Agency: 4 banks have 'living will' weakness Bank of America among four banks found with 'living will' weaknesses

Bank of America is one of four national and super-regional financial institutions considered to have weaknesses in their "living will" plans by the Federal Deposit Insurance Corp. and Federal Reserve Board.

Meanwhile, Wells Fargo & Co. was among four not identified with weakness, but is receiving feedback from the regulators "to guide improvements to future plans."

Late last week, the agencies disclosed their joint review of the July resolution plan submissions of the nation's eight largest and most complex banks.

Also determined to have weaknesses were Citigroup, Goldman Sachs and JPMorgan Chase & Co., while Bank of New York Mellon Corp., Morgan Stanley and State Street Corp. were not listed with weaknesses.

In 2010, in the aftermath of the 2008 financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act1 was adopted to promote the financial stability of the United States, and make possible the orderly failure of systemically important financial institutions without taxpayer support.

According to the agencies, resolution plans are required from banks that describe their strategy for orderly resolution in bankruptcy in the event of its material financial distress or failure.

The four banks cited with weaknesses were identified as having a "shortcoming that raises questions about the feasibility of the plan.

The agencies, however, split on the level of severity in the weakness of the Citigroup plan.

FDIC chairman Martin Gruenberg said in a statement Friday that its staff has concluded that Citigroup's weaknesses "are of such magnitude that the plan is not credible or would not facilitate an orderly resolution under bankruptcy."

"This weakness ... requires urgent attention by the firm's senior management and board of directors."

Meanwhile, the Fed concluded that the weakness is only a shortcoming.

For the four banks with an identified shortcoming, the regulators described the specific weaknesses resulting in the shortcoming and the remedial actions required by the agencies.

The shortcomings are to be addressed in the next resolution plans due by July 1, 2025.

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