Regulatory Capital Rule: Eligible Retained Income
Interim final rule with request for comments.
CFR Part: "12 CFR Part 3"; "12 CFR Part 217"; "12 CFR Part 324"
RIN Number: "RIN 1557-AE81"; "RIN 7100-AF77"; "RIN 3064-AF40"
Citation: "85 FR 15909"
Document Number: "Docket No. OCC-2020-0009"; "Regulations Q; Docket No. R-1703"
Page Number: "15909"
"Rules and Regulations"
Agency: "
SUMMARY: In light of recent disruptions in economic conditions caused by the coronavirus disease 2019 (COVID-19) and current strains in
DATES:
The interim final rule is effective
ADDRESSES:
OCC: Commenters are encouraged to submit comments through the Federal eRulemaking Portal or email, if possible. Please use the title "Regulatory Capital Rule: Eligible Retained Income" to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods:
* Federal eRulemaking Portal--Regulations.gov Classic or Regulations.gov Beta: Regulations.gov Classic: Go to https://www.regulations.gov/. Enter "Docket ID OCC-2020-0009" in the Search Box and click "Search." Click on "Comment Now" to submit public comments. For help with submitting effective comments please click on "View Commenter's Checklist." Click on the "Help" tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting public comments. Regulations.gov Beta: Go to https://beta.regulations.gov/ or click "Visit New Regulations.gov Site" from the Regulations.gov Classic homepage. Enter "Docket ID OCC-2020-0009" in the Search Box and click "Search." Public comments can be submitted via the "Comment" box below the displayed document information or by clicking on the document title and then clicking the "Comment" box on the top-left side of the screen. For help with submitting effective comments please click on "Commenter's Checklist." For assistance with the Regulations.gov Beta site, please call (877) 378-5457 (toll free) or (703) 454-9859 Monday-Friday,
* Email: [email protected].
* Mail: Chief Counsel's Office, Attention: Comment Processing,
* Hand Delivery/Courier:
* Fax: (571) 465-4326.
Instructions: You must include "OCC" as the agency name and "Docket ID OCC-2020-0009" in your comment. In general, the OCC will enter all comments received into the docket and publish the comments on the Regulations.gov website without change, including any business or personal information provided such as name and address information, email addresses, or phone numbers. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure.
You may review comments and other related materials that pertain to this rulemaking action by any of the following methods:
* Viewing Comments Electronically--Regulations.gov Classic or Regulations.gov Beta:
Regulations.gov Classic: Go to https://www.regulations.gov/. Enter "Docket ID OCC-2020-0009" in the Search box and click "Search." Click on "Open Docket Folder" on the right side of the screen. Comments and supporting materials can be viewed and filtered by clicking on "View all documents and comments in this docket" and then using the filtering tools on the left side of the screen. Click on the "Help" tab on the Regulations.gov home page to get information on using Regulations.gov. The docket may be viewed after the close of the comment period in the same manner as during the comment period.
Regulations.gov Beta: Go to https://beta.regulations.gov/ or click "Visit New Regulations.gov Site" from the Regulations.gov Classic homepage. Enter "Docket ID OCC-2020-0009" in the Search Box and click "Search." Click on the "Comments" tab. Comments can be viewed and filtered by clicking on the "Sort By" drop-down on the right side of the screen or the "Refine Results" options on the left side of the screen. Supporting materials can be viewed by clicking on the "Documents" tab and filtered by clicking on the "Sort By" drop-down on the right side of the screen or the "Refine Results" options on the left side of the screen." For assistance with the Regulations.gov Beta site, please call (877) 378-5457 (toll free) or (703) 454-9859 Monday-Friday,
* Viewing Comments Personally: You may personally inspect comments at the OCC,
Board: You may submit comments, identified by Docket No. R-1703; RIN 7100-AF77, by any of the following methods:
* Agency website: http://www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
* Email: [email protected]. Include docket and RIN numbers in the subject line of the message.
* FAX: (202) 452-3819 or (202) 452-3102.
