Recovery Planning Supporting Statement 3-5-19

OCC Guidelines Establishing Standards for Recovery Planning by Certain Large Insured
National Banks, Insured Federal Savings Associations, and Insured Federal Branches
Supporting Statement
OMB Control No. 1557-0333
The Office of the Comptroller of the Currency (OCC) submitted the information
collections contained in the notice of proposed rulemaking titled “OCC Guidelines Establishing
Standards for Recovery Planning by Certain Large Insured National Banks, Insured Federal
Savings Associations, and Insured Federal Branches; Technical Amendments” to the Office of
Management and Budget (OMB) for review and approval pursuant to the Paperwork Reduction
Act of 1980 (as amended) (PRA) at 44 U.S.C. 3506 and the implementing regulations at 5 CFR
part 1320.11. At the request of OMB, the OCC is resubmitting the collections in connection
with the final rule.
The final rule raises from $50 billion to $250 billion the resolution planning threshold.
This is consistent with the Economic Growth, Regulatory Relief, and Consumer Protection Act
(Act),1 which was enacted to promote economic growth, provide tailored economic relief, and
enhance consumer protections. Section 401 of the Act raises from $50 billion to $250 billion the
section 165 resolution planning threshold.
A. Justification.
1.

Circumstances that make the collection of information necessary:

In 2015, the OCC issued guidelines applicable to each insured national bank, insured
Federal savings association, and insured Federal branch of a foreign bank (together, banks) with
average total consolidated assets equal to or greater than $50 billion (covered banks). The
guidelines stated that each covered bank should develop and maintain a recovery plan that is
appropriate for its individual size, risk profile, activities, and complexity, including the
complexity of its organizational and legal entity structure, in order to be able to respond quickly
to and recover from the financial effects of severe stress. The guidelines established standards
for this recovery planning.
The OCC issued a final rule which increases the average total consolidated assets
threshold for applying the recovery planning guidelines to a bank from $50 billion to $250
billion and decreases from 18 months to 12 months the time within which a bank should comply
with the recovery planning guidelines after the bank first becomes subject to the guidelines.
2.

Use of the information:

Overview of covered bank. A recovery plan should describe the covered bank’s overall
organizational and legal entity structure, including its material entities, critical operations, core
business lines, and core management information systems. The plan should describe
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Pub. L. 115-174, 132 Stat. 1296 (May 24, 2018).

interconnections and interdependencies (1) across business lines within the covered bank, (2)
with affiliates in a bank holding company structure, (3) between a covered bank and its foreign
subsidiaries, and (4) with critical third parties.
Triggers. A covered bank’s recovery plan should identify triggers that appropriately
reflect the bank’s particular vulnerabilities.
Options for recovery. A recovery plan should identify a wide range of credible options
that a covered bank could undertake to restore financial strength and viability, thereby allowing
the bank to continue to operate as a going concern and to avoid liquidation or resolution. A
recovery plan should explain how the covered bank would carry out each option and describe the
timing required for carrying out each option. The recovery plan should specifically identify the
recovery options that require regulatory or legal approval.
Impact assessments. For each recovery option, a covered bank should assess and
describe how the option would affect the covered bank. This impact assessment and description
should specify the procedures the covered bank would use to maintain the financial strength and
viability of its material entities, critical operations, and core business lines for each recovery
option. For each option, the recovery plan’s impact assessment should address the following: (1)
the effect on the covered bank’s capital, liquidity, funding, and profitability, (2) the effect on the
covered bank’s material entities, critical operations, and core business lines, including
reputational impact, and (3) any legal or market impediment or regulatory requirement that must
be addressed or satisfied in order to implement the option.
Escalation procedures. A recovery plan should clearly outline the process for escalating
decision-making to the covered bank’s senior management, board of directors (board), or
appropriate board committee in response to the breach of any trigger. The recovery plan should
also identify the departments and persons responsible for executing the decisions of senior
management, the board, or an appropriate board committee.
Management reports. A recovery plan should require reports that provide senior
management, the board, or an appropriate board committee with sufficient data and information
to make timely decisions regarding the appropriate actions necessary to respond to the breach of
a trigger.
Communication procedures. A recovery plan should provide that the covered bank notify
the OCC of any significant breach of a trigger and any action taken or to be taken in response to
such breach and should explain the process for deciding when a breach of a trigger is significant.
A recovery plan also should address when and how the covered bank will notify persons within
the organization and other external parties of its action under the recovery plan. The recovery
plan should specifically identify how the covered bank will obtain required regulatory or legal
approvals.
Other information. A recovery plan should include any other information that the OCC
communicates in writing directly to the covered bank regarding the covered bank’s recovery plan.
A covered bank should (1) integrate its recovery plan into its risk governance functions
and (2) align its recovery plan with its other plans, such as its strategic, operational (including
business continuity), contingency, capital (including stress testing), liquidity, and resolution
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planning. The covered bank’s recovery plan also should be specific to that covered bank and
coordinated with any recovery and resolution planning efforts by the bank’s holding company.
A covered bank’s recovery plan should address the responsibilities of the bank’s
management and board with respect to the plan. Specifically, management should review the
recovery plan at least annually and in response to a material event. It should revise the plan as
necessary to reflect material changes in the covered bank’s size, risk profile, activities, and
complexity, as well as changes in external threats. This review should evaluate the
organizational structure and its effectiveness in facilitating a recovery. The board is responsible
for overseeing the covered bank’s recovery planning process. The board of a covered bank or an
appropriate board committee should review and approve the recovery plan at least annually, and
as needed to address significant changes made by management.
The OCC believes that a large, complex institution should undertake recovery planning
in order to be able to respond quickly to and recover from the financial effects of severe stress on
the institution. The process of developing and maintaining a recovery plan also should cause a
covered bank’s management and its board to enhance their focus on risk governance with a view
toward lessening the negative impact of future events. OCC examiners will assess the
appropriateness and adequacy of the covered bank’s ongoing recovery planning process as part
of the agency’s regular supervisory activities.
3.
Describe whether, and to what extent, the collection of information involves the use of
automated, electronic, mechanical, or other technological collection techniques or other
forms of information technology. Describe any consideration of using information
technology to reduce burden:
Respondents may use any technology compatible with meeting the requirements of the
guidelines.
4.

