Board announces implementation delay from April 1, 2020 to October 1, 2020 for changes to Payment System Risk policy

March 25, 2020

On April 1, 2019, the Federal Reserve Board of Governors announced changes to part II of the Federal Reserve Policy on Payments System Risk (PSR policy) related to procedures for determining the net debit cap and maximum daylight overdraft capacity of a U.S. branch or agency of a foreign banking organization (FBO). The changes were initially scheduled to become effective on April 1, 2020. In light of the ongoing disruptions caused by the coronavirus, the Board is delaying implementation until October 1, 2020. This additional time will allow FBOs and the Reserve Banks to focus on other heightened priorities rather than establishing new arrangements for accessing intraday credit. The following changes will become effective on October 1, 2020:

  • Remove references to the Strength of Support Assessment (SOSA) ranking
  • Remove references to an FBO’s financial holding company (FHC) status
  • Adopt alternative methods for determining an FBO’s eligibility for a positive net debit cap, the size of its net debit cap and its eligibility to request a streamlined procedure to obtain maximum daylight overdraft capacity
  • Apply U.S. capital equivalency equal to 10 percent of worldwide capital for all FBOs

For more information on the policy changes, please see the resources listed below:

Questions regarding the PSR policy changes may be directed to your local Credit and Risk Management staff.

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