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Dodd-Frank Act Stress Test (Company-Run)

Purpose

Section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) requires national banks and federal savings associations with total consolidated assets of more than $100 billion to conduct annual stress tests. On October 9, 2012, the OCC published its final annual stress test rule (12 CFR 46), which set out definitions and rules for scope of application, scenarios, reporting, and disclosure. On December 3, 2014, the OCC published final rules to adjust the timing of the annual stress testing cycle and to clarify the method used to calculate regulatory capital in the stress tests. On February 23, 2018, the OCC finalized technical and conforming changes to the stress test rule.

Covered institutions with $100 billion in assets or more are required to submit the results of their company-run stress tests to the OCC by April 5 and publish those results between June 15 and July 15. The OCC will provide the required scenarios to the covered institutions by February 15 of each year.

The results of the company-run stress tests provide the OCC with forward-looking information used in bank supervision and will assist the agency in assessing the company’s risk profile and capital adequacy. The objective of the annual company-run stress test is to ensure that institutions have robust, forward-looking capital planning processes that account for their unique risks, and to help ensure that institutions have sufficient capital to continue operations throughout times of economic and financial stress. The OCC intends to use the data to assess the reasonableness of the stress test results and determine whether additional analytical techniques are needed to identify, measure and monitor risk. These stress test results are also expected to support ongoing improvement in a covered institution’s stress testing practices with respect to its internal assessments of capital adequacy and overall capital planning.

Scenarios

Beginning in 2016, the OCC will release economic and financial market scenarios that are used in the annual company-run stress test under the Dodd-Frank Act no later than February 15. The scenarios include baseline, adverse and severely adverse scenarios. Each scenario includes economic variables, including macroeconomic activity, unemployment, exchange rates, prices, incomes and interest rates. The adverse and severely adverse scenarios are not forecasts, but rather hypothetical scenarios designed to assess the strength and resilience of financial institutions.

Reporting Templates

These reporting templates collect quantitative projections of balance sheet, capital, losses, and income across three or more macroeconomic scenarios, along with qualitative information on methodologies.

Covered institutions are required to complete reporting templates using financial information as of December 31 each year. For 2019, the OCC has proposed the following changes to the templates and instructions:

Institution Size Templates Instructions Scenarios Technical Instructions
$100B or more .zip
(proposed)
.pdf
(proposed)
TBD TBD

Click here for 2018, 2017, 2016, and 2015 DFAST templates, instructions, scenarios, and technical instructions.

Disclosure of Annual Stress Test Results

The Annual Stress Test rule (12 CFR 46.8) requires the covered institutions to publish a summary of the results of its annual stress tests. The required summary of results may be published on the covered institution’s web site or in any other forum that is reasonably accessible to the public.

  • $100 billion or more covered institution: $100 billion or more covered institution must publish a summary of the results of its annual stress test in the period starting June 15 and ending July 15 (for the stress test cycle beginning January 1, 2016, and for all stress tests thereafter). Unless the OCC determines otherwise, if the $100 billion or more covered institution is a consolidated subsidiary of a bank holding company or savings and loan holding company subject to supervisory stress tests conducted by the Board of Governors of the Federal Reserve System pursuant to 12 CFR part 252, then within the June 15 to July 15 period such covered institution may not publish the required summary of its annual stress test earlier than the date that the Board of Governors of the Federal Reserve System publishes the supervisory stress test results of the covered bank's parent holding company.

Related Links

Date Issued Subject/Title
October 31, 2018 ($100B or More Proposed Reporting Template and Instructions) Agency Information Collection Activities: Revision of an Approved Information Collection; Comment Request; Company-Run Annual Stress Test Reporting Template and Documentation for Covered Institutions with Total Consolidated Assets of $100 Billion or More under the Dodd-Frank Wall Street Reform and Consumer Protection Act
July 6, 2018 Interagency Statement regarding the Impact of the Economic Growth, Regulatory Relief, and Consumer Protection Act
February 23, 2018 Final Rule on Annual Stress Test
February 2, 2018 (Over $50B Final Reporting Template and Instructions) Agency Information Collection Activities; Proposals, Submissions, and Approvals: Company-Run Annual Stress Test Reporting Template and Documentation for Covered Institutions with Total Consolidated Assets of 50 Billion Dollars or More under Dodd-Frank Wall Street Reform and Consumer Protection Act
November 8, 2017 (Over $50B Proposed Reporting Template and Instructions) Agency Information Collection Activities: Revision of an Approved Information Collection; Comment Request; Company-Run Annual Stress Test Reporting Template and Documentation for Covered Institutions With Total Consolidated Assets of $50 Billion or More Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
October 28, 2013 Final Policy Statement on the Principles for Development and Distribution of Annual Stress Test Scenarios