Regulatory Capital Rule: Temporary Exclusion of U.S. Treasury Securities and Deposits at Federal Reserve Banks From the Supplementary Leverage Ratio for Depository Institutions
Interim final rule and request for comment.
CFR Part: "12 CFR Parts 3 and 6"; "12 CFR Parts 208 and 217"; "12 CFR Part 324"
RIN Number: "RIN 1557-AE85"; "RIN 7100-AF91"; "RIN 3064-AF44"
Citation: "85 FR 32980"
Document Number: "Docket No. OCC-2020-0013"; "Regulations H and Q; Docket No. R-1718"
Page Number: "32980"
"Rules and Regulations"
Agency: "
SUMMARY: In light of recent disruptions in economic conditions caused by the coronavirus disease 2019 and strains in
DATES:
Effective date: This rule is effective on
Comment date: Comments on the interim final rule must be received no later than
ADDRESSES:
OCC: Commenters are encouraged to submit comments through the Federal eRulemaking Portal or email, if possible. Please use the title "Regulatory Capital Rule: Temporary Exclusion of
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* Email: [email protected].
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Instructions: You must include "OCC" as the agency name and "Docket ID OCC-2020-0013" 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:
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The docket may be viewed after the close of the comment period in the same manner as during the comment period.
Board: You may submit comments, identified by Docket No. R-1718; RIN 7100-AF91, by any of the following methods:
* Agency website: http://www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/apps/foia/proposedregs.aspx.
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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. Public comments may also be viewed electronically or in paper in
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* Mail:
* Hand Delivery/Courier: Comments may be hand delivered to the guard station at the rear of the
FOR FURTHER INFORMATION CONTACT: OCC:
Board:
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. The Interim Final Rule
III. Impact Assessment
IV. Technical Amendments
V. Administrative Law Matters
A. Administrative Procedure Act
B. Congressional Review Act
C. Paperwork Reduction Act
D. Regulatory Flexibility Act
E.
F. Use of Plain Language
G. Unfunded Mandates Act
I. Background The spread of the coronavirus disease 2019 (COVID-19) has significantly and adversely affected global financial markets, including depository institutions' role as financial intermediaries. In particular, disruptions in financial markets, and the resulting flight to liquid assets by market participants, have caused depository institutions' balance sheets to expand to accommodate inflows of deposits. This balance sheet expansion has contributed to depository institutions making substantial deposits in their accounts at Federal Reserve Banks (deposits at Federal Reserve Banks). In addition, customer draws on credit lines and depository institutions' holdings of significant amounts of
For a depository institution subsidiary of a
FOOTNOTE 1 See 84 FR 59230 (
GSIB depository institution subsidiaries also are subject to enhanced supplementary leverage ratio (eSLR) standards established by the agencies in 2014. /2/ Under the eSLR standards, GSIB depository institution subsidiaries must maintain a 6-percent supplementary leverage ratio to be considered "well capitalized" under the prompt corrective action (PCA) framework of each agency.
FOOTNOTE 2 See 79 FR 24528 (
In contrast to the risk-based capital requirements in the capital rule, a leverage ratio does not differentiate the amount of capital required by the type of exposure. Rather, a leverage ratio places an upper bound on depository institution leverage. A leverage ratio protects against underestimating risk and serves to complement the risk-based capital requirements. Under the supplementary leverage ratio, depository institutions include all on-balance sheet assets, including Treasuries and deposits at Federal Reserve Banks, in their total leverage exposure calculation. /3/
FOOTNOTE 3 The agencies recently issued a final rule, effective
II. The Interim Final Rule
The ability of depository institutions to hold certain assets, most notably deposits at a
FOOTNOTE 4 The Board recently issued an interim final rule to revise, on a temporary basis for bank holding companies, savings and loan holding companies, and
In order to facilitate depository institutions' significant increase in reserve balances resulting from the
FOOTNOTE 5 This scope is consistent with the Board's recent interim final rule to revise the supplementary leverage ratio. See supra note 4. END FOOTNOTE
Under the interim final rule, a depository institution that opts into this treatment (electing depository institution) would be required to obtain prior approval of distributions from its primary Federal banking regulator. An electing depository institution must notify its primary Federal banking regulator of its election within 30 days after the interim final rule is effective. /6/ The primary Federal banking regulator will consider a notice received from a qualifying depository institution more than 30 days after the effective date of the interim final rule on a case-by-case basis. The election will not affect the electing depository institution's ability to pay distributions already declared or to declare distributions for payment in the second quarter of 2020. The prior approval requirement applies to distributions to be paid beginning in the third quarter of 2020. The interim final rule will terminate after
FOOTNOTE 6 An FDIC supervised institution must provide this notice in writing to the appropriate
For purposes of reporting the supplementary leverage ratio as of
Under the interim final rule, beginning in the third quarter of 2020, an electing depository institution will be required to obtain approval from its primary Federal banking regulator before making a distribution /7/ or creating an obligation to make such a distribution so long as the temporary exclusion is in effect. The primary Federal banking regulator will endeavor to respond within 14 days to the request with an approval, disapproval, or request for additional information. This prior-approval requirement will help support the objective of the interim final rule to strengthen the ability of electing depository institutions to continue taking deposits, lending, and conducting other financial intermediation activities during this period of stress.
