Capital Calculation Simplification Rule Finalized by Regulatory Agencies

October 31, 2019

On Tuesday, the federal bank regulatory agencies finalized a rule that simplifies capital requirements for qualifying community banks by permitting them to adopt a simple leverage ratio in order to measure their capital adequacy. The community bank leverage ratio (CBLR) framework removes the risk-based capital reporting requirements for qualifying institutions that opt into the framework. The CBLR will first be available for banking organizations to use in their March 31, 2020 Call Report or Form FR Y-9C, as applicable. Qualifying institutions can opt into or out of the CBLR framework in a subsequent Call Report or FR-Y-9C.

The final ruling can be found here. We will be taking a closer look at the CBLR framework and considerations for qualifying institutions in our next newsletter….stay tuned!

If you would like to discuss these matters further, please contact your BNN advisor at 800.244.7444.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.