There are no differences in accounting standards, and some technical differences among capital standards, among the federal banking agencies, the three regulators said in a report scheduled to be published Thursday in the Federal Register.
According to the joint report of the federal banking agencies (Differences in Accounting and Capital Standards Among the Federal Banking Agencies as of September 30, 2021; Report to Congressional Committees), mandated under the Federal Deposit Insurance Act (FDIA), there are no material differences among the agencies’ accounting and capital standards applicable to the banks and other insured depository institutions they regulate and supervise.
The FDIA requires the annual report to the Senate and House committees with oversight of the agencies (Banking and Financial Services Committees, respectively) to describe differences, if any, among the accounting and capital standards used by the agencies for the financial institutions they supervise.
More specifically, the regulators said they had not identified “any material differences among themselves in the accounting standards applicable to institutions.”
For capital standards, the agencies admitted, there are some “remaining technical differences” in their capital rule. “The agencies’ capital rule largely contains the same definitions,” the agencies wrote. “The differences that exist generally serve to accommodate the different needs of the institutions that each agency charters, regulates, and/or supervises.”
Among the differences: definitions of a “pre-sold construction loan,” capital components and eligibility criteria for regulatory capital instruments, capital deductions, special statutory requirements for subsidiaries of savings associations, tangible capital requirement for savings associations, and the enhanced supplementary leverage ratio.