Regulatory Capital Rule: Transition for the Community Bank Leverage Ratio Framework

Title:
Regulatory Capital Rule: Transition for the Community Bank Leverage Ratio Framework
Subject: CBLR framework
Agency: FDIC, Federal Reserve, OCC
Status: Interim final rule; request for comments
Summary:
This interim final rule provides a graduated transition to a community bank leverage ratio requirement of 9 percent from the temporary 8-percent community bank leverage ratio requirement (transition interim final rule). When the requirements in the transition interim final rule become applicable, the community bank leverage ratio will be 8 percent beginning in the second quarter of calendar year 2020, 8.5 percent through calendar year 2021, and 9 percent thereafter. The transition interim final rule also maintains a two-quarter grace period for a qualifying community banking organization whose leverage ratio falls no more than 1 percentage point below the applicable community bank leverage ratio requirement. The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (together, the agencies) issued concurrently an interim final rule that established an 8-percent community bank leverage ratio, as mandated under the Coronavirus Aid, Relief, and Economic Security Act. The agencies are issuing the transition interim final rule to provide community banking organizations with sufficient time and clarity to meet the 9 percent leverage ratio requirement under the community bank leverage ratio framework while they also focus on supporting lending to creditworthy households and businesses given the recent strains on the U.S. economy caused by the coronavirus disease emergency.
FR Doc:
Date proposed:
Comments due date: June 8, 2020
Effective date:

April 23, 2020

Rule compliance date:
Agency release:

Related Reg Report item(s):

Temporary reduction in CBLR to 8% outlined in two interim rules, in response to CARES Act

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