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Growing Pains DFAST to CCAR

01 PROJECT OVERVIEW

Larger financial institutions are constantly purchasing smaller institutions to adjust specific capital ratios, expand into new territories, or offer new products to their existing customers. With the passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, there was a new component for M&A activity leading to a combined institution of greater than $50 billion in US assets. CCAR stress testing was required for all Bank Holding companies with greater than $50 billion in US assets and these stress tests were a significant increase in the regulatory reporting burden than was previously placed on banks.

 

Our client was an acquired institution that was pushed into the world of CCAR stress testing and regulatory reporting overnight. They needed to build out a regulatory compliance department and fill the data gaps in their lending portfolio with urgency.

02 THE SOLUTION

The BRS team of commercial and residential credit experts advised our client on the classification of some unique lending facilities that did not fall in any typical category. Once the portfolio was properly split between Commercial and Residential loan classifications, our team developed two custom data aggregation templates to collect the necessary information. In addition, our team assisted with the creation of future data collection protocols to maintain compliance with regulations as Commercial and Residential loans require frequent data collection.

03 THE RESULTS

At the conclusion of the 5-week assignment, our team collected, validated and uploaded 91,000 data elements into our client’s data repository. Our team helped to implement long term sustainability practices that still persist today, resulting in our client being one of the most successful first-time CCAR filing institutions that the OCC has seen to date