as interpretive guidance.19 Their incorporation into the Rule would
codify that guidance. These content requirements include information about franchise
components, key personnel, and communications capabilities.
The Proposal would add detail or expand upon certain content elements that have been
required in the Rule or articulated in past feedback as guidance, in addition to those described
above. In particular, the Proposal would require more detailed information about the
organizational structure of the firm and any cross-border activities. The Proposal incorporates
and builds upon past guidance, including in addressing the identification of franchise
components and requiring identification of those that currently are separable and can be
marketed in a timely manner, to provide optionality in resolution and to support a potential
multiple acquirer resolution strategy. The Proposal includes a requirement for focused and
specific information on material asset portfolios, which is important where the resolution of the
firm in the event of failure may include marketing asset portfolios either in coordination with the
sale of the franchise or separately out of the receivership
nality in resolution and to support a potential
multiple acquirer resolution strategy. The Proposal includes a requirement for focused and
specific information on material asset portfolios, which is important where the resolution of the
firm in the event of failure may include marketing asset portfolios either in coordination with the
sale of the franchise or separately out of the receivership. Additional detail would be required
with respect to the overall deposit structure, including mapping deposits to lines of business.
While the Proposal would not require the submissions to address systemic risk, which was
exempted for all submissions pursuant to the 2021 Statement, the Proposal would substitute a
more focused requirement for firm-specific information related to the potential economic effects
of resolution of the CIDI, such as market share in a particular region or business segment or a
significant level of bank-to-bank activity.

19 If the Proposal is adopted as a final rule, all previously-issued guidance, including the 2021 Statement, would be
superseded by the final Rule.

17

In addition, the Proposal would require all CIDIs to include in their submissions
information about digital services and electronic platforms that CIDIs offer to depositors to
support banking transactions for business customers. The Proposal addresses the fact that digital
services and electronic platforms and related services provided to retail and commercial
customers have proliferated dramatically since the Rule was adopted. This information will
enhance the FDIC‘s understanding of the value of these services, their impact on customer
relationships, and the potential challenges to continuing or winding down those services in
resolution.
The Proposal would also eliminate certain information currently required by the Rule that
is expected to be exempted for all specified CIDIs pursuant to the 2021 Statement
dopted. This information will
enhance the FDIC‘s understanding of the value of these services, their impact on customer
relationships, and the potential challenges to continuing or winding down those services in
resolution.
The Proposal would also eliminate certain information currently required by the Rule that
is expected to be exempted for all specified CIDIs pursuant to the 2021 Statement. For example,
the Proposal would eliminate the requirements for information regarding major counterparties
and disaster recovery or other backup plans. However, most of the content requirements that
were expected to be exempted for all CIDIs pursuant to the 2021 Statement would instead
continue to be required in the Proposal. FDIC staff decided to maintain these content
requirements because recent events have shown this content to be useful in resolution planning.
The Proposal would also eliminate the Rule’s process requiring the FDIC to either
acknowledge the acceptance of a submission or to return the submission if the FDIC determines
that it is incomplete.20 Staff recommends deleting these provisions because they have not proven
to be useful.
C.
Proposed Transition Period
The preamble of the Proposal provides information about certain aspects of the transition
from the current Rule to an amended Rule, consistent with staff’s recommended approach. The

20 See 12 C.F.R. § 360.10(c)(4)(ii)-(iv).
0 Staff recommends deleting these provisions because they have not proven
to be useful.
C.
Proposed Transition Period
The preamble of the Proposal provides information about certain aspects of the transition
from the current Rule to an amended Rule, consistent with staff’s recommended approach. The

20 See 12 C.F.R. § 360.10(c)(4)(ii)-(iv).

18

Director of the Division of Complex Institution Supervision and Resolution, acting under
delegated authority, has directed certain Group A CIDIs to submit their next Current Rule Plans
in December 2023, December 2024 or December 2025. The preamble advises that Group A
CIDIs be required to submit Current Rule Plans as previously directed unless they receive
written notice of an extension. The 2023 Current Rule Plans must be evaluated under the current
Rule. Nevertheless, the preamble indicates that feedback on those submissions will focus on
Rule provisions that would remain relevant under the Rule as amended if the Proposal is adopted
as a final rule (“Amended Rule”). The preamble also states that the FDIC does not anticipate
conducting engagement and capabilities testing on 2023 Current Rule Plans. Finally, the
preamble indicates that staff expects to offer meetings to the CIDIs to discuss the FDIC’s
expectations for submissions under the Amended Rule and to respond to their questions.
Going forward, staff recommends that approximately half of the Group A CIDIs submit
their first Proposed Rule Resolution Plans on a date specified by the FDIC that would be at least
270 days from the effective date of the Amended Rule, with the other half submitting their first
Proposed Rule Resolution Plans the following year. The preamble describes this proposed
approach and also advises that any Group A CIDI that is in the second cohort would be expected
to provide an interim supplement on or before the date the first cohort is required to submit
Proposed Rule Resolution Plans
from the effective date of the Amended Rule, with the other half submitting their first
Proposed Rule Resolution Plans the following year. The preamble describes this proposed
approach and also advises that any Group A CIDI that is in the second cohort would be expected
to provide an interim supplement on or before the date the first cohort is required to submit
Proposed Rule Resolution Plans. This time period is consistent with the Rule’s provision for a
270 day minimum plan preparation period for an IDI’s first submission after it becomes a
CIDI.21
In addition, the preamble indicates, consistent with staff’s recommendation, that all
Group B CIDIs would be required to submit their first Informational Filings on a date specified

