December 21, 2017
Agencies announce Shared National Credit definition change; aggregate loan commitment threshold increased to adjust for inflation, and changes in average loan size
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of Comptroller of the Currency
For release at 4:00 p.m. EST
To adjust for inflation and changes in average loan size, the federal banking agencies on Thursday announced that, effective January 1, 2018, the aggregate loan commitment threshold for inclusion in the Shared National Credit (SNC) program will increase from $20 million to $100 million. This change will reduce reporting burden for a substantial number of banking institutions, with no material impact on the size of the portfolio evaluated.
The reporting change provides regulatory relief to 82 financial institutions while reducing the dollar amount of loans identified as SNCs by 2 percent. As a result, the SNC program will continue to reflect a portfolio of more than $4.2 trillion in credit commitments. The table below provides details for the planned change.
The SNC program is an interagency review and assessment of risk in the largest and most complex credits shared by multiple financial institutions. The interagency program began in 1977. This is the first increase in the dollar threshold for inclusion as a SNC since the program's inception.
Further, the agencies announced that, starting in 2018, annual SNC results will be reported after the third quarter examination, reflecting data as of June 30. Previously the annual report was issued after the first quarter examination, reflecting data as of December 31.
Effect of SNC Definition Change on Commitments, Borrowers, and Banks
| SNC using $20 Million | SNC using $100 Million | Net Change | % Change | |
|---|---|---|---|---|
| Commitments ($ Billions) | $4,310 | $4,218 | ($92) | (2%) |
| Borrower Count | 7,036 | 5,463 | (1,573) | (22%) |
| Bank Count | 197 | 115 | (82) | (42%) |