* Mail:
All public comments will be made available on the Board's website at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, unless modified for technical reasons or to remove personally identifiable information at the commenter's request. Accordingly, comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper in
* Agency website: http://www.fdic.gov/regulations/laws/federal. Follow instructions for submitting comments on the Agency website.
* Email: [email protected]. Include "RIN 3064-AF40" on the subject line of the message.
* Mail:
* Hand Delivery/Courier: Comments may be hand delivered to the guard station at the rear of the 550 17th
FOR FURTHER INFORMATION CONTACT: OCC:
Board:
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. The Interim Final Rule
III. Impact Assessment
IV. Administrative Law Matters
A. Effective Date/Request for Comment
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D.
E. Use of Plain Language
F. Unfunded Mandates
I. Background Under the capital rule, a banking organization /1/ must maintain a minimum amount of regulatory capital. /2/ In addition, a banking organization must maintain a buffer of regulatory capital above its minimum capital requirements to avoid restrictions on capital distributions and discretionary bonus payments. /3/ The agencies established the buffer requirements to encourage better capital conservation by banking organizations and to enhance the resilience of the banking system during stress periods. /4/ In particular, the agencies intend for the buffer requirements to limit the ability of banking organizations to distribute capital in the form of dividends and discretionary bonus payments and therefore strengthen the ability of banking organizations to continue lending and conducting other financial intermediation activities during stress periods. The agencies are concerned, however, that the buffer requirements do not limit capital distributions in the gradual manner intended when the buffer requirements were developed. Rather, the limitations on capital distributions could be sudden and severe if such banking organizations were to experience even a modest reduction in their capital ratios, undermining the ability of banking organizations to use their capital buffers.
FOOTNOTE 1 Banking organizations subject to the capital rule include national banks, state member banks, state nonmember banks, savings associations, and top-tier bank holding companies and savings and loan holding companies domiciled in
FOOTNOTE 2 See 12 CFR 3.10 (OCC), 12 CFR 217.10 (Board), and 12 CFR 324.10 (FDIC). END FOOTNOTE
FOOTNOTE 3 See 12 CFR 3.11 (OCC); 12 CFR 217.11 (Board); 12 CFR 324.11 (FDIC). END FOOTNOTE
FOOTNOTE 4 78 FR 62018, 62034 (
The agencies are adopting an interim final rule that revises the definition of eligible retained income. The interim final rule also addresses the impact of recent dislocations in the
FOOTNOTE 5 The interim final rule also would apply to the
During this stress period, the agencies encourage banking organizations to make prudent decisions regarding capital distributions. In addition, this interim final rule does not make changes to any other rule or regulation that may limit capital distributions or discretionary bonus payments. For instance, under the prompt corrective action framework, an insured depository institution that becomes less than adequately capitalized will be subject to dividend restrictions. /6/
FOOTNOTE 6 12 CFR 6.6 (OCC); 12 CFR 208.40 (Board); 12 CFR 324.405 (FDIC). END FOOTNOTE
In addition, S-corporation banks do not pay Federal income taxes. Income and losses are attributed to shareholders, potentially increasing their personal tax liability when the S-corporation has income and potentially reducing their personal tax liability if the S-corporation has losses. In a situation where the S-corporation has income but does not pay dividends, its shareholders are responsible for meeting the increased tax liability from their own resources. A situation in which S-corporation shareholders' dividends would be insufficient to pay their share of taxes on the banks' income because of the capital conservation buffer is most likely to occur when the bank is adequately capitalized but one or more of its risk-based capital ratios breach the capital conservation buffer requirements. /7/ The revised definition of eligible retained income would assist in the ability of S-corporation banks to provide dividends to shareholders in order to meet their pass-through tax liabilities.
