Fed Revamps Rating System for Big Banks and Insurers
Published Date: 11/17/2025
Notice
Summary
Starting January 16, 2026, big banks and insurance companies will be rated with a clearer, fairer system that better shows which ones are strong and well-managed. The new rules drop automatic penalties for certain low scores, making enforcement more flexible based on each case. This update helps keep our financial system safe without being too harsh or confusing.
Analyzed Economic Effects
3 provisions identified: 2 benefits, 1 costs, 0 mixed.
Deficient-2 Still Triggers Enforcement Presumption
The final notice keeps the presumption that the Board will impose a formal enforcement action on any firm with one or more Deficient-2 component ratings. That presumption remains in place under the revised Frameworks effective January 16, 2026.
New "Well Managed" Test for Large Firms
Starting January 16, 2026, a firm subject to the Federal Reserve's Large Financial Institution or Insurance Supervisory Frameworks will be considered "well managed" if it has at least two component ratings of Broadly Meets Expectations or Conditionally Meets Expectations and no more than one Deficient-1 component rating. The LFI Framework applies to bank holding companies and savings and loan holding companies with total consolidated assets of $100 billion or more, and U.S. intermediate holding companies of foreign banking organizations with total consolidated assets of $50 billion or more; parallel criteria apply for supervised insurance organizations.
No Automatic Enforcement for Single Deficient-1
Beginning January 16, 2026, the Frameworks no longer presume that a firm with one or more Deficient-1 component ratings will be subject to a formal or informal enforcement action; instead, such firms may be subject to enforcement action depending on particular facts and circumstances. The Frameworks continue to allow supervisors to monitor remediation and to take enforcement action when legal standards are met.
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Key Dates
Related Federal Register Documents
2025-21626 — Regulatory Capital Rule: Modifications to the Enhanced Supplementary Leverage Ratio Standards for U.S. Global Systemically Important Bank Holding Companies and Their Subsidiary Depository Institutions; Total Loss-Absorbing Capacity and Long-Term Debt Requirements for U.S. Global Systemically Important Bank Holding Companies
Big U.S. banks that are super important to the economy are getting new rules to keep them safer and stronger. These changes tweak how much money they must keep on hand and how they handle long-term debt, helping prevent financial trouble. The new rules kick in soon and could affect how these banks manage billions in assets and debt.
2026-11978 — Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company
If someone wants to buy enough shares to control a bank or bank holding company, they have to tell the Federal Reserve first. People can check these plans and share their thoughts by June 30, 2026. This keeps bank ownership clear and fair, making sure big changes don’t sneak by unnoticed.
2026-11522 — Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company
If you or your family want to buy or control shares in a bank or bank holding company, you need to tell the Federal Reserve and wait for approval. The Federal Reserve reviews these requests carefully and invites the public to share their thoughts by June 24, 2026. This keeps bank ownership clear and fair, making sure big money moves get the green light before they happen.
2026-11523 — Formations of, Acquisitions by, and Mergers of Bank Holding Companies
Some companies want to become bank holding companies or merge with others, which means they’ll control banks or other financial businesses. If you want to share your thoughts, you’ve got until July 9, 2026, to send comments. These changes could shake up local banking, so keep an eye on who’s joining forces and when!
2026-11448 — Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company
Some folks want to buy shares in banks or bank companies, and the Federal Reserve is checking their applications to make sure everything’s fair and safe. If you want to share your thoughts, you’ve got until June 23, 2026, to speak up! This process helps keep banks strong and protects everyone’s money.
2026-11355 — Formations of, Acquisitions by, and Mergers of Bank Holding Companies
Mascoma Mutual Financial Services from New Hampshire is merging with Androscoggin Bancorp in Maine and will also take over Portland Trust Company to offer trust services. This means bigger banking options and new services for customers in these areas. The Federal Reserve fixed a previous notice to make sure everyone knows the details clearly.
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