CONTINGENCY FUNDING PLAN. (1) Within sixty (60) days, the Board shall expand the Bank’s Contingency Funding Plan to ensure the Bank operates with adequate backup sources of liquidity in relation to the Bank’s needs. The formalized written Contingency Funding plan should address the responsibilities of senior management during a funding crisis and include at a minimum: (a) liquidity crisis triggers relating to regulatory matters (e.g., formal enforcement action, drop in capital category, reduction in composite rating) and asset quality deterioration; (b) determination of the appropriate frequency for meetings of the Liquidity Emergency Team to address a potential liquidity crisis; (c) determination of an appropriate communication strategy to the Bank’s wholesale funds providers and bank customers; (d) establishment of guidelines for paying premiums on deposits to ensure regulatory compliance if the Bank drops to “Adequately Capitalized” under bank regulations; and (e) development and implementation of a testing schedule to validate the Bank’s Contingency Funding Plan. (2) Within sixty (60) days, the Bank shall develop, implement, and adhere to a plan to improve the Bank’s asset-based liquidity and reduce the Bank’s reliance on noncore liabilities to fund long term assets as those terms are defined in the Federal Deposit Insurance Corporation Uniform Bank Performance Report. Such actions shall include, but not be limited to: (a) measures to maintain sufficient asset based liquidity; (b) reduction of wholesale or credit sensitive liabilities; and (c) revision of the Bank's risk limits for reliance on wholesale or credit sensitive liabilities from a single provider or in aggregate to fund long- term assets in light of the requirement of this Article. (3) The Board shall immediately implement, and shall thereafter ensure adherence to its terms of this article. Monthly reports shall set forth liquidity requirements and sources. Copies of these reports shall be forwarded to the Assistant Deputy Comptroller.
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Samples: Banking Agreement, Banking Agreement
CONTINGENCY FUNDING PLAN. (1) Within sixty ninety (6090) daysdays of the date of this Agreement, the Board Bank shall expand submit to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection an acceptable written Contingency Funding Plan. Refer to the “Liquidity” booklet of the Comptroller’s Handbook.
(2) The Contingency Funding Plan shall provide policies, procedures, action plans and projection reports to ensure the Bank’s Contingency Funding Plan liquidity sources are sufficient to ensure the Bank operates with adequate backup sources of liquidity in relation meet its needs under stress events, unexpected circumstances and ongoing adverse business conditions, to the Bank’s needs. The formalized written Contingency Funding plan should address the responsibilities of senior management during a funding crisis and include include, at a minimum:
(a) a definition of a liquidity crisis triggers relating to regulatory matters (e.g., formal enforcement action, drop in capital category, reduction in composite rating) and asset quality deteriorationfor the Bank;
(b) determination the identification of the appropriate frequency for meetings of the Liquidity Emergency Team plausible stress events relating to address internal and external events or circumstances, including systemic or market events, that could lead to a potential Bank liquidity crisis;
(c) determination determinations of an appropriate communication strategy to how each identified stress event will affect the Bank’s wholesale funds providers and bank customersability to obtain funding needs under different levels of severity;
(d) establishment quantitative projection and evaluation of guidelines funding needs under each identified stress event;
(e) the identification of all potentially viable funding sources for paying premiums on deposits to addressing each identified stress event with a priority listing of preferred funding sources as well as alternative funding sources of incremental liquidity;
(f) processes that ensure regulatory compliance if the Bank drops maintains access and the operational capability to “Adequately Capitalized” under bank regulationsmonetize all funding sources that are relied upon for each stress event;
(g) the identification of timely early warning triggers to alert management to potential liquidity problems;
(h) development of a detailed plan for addressing each identified early warning trigger and stress event;
(i) assigned management responsibility for implementation of all funding plan phases as well as the appointment of a qualified liquidity crisis management team and administrative structure;
(j) preparation of monthly liquidity crisis reports to monitor the Bank’s ability to meet its current and future liquidity needs, to include at a minimum:
(i) funding capacity reports by funding type;
(ii) funding source concentration reports;
(iii) vault cash management reports;
(iv) liquid asset levels including the fair value of unencumbered investment securities in available-for-sale and held-to-maturity portfolios, and the adequacy of established methods to monetize assets;
(v) levels and trends in uninsured deposits;
(vi) certificate of deposit breakage and early redemptions;
(vii) aggregate wire transfer activity levels and trends;
(viii) account runoff attributed to deposit rate restrictions;
(ix) reports describing alternative funding sources of incremental liquidity, including standby emergency sources of liquidity;
(x) information and reports on the stability, pricing and performance of the markets from which funds would be obtained; and
(exi) development cash flow projections and implementation of a testing schedule to validate the Bank’s Contingency Funding Plan.run-off reports;
(2k) Within sixty (60) daysan internal and external communication process, the Bank shall develop, implement, and adhere to a plan to improve the Bank’s asset-based liquidity and reduce the Bank’s reliance on noncore liabilities to fund long term assets as those terms are defined in the Federal Deposit Insurance Corporation Uniform Bank Performance Report. Such actions shall include, but not be limited toincluding:
(ai) measures the identification of relevant report and other information for dissemination to maintain sufficient asset based liquidityvarious stakeholders that may include the Board, management, staff, and Assistant Deputy Comptroller;
(bii) reduction of wholesale or credit sensitive liabilitiesprocesses and assigned responsibility for periodic reporting to the various stakeholders;
(iii) detailed plans and processes for controlling negative publicity, including assigned responsibility and plans for addressing customer concerns and negative publicity, including social media; and
(cl) revision procedures to test components of the Bank's risk limits for reliance on wholesale or credit sensitive liabilities from a single provider or in aggregate Contingency Funding Plan to fund long- term assets in light assess its reliability under times of the requirement of this Articlestress.
