Regulatory relief can alter the work a bank must do without establishing what it will earn or lend. The Federal Reserve's February 3 final rule would remove qualitative CCAR objections for qualifying large and noncomplex firms, beginning March 6. The economically useful distinction is between changing a review channel and demonstrating lower costs or greater credit supply. [2017-02257][2016-23629]

The September proposal made that channel change explicit: quantitative CCAR assessment would continue, while qualitative assessment would occur through supervision. The final rule retains supervisory and enforcement authority. That combination explains why counting the removal of one objection power as the removal of capital scrutiny would exaggerate the change. [2017-02257][2016-23629]

The eligibility boundary also evolved. The proposal used on-balance-sheet foreign exposure below $10 billion alongside asset criteria. The final classification instead excludes U.S. global systemically important banking groups, while requiring average consolidated assets below $250 billion and defined average nonbank assets below $75 billion as of the preceding December 31. A proposed screen and an adopted screen are not interchangeable inputs to an economic assessment. [2017-02257][2016-23629]

Nor can a firm's coverage be inferred from a momentary balance. Ordinary entry generally uses the $50 billion average-consolidated-assets threshold, subject to transitions and Board-order authority. The ongoing-applicability text requires four consecutive individual quarterly reports below $50 billion before exit takes effect. These details identify where tailoring applies. They do not show that compliance savings occurred, competition strengthened or shareholders received a windfall. [2017-02257][2016-23629]

Source documents

  1. Amendments to the Capital Plan and Stress Test Rules; Regulations Y and YYhttps://www.govinfo.gov/content/pkg/FR-2017-02-03/html/2017-02257.htm
  2. Amendments to the Capital Plan and Stress Test Ruleshttps://www.govinfo.gov/content/pkg/FR-2016-09-30/html/2016-23629.htm