# FDIC FIL-57-2020: Temporary Exclusion of U.S. Treasury Securities and Deposits at Federal Reserve Banks from the Supplementary Leverage Ratio for Depository Institutions

> Federal · Agency guidance · In force

URL: https://www.frixlaw.com/law-library/statutes/FDIC_FIL20057

## Section

- **Citation:** FDIC FIL-57-2020
- **Heading:** Temporary Exclusion of U.S. Treasury Securities and Deposits at Federal Reserve Banks from the Supplementary Leverage Ratio for Depository Institutions
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** FDIC Financial Institution Letters / Temporary Exclusion of U.S. Treasury Securities and Deposits at Federal Reserve Banks from the Supplementary Leverage Ratio for Depository Institutions

## Text

32980
Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations
not deviations. Awards to foreign
entities are not subject to this section.
(2) A single-case deviation is a
deviation which applies to one financial
assistance transaction and one
applicant, recipient, or subrecipient
only.
(3) A class deviation is a deviation
which applies to more than one
financial assistance transaction,
applicant, recipient, or subrecipient.
(b) Conditions for approval. The DOE/
NNSA officials specified in paragraph
(c) of this section may authorize a
deviation only upon a written
determination that the deviation is—
(1) Necessary to achieve program
objectives;
(2) Necessary to conserve public
funds;
(3) Otherwise essential to the public
interest; or
(4) Necessary to achieve equity.
(c) Approval procedures. (1) A
deviation request must be in writing and
must be submitted to the responsible
DOE/NNSA Contracting Officer. An
applicant for a subaward or a
subrecipient shall submit any such
request through the recipient.
(2) Except as provided in paragraph
(c)(3) of this section—
(i) A single-case deviation may be
authorized by the responsible HCA.
(ii) A class deviation may be
authorized by the Director, Office of
Acquisition Management, for DOE
actions, and the Deputy Associate
Administrator for the Office of
Acquisition and Project Management for
NNSA, for NNSA actions, or designee.
(3) Whenever the approval of OMB,
other Federal agency, or other DOE/
NNSA office is required to authorize a
deviation, the proposed deviation must
be submitted to the Director, Office of
Acquisition Management, for DOE
actions, and the Deputy Associate
Administrator for the Office of
Acquisition and Project Management for
NNSA, for NNSA actions, or designee
for concurrence prior to submission to
the authorizing official.
her Federal agency, or other DOE/
NNSA office is required to authorize a
deviation, the proposed deviation must
be submitted to the Director, Office of
Acquisition Management, for DOE
actions, and the Deputy Associate
Administrator for the Office of
Acquisition and Project Management for
NNSA, for NNSA actions, or designee
for concurrence prior to submission to
the authorizing official.
(d) Notice. Whenever a request for a
class deviation is approved, DOE/NNSA
will identify this class deviation (as
applicable) in the Notice of Funding
Opportunity(s) that may be affected.
(e) Subawards. A recipient may use a
deviation in a subaward only with the
prior written approval of a DOE/NNSA
Contracting Officer.
[FR Doc. 2020–10577 Filed 5–29–20; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF TREASURY
Office of the Comptroller of the
Currency
12 CFR Parts 3 and 6
[Docket No. OCC–2020–0013]
RIN 1557–AE85
FEDERAL RESERVE SYSTEM
12 CFR Parts 208 and 217
[Regulations H and Q; Docket No. R–1718]
RIN 7100–AF91
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 324
RIN 3064–AF44
Regulatory Capital Rule: Temporary
Exclusion of U.S. Treasury Securities
and Deposits at Federal Reserve
Banks From the Supplementary
Leverage Ratio for Depository
Institutions
AGENCY: Office of the Comptroller of the
Currency (OCC), Board of Governors of
the Federal Reserve System (Board), and
Federal Deposit Insurance Corporation
(FDIC).
ACTION: Interim final rule and request
for comment.
SUMMARY: In light of recent disruptions
in economic conditions caused by the
coronavirus disease 2019 and strains in
U.S. financial markets, the OCC, the
Board, and the FDIC (together, the
agencies) are issuing an interim final
rule that temporarily revises the
supplementary leverage ratio
calculation for depository institutions.
Under the interim final rule, any
depository institution subsidiary of a
U.S
f recent disruptions
in economic conditions caused by the
coronavirus disease 2019 and strains in
U.S. financial markets, the OCC, the
Board, and the FDIC (together, the
agencies) are issuing an interim final
rule that temporarily revises the
supplementary leverage ratio
calculation for depository institutions.
Under the interim final rule, any
depository institution subsidiary of a
U.S. global systemically important bank
holding company or any depository
institution subject to Category II or
Category III capital standards may elect
to exclude temporarily U.S. Treasury
securities and deposits at Federal
Reserve Banks from the supplementary
leverage ratio denominator.
Additionally, under this interim final
rule, any depository institution making
this election must request approval from
its primary Federal banking regulator
prior to making certain capital
distributions so long as the exclusion is
in effect. The interim final rule is
effective as of the date of Federal
Register publication and will remain in
effect through March 31, 2021. The
agencies are adopting this interim final
rule to allow depository institutions that
elect to opt into this treatment
additional flexibility to act as financial
intermediaries during this period of
financial disruption. The tier 1 leverage
ratio is not affected by this interim final
rule.
DATES:
Effective date: This rule is effective on
June 1, 2020.
Comment date: Comments on the
interim final rule must be received no
later than July 16, 2020.
ADDRESSES:
OCC: Commenters are encouraged to
submit comments through the Federal
eRulemaking Portal or email, if possible.
Please use the title ‘‘Regulatory Capital
Rule: Temporary Exclusion of U.S.
Treasury Securities and Deposits at
Federal Reserve Banks from the
Supplementary Leverage Ratio’’ to
facilitate the organization and
distribution of the comments
no
later than July 16, 2020.
ADDRESSES:
OCC: Commenters are encouraged to
submit comments through the Federal
eRulemaking Portal or email, if possible.
Please use the title ‘‘Regulatory Capital
Rule: Temporary Exclusion of U.S.
Treasury Securities and Deposits at
Federal Reserve Banks from the
Supplementary Leverage Ratio’’ to
facilitate the organization and
distribution of the comments. You may
submit comments by any of the
following methods:
• Federal eRulemaking Portal—
Regulations.gov Classic or
Regulations.gov Beta:
Regulations.gov Classic: Go to https://
www.regulations.gov/. Enter ‘‘Docket ID
OCC–2020–0013’’ in the Search Box and
click ‘‘Search.’’ Click on ‘‘Comment
Now’’ to submit public comments. For
help with submitting effective
comments please click on ‘‘View
Commenter’s Checklist.’’ Click on the
‘‘Help’’ tab on the Regulations.gov home
page to get information on using
Regulations.gov, including instructions
for submitting public comments.
Regulations.gov Beta: Go to https://
beta.regulations.gov/ or click ‘‘Visit
New Regulations.gov Site’’ from the
Regulations.gov Classic homepage.
Enter ‘‘Docket ID OCC–2020–0013’’ in
the Search Box and click ‘‘Search.’’
Public comments can be submitted via
the ‘‘Comment’’ box below the
displayed document information or by
clicking on the document title and then
clicking the ‘‘Comment’’ box on the top-
left side of the screen. For help with
submitting effective comments please
click on ‘‘Commenter’s Checklist.’’ For
assistance with the Regulations.gov Beta
site, please call (877) 378–5457 (toll
free) or (703) 454–9859 Monday–Friday,
9 a.m.–5 p.m. ET or email regulations@
erulemakinghelpdesk.com.
• Email: regs.comments@
occ.treas.gov.
• Mail: Chief Counsel’s Office,
Attention: Comment Processing, Office
of the Comptroller of the Currency, 400
7th Street SW, suite 3E–218,
Washington, DC 20219.
• Hand Delivery/Courier: 400 7th
Street, SW, suite 3E–218, Washington,
DC 20219
(toll
free) or (703) 454–9859 Monday–Friday,
9 a.m.–5 p.m. ET or email regulations@
erulemakinghelpdesk.com.
• Email: regs.comments@
occ.treas.gov.
• Mail: Chief Counsel’s Office,
Attention: Comment Processing, Office
of the Comptroller of the Currency, 400
7th Street SW, suite 3E–218,
Washington, DC 20219.
• Hand Delivery/Courier: 400 7th
Street, SW, suite 3E–218, Washington,
DC 20219.
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• Fax: (571) 465–4326.
