Agencies propose simplified Community Bank Leverage rule

The OCC, Fed, and FDIC published at 84 FR 3062 in Friday's Federal Register a notice of proposed rulemaking that would provide a simplified measure of capital adequacy for qualifying community banking organizations consistent with section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. Qualifying community banking organizations that comply with and elect to use the community bank leverage ratio (CBLR) framework and that maintain a CBLR greater than 9 percent would be considered to have met the capital requirements for the “well-capitalized” capital category under the agencies’ prompt corrective action (PCA) frameworks and would no longer be subject to the generally applicable capital rule. The proposed CBLR framework is a simple alternative methodology to measure capital adequacy for qualifying community banks. The proposal would provide material regulatory relief while maintaining safety and soundness in the banking system.

Also see OCC Bulletin 2019-6.