Regulators delay implementation of stress-test requirements for mid-size banks

The FDIC, Federal Reserve and Office of the Comptroller of the Currency announced on Monday that they are considering changes to implementation timelines regarding annual capital-adequacy stress tests mandated by Dodd-Frank.

Under a rule proposed in January, financial institutions with between $10 billion and $50 billion in assets are required to undergo annual stress tests beginning in late 2013. The rule, however, is still under consideration by regulators.

The delay is expected to impact approximately 65 mid-size banks, including E*Trade Financial, First Niagra Financial Group Inc., Synovus Financial Corp., First Horizon National Corp. and CIT Group, according to The Wall Street Journal.

The large volume of comments on the proposed rule has led the agencies to consider delaying the effective date of the rule to ensure that all institutions have ample time to develop stress-testing programs.

Several comments on the rule relate to the proposed timing of compliance, specifically in regards to whether covered institutions would have the resources and ability to conduct the stress tests in the short period likely to follow publication of the rule and its effective date.

Larger banks have been subject to stress testing by the Federal Reserve since 2009. The OCC is considering requiring institutions with more than $50 billion in assets to begin conducting those tests by the end of the year, though the office did say it would consider delaying the requirement on a case-by-case basis, The Wall Street Journal reports.

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