Instructions: You must include
‘‘OCC’’ as the agency name and ‘‘Docket
ID OCC–2020–0013’’ in your comment.
In general, the OCC will enter all
comments received into the docket and
publish the comments on the
Regulations.gov website without
change, including any business or
personal information provided such as
name and address information, email
addresses, or phone numbers.
Comments received, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. Do not
include any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
You may review comments and other
related materials that pertain to this
rulemaking action by any of the
following methods:
• Viewing Comments Electronically—
Regulations.gov Classic or
Regulations.gov Beta:
Regulations.gov Classic: Go to https://
www.regulations.gov/. Enter ‘‘Docket ID
OCC–2020–0013’’ in the Search box and
click ‘‘Search.’’ Click on ‘‘Open Docket
Folder’’ on the right side of the screen.
Comments and supporting materials can
be viewed and filtered by clicking on
‘‘View all documents and comments in
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gulations.gov Classic: Go to https://
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OCC–2020–0013’’ in the Search box and
click ‘‘Search.’’ Click on ‘‘Open Docket
Folder’’ on the right side of the screen.
Comments and supporting materials can
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on the ‘‘Help’’ tab on the
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The docket may be viewed after the
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Regulations.gov Beta: Go to https://
beta.regulations.gov/ or click ‘‘Visit
New Regulations.gov Site’’ from the
Regulations.gov Classic homepage.
Enter ‘‘Docket ID OCC–2020–0013’’ in
the Search Box and click ‘‘Search.’’
Click on the ‘‘Comments’’ tab.
Comments can be viewed and filtered
by clicking on the ‘‘Sort By’’ drop-down
on the right side of the screen or the
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be viewed by clicking on the
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clicking on the ‘‘Sort By’’ drop-down on
the right side of the screen or the
‘‘Refine Results’’ options on the left side
of the screen.’’ For assistance with the
Regulations.gov Beta site, please call
(877) 378–5457 (toll free) or (703) 454–
9859 Monday–Friday, 9 a.m.–5 p.m. ET
or email regulations@
erulemakinghelpdesk.com.
The docket may be viewed after the
close of the comment period in the same
manner as during the comment period.
Board: You may submit comments,
identified by Docket No. R–1718; RIN
7100–AF91, by any of the following
methods:
• Agency website: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
http://www.federalreserve.gov/apps/
foia/proposedregs.aspx.
• Email: regs.comments@
federalreserve.gov. Include docket and
RIN numbers in the subject line of the
message.
• FAX: (202) 452–3819 or (202) 452–
3102
tified by Docket No. R–1718; RIN
7100–AF91, by any of the following
methods:
• Agency website: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
http://www.federalreserve.gov/apps/
foia/proposedregs.aspx.
• Email: regs.comments@
federalreserve.gov. Include docket and
RIN numbers in the subject line of the
message.
• FAX: (202) 452–3819 or (202) 452–
3102.
• Mail: Ann E. Misback, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue NW, Washington,
DC 20551.
All public comments will be made
available on the Board’s website at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm as
submitted, unless modified for technical
reasons or to remove personally
identifiable information at the
commenter’s request. Public comments
may also be viewed electronically or in
paper in Room 146, 1709 New York
Avenue NW, Washington, DC 20006,
between 9:00 a.m. and 5:00 p.m. on
weekdays. For security reasons, the
Board requires that visitors make an
appointment to inspect comments. You
may do so by calling (202) 452–3684.
FDIC: You may submit comments,
identified by RIN 3064–AF44, by any of
the following methods:
• Agency website: https://
www.fdic.gov/regulations/laws/federal.
Follow instructions for submitting
comments on the Agency website.
• Email: Comments@FDIC.gov.
Include ‘‘RIN 3064–AF44’’ on the
subject line of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments/RIN
3064–AF44, Federal Deposit Insurance
Corporation, 550 17th Street NW,
Washington, DC 20429.
• Hand Delivery/Courier: Comments
may be hand delivered to the guard
station at the rear of the 550 17th Street
building (located on F Street) on
business days between 7 a.m. and 5 p.m.
All comments received must include the
agency name (FDIC) and RIN 3064–
AF44 and will be posted without change
to https://www.fdic.gov/regulations/
laws/federal, including any personal
information provided
Hand Delivery/Courier: Comments
may be hand delivered to the guard
station at the rear of the 550 17th Street
building (located on F Street) on
business days between 7 a.m. and 5 p.m.
All comments received must include the
agency name (FDIC) and RIN 3064–
AF44 and will be posted without change
to https://www.fdic.gov/regulations/
laws/federal, including any personal
information provided.
FOR FURTHER INFORMATION CONTACT:
OCC: Margot Schwadron, Director, or
Venus Fan, Risk Expert, Capital and
Regulatory Policy, (202) 649–6370; or
Carl Kaminski, Special Counsel, or
Chris Rafferty, Senior Attorney, Chief
Counsel’s Office, (202) 649–5490, for
persons who are deaf or hearing
impaired, TTY, (202) 649–5597, Office
of the Comptroller of the Currency, 400
7th Street SW, Washington, DC 20219.
Board: Anna Lee Hewko, Associate
Director, (202) 530–6360; Constance
Horsley, Deputy Associate Director,
(202) 452–5239; Elizabeth MacDonald,
Manager, (202) 475–6316; Sviatlana
Phelan, Lead Financial Institution
Policy Analyst, (202) 912–4306; or
Christopher Appel, Senior Financial
Institution Policy Analyst II, (202) 973–
6862, Division of Supervision and
Regulation; Benjamin McDonough,
Assistant General Counsel, (202) 452–
2036; Mark Buresh, Senior Counsel,
(202) 452–5270; Andrew Hartlage,
Counsel, (202) 452–6483; Jonah Kind,
Senior Attorney, (202) 452–2045; or
Jasmin Keskinen, Legal Assistant, (202)
475–6650, Legal Division, Board of
Governors of the Federal Reserve
System, 20th Street and Constitution
Avenue NW, Washington, DC 20551.
Users of Telecommunication Device for
Deaf (TDD) only, call (202) 263–4869.
FDIC: Bobby R
Senior Counsel,
(202) 452–5270; Andrew Hartlage,
Counsel, (202) 452–6483; Jonah Kind,
Senior Attorney, (202) 452–2045; or
Jasmin Keskinen, Legal Assistant, (202)
475–6650, Legal Division, Board of
Governors of the Federal Reserve
System, 20th Street and Constitution
Avenue NW, Washington, DC 20551.
Users of Telecommunication Device for
Deaf (TDD) only, call (202) 263–4869.
FDIC: Bobby R. Bean, Associate
Director, bbean@fdic.gov; Benedetto
Bosco, Chief, Capital Policy Section,
bbosco@fdic.gov; Noah Cuttler, Senior
Policy Analyst, ncuttler@fdic.gov;
regulatorycapital@fdic.gov; Capital
Markets Branch, Division of Risk
Management Supervision, (202) 898–
6888; or Michael Phillips, Counsel,
mphillips@fdic.gov; Catherine Wood,
Counsel, cawood@fdic.gov; Francis Kuo,
Counsel, fkuo@fdic.gov; Supervision
and Legislation Branch, Legal Division,
Federal Deposit Insurance Corporation,
550 17th Street NW, Washington, DC
20429. For the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), (800) 925–4618.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. The Interim Final Rule
III. Impact Assessment
IV. Technical Amendments
V. Administrative Law Matters
A. Administrative Procedure Act
B. Congressional Review Act
C. Paperwork Reduction Act
D. Regulatory Flexibility Act
E. Riegle Community Development and
Regulatory Improvement Act of 1994
F. Use of Plain Language
G. Unfunded Mandates Act
I. Background
The spread of the coronavirus disease
2019 (COVID–19) has significantly and
adversely affected global financial
markets, including depository
institutions’ role as financial
intermediaries. In particular,
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Unfunded Mandates Act
I. Background
The spread of the coronavirus disease
2019 (COVID–19) has significantly and
adversely affected global financial
markets, including depository
institutions’ role as financial
intermediaries. In particular,
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1 See 84 FR 59230 (Nov. 1, 2019). Banking
organizations that are subject to Category II
standards include those with (1) at least $700
billion in total consolidated assets or (2) at least $75
billion in cross-jurisdictional activity and at least
$100 billion in total consolidated assets. Banking
organizations that are subject to Category III
standards include those with (1) at least $250
billion in average total consolidated assets or (2) at
least $100 billion in average total consolidated
assets and at least $75 billion in average total
nonbank assets, average weighted short-term
wholesale funding; or average off-balance sheet
exposure. See 12 CFR 217.2.
