2018-27002: Regulatory Capital Rule: Capital Simplification for Qualifying Community Banking Organizations

Summary

The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) are inviting public comment on a notice of proposed rulemaking (proposal) that would provide for a simple measure of capital adequacy for certain community banking organizations, consistent with section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. Under the proposal, most depository institutions and depository institution holding companies that have less than $10 billion in total consolidated assets, that meet risk-based qualifying criteria, and that have a community bank leverage ratio (as defined in the proposal) of greater than 9 percent would be eligible to opt into a community bank leverage ratio framework. Such banking organizations that elect to use the community bank leverage ratio and that maintain a community bank leverage ratio of greater than 9 percent would not be subject to other risk-based and leverage capital requirements and would be considered to have met the well capitalized ratio requirements for purposes of section 38 of the Federal Deposit Insurance Act and regulations implementing that section, as applicable, and the generally applicable capital requirements under the agencies' capital rule.

The agency’s own summary, as published.

What this changes

Amends 26 parts of the Code of Federal Regulations — the standing rules this notice rewrites.

• 12 CFR 1 Investment Securities
• 12 CFR 3 Capital Adequacy Standards
• 12 CFR 5 Rules, Policies, and Procedures for Corporate Activities
• 12 CFR 6 Prompt Corrective Action
• 12 CFR 23 Leasing
• 12 CFR 24 Community and Economic Development Entities, Community Development Projects, and Other Public Welfare Investments
• 12 CFR 32 Lending Limits
• 12 CFR 34 Real Estate Lending and Appraisals
• 12 CFR 160 Lending and Investment
• 12 CFR 192 Conversions from Mutual to Stock Form
• 12 CFR 206 Limitations on Interbank Liabilities (Regulation F)
• 12 CFR 208 Membership of State Banking Institutions in the Federal Reserve System (Regulation H)
• 12 CFR 211 International Banking Operations (Regulation K)
• 12 CFR 215 Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks (Regulation O)
• 12 CFR 217 Capital Adequacy of Bank Holding Companies, Savings and Loan Holding Companies, and State Member Banks (Regulation Q)
• 12 CFR 223 Transactions Between Member Banks and Their Affiliates (Regulation W)
• 12 CFR 225 Bank Holding Companies and Change in Bank Control (Regulation Y)
• 12 CFR 238 Savings and Loan Holding Companies (Regulation LL)
• 12 CFR 251 Concentration Limit (Regulation XX)
• 12 CFR 303 Filing Procedures
• 12 CFR 324 Capital Adequacy of FDIC-Supervised Institutions
• 12 CFR 337 Unsafe and Unsound Banking Practices
• 12 CFR 347 International Banking
• 12 CFR 362 Activities of Insured State Banks and Insured Savings Associations
• 12 CFR 365 Real Estate Lending Standards
• 12 CFR 390 Regulations Transferred from the Office of Thrift Supervision