FOOTNOTE 7 See 12 CFR 3.2 (defining "distribution") (OCC); 12 CFR 217.2 (defining "distribution") (Board); 12 CFR 324.2 (defining "distribution") (FDIC). END FOOTNOTE
When evaluating any such request, the primary Federal banking regulator will consider all relevant factors, including whether any distribution would be contrary to safety and soundness and limitations on distributions in the existing rules applicable to the electing depository institution. /8/ Factors that the primary Federal banking regulator will take into account include the depository institution's current earnings and forecasts, the nature, purpose, and extent of the request, and the particular circumstances giving rise to the request. /9/ For example, the primary Federal banking regulator may consider the expected future capital needs of the depository institution and its ability to meet capital requirements after the temporary relief provided under this interim final rule expires. The requirement that a depository institution request approval for distributions is not intended to prohibit electing depository institutions from paying dividends in all cases. Rather, the primary Federal banking regulator will evaluate each request to ensure that the electing depository institution will be able to continue supporting the economy by lending and accepting deposits consistent with the goal of this interim final rule.
FOOTNOTE 8 Additional limitations on distributions may apply under 12 CFR part 3, subparts H and I; 12 CFR 5.46, 12 CFR part 5, subpart E; 12 CFR part 6; 12 CFR part 208, subparts A and D; 12 CFR part 303, subparts
FOOTNOTE 9 Holding companies use dividends from their subsidiaries for various purposes. For example, dividends to the holding company can support the efficient internal allocation of capital within a holding company, allowing excess capital from one subsidiary, such as the depository institution, to be redeployed to other subsidiaries. As such, an effective dividend strategy can both ensure the safety and soundness of the depository institution and promote the safety and soundness of the entire banking organization. END FOOTNOTE
The interim final rule revises the measure of total leverage exposure on a temporary basis for electing depository institutions for the limited purposes of the agencies' capital rule. Depository institutions subject to supplementary leverage ratio requirements report their supplementary leverage ratios on the Consolidated Reports of Condition and Income (Call Reports), Schedule RC-R and Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (
FOOTNOTE 10 Depository institutions that are required to submit the OCC Reporting Form DFAST-14A on
FOOTNOTE 11 The instructions for Board's FR Y-9C, Schedule HC-R, Line Item 45 (Advanced approaches holding companies only: Supplementary leverage ratio) state that respondents must report the supplementary leverage ratio from
The agencies seek comment on all aspects of this interim final rule.
Question 1: Discuss the advantages and disadvantages of removing temporarily Treasuries and deposits at Federal Reserve Banks from total leverage exposure for depository institutions. How does the interim final rule support the objectives of facilitating financial intermediation by depository institutions? How does the interim final rule affect the concurrent objective of safety and soundness? How would the end date of
Question 2: What additional assets or exposure types should the agencies consider to exclude temporarily from total leverage exposure in order to achieve the interim final rule's objectives? For example, what consideration should the agencies give to excluding deposits at certain foreign central banks, foreign sovereign debt instruments, or exposures guaranteed by the
III. Impact Assessment
The supplementary leverage ratio requirement generally has not prevented depository institutions from accommodating customer deposit inflows or serving as financial intermediaries. However, as a result of the spread of COVID-19, stress has materialized in numerous financial markets. Disruptions in financial markets have resulted in expansion of depository institutions' balance sheets to accommodate inflows of deposits. In particular, using data from the fourth quarter of 2019, the agencies expect that the interim final rule would temporarily decrease binding tier 1 capital requirements by approximately
FOOTNOTE 12 This analysis takes into account the exclusion of qualifying central bank deposits for custodial banking organizations as provided under the capital rule. As of
Depository institutions that opt into the temporary exclusion of Treasuries and deposits at Federal Reserve Banks from the denominator of the supplementary leverage ratio will likely incur some costs associated with making changes to internal systems or processes for managing supplementary leverage ratio compliance. However, these costs are likely to be very small.
