Agencies schedule call on capital proposal

A conference call for bankers on a proposal to simplify capital rules, particularly as they apply to “high volatility commercial real estate” (HVCRE) loans, will be held on Thursday (Oct. 12) by the Federal Deposit Insurance Corp. (FDIC), Federal Reserve and the Office of the Comptroller of the Currency (OCC).

The call, for bank officers and staff, is at 1 p.m. ET, and will focus on the proposed changes to the capital rules, as well as items subject to threshold deduction, and minority interests includable in regulatory capital, according to a notice issued by the FDIC.

The three agencies last week issued the joint proposal on the capital rules with a 60-day comment period.

The agencies are proposing replacement of the “current complex treatment” for certain acquisition, development and construction (ADC) loan exposures with a “simpler treatment,” a new exposure category called high volatility ADC. The change would be applicable to all banking organizations calculating their risk-rated assets under the standardized approach by “clearly defining the scope of loans that are considered higher risk and merit a higher risk rate,” FDIC staff said.

“By simplifying the definition, the proposal seeks to reduce the amount of time banking organizations spend determining the appropriate capital treatment for their ADC portfolio,” FDIC said in its notice of proposed rulemaking.

Calendar: Agencies schedule conference call on proposed capital rule