February 21, 2019

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

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