Dodd-Frank News Center

FDIC to propose simplified capital measurement for qualifying community banks

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation's Board of Directors has voted to propose a simpler method that qualifying community banks can use to measure their capital adequacy. The community bank leverage ratio framework will allow qualifying banks to satisfy generally applicable capital requirements, prompt corrective action well-capitalized ratio requirements, and all other applicable capital and leverage requirements with a single measurement.

The proposed regulation amendments are required by the Economic Growth, Regulatory Relief, and Consumer Protection Act, and the Federal Reserve Board and Office of the Comptroller of the Currency are also expected to approve the notice of proposed rulemaking. Comments on the proposal must be received within 60 days of its publication in the Federal Register.

McWilliams speaks in Chicago on simplifying capital rules for community banks

This story appeared in Bank Digest.  

Federal Deposit Insurance Corporation Chairman Jelena McWilliams spoke at the Federal Reserve Bank of Chicago Thirteenth Annual Community Bankers Symposium, entitled "Back to Basics," on Nov. 16, 2018. In her prepared remarks, McWilliams stressed the importance of community banks and said it was necessary to ensure that the regulatory regime for such banks is appropriately tailored. McWilliams said one area where she believed the rules for community banks are too complicated is regulatory capital.

McWilliams said she believed that "robust capital requirements do not need to be complex, particularly as they relate to community banks. The Basel III standards, which may be appropriate for internationally active banks, are unduly complex and unnecessary for community banks."

McWilliams said the first step in the process of simplifying the capital requirements for community banks is enacting the Community Bank Leverage Ratio, which will soon be voted on by the FDIC Board. She said that, "Under the proposed rule, a qualifying bank with less than $10 billion in assets will not have to comply with the existing risk-based capital requirements if the bank meets a simple ratio of tangible equity to total assets."

Text of Economic Growth, Regulatory Relief, and Consumer Protection Act released

This story appeared in Bank Digest. 

Senators have released the text of the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155), bipartisan legislation that is the result of an agreement announced earlier this month on legislative proposals to improve the nation’s financial regulatory framework and promote economic growth. 

According to a Senate Banking Committee majority press release, the bill “right-sizes regulation for smaller financial institutions and includes important consumer protections for veterans, senior citizens and victims of fraud.” The release said the bill will also “improve our nation’s financial regulatory framework for Main Street banks, encouraging economic growth in local communities.”

 

Financial Services Committee holds markup hearing

This story appeared in Bank Digest. 

The House Financial Services Committee held a full committee markup on Nov. 14, 2017, to begin consideration of 23 bills, including the Mortgage Choice Act of 2017 (H.R. 1153), the Iranian Leadership Asset Transparency Act (H.R. 1638), the Investor Clarity and Bank Parity Act (H.R. 3093), and the Securing Access to Affordable Mortgages Act (H.R. 3221). 

According to the prepared opening remarks of Chairman Jeb Hensarling (R-Texas), the bills generally “will increase investment opportunities for more Americans. They will provide smaller businesses with greater access to the capital markets so those businesses can grow and create jobs. And certainly, they will deliver much-needed regulatory relief to community banks and credit unions so those Main Street financial institutions can better serve their customers.” 

But in her prepared opening remarks, Ranking Member Maxine Waters (D-Calif) said she was “disappointed that the Committee is moving forward today with marking up a large number of bills that could be harmful to consumers, investors and our economy.”