(3) The Within thirty (30) days following receipt of the Assistant Deputy Comptroller written determination of no supervisory objection to the Contingency Funding Plan or to any subsequent amendment to the Contingency Funding Plan, the Board shall adopt and Bank management, subject to Board review and ongoing monitoring, shall immediately implement, implement and shall thereafter ensure adherence to its terms the Contingency Funding Plan. The Board shall review the effectiveness of this articlethe Contingency Funding Plan at least annually, no later than January 31 each year, and more frequently if necessary or if required by the OCC in writing, and amend the Contingency Funding Plan as needed or directed by the OCC. Monthly reports shall set forth liquidity requirements and sources. Copies of these reports shall Any amendment to the Contingency Funding Plan must be forwarded submitted to the Assistant Deputy ComptrollerComptroller for review and prior written determination of no supervisory objection.
Appears in 1 contract
Samples: Compliance Agreement
CONTINGENCY FUNDING PLAN. (1) Within sixty (60) days, the Board shall expand revise, implement, and ensure adherence to a comprehensive Contingency Funding Plan (“CFP” or “plan”) consistent with the guidelines set forth in the Liquidity booklet of the Comptroller’s Handbook. The plan shall, among other things, address ways to improve the Bank’s Contingency Funding Plan to ensure the Bank operates with liquidity position by maintaining adequate backup sources of liquidity in relation to stable funding throughout the Bank’s needsnormal course of business, as well as various crisis situations. The formalized written Contingency Funding plan should address the responsibilities of senior management during a funding crisis and include at At a minimum, the revised CFP should:
(a) expand the scenarios to include factors such as: temporary disruptions in funding, long-term distressed environments, significant losses, bank-wide scenarios across all funding sources, multiple global liquidity scenarios of varying severity, scenarios addressing the liquidity impact across all sources of funding simultaneously, and regulatory issues. These scenarios should show the impact on each funding source (reduced availability, no availability, increased collateral requirements, etc.) and the Bank’s overall liquidity;
(b) expand the plan to clearly identify, quantify, and rank all sources of funding by preference. The scenarios should include both asset and liability sources of funding as well as off-balance sheet sources;
(c) prioritize strategies that address each stage of a funding crisis;
(d) include liquidity crisis triggers relating to regulatory matters (e.g., formal enforcement action, drop in capital category, reduction in composite rating) and asset quality deterioration;
(be) determination establish frequency of management meetings and reporting to oversee implementation of contingency plans while the appropriate frequency for meetings of the Liquidity Emergency Team to address Bank is in a potential liquidity crisis;
(cf) determination address management contact with correspondent banks on an ongoing basis to inform them of an appropriate communication strategy to adverse conditions and determine the Bank’s wholesale funds providers and bank customerslikelihood of continued line availability;
(dg) establishment of guidelines for paying premiums on deposits to ensure regulatory compliance if the Bank drops to “Adequately Capitalized” under bank regulations; and
(e) development develop and implementation of implement a testing schedule to validate the Bank’s Contingency Funding PlanCFP; and
(h) address the responsibilities of senior management during a funding crisis. It should include the names, addresses, and telephone numbers of crisis team members. It also should assign responsibility for initiating external contacts with regulators, analysts, investors, external auditors, the press, significant customers and others.