FOOTNOTE 7
II. The Interim Final Rule
The capital rule requires a banking organization to maintain minimum risk-based capital and leverage ratios. /8/ The capital rule also requires a banking organization to maintain certain buffers above its risk-based capital and leverage ratios, as applicable, to avoid increasingly stringent restrictions on capital distributions and discretionary bonus payments. /9/ All banking organizations are currently subject to a fixed capital conservation buffer equal to 2.5 percent of risk-weighted assets. Banking organizations subject to Category I, II, and III standards also are subject to a countercyclical capital buffer requirement, and the largest and most systemically important banking organizations--global systemically important bank holding companies, or
FOOTNOTE 8 12 CFR 3.10 (OCC); 12 CFR 217.10 (Board); 12 CFR 324.10 (FDIC). END FOOTNOTE
FOOTNOTE 9 See 12 CFR 3.11 (OCC); 12 CFR 217.11 (Board); 12 CFR 324.11 (FDIC). END FOOTNOTE
FOOTNOTE 10 In
FOOTNOTE 11 Amendments to the
Under the capital rule, if a banking organization's capital ratios fall within its buffer requirements, the maximum amount of capital distributions and discretionary bonus payments it can make is a function of its eligible retained income. For example, a banking organization in the bottom quartile of its capital conservation buffer may not make any capital distributions without prior approval from the Board, OCC, or
Under a benign business environment when banking organizations have significant capital cushions above their capital requirements, some banking organizations decide to distribute all or nearly all of their net income. Because the measure of eligible retained income subtracts capital distributions made during the previous year, a period of sudden stress following a period of relatively benign conditions could result in very low or zero eligible retained income. Similarly, if a banking organization with eligible retained income that is very low or negative experiences an increase in its stress capital buffer requirement, because, for example, the banking organization's risk profile changed, then the banking organization's capital levels might not be sufficient to meet the stress capital buffer requirement. In either scenario, the banking organization could face sudden and severe distribution limitations even if its capital ratios only marginally fall below applicable buffer requirements.
To address this concern, the SCB final rule revised the definition of eligible retained income for the stress loss portion of a covered holding company's capital conservation buffer requirement. Under the SCB final rule, if a covered holding company's capital ratios are above minimum requirements plus the fixed 2.5 percent portion of the capital conservation buffer plus any applicable GSIB surcharge and countercyclical capital buffer, the covered holding company's eligible retained income is defined as the average of its previous four quarters of net income. Under the SCB final rule, if a covered holding company's capital ratios are below its minimum requirements plus the fixed 2.5 percent portion of the capital conservation buffer plus any applicable GSIB surcharge and countercyclical capital buffer, the covered holding company's eligible retained income is defined as net income for the four preceding calendar quarters, net of any distributions.
Recent events have suddenly and significantly impacted financial markets. The spread of the COVID-19 virus has disrupted economic activity in many countries. In addition, financial markets have experienced significant volatility. The magnitude and persistence of the overall effects on the economy remain highly uncertain. In light of these developments, banking organizations may realize a sudden, unanticipated drop in capital ratios. This could create a strong incentive for these banking organizations to limit their lending and other financial intermediation activities in order to avoid facing abrupt limitations on capital distributions. Thus, the current definition of eligible retained income, particularly in light of present market uncertainty, could serve as a deterrent for banking organizations to continue lending to creditworthy businesses and households.
To better allow a banking organization to continue lending during times of stress, the agencies are issuing the interim final rule to revise the definition of eligible retained income to the greater of (1) a banking organization's net income for the four preceding calendar quarters, net of any distributions and associated tax effects not already reflected in net income, and (2) the average of a banking organization's net income over the preceding four quarters. This definition will apply with respect to all of a banking organization's buffer requirements, including the fixed 2.5 percent capital conservation buffer, and, if applicable, the countercyclical capital buffer, the GSIB surcharge, and enhanced supplementary leverage ratio standards. Once the SCB final rule is effective, this definition will also apply to all parts of a covered holding company's buffer requirements, including the stress loss portion of a covered holding company's capital conservation requirement. The agencies believe that having one definition for all banking organizations as described in this interim final rule simplifies the regulatory capital framework and ensures fairness across banking organizations of all sizes.
