The Federal Deposit Insurance Corp. is moving forward with efforts to overhaul its resolution planning process for large banks.
A June 25 notice of proposed rulemaking would drastically change the FDIC's Insured Depository Institution (IDI) submission process by reducing the information banks must provide regulators by more than half, raising the asset threshold for banks subject to the rule and extending the time between submissions. The changes would provide the FDIC with more targeted information to resolve a large bank failure more quickly, board members said.
The current resolution plan framework "has taken the form of lengthy narrative plans rather than focusing on the key information the FDIC needs to execute a resolution and on maximizing the likelihood of an optimal resolution outcome," Chairman Travis Hill said during an open meeting. The proposal would "meaningfully adjust our approach to IDI resolution submissions by substantially streamlining filing requirements to focus on the operational information most relevant to the FDIC."
Under the proposal, banks with over $100 billion in assets would be required to submit resolution plans to the agency every three years. Under current rules, banks over $50 billion in assets must submit plans every three years, while global systemically important banks (GSIBs) submit them every two years.
Raising the asset threshold would reduce the number of banks subject to the rule by 16. Currently, 48 banks are required to submit regular resolution plans. Under the proposal, the asset threshold would be automatically updated every three years using an indexing methodology to account for future inflation.
Banks still required to submit resolution plans under the proposed rule will submit less information, cutting the amount of information they must provide by more than half.
Examples of information that would no longer be required are hypothetical failure analysis and details about the bank's processes and procedures. Banks would also no longer be required to submit a public portion of their plan. Capability testing and the FDIC's credibility assessments would also be eliminated.
The proposal would also remove the requirement for banks to submit interim information for the years they do not submit full plans. Instead, the FDIC will collect information as needed through the agency's existing notice of extraordinary event process.
The proposal also adds some new required information, such as an organizational chart and information about the bank's noncontrolling interests, partnerships and joint ventures; a mapping of the institution's information technology systems and deposit and loan processing times; more details on deposit activities; and information on qualified financial contracts.
Resolution planning reform has been a top priority for federal bank regulators since they stepped into office in early 2025. In April of that year, the FDIC reduced the amount of information banks had to include in the upcoming submission cycle to prioritize information that would best help the agency resolve large banks quickly. It has also taken steps to increase the number of failed bank bidders, specifically for private equity and nonbanks.
In January of this year, Comptroller of the Currency Jonathan Gould called for a complete elimination of the covered IDI plans process, instead saying the FDIC should focus on maturing its internal capabilities to resolve large bank failures.
The topic garnered more attention in May when Gould abstained from voting on the GSIBs' resolution plans. Later that month, Hill told reporters that he shared a lot of Gould's views and that the agency planned to soon propose a rule reforming the IDI process.
Gould voted in favor of the proposal, but said it does not go far enough.
"I strongly encourage stakeholders to provide comment on what is right with the proposal and what more should be done, including whether specific information requirements such as those targeting digital asset activities are warranted and whether they might be used by future administration to chilling effect or otherwise be unnecessary," Gould said during the FDIC board meeting. "I will also seek changes in FDIC structure and staffing that reduce bureaucratic incentives to perpetuate or expand this exercise in the future."