2 See 79 FR 24528 (May 1, 2014). The eSLR
standards, as adopted in 2014, applied to U.S. top-
tier bank holding companies with consolidated
assets over $700 billion or more than $10 trillion
in assets under custody, and depository institution
subsidiaries of holding companies that meet those
thresholds. The Board subsequently revised its
capital rule so that the applicability of the eSLR
standards is to bank holding companies identified
as U.S. GSIBs and their depository institution
subsidiaries. See 80 FR 49082 (August 14, 2015).
The banking organizations currently subject to the
eSLR standards are the same under either
applicability standard.
3 The agencies recently issued a final rule,
effective April 1, 2020, which implements section
402 of the Economic Growth, Regulatory Relief, and
Consumer Protection Act (EGRRCPA), 12 U.S.C
SIBs and their depository institution
subsidiaries. See 80 FR 49082 (August 14, 2015).
The banking organizations currently subject to the
eSLR standards are the same under either
applicability standard.
3 The agencies recently issued a final rule,
effective April 1, 2020, which implements section
402 of the Economic Growth, Regulatory Relief, and
Consumer Protection Act (EGRRCPA), 12 U.S.C.
1831o note, by amending the capital rule to allow
a banking organization that qualifies as a custodial
banking organization to exclude from total leverage
exposure deposits at qualifying central banks,
subject to limits (402 rule). 85 FR 4569 (January 27,
2020).
4 The Board recently issued an interim final rule
to revise, on a temporary basis for bank holding
companies, savings and loan holding companies,
and U.S. intermediate holding companies of foreign
banking organizations, the calculation of total
leverage exposure, the denominator of the
supplementary leverage ratio in the Board’s capital
rule, to exclude Treasuries and deposits at Federal
Reserve Banks. The exclusion will remain in effect
until March 31, 2021. 85 FR 20578 (April 14, 2020).
5 This scope is consistent with the Board’s recent
interim final rule to revise the supplementary
leverage ratio. See supra note 4.
6 An FDIC supervised institution must provide
this notice in writing to the appropriate FDIC
regional director of the FDIC Division of Risk
Management Supervision.
disruptions in financial markets, and
the resulting flight to liquid assets by
market participants, have caused
depository institutions’ balance sheets
to expand to accommodate inflows of
deposits. This balance sheet expansion
has contributed to depository
institutions making substantial deposits
in their accounts at Federal Reserve
Banks (deposits at Federal Reserve
Banks). In addition, customer draws on
credit lines and depository institutions’
holdings of significant amounts of U.S
have caused
depository institutions’ balance sheets
to expand to accommodate inflows of
deposits. This balance sheet expansion
has contributed to depository
institutions making substantial deposits
in their accounts at Federal Reserve
Banks (deposits at Federal Reserve
Banks). In addition, customer draws on
credit lines and depository institutions’
holdings of significant amounts of U.S.
Treasury securities (Treasuries) have
contributed to balance sheet expansion.
These trends are expected to continue
temporarily while depository
institutions and their customers respond
to disruptions in the financial markets.
For a depository institution subsidiary
of a U.S. global systemically important
bank holding company (GSIB), or a
depository institution subject to the
Category II or Category III capital
standards, the agencies’ regulatory
capital rule (capital rule) requires a
minimum supplementary leverage ratio
of 3 percent, measured as the ratio of a
depository institution’s tier 1 capital to
its total leverage exposure.1 Total
leverage exposure, the denominator of
the supplementary leverage ratio,
includes certain off-balance sheet
exposures in addition to on-balance
sheet assets.
GSIB depository institution
subsidiaries also are subject to enhanced
supplementary leverage ratio (eSLR)
standards established by the agencies in
2014.2 Under the eSLR standards, GSIB
depository institution subsidiaries must
maintain a 6-percent supplementary
leverage ratio to be considered ‘‘well
capitalized’’ under the prompt
corrective action (PCA) framework of
each agency.
In contrast to the risk-based capital
requirements in the capital rule, a
leverage ratio does not differentiate the
amount of capital required by the type
of exposure. Rather, a leverage ratio
places an upper bound on depository
institution leverage. A leverage ratio
protects against underestimating risk
and serves to complement the risk-based
capital requirements
mework of
each agency.
In contrast to the risk-based capital
requirements in the capital rule, a
leverage ratio does not differentiate the
amount of capital required by the type
of exposure. Rather, a leverage ratio
places an upper bound on depository
institution leverage. A leverage ratio
protects against underestimating risk
and serves to complement the risk-based
capital requirements. Under the
supplementary leverage ratio,
depository institutions include all on-
balance sheet assets, including
Treasuries and deposits at Federal
Reserve Banks, in their total leverage
exposure calculation.3
II. The Interim Final Rule
The ability of depository institutions
to hold certain assets, most notably
deposits at a Federal Reserve Bank and
Treasuries, is essential to market
functioning, financial intermediation,
and funding market activity,
particularly in periods of financial
uncertainty. In response to volatility
and market strains, the Federal Reserve
has taken a number of actions to support
market functioning and the flow of
credit to the economy. The response to
COVID–19 has notably increased the
size of the Federal Reserve’s balance
sheet and resulted in a large increase in
the amount of reserves in the banking
system. The agencies anticipate that the
Federal Reserve’s balance sheet may
continue to expand in the near term, as
customer deposits continue to expand,
and recently announced facilities to
support the flow of credit to households
and businesses begin or continue
operations. In addition, market
participants have liquidated a high
volume of assets, and customers have
drawn down credit lines and deposited
the cash proceeds with depository
institutions in recent weeks, further
increasing the size of depository
institutions’ balance sheets
and recently announced facilities to
support the flow of credit to households
and businesses begin or continue
operations. In addition, market
participants have liquidated a high
volume of assets, and customers have
drawn down credit lines and deposited
the cash proceeds with depository
institutions in recent weeks, further
increasing the size of depository
institutions’ balance sheets. Absent any
adjustments to the supplementary
leverage ratio, the resulting increase in
the size of depository institutions’
balance sheets may cause a sudden and
significant increase in the regulatory
capital needed to meet a depository
institution’s leverage ratio requirement.4
This is particularly the case for many of
the depository institutions subject to the
supplementary leverage ratio, which are
significant participants in financial
intermediation services, including as
clearing banks for dealers in the open
market operations of the Federal Open
Market Committee and as major
custodians of securities.
In order to facilitate depository
institutions’ significant increase in
reserve balances resulting from the
Federal Reserve’s asset purchases and
the establishment of various programs to
support the flow of credit to the
economy, as well as the need to
continue to accept exceptionally high
levels of customer deposits, the agencies
are issuing this interim final rule to
provide depository institutions subject
to the supplementary leverage ratio
(qualifying depository institutions) the
ability to exclude temporarily
Treasuries and deposits at Federal
Reserve Banks from total leverage
exposure through March 31, 2021
as well as the need to
continue to accept exceptionally high
levels of customer deposits, the agencies
are issuing this interim final rule to
provide depository institutions subject
to the supplementary leverage ratio
(qualifying depository institutions) the
ability to exclude temporarily
Treasuries and deposits at Federal
Reserve Banks from total leverage
exposure through March 31, 2021. For
example, depository institutions would
be able to exclude temporarily on-
balance sheet Treasuries that they hold,
including Treasuries that they have
borrowed and re-pledged in a repo-style
transaction, provided such Treasuries
are included in the depository
institution’s total leverage exposure
prior to the effect of the exclusion.5
Under the interim final rule, a
depository institution that opts into this
treatment (electing depository
institution) would be required to obtain
prior approval of distributions from its
primary Federal banking regulator. An
electing depository institution must
notify its primary Federal banking
regulator of its election within 30 days
after the interim final rule is effective.6
The primary Federal banking regulator
will consider a notice received from a
qualifying depository institution more
than 30 days after the effective date of
the interim final rule on a case-by-case
basis. The election will not affect the
electing depository institution’s ability
to pay distributions already declared or
to declare distributions for payment in
the second quarter of 2020. The prior
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the interim final rule on a case-by-case
basis. The election will not affect the
electing depository institution’s ability
to pay distributions already declared or
to declare distributions for payment in
the second quarter of 2020. The prior
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7 See 12 CFR 3.2 (defining ‘‘distribution’’) (OCC);
12 CFR 217.2 (defining ‘‘distribution’’) (Board); 12
CFR 324.2 (defining ‘‘distribution’’) (FDIC).
