FDIC: Regulatory Capital Rule – Capital Simplification for Qualifying Community Banking Organizations
Summary:
The federal banking agencies jointly have issued a notice of proposed rulemaking (
Statement of Applicability: This proposal is applicable to all
Highlights:
* The community bank leverage ratio (CBLR) would provide material regulatory relief to qualifying community banking organizations by providing the option to calculate a simple on-balance sheet leverage ratio to measure capital adequacy. Banks using the CBLR would complete a simpler reporting schedule, which the agencies intend to propose at a later date.
* The CBLR would be calculated as the ratio of CBLR tangible equity, as defined in the proposal, divided by average total consolidated assets.
* A qualifying community banking organization would be defined as having less than
* A qualifying community banking organization may opt into the CBLR framework if its CBLR is greater than 9 percent.
* A banking organization that opts into the CBLR (CBLR bank), and has a CBLR greater than 9 percent, would not be subject to other capital and leverage requirements and would be considered to have met the well-capitalized ratio requirements under the prompt corrective action (PCA) framework and the generally applicable capital requirements.
* A CBLR bank that ceases to meet any qualifying criteria in a future period would have a grace period of two reporting periods to satisfy the CBLR qualifying criteria or comply with the generally applicable capital requirements.
* For a CBLR bank whose CBLR falls to 9 percent or less, the proposal establishes additional CBLR levels as proxies for the existing capital ratios for the adequately capitalized, undercapitalized, and significantly undercapitalized PCA capital categories.
Distribution:
Suggested Routing:
Chief Executive Officer
Chief Financial Officer
Related Topics:
Capital Adequacy of FDIC-Supervised Institutions, 12 CFR Part 324 (Regulatory Capital Rules)
Attachment:
Capital Simplification for Qualifying Community Banking Organizations (https://www.fdic.gov/news/board/2018/2018-11-20-notice-sum-b-fr.pdf)
Contact:
Note:
FDIC Financial Institution Letters (FILs) may be accessed from the
To receive FILs electronically, please visit www.fdic.gov/about/subscriptions/fil.html.
Paper copies may be obtained through the
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