21 See 12 CFR § 360.10(c)(ii).

19

by the FDIC that would be at least 270 days from the effective date of the Amended Rule. Staff
believes that this would provide adequate time for Group B CIDIs to develop their submissions,
taking into consideration that most Group B CIDIs have never made a submission under the
current Rule and no Group B CIDI has submitted a Current Rule Plan more recently than 2018.
D.
Expected Effects; Paperwork Reduction Act
The preamble analyzes the expected effects of the Proposal and considers requirements
under several statutes, including the Paperwork Reduction Act. For purposes of the expected
effects and Paperwork Reduction Act, the proposed changes are evaluated against the FDIC’s
most recent burden estimate for the Rule, which was conducted in December 2021.22 At that
time, the FDIC was implementing the Rule as contemplated in the 2021 Statement.
The Proposal would increase estimated compliance costs for all CIDIs as compared to
compliance costs as of December 2021
the expected
effects and Paperwork Reduction Act, the proposed changes are evaluated against the FDIC’s
most recent burden estimate for the Rule, which was conducted in December 2021.22 At that
time, the FDIC was implementing the Rule as contemplated in the 2021 Statement.
The Proposal would increase estimated compliance costs for all CIDIs as compared to
compliance costs as of December 2021. The estimated costs associated with recordkeeping,
reporting, and disclosure requirements are calculated based on the number of hours per billion
dollars in assets (“HPBA”).23 The estimated increases are as follows:

22 Resolution Plans Required for IDIs Over $50 Billion,
https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202111-3064-003.
23 This approach reflects the view that the greater a CIDI’s total assets, the more hours it will need to spend to satisfy
requirements under the Proposal.

20

Type of CIDI
Hours per billion in assets
in December 2021
Hours per billion in assets
under Proposal
Group A CIDI affiliated
with a U.S. GSIB – Proposed
Rule Resolution Plan

57.6
72
Group A CIDI not affiliated
with a U.S. GSIB – Proposed
Rule Resolution Plan24

48
72
Group B CIDI –
Informational Filing25

0
67
All CIDIs – Interim
Supplement
0
24

The Proposal would increase regulatory compliance costs for Group A CIDIs due to three
factors: (1) the proposed changes to submission content and to engagement and capabilities
testing, including requiring certain content that the 2021 Statement indicated would be exempted
for all or some of these CIDIs; (2) the proposed increase in submission frequency; and (3) the
new interim supplement requirement. The Proposal would increase regulatory compliance costs
for Group B CIDIs because, at the time of the most recent burden estimates, the Moratorium was
in effect and exempted all IDIs with less than $100 billion in total assets from the Rule’s
submission requirements
or all or some of these CIDIs; (2) the proposed increase in submission frequency; and (3) the
new interim supplement requirement. The Proposal would increase regulatory compliance costs
for Group B CIDIs because, at the time of the most recent burden estimates, the Moratorium was
in effect and exempted all IDIs with less than $100 billion in total assets from the Rule’s
submission requirements. As discussed above, implementation of the Proposal in its final form
would need to be accompanied by a separate action by the Board lifting the Moratorium for
Group B CIDIs, thereby requiring them to resume submissions. The expected HPBA regulatory
compliance costs for Group B CIDIs under the Proposal would be less than those for

24 This table does not reflect the added burden that would be imposed on a Group A CIDI that is a first-time filer.
25 As of December 2021—the time of the FDIC’s most recent burden estimate—the 2018 moratorium was still in
effect, so IDIs with less than $100 billion in total assets (which includes IDIs that would be Group B CIDIs under
the proposed rule) were not required to comply with the Rule.