This interim final rule is intended to strengthen the incentives for a banking organization to use its capital buffers as intended in adverse conditions and serve as a financial intermediary and source of credit to the economy. This revision would reduce the likelihood that a banking organization is suddenly subject to abrupt and restrictive distribution limitations in a scenario of lower than expected capital levels.
Question 1: What would be the advantages and disadvantages of defining eligible retained income as the average of a banking organization's net income over the preceding four quarters instead of the greater of (i) a banking organization's net income for the four preceding calendar quarters, net of any distributions and associated tax effects not already reflected in net income, and (ii) the average of a banking organization's net income over the preceding four quarters?
Question 2: What are the advantages and disadvantages of applying the revised definition of eligible retained income to depository institution subsidiaries? Would, and if so how would, applying the revised definition of eligible retained income to depository institutions be consistent with the purposes of the buffer requirements discussed above? How, if at all, do, the incentives for using a capital buffer differ for depository institutions compared to bank holding companies and savings and loan holding companies? Similarly, would, and if so how would, applying the revised definition of eligible retained income to
Question 3: Under what circumstances, if any, should a banking organization be restricted from making any capital distributions?
III. Impact Assessment
In ordinary economic circumstances, many banking organizations will pay out a significant portion of their net income, and retain the rest to support growth. As banking organizations enter stress periods, the restrictions in the capital buffers limit distributions and help to preserve capital and support lending. However, if the limits to distributions are too restrictive, banking organizations can face a sharp increase in their distribution limitations when they enter the buffer due to stress. This may create an incentive for banking organizations to reduce lending or take other actions to avoid falling into the buffer. The revised definition of eligible net income in the interim final rule allows banking organizations to more gradually reduce distributions as they enter stress, and provides banking organizations with stronger incentives to continue to lend in such a scenario. On the other hand, by enabling banking organizations to gradually decrease capital distributions in stress (rather than mandating a sharp decrease), the rule could incrementally reduce the banking organization's loss-absorption capacity in stress.
The definition of eligible retained income affects the distributions of banking organizations within their capital conservation or stress capital buffers. It does not have an impact on minimum capital requirements, per se. As such, the revised definition of eligible retained income in the interim final rule is not likely to have any noticeable effect on the capital requirements of banking organizations. Furthermore, banking organizations currently maintain robust capital levels, with only a small number of banking organizations having capital levels within the capital conservation buffer.
IV. Administrative Law Matters
A. Administrative Procedure Act
The agencies are issuing the interim final rules without prior notice and the opportunity for public comment and the delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA)). /12/ Pursuant to section 553(b)(B) of the APA, general notice and the opportunity for public comment are not required with respect to a rulemaking when an "agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest." 13
FOOTNOTE 12 5 U.S.C. 553. END FOOTNOTE
The agencies believe that the public interest is best served by implementing the interim final rule immediately upon publication in the
FOOTNOTE 14 5 U.S.C. 553(b)(B); 553(d)(3). END FOOTNOTE
The APA also requires a 30-day delayed effective date, except for (1) substantive rules which grant or recognize an exemption or relieve a restriction; (2) interpretative rules and statements of policy; or (3) as otherwise provided by the agency for good cause. /15/ Because the rules relieve a restriction, the interim final rule is exempt from the APA's delayed effective date requirement. /16/
FOOTNOTE 15 5 U.S.C. 553(d). END FOOTNOTE
FOOTNOTE 16 5 U.S.C. 553(d)(1). END FOOTNOTE
While the agencies believe that there is good cause to issue the rule without advance notice and comment and with an immediate effective date, the agencies are interested in the views of the public and requests comment on all aspects of the interim final rule.
B. Congressional Review Act
For purposes of Congressional Review Act, the OMB makes a determination as to whether a final rule constitutes a "major" rule. /17/ If a rule is deemed a "major rule" by the
FOOTNOTE 17 5 U.S.C.
