OCC, FRB and FDIC Finalize Revisions to the Regulatory Capital Rule

The Office of the Comptroller of the Currency ("OCC"), the Board of Governors of the Federal Reserve System ("FRB") and the FDIC (collectively, the "Agencies") announced finalization of revisions intended to clarify, correct and update certain provisions of the regulatory capital rule adopted by the Agencies in 2013. The revisions apply only to banking organizations that are subject to the Agencies' "advanced approaches" risk-based capital framework. "Advanced approaches banking organizations generally include those with $250 billion or more in total consolidated assets or $10 billion or more in on-balance-sheet foreign exposure; other banking organizations that opt in to the advanced approaches; and depository institution subsidiaries of banking organizations that trigger one of the aforementioned thresholds."

Highlights of the finalized revisions include: (i) clarification of the qualification criteria and calculation requirements for risk-weighted assets in order to facilitate the reviews of advanced approaches banking organizations seeking to exit parallel run; (ii) the clarification that all advanced approaches banking organizations are subject to the supplementary leverage ratio and the disclosure requirements for that ratio; and (iii) corrected typographical and technical errors in the advanced approaches sections of the regulatory capital rule.

Related news: Banking Agencies Finalize Revisions to Capital Rules Applicable to Advanced Approaches Banking Organizations (June 16, 2016).