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Statement of Jeremiah O. Norton
Memorandum and Resolution re: Determination Regarding
2013 Resolution Plans of Eleven First Wave Covered Companies
Memorandum and Resolution re: Authorization to Send Letters Jointly
Board of Governors of the Federal Reserve
System in Response to October 2013
Resolution Plan Submissions of First
Wave Covered Companies
August 5, 2014

Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act1 (DoddFrank) contains the primary path to resolvability for large and complex financial
institutions. Pursuant to section 165(d) of Dodd-Frank and its implementing regulation,
large bank holding companies and foreign banking organizations with branches or
agencies in the U.S. must submit resolution plans (or living wills) annually if their
consolidated assets are greater than or equal to $50 billion.2 These living wills must
report the "plan of such company for rapid and orderly resolution in the event of material
financial distress or failure."3 The plans must include, among other items, a description
of the ownership structure, assets, liabilities, and contractual obligations of each
company as well as an identification of major counterparties.4
The statute requires the Federal Reserve and the FDIC (the Agencies) to review the
resolution plans.5 In the event that the Agencies jointly determine that a plan is not
credible or would not facilitate an orderly bankruptcy process under Title 11 of the U.S.
Code, the law requires the Agencies to notify the company of its plan's deficiencies.6
Should such a notification occur, the company must resubmit its plan with revisions
demonstrating that it can be resolved in an orderly way in a bankruptcy proceeding. If
the firm fails to resubmit a plan that would result in an orderly bankruptcy or is not
credible, then the Agencies may impose enhanced supervisory measures, such as
capital, leverage, or liquidity constraints and may ultimately order divestitures if the
deficiencies remain uncured.7
2013 Plan Review
After reviewing the 2013 resolution plan submissions of the firms that constitute the first
wave of resolution plan filers,8 the FDIC has concluded that the plans do not meet the
threshold required under statute that the plans be credible and facilitate an orderly
bankruptcy. However, today's vote will not result in a notice of deficiencies that would
trigger resubmission requirements and possible enhanced supervisory measures

because the issuance of such a notice requires joint action by the Federal Reserve and
the FDIC.9
2015 Instructions
Separately, the Agencies have agreed to issue new instructions for the first wave of
resolution plan filers8 in advance of their July 1, 2015 submissions. The instructions
address issues such as legal structure, financial contracts with early termination rights,
shared services, and operational capabilities.
I supported the recommendations of the FDIC staff with respect to both the 2013 plan
review and the 2015 instructions at today's board meeting. Title I resolution planning is
a critical component of financial reform. In many respects, achieving a credible and
workable framework for resolving large and complex financial institutions would be the
pinnacle accomplishment in the wake of the 2008 financial crisis.
1P.L. 111-203 (July 21, 2010).
212 U.S.C. § 5365(d)(1); 12 C.F.R. § 381.3. The statute also requires those nonbank
financial firms designated as systemically important by the Financial Stability Oversight
Council to submit resolution plans.
312 U.S.C. § 5365(d)(1).
512 U.S.C. § 5365(d)(3).
612 U.S.C. § 5365(d)(4).
712 U.S.C. § 5365(d)(5).
8The first wave of resolution plan filers consists of 11 firms. See;
912 U.S.C. § 5365(d)(4).
Last Updated 8/5/2014