The Federal Reserve Board ("FRB") proposal to extend the single-counterparty credit limit compliance dates for foreign banking organizations was published in the Federal Register. Comments on the proposal must be submitted by December 20, 2019.
The FRB final rule, which went into effect on October 5, 2018, was adopted to implement single-counterparty credit limits for U.S. bank holding companies and foreign banking organizations operating in the United States with $250 billion or more in total global consolidated assets. The limits also apply to any global systemically important banks ("GSIBs"), as well as any foreign banking organization's U.S. intermediate holding companies with $50 billion in total consolidated assets.
As previously covered, the compliance dates initially were set to be January 1, 2020 for a foreign banking organization with the characteristics of a GSIB, and July 1, 2020 for any other foreign banking organization. The FRB is now proposing to extend the initial compliance dates for foreign banking organizations with the characteristics of GSIBs and other foreign banking organizations to July 1, 2021 and January 1, 2022, respectively.
The FRB is not proposing any modification or amendment of the compliance dates regarding the single-counterparty credit limits applicable to U.S. intermediate holding companies of foreign banking organizations. This proposed extension would only affect the single-counterparty credit limits applicable to a foreign banking organization's combined U.S. operations.
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