8 Additional limitations on distributions may
apply under 12 CFR part 3, subparts H and I; 12
CFR 5.46, 12 CFR part 5, subpart E; 12 CFR part
6; 12 CFR part 208, subparts A and D; 12 CFR part
303, subparts K and M. The restrictions set forth in
this interim final rule are in addition to, and
therefore do not supersede, any existing statutory or
regulatory limitations on making capital
distributions. For purposes of the FDIC’s PCA rules,
regarding capital distribution restrictions for
undercapitalized FDIC-supervised institutions, see
12 CFR 324.405.
9 Holding companies use dividends from their
subsidiaries for various purposes. For example,
dividends to the holding company can support the
efficient internal allocation of capital within a
holding company, allowing excess capital from one
subsidiary, such as the depository institution, to be
redeployed to other subsidiaries. As such, an
effective dividend strategy can both ensure the
safety and soundness of the depository institution
and promote the safety and soundness of the entire
banking organization.
10 Depository institutions that are required to
submit the OCC Reporting Form DFAST–14A on
April 6, 2021, or the FDIC DFAST–14A, have the
option to include these changes in their company-
run stress test results
uch, an
effective dividend strategy can both ensure the
safety and soundness of the depository institution
and promote the safety and soundness of the entire
banking organization.
10 Depository institutions that are required to
submit the OCC Reporting Form DFAST–14A on
April 6, 2021, or the FDIC DFAST–14A, have the
option to include these changes in their company-
run stress test results.
11 The instructions for Board’s FR Y–9C, Schedule
HC–R, Line Item 45 (Advanced approaches holding
companies only: Supplementary leverage ratio)
state that respondents must report the
supplementary leverage ratio from FFIEC 101
Schedule A, Table 2, Item 2.22. Therefore, revisions
to the FFIEC 101 regarding how to report the
supplementary leverage ratio would flow through to
the FR Y–9C. The Board plans to amend the
instructions for FR Y–9C as necessary.
12 This analysis takes into account the exclusion
of qualifying central bank deposits for custodial
banking organizations as provided under the capital
rule. As of April 1, 2020, custodial banking
organizations may exclude deposits with qualifying
foreign central banks, in addition to the exclusions
of deposits at Federal Reserve Banks provided
Continued
approval requirement applies to
distributions to be paid beginning in the
third quarter of 2020. The interim final
rule will terminate after March 31, 2021.
For purposes of reporting the
supplementary leverage ratio as of June
30, 2020, an electing depository
institution may reflect the exclusion of
Treasuries and deposits at Federal
Reserve Banks from total leverage
exposure as if this interim final rule had
been in effect for the entire second
quarter of 2020. Because the
supplementary leverage ratio is
calculated as an average over the
quarter, this will have the effect of
maximizing the effect of the exclusion
starting in the second quarter of 2020
n may reflect the exclusion of
Treasuries and deposits at Federal
Reserve Banks from total leverage
exposure as if this interim final rule had
been in effect for the entire second
quarter of 2020. Because the
supplementary leverage ratio is
calculated as an average over the
quarter, this will have the effect of
maximizing the effect of the exclusion
starting in the second quarter of 2020.
The agencies are not making similar
adjustments to risk-based capital ratios
because Treasuries and deposits at
Federal Reserve Banks are risk-weighted
at zero percent.
Under the interim final rule,
beginning in the third quarter of 2020,
an electing depository institution will
be required to obtain approval from its
primary Federal banking regulator
before making a distribution 7 or
creating an obligation to make such a
distribution so long as the temporary
exclusion is in effect. The primary
Federal banking regulator will endeavor
to respond within 14 days to the request
with an approval, disapproval, or
request for additional information. This
prior-approval requirement will help
support the objective of the interim final
rule to strengthen the ability of electing
depository institutions to continue
taking deposits, lending, and
conducting other financial
intermediation activities during this
period of stress.
When evaluating any such request,
the primary Federal banking regulator
will consider all relevant factors,
including whether any distribution
would be contrary to safety and
soundness and limitations on
distributions in the existing rules
applicable to the electing depository
institution.8 Factors that the primary
Federal banking regulator will take into
account include the depository
institution’s current earnings and
forecasts, the nature, purpose, and
extent of the request, and the particular
circumstances giving rise to the
request.9 For example, the primary
Federal banking regulator may consider
the expected future capital needs of the
depository institution a
ution.8 Factors that the primary
Federal banking regulator will take into
account include the depository
institution’s current earnings and
forecasts, the nature, purpose, and
extent of the request, and the particular
circumstances giving rise to the
request.9 For example, the primary
Federal banking regulator may consider
the expected future capital needs of the
depository institution and its ability to
meet capital requirements after the
temporary relief provided under this
interim final rule expires. The
requirement that a depository
institution request approval for
distributions is not intended to prohibit
electing depository institutions from
paying dividends in all cases. Rather,
the primary Federal banking regulator
will evaluate each request to ensure that
the electing depository institution will
be able to continue supporting the
economy by lending and accepting
deposits consistent with the goal of this
interim final rule.
The interim final rule revises the
measure of total leverage exposure on a
temporary basis for electing depository
institutions for the limited purposes of
the agencies’ capital rule. Depository
institutions subject to supplementary
leverage ratio requirements report their
supplementary leverage ratios on the
Consolidated Reports of Condition and
Income (Call Reports), Schedule RC–R
and Regulatory Capital Reporting for
Institutions Subject to the Advanced
Capital Adequacy Framework (FFIEC
101), Schedule A.10 The agencies expect
in the near future to make all necessary
revisions to the Call Reports and the
FFIEC 101, Schedule A to implement
the interim final rule’s revisions to the
supplementary leverage ratio for
electing depository institutions and to
require such institutions to disclose the
election publicly.11 In addition, the
interim final rule provides for the
necessary modifications of the
disclosure requirements of section 173
of the capital rule to reflect the optional
temporary exclusion provided by the
interim final rule
im final rule’s revisions to the
supplementary leverage ratio for
electing depository institutions and to
require such institutions to disclose the
election publicly.11 In addition, the
interim final rule provides for the
necessary modifications of the
disclosure requirements of section 173
of the capital rule to reflect the optional
temporary exclusion provided by the
interim final rule.
The agencies seek comment on all
aspects of this interim final rule.
Question 1: Discuss the advantages
and disadvantages of removing
temporarily Treasuries and deposits at
Federal Reserve Banks from total
leverage exposure for depository
institutions. How does the interim final
rule support the objectives of facilitating
financial intermediation by depository
institutions? How does the interim final
rule affect the concurrent objective of
safety and soundness? How would the
end date of March 31, 2021, for the
exclusion under the interim final rule be
consistent with the objectives of the
rule, or what earlier or later end date
should be used instead?
Question 2: What additional assets or
exposure types should the agencies
consider to exclude temporarily from
total leverage exposure in order to
achieve the interim final rule’s
objectives? For example, what
consideration should the agencies give
to excluding deposits at certain foreign
central banks, foreign sovereign debt
instruments, or exposures guaranteed by
the U.S. Federal Government and why?
Which specific repo-style transactions
that would support depository
institutions’ role serving as financial
intermediaries should the agencies
exclude, if any, and why?
III. Impact Assessment
The supplementary leverage ratio
requirement generally has not prevented
depository institutions from
accommodating customer deposit
inflows or serving as financial
intermediaries. However, as a result of
the spread of COVID–19, stress has
materialized in numerous financial
markets
serving as financial
intermediaries should the agencies
exclude, if any, and why?
III. Impact Assessment
The supplementary leverage ratio
requirement generally has not prevented
depository institutions from
accommodating customer deposit
inflows or serving as financial
intermediaries. However, as a result of
the spread of COVID–19, stress has
materialized in numerous financial
markets. Disruptions in financial
markets have resulted in expansion of
depository institutions’ balance sheets
to accommodate inflows of deposits. In
particular, using data from the fourth
quarter of 2019, the agencies expect that
the interim final rule would temporarily
decrease binding tier 1 capital
requirements by approximately $55
billion for depository institutions if all
depository institutions subject to the
supplementary leverage ratio elect to
opt in.12 In light of the exclusions under
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under this interim final rule. (See supra note 3.) In
addition, the analysis in this interim final rule uses
balances due from banks in foreign countries and
foreign central banks, as reported under line item
3 of Schedule RC–A of the Call Report. Line item
3 of Schedule RC–A may slightly overstate amounts
eligible for exclusion by custodial banking
organizations because it includes balances due from
banks in foreign countries and foreign central banks
that are not eligible for exclusion under this interim
final rule.