FOOTNOTE 18 5 U.S.C. 801(a)(3). END FOOTNOTE
The Congressional Review Act defines a "major rule" as any rule that the Administrator of the
FOOTNOTE 19 5 U.S.C. 804(2). END FOOTNOTE
For the same reasons set forth above, the agencies are adopting the interim final rule without the delayed effective date generally prescribed under the Congressional Review Act. The delayed effective date required by the Congressional Review Act does not apply to any rule for which an agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest. /20/ In light of current market uncertainty, the agencies believe that delaying the effective date of the rule would be contrary to the public interest. In addition, as discussed above, the revised definition of eligible retained income in the interim final rule is not likely to have any significant effect on the capital requirements of banking organizations.
FOOTNOTE 20 5 U.S.C. 808. END FOOTNOTE
As required by the Congressional Review Act, the agencies will submit the final rule and other appropriate reports to
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA) states that no agency may conduct or sponsor, nor is the respondent required to respond to, an information collection unless it displays a currently valid OMB control number. The interim final rule affects the agencies' current information collections for the Consolidated Reports of Condition and Income (Call Reports) (
Although there is a substantive change to the actual calculation of retained income for purposes of the Call Reports, the change should be minimal and result in a zero net change in hourly burden under the agencies' information collections. Submissions will, however, be made by the agencies to OMB. The changes to the Call Reports and their related instructions will be addressed in a separate
The Board's delegated authority requires that the Board, after temporarily approving a collection, solicit public comment on a proposal to extend the temporary collection for a period not to exceed three years. Therefore, the Board is inviting comment on a proposal to extend the FR
a. Whether the proposed collection of information is necessary for the proper performance of the Board's functions, including whether the information has practical utility;
b. The accuracy of the Board's estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used;
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. Ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
e. Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.
Comments must be submitted on or before
Adopted Revision, With Extension for Three Years, of the Following Information Collection:
Report title: Financial Statements for Holding Companies.
Agency form number: FR Y-9C; FR Y-9LP; FR Y-9SP; FR Y-9ES; FR Y-9CS.
OMB control number: 7100-0128.
Effective date:
Frequency: Quarterly, semiannually, and annually.
Affected public: Businesses or other for-profit.
Respondents: Bank holding companies (BHCs), savings and loan holding companies (SLHCs), /21/ securities holding companies (SHCs), and
FOOTNOTE 21 A savings and loan holding company (SLHC) must file one or more of the FR
Estimated number of respondents:
FR Y-9C (non AA HCs) with less than
FR Y-9C (non AA HCs) with
FR Y-9C (AA HCs)--19,
FR Y-9LP--434,
FR Y-9SP--3,960,
FR Y-9ES--83,
FR Y-9CS--236.
Estimated average hours per response:
Reporting
FR Y-9C (non AA HCs) with less than
FR Y-9C (non AA HCs) with
FR Y-9C (AA HCs)--47.59,
FR Y-9LP--5.27,
FR Y-9SP--5.40,
FR Y-9ES--0.50,
FR Y-9CS--0.50.
Recordkeeping
FR Y-9C (non AA HCs) with less than
FR Y-9C (non AA HCs) with
FR Y-9C (AA HCs)--1,
FR Y-9LP--1,
FR Y-9SP--0.50,
FR Y-9ES--0.50,
FR Y-9CS--0.50.
Estimated annual burden hours:
Reporting
FR Y-9C (non AA HCs) with less than
FR Y-9C (non AA HCs) with
FR Y-9C (AA HCs)--3,617,
FR Y-9LP--9,149,
FR Y-9SP--42,768,
FR Y-9ES--42,
FR Y-9CS--472.
Recordkeeping
FR Y-9C (non AA HCs) with less than
FR Y-9C (non AA HCs) with
FR Y-9C (AA HCs)--76,
FR Y-9LP--1,736,
FR Y-9SP--3,960,
FR Y-9ES--42,
FR Y-9CS--472.
