Fed Issues Dodd-Frank Mandated Rule on Single-Party Credit Limits

On June 14, 2018, the Fed issued a final rule limiting the credit exposure of large financial institutions to one another. The new rule applies to globally systemically important bank holding companies (GSIBs) – or those with more than $250 billion in total consolidated assets – and caps their credit exposure to one another at 15 percent of tier 1 capital. The rule also covers foreign banks operating in the U.S. with $250 billion or more in total global consolidated assets, and their intermediate holding companies with $50 billion or more in total U.S. consolidated assets. The compliance deadline for GSIBs is January 1, 2020. All other firms must comply by July 1, 2020.