Aside from increases in balance sheets caused by increases in customer deposits, the balance sheets of depository institutions also have increased as households and businesses draw down credit lines. If depository institutions become constrained by supplementary leverage ratio requirements, this could adversely affect their ability to intermediate in financial markets and hamper their ability to provide credit to households and businesses. Therefore, the temporary increase in leverage exposure capacity could have countercyclical benefits as it supports financial market liquidity and increases depository institutions' lending capacities in a time of economic stress.
Although a temporary increase in leverage exposure capacity could lead to an increase in overall leverage in the banking system, the temporary exclusion of Treasuries and deposits at Federal Reserve Banks will help alleviate ongoing stresses on the financial system and the real economy arising from COVID-19. The agencies will closely monitor the balance sheets of electing depository institutions in the coming months while the exclusion is in effect with a particular view toward any resulting increase in risks in conjunction with this interim final rule.
IV. Technical Amendments
Finally, the agencies are making technical corrections and clarifications to the Prompt Corrective Action regulations. In their respective Prompt Corrective Action regulations, the agencies are correcting an unintentional omission of "Category III" to clarify that depository institutions subject to Category III standards must meet their minimum supplementary leverage ratio requirement of 3 percent in order to be considered "adequately capitalized." /13/ When the minimum supplementary leverage ratio requirement was initially added to the capital rule in 2013, the term "advanced approaches" banking organizations referred to all banking organizations that were subject to the supplementary leverage ratio. /14/ However, the tailoring rule that became effective on
FOOTNOTE 13 12 CFR 6.4(b) (OCC); 12 CFR 208.43(b) (Board); 12 CFR 324.403(b) (FDIC). END FOOTNOTE
FOOTNOTE 14 78 FR 62018 (
V. Administrative Law Matters
A. Administrative Procedure Act
The agencies are issuing the interim final rule and its accompanying technical edits without prior notice and the opportunity for public comment and the delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA). /15/ 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." /16/
FOOTNOTE 15 5 U.S.C. 553. END FOOTNOTE
FOOTNOTE 16 5 U.S.C. 553(b)(B). END FOOTNOTE
The agencies believe that the public interest is best served by implementing the interim final rule immediately upon publication in the
FOOTNOTE 17 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. /18/ Because the interim final rule will provide temporary capital relief, the interim final rule is exempt from the APA's delayed effective date requirement. /19/ Additionally, the agencies find good cause to publish the technical edits and corrections, which clarify the scope of the supplementary leverage ratio for purposes of the Prompt Corrective Action regulations, with an immediate effective date for the same reasons set forth above under the discussion of section 553(b)(B) of the APA.
FOOTNOTE 18 5 U.S.C. 553(d). END FOOTNOTE
FOOTNOTE 19 5 U.S.C. 553(d)(1). END FOOTNOTE
While the agencies believe that there is good cause to issue this interim final rule without advance notice and comment and with an immediate effective date, the agencies are interested in the views of the public and request 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. /20/ If a rule is deemed a "major rule" by the
FOOTNOTE 20 5 U.S.C.
FOOTNOTE 21 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 22 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. /23/ In light of current market uncertainty, the agencies believe that delaying the effective date of the rule would be contrary to the public interest.
FOOTNOTE 23 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 Call Reports (OCC OMB No. 1557-0081; Board OMB No. 7100-0036; and FDIC OMB No. 3064-0052) and the Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (
The interim final rule also introduces a new notice opt-in requirement and a requirement for prior approval for distributions, which would affect the agencies' capital rule information collections. The agencies believe that these new requirements will amount to 12 burden hours per respondent (two responses per respondent at six hours per response).
OCC:
Title of Information Collection: Risk-Based Capital Standards: Advanced Capital Adequacy Framework.
OMB Control No.: 1557-0318.
Respondents for Interim Final Rule: 21.
Responses per Respondent: 2.
Burden per Response: 6 hours.
Burden for Interim Final Rule: 252 hours.
Total Burden for Collection: 66,333 hours.
Title of Information Collection: Regulatory Capital Rules.
