Effective October 1: Federal Reserve Announces Individual Capital Requirements for all Large Banks

Regulatory Developments

Effective October 1: Federal Reserve Announces Individual Capital Requirements for all Large Banks
On August 28, the Federal Reserve announced the final individual capital requirements for U.S. bank holding companies, covered savings and loan holding companies, and intermediate holding companies of foreign banking organizations with $100 billion or more in assets (large banks). The announcement included a table showing each large bank’s minimum capital requirement, stress capital buffer requirement, and, if applicable, capital surcharge for the largest and most complex banks. The minimal capital requirement for each bank is 4.5%, and the stress capital buffer requirement is at least 2.5%. Additionally, a capital surcharge was included for certain of the largest and most complex banks. Failure to maintain these capital requirements subjects these banks to restrictions on capital distributions and discretionary bonuses. The capital requirements will be effective on October 1.

The Federal Reserve Requests Input on Operational Practices of Discount Window
On September 5, the Federal Reserve issued a request for information (RFI) seeking public input around the operational practices of the discount window, which provides short-term credit for banks and credit unions. The Federal Reserve and the Reserve Banks that administer the discount windows are looking to improve the efficiency and ease of access to the discount window and intraday credit as the banking system continues to evolve. The RFI seeks input on operational practices, including the collection of legal documentation; the process for pledging and withdrawing collateral; the process for requesting, receiving, and repaying discount window loans; the extension of intraday credit; and Reserve Bank communication practices related to the discount window and intraday credit. The RFI does not seek comments on the eligibility criteria, the terms for discount window advances and intraday credit, or other policy considerations.

The comment period will close 90 days after the request for information is published in the Federal Register.

CFPB’s Nonbank Registry Portal Launches October 16
The CFPB plans to go live with the portal to its Nonbank Registry (NBR) on October 16 for larger participant covered non-banks. The NBR results from a final rule issued by the CFPB on June 4. Under this rule, the CFPB plans to create a comprehensive public database of enforcement actions resulting from violations of the federal consumer financial protection laws. The rule requires non-depository consumer financial services companies under the CFPB’s jurisdiction that have entered into final, written, public orders with a government agency resulting from violations of these laws to register with the CFPB using the portal. In addition to registration, these companies must provide an annual written attestation from senior executives that they remain in compliance with the order. While these attestations will be treated as confidential, the names and titles of the attesting executives will be published on the registry. The final rule becomes effective September 16, with required submission periods beginning on October 16 for larger entities and continuing into 2025 for smaller entities.

Acting Comptroller of the Currency Michael Hsu Delivered Remarks Before the Joint European Banking Authority and European Central Bank International Conference
On September 3, the Acting Comptroller of the Currency, Michael Hsu, spoke before the Joint European Banking Authority and the European Central Bank International Conference. Acting Comptroller Hsu noted that supervision (i) requires a more nimble “team-of-teams” approach, (ii) must be as adept at covering nonfinancial risks as financial risks, and (iii) must contend with more large banks, and that the imperatives for supervisors going forward include implementing and sustaining risk-based supervision and prioritizing agility and credibility.

“Whereas regulation is about adopting and enforcing rules, supervision is about promoting safe and sound practices and behaviors. ... Supervisors are like referees or umpires calling balls and strikes. Or we are like cops on the beat enforcing the law or like firefighters ready to save the neighborhood from financial conflagrations. Some see us as quasi-auditors, checking for adherence to internal procedures and processes. In practice, supervisors do all these things and more; the trick for supervisors is knowing which role to play in a given situation.”

— Mike Hsu, Acting Comptroller of the Currency, OCC

SEC Enhances Reporting for Registered Investment Companies and Issues Liquidity Guidance
On August 28, the SEC adopted amendments to reporting requirements on Form N-PORT to provide SEC and investors with more timely information about certain registered investment companies (Funds). Form N-PORT reports provide information about a Fund’s portfolio holdings and related information to help assess a Fund’s risks. The amendments will require reporting Funds file reports on Form N-PORT on a monthly basis within 30 days after the end of the month and make these monthly reports available to the public 60 days after the end of each month. In addition, the SEC adopted amendments to Form N-CEN, requiring open-end Funds to report certain information about service providers used to fulfill liquidity risk management program.

The amendments to Forms N-PORT and N-CEN will become effective on November 17, 2025. Funds generally will be required to comply with the amendments for reports filed on or after that date, except that fund groups with net assets of less than $1 billion will have until May 18, 2026, to comply with the Form N-PORT amendments.

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