Efforts to identify duplication:

The OCC recognizes that many covered banks already engage in significant planning,
including planning responses to cyber attacks, business interruptions, and leadership vacancies.
Some covered banks also undertake a range of other planning, including strategic, contingency,
capital (including stress testing), liquidity, and resolution. The same is true for their parent
holding companies or affiliates. Also, the OCC does not intend for a covered bank’s recovery
planning to be needlessly burdensome or duplicative of these other planning processes. The
OCC expects, however, that a covered bank’s recovery plan will identify the recovery strategies
that are specific to that bank and, as appropriate, distinguishable from the recovery strategies of
its holding company or affiliates. Furthermore, while the OCC encourages covered banks to
leverage their existing processes, including by incorporating or cross-referencing portions or
elements of relevant plans, in most cases, it is unlikely that a covered bank will be able to use a
plan prepared for another purpose or entity to satisfy the guidelines. The purpose of the
requirements is to provide a comprehensive framework for evaluating how severe stress would
financially affect a covered bank specifically and the recovery options that would allow that bank
to remain viable under such stress.

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5.
If the collection of information impacts small businesses or other small entities,
describe any methods used to minimize burden.
The final rule will increase the average total consolidated assets threshold for applying
the recovery planning guidelines to a bank from $50 billion to $250 billion and decrease from 18
months to 12 months the time within which a bank should comply with the recovery planning
guidelines after the bank first becomes subject to the guidelines.
6.

Consequence to Federal program if the collection were conducted less frequently:

If a covered bank were to prepare, review, or revise its recovery plan less frequently
than provided in the rule, the bank would be less prepared to respond quickly to and recover
from the financial effects of severe stress, which could threaten its viability or the safety and
soundness of its operations.
7.
Special circumstances that would cause an information collection to be conducted in a
manner inconsistent with 5 CFR par 1320:
The information collection will be conducted in a manner consistent with 5 CFR part
1320.5(d)(2).
8.

Efforts to consult with persons outside the agency:

The information collection requirements were issued for public comment through the
notice of proposed rulemaking on September 19, 2018, 83 FR 47313.
The OCC submitted the information collection requirements to OMB at the proposed
rule stage. OMB filed a comment specifying that the OCC shall examine public comment in
response to the NPRM and will include in the supporting statement of the next ICR--to be
submitted to OMB at the final rule stage--a description of how the agency has responded to
any public comments on the ICR, including comments on maximizing the practical utility of
the collection and minimizing the burden. No comments were received on the information
collection.
9.

Payment or gift to respondent:
Not applicable.

10.

Any assurance of confidentiality:
The information collection request will be kept private to the extent permissible by law.

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11.

Justification for questions of a sensitive nature:
None.

12.

Burden estimate:
Total Number of Respondents: 8.
Total Burden per Respondent: 7,543 hours.
Total Burden for Collection: 60,344 hours.

13.

Estimate of total annual costs to respondents (excluding cost of hour burden in Item #12)
None.

14.

Estimate of annualized cost to the Federal government:
None.

15.

Change in burden:
Prior Burden: 188,575
Current Burden: 60,344 hours.
Difference: - 128,231 hours.
Cost of burden reduction:
128,231 hours x $117 = $15,003,027
To estimate wages we reviewed data from May 2017 for wages (by industry and
occupation) from the U.S. Bureau of Labor Statistics (BLS) for depository credit
intermediation (NAICS 522100). To estimate compensation costs associated with the
rule, we use $117 per hour, which is based on the average of the 90th percentile for seven
occupations adjusted for inflation (2.2 percent), plus an additional 34.2 percent to cover
private sector benefits for financial activities.
The decrease in burden is due to the decrease in the threshold under the rule.

16.

Information regarding collections whose results are to be published for statistical use:
Not applicable.

17.

Reasons for not displaying OMB approval expiration date:
Not applicable.
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18. Exceptions to the certification statement:
Not applicable.
B. Collections of Information Employing Statistical Methods
Not applicable.

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