(2) Within sixty (60) days, The CFP adopted pursuant to this Article shall be reviewed and approved by the Bank shall develop, implement, and adhere to a plan to improve the Bank’s asset-based liquidity and reduce the Bank’s reliance on noncore liabilities to fund long term assets as those terms are defined Board in the Federal Deposit Insurance Corporation Uniform Bank Performance Report. Such actions shall include, but not be limited to:
(a) measures to maintain sufficient asset based liquidity;
(b) reduction advance of wholesale or credit sensitive liabilities; and
(c) revision of the Bank's risk limits for reliance on wholesale or credit sensitive liabilities from a single provider or in aggregate to fund long- term assets in light of the requirement of this Article.
(3) The Board shall immediately implement, implementation and shall thereafter ensure adherence to its terms of this article. Monthly reports shall set forth liquidity requirements be reviewed and sources. Copies of these reports shall be forwarded to updated by the Assistant Deputy ComptrollerBoard annually, or more frequently if circumstances warrant.
Appears in 1 contract
Samples: Banking Agreement
CONTINGENCY FUNDING PLAN. (1) Within sixty (60) daysdays of the date of this Agreement, the Board shall expand the Bank’s adopt a safe and sound Contingency Funding Plan to ensure (“CFP”) that is reasonable and effective in ensuring that the Bank operates will continue to operate with adequate backup sources of liquidity in relation the event of extraordinary demands against its funding base. Refer to the Bank“Liquidity” booklet of the Comptroller’s needsHandbook for guidance. The formalized written Contingency Funding plan should address the responsibilities of senior management during a funding crisis and CFP shall include at a minimum:
(a) a statement on the Board’s strategy for maintaining adequate sources of stable funding given the Bank’s anticipated liquidity crisis triggers relating to regulatory matters (e.g., formal enforcement action, drop in capital category, reduction in composite rating) and asset quality deteriorationfunding needs;
(b) determination a description of specific stress scenarios quantified projected effects of the appropriate frequency for meetings of the Liquidity Emergency Team to address a potential liquidity crisisstress scenarios on cash flows, and specific action plans in each scenario;
(c) determination expanded stress scenarios for worse case scenarios reflecting asset quality and financial condition deterioration including;
(i) the impact of an appropriate communication strategy the regulatory CAMELS ratings downgrades and the loss of Prompt Corrective Action well-capitalized status;
(ii) the potential impact from the retention of deposits subject to rate cap restrictions, wholesale funding sources, and other volatile sources of funding; and
(iii) the Bank’s wholesale funds providers and bank customerspotential impact of the Federal Deposit Insurance Corporation (“FDIC’) restrictions on rates paid on deposits by less than well capitalized FDIC-insured institution;
(d) establishment management’s best estimate of guidelines for paying premiums on deposits balance sheet changes that may result from each of the stress scenarios and corresponding action plans;
(e) procedures to ensure regulatory compliance if periodic monitoring and reporting of the Bank drops to “Adequately Capitalized” under bank regulationsrate cap;
(f) specific terms or events that trigger enactment of the plan;
(g) necessary management information systems and reporting criteria for use in crises situations;
(h) management responsibilities and specific actions for enacting the plan;
(i) prioritization of all sources of funding for the various scenarios including asset side funding, liability side funding, off-balance sheet funding; and
(ej) development and implementation of a testing schedule to validate the Bank’s Contingency Funding Plancontingency liquidity sources at least annually.
(2) Within sixty (60) days, the Bank shall develop, implement, and adhere to a plan to improve the Bank’s asset-based liquidity and reduce the Bank’s reliance on noncore liabilities to fund long term assets as those terms are defined in the Federal Deposit Insurance Corporation Uniform Bank Performance Report. Such actions shall include, but not be limited to:
(a) measures to maintain sufficient asset based liquidity;
(b) reduction of wholesale or credit sensitive liabilities; and
(c) revision Upon adoption of the Bank's risk limits for reliance on wholesale or credit sensitive liabilities from a single provider or in aggregate CFP, Bank management, subject to fund long- term assets in light of the requirement of this Article.
(3) The Board review and ongoing monitoring, shall immediately implement, implement and shall thereafter ensure adherence to its terms the CFP and any amendments thereto. The Board shall review the effectiveness of this articlethe CFP at least annually, and more frequently if necessary or if required by the OCC in writing, and amend the CFP as needed or directed by the OCC. Monthly reports The Board shall set forth liquidity requirements forward a copy of the adopted CFP, and sources. Copies of these reports shall be forwarded any subsequent amendments thereto, to the Assistant Deputy ComptrollerADC within thirty (30) days of adoption.
Appears in 1 contract
Samples: Compliance Agreement