Rule transitioning CBLR minimum to 9% by 2022 set to publish as final, without revision, in Register Friday

A final rule temporarily lowering the community bank leverage ratio (CBLR) threshold to 8% through 2020 and transitioning it to 9% by 2022 is slated for publication Friday in the Federal Register.

The final rule, implementing provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), was adopted in interim form by the Federal Deposit Insurance Corp. (FDIC), Federal Reserve, and Office of the Comptroller of the Currency (OCC) this spring and has been in effect since then. The rule was finalized without revision in August. The final rule is effective 30 days after publication in the Register (on or about Nov. 9).

This is the second of three actions announced Aug. 26 to help mitigate the effects of the COVID-19 pandemic that is just making it into the Federal Register. Another, modifying the definition of eligible retained income to help make automatic limitations on capital distributions more gradual, is in today’s Federal Register and was reported here Wednesday.

The third – allowing some institutions to delay the effects on capital of the current expected credit losses (CECL) accounting standard – has been in effect since this spring and was in the Register in final form Sept. 30.

RR: Agencies make final series of interim rules on leverage ratio modification, distribution restrictions, CECL mitigation (Aug. 26, 2020)