FR 2590

Single-Counterparty Credit Limits

Description: The FR 2590 report collects general information about the covered company or covered foreign entity, including its full legal name, the amount of its capital stock and surplus, and whether it would be considered a "major covered company" or "major foreign banking organization" under the Board's single-counterparty credit limits (SCCL) rule. The report also collects descriptive information about the covered company or covered foreign entity's exposures to its top 50 counterparties and the data required to calculate its gross credit exposure, net credit exposure, and aggregate net credit exposure to those counterparties in accordance with the SCCL rule.

OMB: 7100-0377

Purpose: The information collected will allow the Board to monitor a covered company's or a covered foreign entity's compliance with the SCCL rule.

Background: As demonstrated during the 2007-2008 financial crisis, large credit exposures, particularly between financial institutions, can spread financial distress and undermine financial stability. Section 165(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) directed the Board to prescribe regulations that prohibit a covered company or covered foreign entity from having a credit exposure to any unaffiliated company that exceeds 25 percent of the capital stock and surplus of the covered company or covered foreign entity, or such lower limit as the Board may determine by regulation to be necessary to mitigate risks to the financial stability of the United States. In order to implement section 165(e) of the Dodd-Frank Act, the Board issued the SCCL rule in the third quarter of 2018. The SCCL rule was amended in the fourth quarter of 2019 and is defined pursuant to 12 CFR part 238, subpart Q, and 12 CFR part 252, subparts H and Q. The Board's SCCL rule applies a single-counterparty credit limit to covered companies and covered foreign entities using a base of tier 1 capital and applies an additional single-counterparty credit limit for exposures between major counterparties, as defined in the SCCL rule. The SCCL rule requires each covered company and covered foreign entity to calculate its aggregate net credit exposure to a counterparty using the methods set forth in the rule, and sets limits on the aggregate net credit exposure that each covered company and covered foreign entity may have to the counterparty. In addition, certain provisions in the SCCL rule permit a covered company or covered foreign entity to request temporary relief from specific requirements of the rule.

Respondent Panel: The panel consists of U.S. bank holding companies and savings and loan holding companies that are subject to Category I, II, or III standards; foreign banking organizations that are subject to Category II or III standards or that have total global consolidated assets of $250 billion or more; and U.S. intermediate holding companies that are subject to Category II or III standards. Categories I, II, and III standards are defined pursuant to 12 CFR 238.10 or 252.5, depending on the type of organization.

Frequency: The FR 2590 is required to be submitted quarterly as of March 31, June 30, September 30, and December 31. The submission date is 40 calendar days after the March 31, June 30, and September 30 as-of dates and 45 calendar days after the December 31 as-of date.

Public Release: FR 2590 data will be kept confidential and not made available to the public under exemption 4 of the Freedom of Information Act (FOIA).

Last Update: September 23, 2020