13 12 CFR 6.4(b) (OCC); 12 CFR 208.43(b) (Board);
12 CFR 324.403(b) (FDIC).
14 78 FR 62018 (Oct. 11, 2013).
15 5 U.S.C. 553.
16 5 U.S.C. 553(b)(B).
17 5 U.S.C. 553(b)(B); 553(d)(3).
18 5 U.S.C. 553(d).
19 5 U.S.C. 553(d)(1)
zations because it includes balances due from
banks in foreign countries and foreign central banks
that are not eligible for exclusion under this interim
final rule.
13 12 CFR 6.4(b) (OCC); 12 CFR 208.43(b) (Board);
12 CFR 324.403(b) (FDIC).
14 78 FR 62018 (Oct. 11, 2013).
15 5 U.S.C. 553.
16 5 U.S.C. 553(b)(B).
17 5 U.S.C. 553(b)(B); 553(d)(3).
18 5 U.S.C. 553(d).
19 5 U.S.C. 553(d)(1).
this interim final rule, this temporary
reduction in capital requirements is
expected to increase leverage exposure
capacity at depository institutions by
approximately $1.2 trillion. In
particular, the agencies expect that the
increase in leverage exposure capacity
will strengthen the depository
institutions’ ability to continue to accept
customer deposits, and therefore ensure
that depository institutions remain able
to fulfill this important function.
Depository institutions that opt into
the temporary exclusion of Treasuries
and deposits at Federal Reserve Banks
from the denominator of the
supplementary leverage ratio will likely
incur some costs associated with
making changes to internal systems or
processes for managing supplementary
leverage ratio compliance. However,
these costs are likely to be very small.
Aside from increases in balance
sheets caused by increases in customer
deposits, the balance sheets of
depository institutions also have
increased as households and businesses
draw down credit lines. If depository
institutions become constrained by
supplementary leverage ratio
requirements, this could adversely affect
their ability to intermediate in financial
markets and hamper their ability to
provide credit to households and
businesses. Therefore, the temporary
increase in leverage exposure capacity
could have countercyclical benefits as it
supports financial market liquidity and
increases depository institutions’
lending capacities in a time of economic
stress
irements, this could adversely affect
their ability to intermediate in financial
markets and hamper their ability to
provide credit to households and
businesses. Therefore, the temporary
increase in leverage exposure capacity
could have countercyclical benefits as it
supports financial market liquidity and
increases depository institutions’
lending capacities in a time of economic
stress.
Although a temporary increase in
leverage exposure capacity could lead to
an increase in overall leverage in the
banking system, the temporary
exclusion of Treasuries and deposits at
Federal Reserve Banks will help
alleviate ongoing stresses on the
financial system and the real economy
arising from COVID–19. The agencies
will closely monitor the balance sheets
of electing depository institutions in the
coming months while the exclusion is
in effect with a particular view toward
any resulting increase in risks in
conjunction with this interim final rule.
IV. Technical Amendments
Finally, the agencies are making
technical corrections and clarifications
to the Prompt Corrective Action
regulations. In their respective Prompt
Corrective Action regulations, the
agencies are correcting an unintentional
omission of ‘‘Category III’’ to clarify that
depository institutions subject to
Category III standards must meet their
minimum supplementary leverage ratio
requirement of 3 percent in order to be
considered ‘‘adequately capitalized.’’ 13
When the minimum supplementary
leverage ratio requirement was initially
added to the capital rule in 2013, the
term ‘‘advanced approaches’’ banking
organizations referred to all banking
organizations that were subject to the
supplementary leverage ratio.14
However, the tailoring rule that became
effective on December 31, 2019,
redefined ‘‘advanced approaches.’’
Under that rule, advanced approaches
banking organizations now include a
smaller group of banking organizations
(i.e., banking organizations subject to
Category I and II standards), while
certa
ed to all banking
organizations that were subject to the
supplementary leverage ratio.14
However, the tailoring rule that became
effective on December 31, 2019,
redefined ‘‘advanced approaches.’’
Under that rule, advanced approaches
banking organizations now include a
smaller group of banking organizations
(i.e., banking organizations subject to
Category I and II standards), while
certain banking organizations are no
longer defined as advanced approaches
but remain subject to the supplementary
leverage ratio requirements (i.e.,
banking organizations subject to
Category III standards). The agencies did
not intend to change the applicability of
the minimum supplementary leverage
ratio requirement in their respective
Prompt Corrective Action regulations.
Rather, the Prompt Corrective Action
requirement should continue to apply to
all banking organizations that are
required to calculate the supplementary
leverage ratio. Therefore, consistent
with the capital rule, the agencies are
now clarifying that the supplementary
leverage ratio provisions in their
respective Prompt Corrective Action
regulations apply to all banking
organizations subject to Category III
standards, in addition to banking
organizations subject to Category I and
II standards.
V. Administrative Law Matters
A. Administrative Procedure Act
The agencies are issuing the interim
final rule and its accompanying
technical edits without prior notice and
the opportunity for public comment and
the delayed effective date ordinarily
prescribed by the Administrative
Procedure Act (APA).15 Pursuant to
section 553(b)(B) of the APA, general
notice and the opportunity for public
comment are not required with respect
to a rulemaking when an ‘‘agency for
good cause finds (and incorporates the
finding and a brief statement of reasons
therefor in the rules issued) that notice
and public procedure thereon are
impracticable, unnecessary, or contrary
to the public interest.’’ 16
The agencies believe that the public
inte
A, general
notice and the opportunity for public
comment are not required with respect
to a rulemaking when an ‘‘agency for
good cause finds (and incorporates the
finding and a brief statement of reasons
therefor in the rules issued) that notice
and public procedure thereon are
impracticable, unnecessary, or contrary
to the public interest.’’ 16
The agencies believe that the public
interest is best served by implementing
the interim final rule immediately upon
publication in the Federal Register. As
discussed above, the spread of COVID–
19 has slowed economic activity in
many countries, including the United
States. Specifically, the disruptions in
financial markets have caused
depository institutions to receive
inflows of deposits—contributing to the
increase of deposits at Federal Reserve
Banks—and to hold significant amounts
of Treasuries. Notably, these deposits at
Federal Reserve Banks and holdings of
Treasuries are essential to the normal
functioning of the financial markets,
especially in times of stress. If
depository institutions cannot sustain
the rapid increase in deposits at Federal
Reserve Banks and holdings of
Treasuries, the financial markets would
experience a marked decline in
financial intermediation and a further
increase in general market volatility.
Because the interim final rule will
mitigate these potential negative effects,
the agencies find that there is good
cause consistent with the public interest
to issue the rule without advance notice
and comment.17 This final rule makes
additional technical edits and
corrections to more clearly articulate the
scope of the supplementary leverage
ratio requirements. Because the
additional technical edits and
corrections are not substantive, the
agencies find there is good cause to
issue the rule without advance notice
and comment
ublic interest
to issue the rule without advance notice
and comment.17 This final rule makes
additional technical edits and
corrections to more clearly articulate the
scope of the supplementary leverage
ratio requirements. Because the
additional technical edits and
corrections are not substantive, the
agencies find there is good cause to
issue the rule without advance notice
and comment.
The APA also requires a 30-day
delayed effective date, except for (1)
substantive rules which grant or
recognize an exemption or relieve a
restriction; (2) interpretative rules and
statements of policy; or (3) as otherwise
provided by the agency for good
cause.18 Because the interim final rule
will provide temporary capital relief,
the interim final rule is exempt from the
APA’s delayed effective date
requirement.19 Additionally, the
agencies find good cause to publish the
technical edits and corrections, which
clarify the scope of the supplementary
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20 5 U.S.C. 801 et seq.
21 5 U.S.C. 801(a)(3).
22 5 U.S.C. 804(2).
23 5 U.S.C. 808.
leverage ratio for purposes of the
Prompt Corrective Action regulations,
with an immediate effective date for the
same reasons set forth above under the
discussion of section 553(b)(B) of the
APA.
While the agencies believe that there
is good cause to issue this interim final
rule without advance notice and
comment and with an immediate
effective date, the agencies are
interested in the views of the public and
request comment on all aspects of the
interim final rule.
B
diate effective date for the
same reasons set forth above under the
discussion of section 553(b)(B) of the
APA.
While the agencies believe that there
is good cause to issue this interim final
rule without advance notice and
comment and with an immediate
effective date, the agencies are
interested in the views of the public and
request comment on all aspects of the
interim final rule.
