WASHINGTON—Comptroller of the Currency Jonathan V. Gould issued the following statement today on his abstention from the Federal Deposit Insurance Corporation (FDIC) vote on feedback concerning the July 2025 Dodd-Frank Act Section 165(d) resolution plans:
I am abstaining from voting on the FDIC staff’s proposal regarding the resolution plans of the U.S. global systemically important banks (GSIBs) because I believe that there are fundamental issues with the current resolution planning processes that continue to be unaddressed.
Five months ago, I gave a speech detailing some of the legal and conceptual issues that I have with resolution planning at both the bank and holding company level, noting the limited value of the planning process and the plans themselves, and advocating for significant reforms. Many people expressed their agreement with and appreciation for that speech, and my concerns have not changed. That said, I believe we are making progress reforming the FDIC’s CIDI resolution plan requirements. But we have yet to focus on the section 165(d) resolution plans, and my vote today reflects that.
I acknowledge and appreciate the work of both agencies on the draft feedback letters today. I also appreciate that the proposed feedback letters themselves are relatively benign compared to prior feedback letters. There are no new “shortcomings” or deficiencies identified and, although I would welcome the insights of others, the expectations identified did not seem overly burdensome compared to prior years.
Nonetheless, the letters are based on, and perpetuate, a seriously flawed and, in my opinion, extralegal process. As I discussed in my speech, the agencies have a history of imposing binding, onerous requirements of questionable provenance and efficacy without prior notice or opportunity for comment. Resolution planning concepts that appeared for the first time in resolution feedback letters and guidance include the costly and complicated capital and liquidity requirements commonly referred to as “RCAP,” “RCEN,” “RLAP” and “RLEN.” Today’s feedback letters discuss firms’ compliance with more requirements created via prior feedback letters, such as “assurance” and “contingency strategies.”
The Federal Reserve and FDIC’s 2024 feedback letters to the U.S. GSIBs announced that they expect the firms to develop an “assurance framework” for resolution capabilities, which was to be composed of at least the five elements identified in the feedback letters. The agencies’ resolution planning process has gone from planning to planning plus capabilities to planning plus capabilities plus assurance of capabilities. Although I hope that these assurance frameworks will result in less agency examination of resolution capabilities, we have no “assurance” that adding requirements via feedback letters will end here.
Similarly, the proposed feedback letters discuss “contingency strategies” that describe how the firms can support critical operations “through a range of alternative resolution scenarios when financial resources are significantly lower than the execution needs after the Covered Company files for bankruptcy.” Although I continue to have legal and policy concerns with the capital and liquidity requirements for resolution planning, I do not believe the answer to those concerns is imposing even more planning and other requirements on firms. We should not continue to pursue attempts to eliminate the risk that the failure of a GSIB will not go according to a resolution plan; it will almost certainly not.
Looking forward, the letters leave undefined what the scope of review and anticipated areas of focus are for next year’s resolution plans, although it appears to involve additional “capabilities” testing. As I stated in my speech, I am skeptical that there is much incremental value in this exercise. We need to, instead, extend the time between submissions and take a hard look at the resolution planning “guidance” and other feedback that has led to binding requirements and significant burden without commensurate value.
A round of relatively benign feedback letters shows that we have treated a symptom of a flawed process but not the flaws themselves. I believe we can agree on at least some of those flaws and that we can therefore address them. Now is the time to do so.
