Washington D.C. – A coalition of financial services trade associations urged the Federal Reserve Board (FRB) to take prompt, interim steps that clarify the operation of the 2025 stress test cycle and related stress capital buffer (SCB) requirements to avoid unnecessary uncertainty.  The associations include the Financial Services Forum, American Bankers Association, Bank Policy Institute, and Securities Industry and Financial Markets Association.

On April 17^th, the FRB proposed changes to the stress testing regime effective for 2025 which include averaging stress capital buffer requirements and a change in the effective date of the requirements, with comments due on June 23^rd. In a joint letter, the associations explained that since a final rule will not be in place by the time that stress test results are released on June 30^th, firms will be unable to accurately communicate their tentative stress capital buffers or capital actions.

To address this issue, the associations recommend the FRB take action prior to the 2025 stress test results that allows firms to base their upcoming SCB solely on their 2025 stress test results to ensure accurate SCB calculations, provide reliable dividend payment disclosures, and prevent public confusion.

“To avoid introducing additional uncertainty regarding the SCB requirement, which would be inconsistent with the Proposal’s stated purpose, we urge that the FRB, no later than 14 calendar days before the scheduled date for the announcement of 2025 stress testing results, publicly announce that firms will be permitted to operate under the existing SCB framework through September 30, 2026, regardless of whether the FRB adopts revised SCB mechanics in a final rule with an effective date in that window,” the associations stated.

The full letter can be found here.

About Financial Services Forum

The Financial Services Forum is an economic policy and advocacy organization whose members are the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, financial inclusion, deep and liquid capital markets, a competitive global marketplace, and a sound financial system.

About American Bankers Association

The American Bankers Association is the voice of the nation’s $24.1 trillion banking industry, which is composed of small, regional and large banks that together employ approximately 2.1 million people, safeguard $19.2 trillion in deposits and extend $12.7 trillion in loans.

About Bank Policy Institute

The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.

About Securities Industry and Financial Markets Association

SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development.  SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).

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