OMB Control No.: 3064-0153.
Respondents for Interim Final Rule: 7.
Responses per Respondent: 2.
Burden per Response: 6 hours.
Burden for Interim Final Rule: 84 hours.
Total Burden for Collection: 128,140 burden hours.
The agencies request comment on:
a. Whether the collections of information are necessary for the proper performance of the agencies' functions, including whether the information has practical utility;
b. The accuracy of the agencies' estimates of the burden of the information collections, 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 collections 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.
The Board has temporarily revised the Financial Statements for Holding Companies (FR Y-9C; OMB No. 7100-0128) and the Recordkeeping and Disclosure Requirements Associated with Regulation Q (FR Q; OMB No. 7100-0313) information collections to accurately reflect certain aspects of this and other interim final rules. On
The Board invites public comment on the FR Q information collection, which is being reviewed under authority delegated by the OMB under the PRA. Comments must be submitted on or before
a. Whether the collections of information are 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 information collections, 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 collections 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.
At the end of the comment period, the comments and recommendations received will be analyzed to determine the extent to which the Board should modify the collections.
Final Approval Under OMB Delegated Authority of the Temporary Revision 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, and FR Y-9CS.
OMB control number: 7100-0128.
Effective Date:
Frequency: Quarterly, semiannually, and annually.
Respondents: Bank holding companies, savings and loan holding companies, /24/ securities holding companies, and
FOOTNOTE 24 An SLHC must file one or more of the FR
Estimated number of respondents: FR Y-9C (non-advanced approaches CBLR HCs with less than
Estimated average hours per response:
Reporting
FR Y-9C (non-advanced approaches CBLR HCs with less than
Recordkeeping
FR Y-9C (non-advanced approaches HCs with less than
Estimated annual burden hours:
Reporting
FR Y-9C (non-advanced approaches CBLR HCs with less than
Recordkeeping
FR Y-9C (non-advanced approaches HCs with less than
General description of report: The FR Y-9C consists of standardized financial statements similar to the Call Reports filed by commercial banks. /25/ The FR Y-9C collects consolidated data from HCs and is filed quarterly by top-tier HCs with total consolidated assets of
FOOTNOTE 25 The Call Reports consist of the Consolidated Reports of Condition and Income for a Bank with Domestic Offices Only and Total Assets Less Than
FOOTNOTE 26 Under certain circumstances described in the FR Y-9C's General Instructions, HCs with assets under
The FR Y-9LP, which collects parent company only financial data, must be submitted by each HC that files the FR Y-9C, as well as by each of its subsidiary HCs. /27/ The report consists of standardized financial statements.
FOOTNOTE 27 A top-tier HC may submit a separate FR Y-9LP on behalf of each of its lower-tier HCs. END FOOTNOTE
The FR Y-9SP is a parent company only financial statement filed semiannually by HCs with total consolidated assets of less than
The FR Y-9ES is filed annually by each employee stock ownership plan (ESOP) that is also an HC. The report collects financial data on the ESOP's benefit plan activities. The FR Y-9ES consists of four schedules: A Statement of Changes in Net Assets Available for Benefits, a Statement of Net Assets Available for Benefits, Memoranda, and Notes to the Financial Statements.
The FR Y-9CS is a free-form supplemental report that the Board may utilize to collect critical additional data deemed to be needed in an expedited manner from HCs on a voluntary basis. The data are used to assess and monitor emerging issues related to HCs, and the report is intended to supplement the other FR
Legal authorization and confidentiality: The Board has the authority to impose the reporting and recordkeeping requirements associated with the
Aside from the data items described above, the remaining data items on the FR
To the extent that the instructions, to the FR Y-9C, FR Y-9LP, FR Y-9SP, and FR Y-9ES reports, each respectively direct a 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 may be considered confidential pursuant to exemption 8 of the
Current Actions: On
FOOTNOTE 28 85 FR 20578 (
The agencies now intend to revise the
Because these revisions result completely revert the temporary revisions made by the Board to the FR Y-9C in connection with the holding company SLR IFR, the resulting instructions regarding the supplementary leverage ratio are identical to those adopted following notice and comment. Therefore, the Board does not intend to request further comment in order to retain these instructions.
Title of Information Collection: Recordkeeping and Disclosure Requirements Associated with Regulation Q.
Agency form number: FR Q.
OMB control number: 7100-0313.
Frequency: Quarterly, annual.
Affected Public: Businesses or other for-profit.
