2017-17822: Regulatory Capital Rules: Retention of Certain Existing Transition Provisions for Banking Organizations That Are Not Subject to the Advanced Approaches Capital Rules

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) (collectively, the agencies) are inviting public comment on a notice of proposed rulemaking (NPR) that would extend the current treatment under the regulatory capital rules (capital rules) for certain regulatory capital deductions and risk weights and certain minority interest requirements, as they apply to banking organizations that are not subject to the advanced approaches capital rules (non-advanced approaches banking organizations). Specifically, for non-advanced approaches banking organizations, the agencies propose to extend the current regulatory capital treatment of: Mortgage servicing assets; deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks; significant investments in the capital of unconsolidated financial institutions in the form of common stock; non-significant investments in the capital of unconsolidated financial institutions; significant investments in the capital of unconsolidated financial institutions that are not in the form of common stock; and common equity tier 1 minority interest, tier 1 minority interest, and total capital minority interest exceeding the capital rules' minority interest limitations. The agencies expect in the near term to issue a separate NPR seeking public comment on a proposal to simplify the regulatory capital treatment of these items. Providing the proposed extension to non-advanced approaches banking organizations for these items would avoid potential burden on banking organizations that may be subject in the near future to a different regulatory capital treatment for these items.

The agency’s own summary, as published.

What this changes

Amends 3 parts of the Code of Federal Regulations — the standing rules this notice rewrites.

• 12 CFR 3 Capital Adequacy Standards
• 12 CFR 217 Capital Adequacy of Bank Holding Companies, Savings and Loan Holding Companies, and State Member Banks (Regulation Q)
• 12 CFR 324 Capital Adequacy of FDIC-Supervised Institutions