Section 165(i) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act") requires:
- The Board of Governors of the Federal Reserve System ("Board") to conduct an annual stress test ("Supervisory Test") on each systemically important bank holding company ("BHCs") and systemically-important nonbank;
- All banking organizations with total consolidated assets of more than $10 billion (on an average basis over the prior four quarters) to conduct an annual company-run stress test ("Annual Self-Test"); and
- Systemically important BHCs and nonbanks to conduct an additional mid-cycle company-run stress test each year ("Mid-Cycle Self-Test").
Last week, the Board, the Office of the Comptroller of the Currency ("OCC") and the Federal Deposit Insurance Corporation ("FDIC") all issued final rules to effectuate these Dodd-Frank Act stress testing requirements.