Bank of America gets U.S. Fed's approval of new capital plan

The U.S. Federal Reserve on Thursday announced that it has approved the resubmitted capital plan from the Bank of America Corporation, highliting the progress it has made on enhancing internal control.

In March, Bank of America passed the Fed's annual "stress test" but was required to resubmit its capital plan to address certain deficiencies in its capital planning processes.

Those deficiencies included weaknesses in aspects of the firm's loss and revenue modeling practices and its internal controls.

"Bank of America has made progress in remediating the identified deficiencies in its capital planning processes," the Fed said in a statement Thursday.

The Fed conducts the Comprehensive Capital Analysis and Review (CCAR) on major U.S. banking organizations each year to understand their ability of withstanding a major financial crisis.

CCAR evaluates the capital planning processes and capital adequacy of the largest U.S.-based bank holding companies, including the firms' planned capital actions such as dividend payments and share buybacks and issuances.

The Fed asked the Bank of America to continue to make steady, demonstrable progress prior to the 2016 CCAR cycle toward establishing and maintaining sound risk-management and capital-planning processes that are commensurate with the size and complexity of its operations and systemic importance.

Strong capital levels act as a cushion to absorb losses and help ensure that banking organizations have the ability to lend to households and businesses even in times of stress. Endit