General description of report: The FR
Legal authorization and confidentiality: The Board has the authority to impose the reporting and recordkeeping requirements associated with the FR
With respect to the FR Y-9C report, Schedule HI's memoranda data item 7(g) "
In addition, for both the FR Y-9C report and the FR Y-9SP report, Schedule HC's memorandum item 2.b., the name and email address of the external auditing firm's engagement partner, is considered confidential commercial information and protected by exemption 4 of the
Aside from the data items described above, the remaining data items on the FR Y-9C report and the FR Y-9SP report are generally not accorded confidential treatment. The data items collected on FR Y-9LP, FR Y-9ES, and FR Y-9CS reports, are also generally not accorded confidential treatment. As provided in the Board's Rules Regarding Availability of Information (12 CFR part 261), however, a respondent may request confidential treatment for any data items the respondent believes should be withheld pursuant to a
To the extent the instructions to the FR Y-9C, FR Y-9LP, FR Y-9SP, and FR Y-9ES reports each respectively direct the financial institution to retain the workpapers and related materials used in preparation of each report, such material would only be obtained by the Board as part of the examination or supervision of the financial institution. Accordingly, such information is considered confidential pursuant to exemption 8 of the
Current actions: The Board has temporarily revised the instructions for the FR Y-9C to reflect the modification to the definition of eligible retained income contained in this interim final rule. Specifically, the Board has temporarily revised the instructions for the item capturing eligible retained income for HCs not subject to the capital plan rule on FR Y-9C, Schedule HC-R. The Board has determined that the revisions to the FR Y-9C must be instituted quickly and that public participation in the approval process would defeat the purpose of the collection of information, as delaying the revisions would result in the collection of inaccurate information and would interfere with the Board's ability to perform its statutory duties. The Board also proposes to revise the instructions for a forthcoming item, which will be added to Schedule HC-R for the
The Board also proposes to extend the FR
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) /22/ requires an agency to consider whether the rules it proposes will have a significant economic impact on a substantial number of small entities. /23/ The RFA applies only to rules for which an agency publishes a general notice of proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed previously, consistent with section 553(b)(B) of the APA, the agencies have determined for good cause that general notice and opportunity for public comment is unnecessary, and therefore the agencies are not issuing a notice of proposed rulemaking. Accordingly, the agencies have concluded that the RFA's requirements relating to initial and final regulatory flexibility analysis do not apply.
FOOTNOTE 22 5 U.S.C.
FOOTNOTE 23 Under regulations issued by the
Nevertheless, the agencies seek comment on whether, and the extent to which, the interim final rule would affect a significant number of small entities.
E.
Pursuant to section 302(a) of the
FOOTNOTE 24 12 U.S.C. 4802(a). END FOOTNOTE
FOOTNOTE 25 12 U.S.C. 4802. END FOOTNOTE
As such, the final rule will be effective on
F. Use of Plain Language
Section 722 of the Gramm-Leach-Bliley Act /26/ requires the Federal banking agencies to use plain language in all proposed and final rules published after
FOOTNOTE 26 12 U.S.C. 4809. END FOOTNOTE
* Have we organized the material to suit your needs? If not, how could this material be better organized?
* Are the requirements in the regulation clearly stated? If not, how could the regulation be more clearly stated?
* Does the regulation contain language or jargon that is not clear? If so, which language requires clarification?
* Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes to the format would make the regulation easier to understand?
What else could we do to make the regulation easier to understand?
G. Unfunded Mandates
As a general matter, the Unfunded Mandates Act of 1995 (UMRA), 2 U.S.C.
List of Subjects
12 CFR Part 3
Administrative practice and procedure, Capital, Federal savings associations, National banks, Risk.
12 CFR Part 217
Administrative practice and procedure, Banks, Banking,
12 CFR Part 324
Administrative practice and procedure, Banks, banking, Reporting and recordkeeping requirements, Savings associations.
PART 3--CAPITAL ADEQUACY STANDARDS
1. The authority citation for part 3 continues to read as follows:
Authority:12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818, 1828(n), 1828 note, 1831n note, 1835, 3907, 3909, and 5412(b)(2)(B).
