SCCL Compliance Lab

What’s Reported on Schedule G-1? 1. Overview Schedule G-1 is one of the most important components of the Federal Reserve's FR 2590 reporting form. It plays a central role in enforcing the Single-Counterparty Credit Limits (SCCL) rule by requiring covered banking organizations to report detailed information about their credit exposures to their largest counterparties. The goal of the SCCL rule is to reduce systemic risk by limiting how much credit exposure a large bank can have to any single counterparty. Schedule G-1 helps the Federal Reserve monitor whether institutions are staying within those limits. This schedule focuses on general gross credit exposures to the top 50 counterparties, broken down into specific categories. While it may seem straightforward, preparing this schedule accurately requires attention to detail, reliable data, and a solid understanding of what the regulators expect. 2. Regulatory Requirement Under 12 CFR Part 252, Subpart H , covered compan...

The Role of Internal Audit in SCCL Compliance 1. Overview The Single Counterparty Credit Limits (SCCL) rule is a key part of the Federal Reserve's effort to reduce systemic risk in the banking system. It limits how much credit exposure a large U.S. bank holding company (BHC), foreign banking organization (FBO), or U.S. intermediate holding company (IHC) can have to any single counterparty. This requirement helps prevent financial contagion in the event of a major counterparty failure. While senior management is responsible for making sure the bank complies with SCCL, internal audit plays a crucial supporting role. Audit teams provide independent and objective assurance that the bank’s SCCL framework is effective, well-controlled, and aligned with regulatory expectations. Their work helps identify gaps before they become problems and gives regulators confidence in the strength of the bank’s overall compliance program. 2. Regulatory Requirement Under Regulation YY ( ...

How the Fed Reviews SCCL Submissions 1. Overview The Single-Counterparty Credit Limits (SCCL) rule was designed by the Federal Reserve to reduce systemic risk by limiting the credit exposure of large banking organizations to a single counterparty. To comply, firms submit quarterly reports using the FR 2590 form. But submission is only half the story. The Federal Reserve conducts a detailed review of each filing to ensure compliance, data accuracy, and sound risk management practices. Understanding how the Fed reviews these submissions is essential for risk officers, compliance teams, and regulatory reporting professionals. The review process goes far beyond checking a box. It is a structured, multi-step evaluation that scrutinizes everything from data quality to exposure aggregation methods. 2. Regulatory Requirement The SCCL rule, found under 12 CFR Part 252, Subpart H , requires covered companies to limit their aggregate net credit exposure to any single counterparty. Cover...

What Triggers a Refile for FR 2590? 1. Overview For institutions subject to the Single Counterparty Credit Limits (SCCL) rule, accurate and timely reporting of the FR 2590 is essential. However, even with strong controls in place, errors can occur. When they do, firms must determine whether a correction is necessary and if the report should be refiled with the Federal Reserve. This blog post explains what triggers a refile of the FR 2590, based on regulatory expectations and GLOBAL ABAS’s experience advising covered companies and U.S. intermediate holding companies (IHCs). We also share practical considerations and a sample materiality framework to help firms manage this process more confidently. 2. Regulatory Requirement The Federal Reserve requires covered companies to submit the FR 2590 quarterly. If a firm identifies a material error or omission after submission, a corrected report must be refiled. This requirement is not optional. It ensures that exposures to counterparti...