21

Group A CIDIs as the Group B CIDIs’ Informational Filings would have fewer content
requirements than the Group A CIDIs’ Proposed Rule Resolution Plans.
Staff does not believe that the net additional costs that would be incurred as a result of the
changed requirements in the Proposal would have an adverse impact on banking activities such
as originating and servicing loans, processing payments, or various financial market activities in
which these IDIs may be involved, as the costs are low compared to the size of the institutions
affected by the Proposal. The preamble includes this statement.
IV.
CONCLUSION:
Staff recommends that the Board:
A.
Approve the attached Notice of Proposed Rulemaking and authorize its
publication in the Federal Register for a comment period ending November 30, 2023.
B
cial market activities in
which these IDIs may be involved, as the costs are low compared to the size of the institutions
affected by the Proposal. The preamble includes this statement.
IV.
CONCLUSION:
Staff recommends that the Board:
A.
Approve the attached Notice of Proposed Rulemaking and authorize its
publication in the Federal Register for a comment period ending November 30, 2023.
B.
Authorize the General Counsel, or designee, and the Executive Secretary, or
designee, to make minor changes to the draft Federal Register document to prepare it for
publication.
CONCUR:

__________________
Harrel M. Pettway
General Counsel
Date

CONTACTS:
CISR:
Patrick Bittner; Aaron Wishart; Brian O’Keefe; Elizabeth Falloon;
Kent Bergey
DRR:
Audra Cast; Shawn Khani; Varanessa Marshall; Leslie Sulenta
Legal:
Celia Van Gorder; Angus Tarpley; Ben DeMaria; Dena Kessler;
Francesca Muratori; Esther Rabin; Greg Wach

22

ATTACHMENTS:
Attachment 1: Draft Board Resolution

Attachment 2: Notice of Proposed Rulemaking, Including Preamble

Attachment 3: Chart of CIDI Groups

Attachment 4: Comparison of Group A CIDI Submissions, Group B CIDI Submissions
and Interim Supplements

Attachment 3

Chart of CIDI Groups26

Group A CIDIs

*estimated assets following completion of recent mergers and acquisitions

26 Data as of 3/31/2023.
Total Assets
(4Q AVG, $000s)
1
JPMORGAN CHASE BANK, N.A.
OCC
3,289,826,000
2
BANK OF AMERICA, N.A.
OCC
2,446,180,500
3
CITIBANK, N.A.
OCC
1,730,770,250
4
WELLS FARGO BANK, N.A.
OCC
1,707,503,750
5
U.S. BANK N.A.*
OCC
700,671,699
6
PNC BANK, N.A.
OCC
549,090,745
7
TRUIST BANK
FDIC
544,332,500
8
GOLDMAN SACHS BANK USA
FR
498,394,250
9
CAPITAL ONE, N.A.
OCC
425,747,461
10
TD BANK, N.A.
OCC
396,899,813
11
CHARLES SCHWAB BANK, SSB
FR
366,151,000
12
THE BANK OF NEW YORK MELLON
FR
343,964,250
13
STATE STREET BANK AND TRUST
COMPANY
FR
295,383,250
14
CITIZENS BANK, N.A
ANK, N.A.
OCC
1,707,503,750
5
U.S. BANK N.A.*
OCC
700,671,699
6
PNC BANK, N.A.
OCC
549,090,745
7
TRUIST BANK
FDIC
544,332,500
8
GOLDMAN SACHS BANK USA
FR
498,394,250
9
CAPITAL ONE, N.A.
OCC
425,747,461
10
TD BANK, N.A.
OCC
396,899,813
11
CHARLES SCHWAB BANK, SSB
FR
366,151,000
12
THE BANK OF NEW YORK MELLON
FR
343,964,250
13
STATE STREET BANK AND TRUST
COMPANY
FR
295,383,250
14
CITIZENS BANK, N.A.
OCC
224,842,002
15
FIRST CITIZENS BANK & TRUST COMPANY*
FDIC
207,113,382
16
FIFTH THIRD BANK, N.A.
OCC
205,926,465
17
MORGAN STANLEY PRIVATE BANK, N.A.
OCC
200,040,500
18
MORGAN STANLEY BANK, N.A.
OCC
197,268,500
19
MANUFACTURERS AND TRADERS TRUST
COMPANY
FR
200,990,176
20
KEYBANK N.A.
OCC
188,792,756
21
THE HUNTINGTON NATIONAL BANK
OCC
182,073,119
22
ALLY BANK
FR
180,700,500
23
HSBC BANK USA, N.A.
OCC
165,654,561
24
BMO HARRIS BANK N.A.
OCC
192,612,413
25
THE NORTHERN TRUST COMPANY
FR
155,435,676
26
REGIONS BANK
FR
155,981,000
27
AMERICAN EXPRESS NATIONAL BANK
OCC
151,544,587
28
FLAGSTAR BANK, N.A.*
OCC
123,306,433
29
UBS BANK USA
FDIC
118,303,336
30
DISCOVER BANK
FDIC
123,350,410
31
USAA FEDERAL SAVINGS BANK
OCC
111,706,000
INSTITUTION NAME
PFR

