Banking regulators’ final rules on the new community bank leverage ratio (CBLR) and a revised effective date for other capital rule simplifications, both signed off on in September and October, are slated for publication in Wednesday’s Federal Register.
The CBLR rule, issued under the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S. 2155), allows depository institutions and depository institution holding companies that have less than $10 billion in consolidated assets, have a leverage ratio exceeding 9% and meet other criteria to use the CBLR framework to satisfy agencies’ “generally applicable” risk-based and leverage capital requirements.
The other rule, originally adopted in July, simplifies regulatory capital requirements for depository institutions and holding companies that are not subject to the advanced approaches capital rule. The rule was revised this fall to permit these institutions to implement the provisions Jan. 1 instead of April 1, 2020. This rule simplifies regulatory capital requirements for mortgage servicing assets, certain deferred tax assets, investments in the capital of unconsolidated financial institutions, and calculations related to capital held by third parties; and makes other technical changes.
The rules were issued jointly by the Federal Deposit Insurance Corp. (FDIC), the Federal Reserve, and the Office of the Comptroller of the Currency (OCC).
Reg lookup: Regulatory Capital Rule: Capital Simplification for Qualifying Community Banking Organizations
Reg lookup: Regulatory Capital Rule: Simplifications to the Capital Rule Pursuant to the Economic Growth and Regulatory Paperwork Reduction Act of 1996