April 28, 2014
Federal Reserve Board announces it is requiring Bank of America Corporation to resubmit its capital plan and to suspend planned increases in capital distributions
For release at 9:00 a.m. EDT
The Federal Reserve Board on Monday announced it is requiring Bank of America Corporation to resubmit its capital plan and to suspend planned increases in capital distributions. The decision relates to the disclosure by Bank of America that the banking organization incorrectly reported data used in the calculation of regulatory capital ratios and submitted as inputs for the most recent stress tests conducted by the Federal Reserve.
The Federal Reserve can require a banking organization that is part of the annual Comprehensive Capital Analysis and Review (CCAR) program to resubmit its capital plan at any time if there is a material change that could potentially lead to an alteration in a firm's capital position. Bank of America will be required to resubmit its capital plan within 30 days, unless that time is extended by the Federal Reserve. Bank of America must address the quantitative errors in its regulatory capital calculations as part of the resubmission and must undertake a review of its regulatory capital reporting to help ensure there are no further errors.
Until receiving notice that the Federal Reserve has not objected to the new capital plan, Bank of America will not be able to increase its capital distributions, including those increases approved during the 2014 CCAR exercise last month.
The Federal Reserve in CCAR evaluates the capital planning processes and capital adequacy of the largest bank holding companies, including the firms' proposed capital actions such as dividend payments and share buybacks and issuances.
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