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Retention of Certain Existing Transition Provisions for Banking Organizations That Are Not Subject to the Advanced Approaches Capital Rules

Regulatory Capital Rules

Retention of Certain Existing Transition Provisions for Banking Organizations That Are Not Subject to the Advanced Approaches Capital Rules

August 22, 2017

Summary:

The federal bank regulatory agencies (the agencies) jointly have issued a notice of proposed rulemaking (NPR) to extend the current treatment under the regulatory capital rules for certain regulatory capital deductions and risk weights as well as certain minority interest requirements for banking organizations not subject to the advanced approaches.

Statement of Applicability to Institutions with Total Assets Under $1 Billion: This Financial Institution Letter is applicable to all banks not subject to the advanced approaches capital rules.

Highlights:

The NPR proposes to extend the current treatment for regulatory capital deductions and risk weights for the following items:

  • Mortgage servicing assets;
  • Deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks;
  • Significant investments in the capital of unconsolidated financial institutions in the form of common stock;
  • Non-significant investments in the capital of unconsolidated financial institutions; and
  • Significant investments in the capital of unconsolidated financial institutions that are not in the form of common stock.

The NPR proposes to extend the current treatment of common equity tier 1 minority interest, tier 1 minority interest, and total capital minority interest exceeding the regulatory capital rules' minority interest limitations.

Distribution:

  • FDIC-Supervised Banks (Commercial and Savings)

Suggested Routing:

  • Chief Executive Officer
  • Chief Financial Officer
  • Chief Risk Officer

Paper copies may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).

Attachment(s)

Last Updated: August 22, 2017