Providing clarity on capital instruments for mutual banking organizations (MBOs) through Federal Reserve guidance was lauded by the national bank regulator late Thursday.
In a statement, Comptroller of the Currency Jonathon Gould said the Oct. 8 “additional tier 1 term sheet” (or guidance) issued by the Fed supported MBOs “by providing clarification regarding mutual capital certificates and alternative mutual capital instruments.”
“The OCC (Office of the Comptroller of the Currency) fully supports mutual banking organizations, including OCC-supervised federal mutual savings associations,” Gould said. He noted that his agency recently authorized a federal mutual savings association to issue an innovative form of mutual capital certificate that qualifies as regulatory capital. “This was the first approval for a mutual capital certificate for a federal mutual savings association in decades,” he asserted.
The guidance, issued under the Fed’s Regulation Q, notes that certificates issued by MBOs are instruments representing paid-in capital, “the paid-in amount of which shall be classified as equity under U.S. Generally Accepted Accounting Principles (GAAP).”
Gould added that the OCC “will continue to support OCC-supervised mutual savings associations by considering the specific needs of mutual associations through active engagement with the mutual industry.”
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