Respondents: State member banks (SMBs), bank holding companies (BHCs),
Legal authorization and confidentiality: This information collection is authorized by section 38(o) of the Federal Deposit Insurance Act (12 U.S.C. 1831o(c)), section 908 of the International Lending Supervision Act of 1983 (12 U.S.C. 3907(a)(1)), section 9(6) of the Federal Reserve Act (12 U.S.C. 324), and section 5(c) of the Bank Holding Company Act (12 U.S.C. 1844(c)). The obligation to respond to this information collection is mandatory. If a respondent considers the information to be trade secrets and/or privileged such information could be withheld from the public under the authority of the Freedom of Information Act (5 U.S.C. 552(b)(4)). Additionally, to the extent that such information may be contained in an examination report such information could also be withheld from the public (5 U.S.C. 552 (b)(8)). Estimated number of respondents: 1,431 (of which 19 are advanced approaches institutions).
Estimated average hours per response:
Minimum Capital Ratios
Recordkeeping (Ongoing)--16.
Standardized Approach
Recordkeeping (Initial setup)--122.
Recordkeeping (Ongoing)--20.
Disclosure (Initial setup)--226.25.
Disclosure (Ongoing quarterly)--131.25.
Advanced Approach
Recordkeeping (Initial setup)--460.
Recordkeeping (Ongoing)--540.77.
Recordkeeping (Ongoing quarterly)--20.
Disclosure (Initial setup)--328.
Disclosure (Ongoing)--5.78.
Disclosure (Ongoing quarterly)--41.
Disclosure (Table 13 quarterly)--5.
Risk-based Capital Surcharge for GSIBs
Recordkeeping (Ongoing)--0.5.
Reporting (Twice)--6.
Total estimated annual burden: 1,136 hours initial setup, 80,245 hours for ongoing.
Current actions: The Board has temporarily revised the FR Q information collection to reflect a revision to the disclosure requirements contained in the Board's Regulation Q. Generally,
Additionally, the Board has temporarily revised the FR Q information collection to include the notification that an electing depository institution must provide to its primary Federal banking regulator, as well as the request for approval that an electing depository institution must submit to its primary Federal banking regulator prior to making certain capital distributions.
The Board has determined that these revisions to the FR Q described above 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 invites comment on a proposal to extend the FR Y-Q for three years, with the revision described above. This revision would be effective for FR Q through
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) /29/ requires an agency to consider whether the rules it proposes will have a significant economic impact on a substantial number of small entities. /30/ 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 29 5 U.S.C.
FOOTNOTE 30 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 31 12 U.S.C. 4802(a). END FOOTNOTE
FOOTNOTE 32 12 U.S.C. 4802. END FOOTNOTE
As such, the final rule will be effective on immediately. Nevertheless, the agencies seek comment on RCDRIA.
F. Use of Plain Language
Section 722 of the Gramm-Leach-Bliley Act /33/ requires the Federal banking agencies to use plain language in all proposed and final rules published after
FOOTNOTE 33 12 U.S.C. 4809. END FOOTNOTE
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G. Unfunded Mandates Reform Act of 1995
As a general matter, the Unfunded Mandates Reform 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 6
Federal savings associations, National banks, Prompt corrective action.
12 CFR Part 208
Accounting, Agriculture, Banks, banking, Confidential business information, Consumer protection, Crime, Currency,
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, State non-member banks.
Authority and Issuance For the reasons stated in the joint preamble, the
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, 5412(b)(2)(B), and Pub. L. 116-136, 134 Stat. 281.
2. Section 3.304 is added to read as follows:
(a) In general. Subject to paragraphs (b) through (g) of this section, and notwithstanding any other requirement in this part, a national bank or Federal savings association, when calculating on-balance sheet assets as of each day of a reporting quarter for purposes of determining the national bank's or Federal savings association's total leverage exposure under
(1)
(2) Funds on deposit at a
(b) Opt-in period. Before applying the relief provided in paragraph (a) of this section, a national bank or Federal savings association must first notify the OCC before
(c) Calculation of relief. When calculating on-balance sheet assets as of each day of a reporting quarter, the relief provided in paragraph (a) of this section applies from the beginning of the reporting quarter in which the national bank or Federal savings association filed an opt-in notice through the termination date specified in paragraph (d) of this section.
