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Federal Register / Vol. 86, No. 21 / Wednesday, February 3, 2021 / Rules and Regulations reporting of company-run stress results that are comparable to the supervisory stress test results. These projections are also necessary for the Federal Reserve to be able to project stress losses and calculate the dividend add-on for the stress capital buffer requirement using the assumptions in the stress test rules.
In response to the commenters suggestion, subtracting the values reported on FR Y14A, Schedule F, from those reported on FR Y14A, Schedule A, would not provide the impact of the business plan change on projections, as Schedule F only captures the day one impact of the business plan change. Therefore, the final rule adopts these reporting requirements as proposed.
In addition, several commenters requested clarification about whether the proposed FR Y14A reporting requirements include all or only material business plan changes. Under the final rule, firms should exclude the effects of material business plan changes from the DFAST sub-schedule of FR
Y14A, Schedule ASummary, and the SCB sub-schedule of Schedule C
Regulatory Capital Instruments. Firms should include only material business plan changes in FR Y14A, Schedule FBusiness Plan Changes.
These revisions to the FR Y14A will be effective as of the FR Y14A
submission due on April 5, 2021.

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E. Covered Savings and Loan Holding Companies i. Application of Capital Plan Rule The Board currently assesses the condition, performance, and activities of savings and loan holding companies on a consolidated basis in the same manner that the Board assesses the condition, performance, and activities of bank holding companies, taking into account any unique characteristics of savings and loan holding companies and the requirements of the Home Owners Loan Act.25 Under the tailoring rule, the Board applies supervisory stress testing requirements to covered savings and loan holding companies subject to Category II, III, or IV standards.26 The tailoring rule also applies company-run stress test requirements to covered savings and loan holding companies subject to Category II or III standards.
The scale, complexity, and risk factors for these firms warrant more sophisticated capital planning, more frequent company-run stress testing, 25 12

U.S.C. 1461 et seq.
covered savings and loan holding company is a savings and loan holding company not predominantly engaged in insurance or commercial activities see 12 CFR 217.2.
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and greater supervisory oversight through supervisory stress testing than for smaller and less complex firms. To implement the supervisory stress test for covered savings and loan holding companies, the tailoring rule required a covered savings and loan holding company to report the FR Y14 report in the same manner as a bank holding company.
The proposal solicited comment on whether to apply capital planning and stress capital buffer requirements to covered savings and loan holding companies subject to Category II, III, or IV standards. In particular, the Board solicited comment on the advantages and disadvantages of applying these requirements to large covered savings and loan holding companies in the same manner as they apply to large bank holding companies, whether any adjustments to those requirements should be made for covered savings and loan holding companies, what other approaches to applying capital planning requirements to covered savings and loan holding companies the Board should consider, and whether the current transition period in the capital plan rule for large bank holding companies would be appropriate for covered savings and loan holding companies. The Board received two comments on this element of the proposal. Commenters suggested that the Board provide covered savings and loan holding companies the option to comply with capital planning and stress capital buffer requirements, particularly for those covered savings and loan holding companies that are subject to less risk. To the extent compliance is mandatory, commenters asserted that the Board should tailor the requirements to a covered savings and loan holding companys risk profile and provide an extended transition period for covered savings and loan holding companies to come into compliance with such requirements.
For the reasons set forth below, the Board is applying the capital planning and stress capital buffer requirements to covered savings and loan holding companies subject to Category II, III, or IV standards in the same manner as they apply to large bank holding companies subject to Category II, III, or IV
standards.27 Additionally, the Board is adopting capital planning reporting requirements for covered savings and 27 The capital planning and stress capital buffer requirements for covered savings and loan holding companies subject to Category II, III, or IV standards are codified at 12 CFR 238.170. The Board also has made conforming changes to its capital rule and stress testing rules for covered savings and loan holding companies.

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loan holding companies.28 A covered savings and loan holding company that becomes subject to capital planning requirements as of the effective date of this rule would be required to submit its first capital plan on April 5, 2022.
Capital is central to a firms ability to absorb unexpected losses and continue to lend to creditworthy businesses and consumers. The Boards capital planning requirements for large bank holding companies help to ensure that these firms have robust systems and processes that incorporate forwardlooking projections of revenue and losses to monitor and maintain their internal capital adequacy. The stress capital buffer requirement helps ensure that a firm can meet its obligations to creditors and other counterparties, as well as continue to serve as a financial intermediary through periods of financial and economic stress. As the Board noted in its final tailoring rule, covered savings and loan holding companies engage in many of the same activities and face similar risks as bank holding companies. Accordingly, the final rule applies capital planning and stress capital buffer requirements to covered savings and loan holding companies subject to Category II, III, or IV standards in the same manner as they apply to large bank holding companies subject to Category II, III, or IV
standards.
While commenters recommended that the Board permit a covered savings and loan holding company to opt out of these requirements because they have different risk profiles than similarly sized bank holding companies, the final rule does not include such an option because these requirements will promote the safety and soundness of a covered savings and loan holding company by ensuring that a covered savings and loan holding company is required to maintain capital commensurate with its risk profile and activities. Moreover, the capital planning and stress testing requirements that apply to bank holding companies do not provide for such an opt-out election.
One commenter asserted that capital planning requirements should be appropriately tailored to the risk profile of covered savings and loan holding companies, including that these firms 28 Covered savings and loan holding companies subject to Category II or III standards will be required to submit FR Y14A, Schedule A
Summary, Schedule BScenario, Schedule C
Regulatory Capital Instruments, Schedule E
Operational Risk, and Schedule FBusiness Plan Changes. Covered savings and loan holding companies subject to Category IV standards will be required to submit FR Y14A, Schedule C
Regulatory Capital Instruments.

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