OCC Bulletin 2019-54| November 13, 2019

Simplifications to the Capital Rule; Effective Date: Final Rule

To

Chief Executive Officers of All National Banks and Federal Savings Associations, Department and Division Heads, All Examining Personnel, and Other Interested Parties

Summary

The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) have published a final rule in the Federal Register that permits certain banking organizations to implement on January 1, 2020, simplifications to the capital rule that were finalized on July 22, 2019. The July 22, 2019, final rule titled “Regulatory Capital: Simplifications to the Capital Rule Pursuant to the Economic Growth and Regulatory Paperwork Reduction Act of 1996” (Capital Simplifications Final Rule) initially provided an April 1, 2020, implementation date. It applies to banking organizations that are not subject to the advanced approaches capital rule, which generally applies to banks that are part of banking organizations with $250 billion or more in total consolidated assets or $10 billion or more in total consolidated foreign financial exposure.

Banking organizations not subject to the advanced approaches capital rule are permitted to implement the simplifications in the Capital Simplifications Final Rule for the quarter beginning January 1, 2020, or to wait until the quarter beginning April 1, 2020.

Note for Community Banks

The Capital Simplifications Final Rule applies to all national banks and federal savings associations that are not subject to the advanced approaches capital rule, including community banks.

Highlights

This final rule

  • permits national banks and federal savings associations that are not subject to the advanced approaches capital rule to implement the simplifications in the Capital Simplifications Final Rule for the quarter beginning January 1, 2020.
  • provides that if a non-advanced approaches national bank or federal savings association elects to adopt these simplifications for the quarter beginning January 1, 2020, it must adopt all of the simplifications for that quarter and thereafter. 
  • provides that all non-advanced approaches national banks and federal savings associations must implement the capital treatment under the Capital Simplifications Final Rule for the reporting period beginning on April 1, 2020.

The simplifications in the Capital Simplifications rule are described in more detail in OCC Bulletin 2019-34, “Simplifications to the Capital Rule: Final Rule.”

Further Information

Please contact Mark Ginsberg, Senior Risk Expert, Capital Policy Division, at (202) 649-6370; or Carl Kaminski, Special Counsel, Chief Counsel’s Office, at (202) 649-5490.

 

Jonathan V. Gould
Senior Deputy Comptroller and Chief Counsel

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