B. Congressional Review Act
For purposes of Congressional Review
Act, the OMB makes a determination as
to whether a final rule constitutes a
‘‘major’’ rule.20 If a rule is deemed a
‘‘major rule’’ by the Office of
Management and Budget (OMB), the
Congressional Review Act generally
provides that the rule may not take
effect until at least 60 days following its
publication.21
The Congressional Review Act defines
a ‘‘major rule’’ as any rule that the
Administrator of the Office of
Information and Regulatory Affairs of
the OMB finds has resulted in or is
likely to result in (A) an annual effect
on the economy of $100,000,000 or
more; (B) a major increase in costs or
prices for consumers, individual
industries, Federal, State, or local
government agencies or geographic
regions, or (C) significant adverse effects
on competition, employment,
investment, productivity, innovation, or
on the ability of United States–based
enterprises to compete with foreign-
based enterprises in domestic and
export markets.22
For the same reasons set forth above,
the agencies are adopting the interim
final rule without the delayed effective
date generally prescribed under the
Congressional Review Act
adverse effects
on competition, employment,
investment, productivity, innovation, or
on the ability of United States–based
enterprises to compete with foreign-
based enterprises in domestic and
export markets.22
For the same reasons set forth above,
the agencies are adopting the interim
final rule without the delayed effective
date generally prescribed under the
Congressional Review Act. The delayed
effective date required by the
Congressional Review Act does not
apply to any rule for which an agency
for good cause finds (and incorporates
the finding and a brief statement of
reasons therefor in the rule issued) that
notice and public procedure thereon are
impracticable, unnecessary, or contrary
to the public interest.23 In light of
current market uncertainty, the agencies
believe that delaying the effective date
of the rule would be contrary to the
public interest.
As required by the Congressional
Review Act, the agencies will submit
the final rule and other appropriate
reports to Congress and the Government
Accountability Office for review.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3521) (PRA) states that
no agency may conduct or sponsor, nor
is the respondent required to respond
to, an information collection unless it
displays a currently valid OMB control
number. The interim final rule affects
the agencies’ current information
collections for the Call Reports (OCC
OMB No. 1557–0081; Board OMB No.
7100–0036; and FDIC OMB No. 3064–
0052) and the Regulatory Capital
Reporting for Institutions Subject to the
Advanced Capital Adequacy Framework
(FFIEC 101; OCC OMB No. 1557–0239;
Board OMB No. 7100–0319; and FDIC
OMB No. 3064–0159). The revisions to
the Call Reports and the FFIEC 101 will
be addressed in a separate Federal
Register notice
l Reports (OCC
OMB No. 1557–0081; Board OMB No.
7100–0036; and FDIC OMB No. 3064–
0052) and the Regulatory Capital
Reporting for Institutions Subject to the
Advanced Capital Adequacy Framework
(FFIEC 101; OCC OMB No. 1557–0239;
Board OMB No. 7100–0319; and FDIC
OMB No. 3064–0159). The revisions to
the Call Reports and the FFIEC 101 will
be addressed in a separate Federal
Register notice.
The interim final rule also introduces
a new notice opt-in requirement and a
requirement for prior approval for
distributions, which would affect the
agencies’ capital rule information
collections. The agencies believe that
these new requirements will amount to
12 burden hours per respondent (two
responses per respondent at six hours
per response).
OCC:
Title of Information Collection: Risk-
Based Capital Standards: Advanced
Capital Adequacy Framework.
OMB Control No.: 1557–0318.
Respondents for Interim Final Rule:
21.
Responses per Respondent: 2.
Burden per Response: 6 hours.
Burden for Interim Final Rule: 252
hours.
Total Burden for Collection: 66,333
hours.
FDIC:
Title of Information Collection:
Regulatory Capital Rules.
OMB Control No.: 3064–0153.
Respondents for Interim Final Rule: 7.
Responses per Respondent: 2.
Burden per Response: 6 hours.
Burden for Interim Final Rule: 84
hours.
Total Burden for Collection: 128,140
burden hours.
The agencies request comment on:
a. Whether the collections of
information are necessary for the proper
performance of the agencies’ functions,
including whether the information has
practical utility;
b. The accuracy of the agencies’
estimates of the burden of the
information collections, including the
validity of the methodology and
assumptions used;
c. Ways to enhance the quality,
utility, and clarity of the information to
be collected;
d. Ways to minimize the burden of
information collections on respondents,
including through the use of automated
collection techniques or other forms of
information technology; and
e
imates of the burden of the
information collections, including the
validity of the methodology and
assumptions used;
c. Ways to enhance the quality,
utility, and clarity of the information to
be collected;
d. Ways to minimize the burden of
information collections on respondents,
including through the use of automated
collection techniques or other forms of
information technology; and
e. Estimates of capital or startup costs
and costs of operation, maintenance,
and purchase of services to provide
information.
The Board has temporarily revised the
Financial Statements for Holding
Companies (FR Y–9C; OMB No. 7100–
0128) and the Recordkeeping and
Disclosure Requirements Associated
with Regulation Q (FR Q; OMB No.
7100–0313) information collections to
accurately reflect certain aspects of this
and other interim final rules. On June
15, 1984, OMB delegated to the Board
authority under the PRA to temporarily
approve a revision to a collection of
information without providing
opportunity for public comment if the
Board determines that a change in an
existing collection must be instituted
quickly and that public participation in
the approval process would defeat the
purpose of the collection or
substantially interfere with the Board’s
ability to perform its statutory
obligation. The Board’s delegated
authority requires that the Board, after
temporarily approving a collection,
solicit public comment to extend
information collections for a period not
to exceed three years. Therefore, the
Board is inviting comment to extend the
FR Q information collection for three
years, with the revisions discussed
below. The Board is not inviting
comment on the FR Y–9 information
collection for the reasons discussed
below.
The Board invites public comment on
the FR Q information collection, which
is being reviewed under authority
delegated by the OMB under the PRA.
Comments must be submitted on or
before July 31, 2020. Comments are
invited on the following:
a
years, with the revisions discussed
below. The Board is not inviting
comment on the FR Y–9 information
collection for the reasons discussed
below.
The Board invites public comment on
the FR Q information collection, which
is being reviewed under authority
delegated by the OMB under the PRA.
Comments must be submitted on or
before July 31, 2020. Comments are
invited on the following:
a. Whether the collections of information
are necessary for the proper performance of
the Board’s functions, including whether the
information has practical utility;
b. The accuracy of the Board’s estimate of
the burden of the information collections,
including the validity of the methodology
and assumptions used;
c. Ways to enhance the quality, utility, and
clarity of the information to be collected;
d. Ways to minimize the burden of
information collections on respondents,
including through the use of automated
collection techniques or other forms of
information technology; and
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24 An SLHC must file one or more of the FR Y–
9 series of reports unless it is: (1) A grandfathered
unitary SLHC with primarily commercial assets and
thrifts that make up less than 5 percent of its
consolidated assets; or (2) a SLHC that primarily
holds insurance-related assets and does not
otherwise submit financial reports with the SEC
pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
le one or more of the FR Y–
9 series of reports unless it is: (1) A grandfathered
unitary SLHC with primarily commercial assets and
thrifts that make up less than 5 percent of its
consolidated assets; or (2) a SLHC that primarily
holds insurance-related assets and does not
otherwise submit financial reports with the SEC
pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934.
25 The Call Reports consist of the Consolidated
Reports of Condition and Income for a Bank with
Domestic Offices Only and Total Assets Less Than
$5 Billion (FFIEC 051), the Consolidated Reports of
Condition and Income for a Bank with Domestic
Offices Only (FFIEC 041) and the Consolidated
Reports of Condition and Income for a Bank with
Domestic and Foreign Offices (FFIEC 031).
26 Under certain circumstances described in the
FR Y–9C’s General Instructions, HCs with assets
under $3 billion may be required to file the FR Y–
9C.
27 A top-tier HC may submit a separate FR Y–9LP
on behalf of each of its lower-tier HCs.
e. Estimates of capital or startup costs and
costs of operation, maintenance, and
purchase of services to provide information.
At the end of the comment period, the
comments and recommendations
received will be analyzed to determine
the extent to which the Board should
modify the collections.
Final Approval Under OMB Delegated
Authority of the Temporary Revision of
the Following Information Collection
Report Title: Financial Statements for
Holding Companies.
Agency form number: FR Y–9C, FR Y–
9LP, FR Y–9SP, FR Y–9ES, and FR Y–
9CS.
OMB control number: 7100–0128.
Effective Date: March 31, 2020
Frequency: Quarterly, semiannually,
and annually.