Attachment 3
2

Group B CIDIs

#CIBC crossed the threshold into Group B as of 3/31/23
Institution Name
PFR
Total Assets
(4Q Avg, $000)
1
SANTANDAR BANK, N.A.
OCC
98,689,404

2
SYNCHRONY BANK
OCC
93,609,750

3
CITY NATIONAL BANK
OCC
93,681,513

4
COMERICA BANK
FED
87,013,500

5
ZIONS BANCORPORATION, N.A.
OCC
88,594,231

6
FIRST HORIZON BANK
FED
80,984,733

7
WEBSTER BANK, N.A
into Group B as of 3/31/23
Institution Name
PFR
Total Assets
(4Q Avg, $000)
1
SANTANDAR BANK, N.A.
OCC
98,689,404

2
SYNCHRONY BANK
OCC
93,609,750

3
CITY NATIONAL BANK
OCC
93,681,513

4
COMERICA BANK
FED
87,013,500

5
ZIONS BANCORPORATION, N.A.
OCC
88,594,231

6
FIRST HORIZON BANK
FED
80,984,733

7
WEBSTER BANK, N.A.
OCC
70,594,669

8
WESTERN ALLIANCE BANK
FED
68,436,988

9
EAST WEST BANK
FED
64,060,191

11
SYNOVOUS BANK
FED
59,295,822

10
VALLEY NATIONAL BANK
OCC
58,031,681

12
BANCO POPULAR DE PUERTO RICO
FED
57,875,000

13
UMPQUA BANK
FDIC
53,985,895

14
FROST BANK
FED
52,272,816

15
CIBC BANK USA#
FDIC
50,224,642

Attachment 4

Comparison of Group A CIDI Submissions, Group B CIDI Submissions and
Interim Supplements

## Nearby sections

- [FDIC FIL-1-2002 FOREIGN ASSETS CONTROL ACT](https://www.frixlaw.com/law-library/statutes/FDIC_FIL02001.md)
- [FDIC FIL-1-2010 Employee Compensation Advance Notice of Proposed Rulemaking](https://www.frixlaw.com/law-library/statutes/FDIC_FIL10001.md)
- [FDIC FIL-1-2024 Consolidated Reports of Condition and Income for Fourth Quarter 2023](https://www.frixlaw.com/law-library/statutes/FDIC_FIL24001.md)
- [FDIC FIL-2-2004 Foreign Assets Control Act](https://www.frixlaw.com/law-library/statutes/FDIC_FIL04002.md)
- [FDIC FIL-2-2020 Consolidated Reports of Condition and Income for Fourth Quarter 2019](https://www.frixlaw.com/law-library/statutes/FDIC_FIL20002.md)
- [FDIC FIL-3-2003 FILING PROCEDURES](https://www.frixlaw.com/law-library/statutes/FDIC_FIL03003.md)
- [FDIC FIL-4-2006 Commercial Real Estate Lending Proposed Interagency Guidance](https://www.frixlaw.com/law-library/statutes/FDIC_FIL06004.md)
- [FDIC FIL-4-2021 Revised Guidelines for Appeals of Material Supervisory Determinations](https://www.frixlaw.com/law-library/statutes/FDIC_FIL21004.md)
- [FDIC FIL-4-2023 Guidance to Help Financial Institutions and Facilitate Recovery in Areas of California Affected by Severe Winter Storms, Flooding, Landslides and Mudslides](https://www.frixlaw.com/law-library/statutes/FDIC_FIL23004.md)
- [FDIC FIL-4-2025 FDIC Statement of Policy on Bank Merger Transactions](https://www.frixlaw.com/law-library/statutes/FDIC_FIL25004.md)
- [FDIC FIL-5-2000 Consumer Credit Reporting Practices](https://www.frixlaw.com/law-library/statutes/FDIC_FIL00005.md)
- [FDIC FIL-5-2003 LETTER TO STAKEHOLDERS](https://www.frixlaw.com/law-library/statutes/FDIC_FIL03005.md)
- [FDIC FIL-5-2021 Frequently Asked Questions Regarding Suspicious Activity Reporting and Other Anti-Money Laundering (AML) Considerations](https://www.frixlaw.com/law-library/statutes/FDIC_FIL21005.md)
- [FDIC FIL-6-2000 Special Alert](https://www.frixlaw.com/law-library/statutes/FDIC_FIL00006.md)

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FDIC_FIL23046. Check the current official text before relying on it. Not legal advice.