FDIC Proposes to Amend Rules to Apply CBLR to Deposit Insurance Banks
FDIC issued a notice of proposed rulemaking (NPR) that would amend its deposit insurance assessment regulations to apply the community bank leverage ratio (CBLR) framework to the deposit insurance assessment system. Comments must be received on or before April 22, 2019. The proposed rule will require changes to Schedule RC-O of the Call Reports FFIEC 031, FFIEC 041, and FFIEC 051, which will be coordinated by FFIEC and addressed in a separate Federal Register notice.
FDIC, FED, and OCC (collectively, the US Agencies) recently issued an interagency proposal to implement the CBLR (the CBLR NPR). Under this proposal, FDIC would assess all banks that elect to use the CBLR framework (CBLR banks) as small banks. Through amendments to the assessment regulations and corresponding changes to the Consolidated Reports of Condition and Income (Call Report), CBLR banks would have the option of using either the:
- CBLR tangible equity or tier 1 capital for their assessment base calculation
- CBLR or the tier 1 leverage ratio for the leverage ratio that the FDIC uses to calculate an established small bank's assessment rate
Through this proposal, FDIC would also clarify that a CBLR bank that meets the definition of a custodial bank would have no change to its custodial bank deduction or reporting items required to calculate the deduction. Moreover, the assessment regulations would continue to reference the prompt corrective action (PCA) regulations for the definitions of capital categories used in the deposit insurance assessment system, with technical amendments to align with the CBLR NPR. To assist banks in understanding the effects of the NPR, FDIC plans to provide, on its website, an assessment estimation tool that estimates deposit insurance assessment amounts under the proposal.
Related Link: Federal Register Notice
Comment Due Date: April 22, 2019
Keywords: Americas, US, Banking, Community Banks, Leverage Ratio, CBLR Framework, Prompt Corrective Action, EGRRCP Act, Reporting, FFIEC 031, FFIEC 041, FFIEC 051, FDIC
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Related Articles
EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
MAS Amends Notice on Related Party Transactions of Banks
MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.
ECB Amends Guideline on Euro Short-Term Rate
ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.
EBA Consults on Standards Related to FRTB-SA
EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).
PRA Proposes Rules Related to IRB Approach for Credit Risk
PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.
BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK
The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.
FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks
FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.
OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks
OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.
EU Amends CRR and Securitization Regulation in Response to Pandemic
To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).
HM Treasury Announces G7 Agreement on Green Agenda Ahead of COP26
HM Treasury announced that G7 Finance Ministers and Central Bank Governors met ahead of COP 26, the 2021 UN Climate Change Conference, and agreed on green agenda.