Respondents: Bank holding
companies, savings and loan holding
companies,24 securities holding
companies, and U.S. intermediate
holding companies (collectively, HCs)
l Statements for
Holding Companies.
Agency form number: FR Y–9C, FR Y–
9LP, FR Y–9SP, FR Y–9ES, and FR Y–
9CS.
OMB control number: 7100–0128.
Effective Date: March 31, 2020
Frequency: Quarterly, semiannually,
and annually.
Respondents: Bank holding
companies, savings and loan holding
companies,24 securities holding
companies, and U.S. intermediate
holding companies (collectively, HCs).
Estimated number of respondents: FR
Y–9C (non-advanced approaches CBLR
HCs with less than $5 billion in total
assets): 7; FR Y–9C (non-advanced
approaches CBLR HCs with $5 billion or
more in total assets): 35; FR Y–9C (non-
advanced approaches, non CBLR, HCs
with less than $5 billion in total assets):
84; FR Y–9C (non-advanced approaches,
non CBLR HCs, with $5 billion or more
in total assets): 154; FR Y–9C (advanced
approaches HCs): 19; FR Y–9LP: 434; FR
Y–9SP: 3,960; FR Y–9ES: 83; FR Y–9CS:
236.
Estimated average hours per response:
Reporting
FR Y–9C (non-advanced approaches
CBLR HCs with less than $5 billion in
total assets): 29.14 hours; FR Y–9C (non-
advanced approaches CBLR HCs with
$5 billion or more in total assets): 35.11;
FR Y–9C (non-advanced approaches,
non CBLR HCs, with less than $5 billion
in total assets): 40.98; FR Y–9C (non-
advanced approaches, non CBLR, HCs
with $5 billion or more in total assets):
46.95 hours; FR Y–9C (advanced
approaches HCs): 48.59 hours; FR Y–
9LP: 5.27 hours; FR Y–9SP: 5.40 hours;
FR Y–9ES: 0.50 hours; FR Y–9CS: 0.50
hours.
Recordkeeping
FR Y–9C (non-advanced approaches
HCs with less than $5 billion in total
assets), FR Y–9C (non-advanced
approaches HCs with $5 billion or more
in total assets), FR Y–9C (advanced
approaches HCs), and FR Y–9LP: 1.00
hour; FR Y–9SP, FR Y–9ES, and
FR Y–9CS: 0.50 hours
s HCs): 48.59 hours; FR Y–
9LP: 5.27 hours; FR Y–9SP: 5.40 hours;
FR Y–9ES: 0.50 hours; FR Y–9CS: 0.50
hours.
Recordkeeping
FR Y–9C (non-advanced approaches
HCs with less than $5 billion in total
assets), FR Y–9C (non-advanced
approaches HCs with $5 billion or more
in total assets), FR Y–9C (advanced
approaches HCs), and FR Y–9LP: 1.00
hour; FR Y–9SP, FR Y–9ES, and
FR Y–9CS: 0.50 hours.
Estimated annual burden hours:
Reporting
FR Y–9C (non-advanced approaches
CBLR HCs with less than $5 billion in
total assets): 8,276 hours; FR Y–9C (non-
advanced approaches CBLR HCs with
$5 billion or more in total assets): 4,915;
FR Y–9C (non-advanced approaches
non CBLR HCs with less than $5 billion
in total assets): 13,769; FR Y–9C (non-
advanced approaches non CBLR HCs
with $5 billion or more in total assets):
28,921 hours; FR Y–9C (advanced
approaches HCs): 3,693 hours; FR Y–
9LP: 9,149 hours; FR Y–9SP: 42,768
hours; FR Y–9ES: 42 hours; FR Y–9CS:
472 hours.
Recordkeeping
FR Y–9C (non-advanced approaches
HCs with less than $5 billion in total
assets): 620 hours; FR Y–9C (non-
advanced approaches HCs with $5
billion or more in total assets): 756
hours; FR Y–9C (advanced approaches
HCs): 76 hours; FR Y–9LP: 1,736 hours;
FR Y–9SP: 3,960 hours; FR Y–9ES: 42
hours; FR Y–9CS: 472 hours.
General description of report: The FR
Y–9C consists of standardized financial
statements similar to the Call Reports
filed by commercial banks.25 The FR Y–
9C collects consolidated data from HCs
and is filed quarterly by top-tier HCs
with total consolidated assets of $3
billion or more.26
The FR Y–9LP, which collects parent
company only financial data, must be
submitted by each HC that files the FR
Y–9C, as well as by each of its
subsidiary HCs.27 The report consists of
standardized financial statements.
The FR Y–9SP is a parent company
only financial statement filed
semiannually by HCs with total
consolidated assets of less than $3
billion
sets of $3
billion or more.26
The FR Y–9LP, which collects parent
company only financial data, must be
submitted by each HC that files the FR
Y–9C, as well as by each of its
subsidiary HCs.27 The report consists of
standardized financial statements.
The FR Y–9SP is a parent company
only financial statement filed
semiannually by HCs with total
consolidated assets of less than $3
billion. In a banking organization with
total consolidated assets of less than $3
billion that has tiered HCs, each HC in
the organization must submit, or have
the top-tier HC submit on its behalf, a
separate FR Y–9SP. This report is
designed to obtain basic balance sheet
and income data for the parent
company, and data on its intangible
assets and intercompany transactions.
The FR Y–9ES is filed annually by
each employee stock ownership plan
(ESOP) that is also an HC. The report
collects financial data on the ESOP’s
benefit plan activities. The FR Y–9ES
consists of four schedules: A Statement
of Changes in Net Assets Available for
Benefits, a Statement of Net Assets
Available for Benefits, Memoranda, and
Notes to the Financial Statements.
The FR Y–9CS is a free-form
supplemental report that the Board may
utilize to collect critical additional data
deemed to be needed in an expedited
manner from HCs on a voluntary basis.
The data are used to assess and monitor
emerging issues related to HCs, and the
report is intended to supplement the
other FR Y–9 reports. The data items
included on the FR Y–9CS may change
as needed.
Legal authorization and
confidentiality: The Board has the
authority to impose the reporting and
recordkeeping requirements associated
with the Y–9 family of reports on bank
holding companies (‘‘BHCs’’) pursuant
to section 5 of the Bank Holding
Company Act (‘‘BHC Act’’), (12 U.S.C.
1844); on savings and loan holding
companies pursuant to section 10(b)(2)
and (3) of the Home Owners’ Loan Act,
(12 U.S.C. 1467a(b)(2) and (3)); on U.S.
intermediate holding companies (‘‘U.S
reporting and
recordkeeping requirements associated
with the Y–9 family of reports on bank
holding companies (‘‘BHCs’’) pursuant
to section 5 of the Bank Holding
Company Act (‘‘BHC Act’’), (12 U.S.C.
1844); on savings and loan holding
companies pursuant to section 10(b)(2)
and (3) of the Home Owners’ Loan Act,
(12 U.S.C. 1467a(b)(2) and (3)); on U.S.
intermediate holding companies (‘‘U.S.
IHCs’’) pursuant to section 5 of the BHC
Act, (12 U.S.C. 1844), as well as
pursuant to sections 102(a)(1) and 165
of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (‘‘Dodd-
Frank Act’’), (12 U.S.C. 511(a)(1) and
5365); and on securities holding
companies pursuant to section 618 of
the Dodd-Frank Act, (12 U.S.C.
1850a(c)(1)(A)). The FR Y–9 series of
reports, and the recordkeeping
requirements set forth in the respective
instructions to each report, are
mandatory, except for the FR Y–9CS,
which is voluntary. With respect to the
FR Y–9C, Schedule HI’s memoranda
item 7(g), Schedule HC–P’s item 7(a),
and Schedule HC–P’s item 7(b) are
considered confidential commercial and
financial information under exemption
4 of the Freedom of Information Act
(‘‘FOIA’’), (5 U.S.C. 552(b)(4)), as is
Schedule HC’s memorandum item 2.b.
for both the FR Y–9C and FR Y–9SP
reports.
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m 7(b) are
considered confidential commercial and
financial information under exemption
4 of the Freedom of Information Act
(‘‘FOIA’’), (5 U.S.C. 552(b)(4)), as is
Schedule HC’s memorandum item 2.b.
for both the FR Y–9C and FR Y–9SP
reports.
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32987
Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations
28 85 FR 20578 (April 14, 2020).