2. Section 3.11 is amended by revising paragraph (a)(2)(i) to read as follows:
(a) * * *
(2) * * *
(i) Eligible retained income. The eligible retained income of a national bank or Federal savings association is the greater of:
(A) The national bank's or Federal savings association's net income, calculated in accordance with the instructions to the Call Report, for the four calendar quarters preceding the current calendar quarter, net of any distributions and associated tax effects not already reflected in net income; and
(B) The average of the national bank's or Federal savings association's net income, calculated in accordance with the instructions to the Call Report, for the four calendar quarters preceding the current calendar quarter.
*****
12 CFR Chapter II
Authority and Issuance
For the reasons stated in the joint preamble, the
PART 217--CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q)
3. The authority citation for part 217 continues to read as follows:
Authority: 12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a, 1818, 1828, 1831n, 1831o, 1831p-1, 1831w, 1835, 1844(b), 1851, 3904, 3906-3909, 4808, 5365, 5368, 5371, and 5371 note.
4. Section 217.11 is amended by revising paragraph (a)(2)(i) to read as follows:
(a) * * *
(2) * * *
(i) Eligible retained income. The eligible retained income of a Board-regulated institution is the greater of:
(A) The Board-regulated institution's net income, calculated in accordance with the instructions to the FR Y-9C or Call Report, as applicable, for the four calendar quarters preceding the current calendar quarter, net of any distributions and associated tax effects not already reflected in net income; and
(B) The average of the Board-regulated institution's net income, calculated in accordance with the instructions to the FR Y-9C or Call Report, as applicable, for the four calendar quarters preceding the current calendar quarter.
*****
12 CFR Chapter III
Authority and Issuance
For the reasons set forth in the joint preamble, chapter III of title 12 of the Code of Federal Regulations is amended as follows:
PART 324--CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS
5. The authority citation for part 324 continues to read as follows:
Authority:12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b), 1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n), 1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub. L. 102-233, 105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242, 105 Stat. 2236, 2355, as amended by Pub. L. 103-325, 108 Stat. 2160, 2233 (12 U.S.C. 1828 note); Pub. L. 102-242, 105 Stat. 2236, 2386, as amended by Pub. L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828 note); Pub. L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note).
6. Section 324.11 is amended by revising paragraph (a)(2)(i) to read as follows:
(a) * * *
(2) * * *
(i) Eligible retained income. The eligible retained income of an
(A) The
(B) The average of the
*****
Dated:
First Deputy Comptroller, Comptroller of the Currency.
By order of the
Secretary of the Board.
By order of the Board of Directors.
Dated at
Executive Secretary.
[FR Doc. 2020-06051 Filed 3-19-20;
BILLING CODE 6210-01-P
During coronavirus outbreak, telemedicine is an answer — if you're covered
Washington's unemployment system flooded with claims as coronavirus fallout grows
Advisor News
- Why aligning wealth and protection strategies will define 2026 planning
- Finseca and IAQFP announce merger
- More than half of recent retirees regret how they saved
- Tech group seeks additional context addressing AI risks in CSF 2.0 draft profile connecting frameworks
- How to discuss higher deductibles without losing client trust
More Advisor NewsAnnuity News
- Allianz Life Launches Fixed Index Annuity Content on Interactive Tool
- Great-West Life & Annuity Insurance Company Trademark Application for “SMART WEIGHTING” Filed: Great-West Life & Annuity Insurance Company
- Somerset Re Appoints New Chief Financial Officer and Chief Legal Officer as Firm Builds on Record-Setting Year
- Indexing the industry for IULs and annuities
- United Heritage Life Insurance Company goes live on Equisoft’s cloud-based policy administration system
More Annuity NewsHealth/Employee Benefits News
- After loss of tax credits, WA sees a drop in insurance coverage
- My Spin: The healthcare election
- COLUMN: Working to lower the cost of care for Kentucky families
- Is cost of health care top election issue?
- Indiana to bid $68 billion in Medicaid contracts this summer
More Health/Employee Benefits NewsLife Insurance News