(d) Termination of exclusions. This section shall cease to be effective after the reporting period that ends
(e) Custody bank. A custody bank must reduce the amount in
(f) Disclosure. Notwithstanding Table 13 to
(g) OCC approval for distributions. During the calendar quarter beginning on
PART 6--PROMPT CORRECTIVE ACTION
3. The authority citation for part 6 continues to read as follows:
Authority: 12 U.S.C. 93a, 1831o, 5412(b)(2)(B).
4. Amend
*****
(b) * * *
(2) * * *
(iv) * * *
(B) With respect to an advanced approaches or Category III national bank or advanced approaches or Category III Federal savings association, the national bank or Federal savings association has a supplementary leverage ratio of 3.0 percent or greater; and
*****
(3) * * *
(iv) * * *
(B) With respect to an advanced approaches or Category III national bank or advanced approaches or Category III Federal savings association, on
*****
Authority and Issuance
For the reasons stated in the joint preamble, the
PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL RESERVE SYSTEM (REGULATION H)
5. The authority citation for part 208 continues to read as follows:
Authority:12 U.S.C. 24, 36, 92a, 93a, 248(a), 248(c), 321-338a, 371d, 461, 481-486, 601, 611, 1814, 1816, 1817(a)(3), 1817(a)(12), 1818, 1820(d)(9), 1833(j), 1828(o), 1831, 1831o, 1831p-1, 1831r-1, 1831w, 1831x, 1835a, 1882, 2901-2907, 3105, 3310, 3331-3351, 3905-3909, 5371, and 5371 note; 15 U.S.C. 78b, 78I(b), 78l(i), 780-4(c)(5), 78q, 78q-1, 78w, 1681s, 1681w, 6801, and 6805; 31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a, 4104b, 4106, and 4128.
6. Section 208.43(b)(2)(iv)(B) and (b)(3)(iv)(B) are revised to read as follows:
*****
(b) * * *
(2) * * *
(iv) * * *
(B) With respect to an advanced approaches bank or bank that is a Category III Board-regulated institution (as defined in
*****
(3) * * *
(iv) * * *
(B) With respect to an advanced approaches bank or bank that is a Category III Board-regulated institution (as defined in
*****
PART 217--CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q)
7. 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, 5371 note, and sec. 4012, Pub. L. 116-136, 134 Stat. 281.
Subpart G--Transition Provisions
8. Revise
(a) In general. Subject to paragraphs (b) through (g) of this section and notwithstanding any other requirement in this part, when calculating on-balance sheet assets as of each day of a reporting quarter for purposes of determining the Board-regulated institution's total leverage exposure under
(1)
(2) Funds on deposit at a
(b) Opt-in period. Before applying the relief provided in paragraph (a) of this section, a state member bank must first notify the Board before
(c) Calculation of relief. When calculating on-balance sheet assets as of each day of a reporting quarter, the relief provided in paragraph (a) of this section applies from the beginning of the reporting quarter in which the state member bank filed an opt-in notice through the termination date specified in paragraph (d) of this section.
(d) Termination of exclusions. This section shall cease to be effective after the reporting period that ends
(e) Custodial banking organizations. A custodial banking organization must reduce the amount in
(f) Disclosure. Notwithstanding Table 13 to
(g) Board approval for distributions. During the calendar quarter beginning on
12 CFR Chapter III
Authority and Issuance For the reasons set forth in the joint preamble, the
PART 324--CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS
9. 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); Pub. L. 115-174; Pub. L. 116-136, 134 Stat. 281.
Subpart G--Transition Provisions
10. Redesignate SEC 324.304 as
11. A new
(a) In general. Subject to paragraphs (b) through (g) of this section, and notwithstanding any other requirement in this part, an
(1)
(2) Funds on deposit at a
(b) Opt-in period. Before applying the relief provided in paragraph (a) of this section, an
(c) Calculation of relief. When calculating on-balance sheet assets as of each day of a reporting quarter, the relief provided in paragraph (a) of this section applies from the beginning of the reporting quarter in which the
(d) Termination of exclusions. This section shall cease to be effective after the reporting period that ends
(e) Custody bank. A custody bank must reduce the amount in
(f) Disclosure. Notwithstanding Table 13 to
(g)
Subpart H--Prompt Corrective Action
12. Section 324.403(b)(2)(vi) and (b)(3)(v) are revised to read as follows:
*****
(b) * * *
(2) * * *
(vi) Beginning
(3) * * *
(v) Beginning
*****
First Deputy 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. 2020-10962 Filed 5-29-20;
BILLING CODE 4810-33-P
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