2020-16052: Regulatory Capital Rules: Tier 1/Tier 2 Framework

Summary

The Farm Credit Administration (FCA or we) seeks comments on this proposed rule that would amend regulatory capital requirements for Farm Credit System (System) institutions and clarify certain provisions in the Tier 1/Tier 2 Framework final rule that became effective in 2017. This proposed rule would incorporate, and further clarify, the guidance provided in FCA Bookletter--BL-068--Tier 1/Tier 2 Capital Framework Guidance. The proposal would also eliminate regulatory capital requirements for the Farm Credit Services Leasing Corporation, simplify the Safe Harbor Deemed Prior Approval calculation, revise the board resolution requirement for certain equities to be included in tier 1 or tier 2 capital, and amend the lending and leasing limit base to use total capital instead of permanent capital and eliminate the exceptional treatment of certain purchased stock. To maintain comparability in our regulatory capital requirements, we propose to amend certain definitions pertaining to qualified financial contracts in conformity with changes adopted by the Federal banking regulatory agencies.

The agency’s own summary, as published.

What this changes

Amends 4 parts of the Code of Federal Regulations — the standing rules this notice rewrites.

• 12 CFR 614 Loan Policies and Operations
• 12 CFR 615 Funding and Fiscal Affairs, Loan Policies and Operations, and Funding Operations
• 12 CFR 620 Disclosure to Shareholders
• 12 CFR 628 Capital Adequacy of System Institutions