Aside from the data items described
above, the remaining data items on the
FR Y–9 reports are generally not
accorded confidential treatment. As
provided in the Board’s Rules Regarding
Availability of Information (12 CFR part
261), however, a respondent may
request confidential treatment for any
data items the respondent believes
should be withheld pursuant to a FOIA
exemption. The Board will review any
such request to determine if confidential
treatment is appropriate, and will
inform the respondent if the request for
confidential treatment has been denied.
To the extent that the instructions, to
the FR Y–9C, FR Y–9LP, FR Y–9SP, and
FR Y–9ES reports, each respectively
direct a financial institution to retain
the workpapers and related materials
used in preparation of each report, such
material would only be obtained by the
Board as part of the examination or
supervision of the financial institution.
Accordingly, such information may be
considered confidential pursuant to
exemption 8 of the FOIA (5 U.S.C.
552(b)(8)). In addition, the financial
institution’s workpapers and related
materials may also be protected by
exemption 4 of the FOIA, to the extent
such financial information is treated as
confidential by the respondent (5 U.S.C.
552(b)(4))
upervision of the financial institution.
Accordingly, such information may be
considered confidential pursuant to
exemption 8 of the FOIA (5 U.S.C.
552(b)(8)). In addition, the financial
institution’s workpapers and related
materials may also be protected by
exemption 4 of the FOIA, to the extent
such financial information is treated as
confidential by the respondent (5 U.S.C.
552(b)(4)).
Current Actions: On April 1, 2020, the
Board announced that it had
temporarily revised the instructions to
the FR Y–9C to accurately reflect the
calculation of the supplementary
leverage ratio pursuant to the Board’s
interim final rule (the ‘‘holding
company SLR IFR’’) that revised, on a
temporary basis for bank holding
companies, savings and loan holding
companies, and U.S. intermediate
holding companies of foreign banking
organizations, the calculation of total
leverage exposure, the denominator of
the supplementary leverage ratio in the
Board’s capital rule, to exclude the on-
balance sheet amounts of Treasuries and
deposits at Federal Reserve Banks.28
This temporary revision to the FR Y–9C
was necessary because holding
companies were previously instructed
to report their supplementary leverage
ratio as reported in the FFIEC 101;
because the FFIEC 101 was not revised
to account for the holding company SLR
IFR, retaining these instructions would
have resulted in inaccurate reporting by
holding companies on the FR Y–9C.
The agencies now intend to revise the
FFIEC 101 to account for this interim
final rule and the holding company SLR
IFR. Following such revisions, holding
companies would be able to report their
supplementary leverage ratio on the FR
Y–9C using the data reported on the
FFIEC 101, as they did previously.
Therefore, the temporary revisions to
the FR Y–9C to account for the holding
company SLR IFR, announced by the
Board on April 1, 2020, are no longer
necessary, and the Board has retracted
these revisions
R. Following such revisions, holding
companies would be able to report their
supplementary leverage ratio on the FR
Y–9C using the data reported on the
FFIEC 101, as they did previously.
Therefore, the temporary revisions to
the FR Y–9C to account for the holding
company SLR IFR, announced by the
Board on April 1, 2020, are no longer
necessary, and the Board has retracted
these revisions. The Board has
determined that this revision to the FR
Y–9C must be instituted quickly and
that public participation in the approval
process would defeat the purpose of the
collection of information, as delaying
the revisions would result in the
collection of inaccurate information,
and would interfere with the Board’s
ability to perform its statutory duties.
Because these revisions result
completely revert the temporary
revisions made by the Board to the FR
Y–9C in connection with the holding
company SLR IFR, the resulting
instructions regarding the
supplementary leverage ratio are
identical to those adopted following
notice and comment. Therefore, the
Board does not intend to request further
comment in order to retain these
instructions.
Final Approval Under OMB Delegated
Authority of the Temporary Revision of,
and Solicitation of Comment To Extend
for Three Years, With Revision, of the
Following Information Collections
Title of Information Collection:
Recordkeeping and Disclosure
Requirements Associated with
Regulation Q.
Agency form number: FR Q.
OMB control number: 7100–0313.
Frequency: Quarterly, annual.
Affected Public: Businesses or other
for-profit.
Respondents: State member banks
(SMBs), bank holding companies
(BHCs), U.S. intermediate holding
companies (IHCs), savings and loan
holding companies (SLHCs), and global
systemically important bank holding
companies (GSIBs).
Legal authorization and
confidentiality: This information
collection is authorized by section 38(o)
of the Federal Deposit Insurance Act (12
U.S.C
her
for-profit.
Respondents: State member banks
(SMBs), bank holding companies
(BHCs), U.S. intermediate holding
companies (IHCs), savings and loan
holding companies (SLHCs), and global
systemically important bank holding
companies (GSIBs).
Legal authorization and
confidentiality: This information
collection is authorized by section 38(o)
of the Federal Deposit Insurance Act (12
U.S.C. 1831o(c)), section 908 of the
International Lending Supervision Act
of 1983 (12 U.S.C. 3907(a)(1)), section
9(6) of the Federal Reserve Act (12
U.S.C. 324), and section 5(c) of the Bank
Holding Company Act (12 U.S.C.
1844(c)). The obligation to respond to
this information collection is
mandatory. If a respondent considers
the information to be trade secrets and/
or privileged such information could be
withheld from the public under the
authority of the Freedom of Information
Act (5 U.S.C. 552(b)(4)). Additionally, to
the extent that such information may be
contained in an examination report such
information could also be withheld from
the public (5 U.S.C. 552 (b)(8)).
Estimated number of respondents: 1,431
(of which 19 are advanced approaches
institutions).
Estimated average hours per response:
Minimum Capital Ratios
Recordkeeping (Ongoing)—16.
Standardized Approach
Recordkeeping (Initial setup)—122.
Recordkeeping (Ongoing)—20.
Disclosure (Initial setup)—226.25.
Disclosure (Ongoing quarterly)—131.25.
Advanced Approach
Recordkeeping (Initial setup)—460.
Recordkeeping (Ongoing)—540.77.
Recordkeeping (Ongoing quarterly)—20.
Disclosure (Initial setup)—328.
Disclosure (Ongoing)—5.78.
Disclosure (Ongoing quarterly)—41.
Disclosure (Table 13 quarterly)—5.
Risk-based Capital Surcharge for GSIBs
Recordkeeping (Ongoing)—0.5.
Reporting (Twice)—6.
Total estimated annual burden: 1,136
hours initial setup, 80,245 hours for
ongoing
itial setup)—460.
Recordkeeping (Ongoing)—540.77.
Recordkeeping (Ongoing quarterly)—20.
Disclosure (Initial setup)—328.
Disclosure (Ongoing)—5.78.
Disclosure (Ongoing quarterly)—41.
Disclosure (Table 13 quarterly)—5.
Risk-based Capital Surcharge for GSIBs
Recordkeeping (Ongoing)—0.5.
Reporting (Twice)—6.
Total estimated annual burden: 1,136
hours initial setup, 80,245 hours for
ongoing.
Current actions: The Board has
temporarily revised the FR Q
information collection to reflect a
revision to the disclosure requirements
contained in the Board’s Regulation Q.
Generally, § 217.173 of the Board’s
Regulation Q requires each advanced
approaches Board-regulated institution
and a Category III Board-regulated
institution that is required to publicly
disclose its supplementary leverage
ratio pursuant to § 217.172(d) of
Regulation Q to make certain
disclosures, which are listed in Table 13
of § 217.173. Pursuant to this interim
final rule, a Board-regulated institution
that is required to make such
disclosures will be required exclude the
balance sheet carrying value of U.S.
Treasury securities and funds on
deposit at a Federal Reserve Bank from
its disclosures under Table 13 of
§ 217.173. The interim final rule also
introduces a new notice opt-in
requirement and a requirement for prior
approval for distributions, which would
affect the agencies’ capital rule
information collections. The agencies
believe that these new requirements will
amount to 12 burden hours per
respondent (two responses per
respondent at six hours per response).
Additionally, the Board has
temporarily revised the FR Q
information collection to include the
notification that an electing depository
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amount to 12 burden hours per
respondent (two responses per
respondent at six hours per response).
Additionally, the Board has
temporarily revised the FR Q
information collection to include the
notification that an electing depository
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32988
Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations
29 5 U.S.C. 601 et seq.
30 Under regulations issued by the Small Business
Administration, a small entity includes a depository
institution, bank holding company, or savings and
loan holding company with total assets of $600
million or less and trust companies with total
average annual receipts of $41.5 million or less. See
13 CFR 121.201.
31 12 U.S.C. 4802(a).
32 12 U.S.C. 4802.
33 12 U.S.C. 4809.
institution must provide to its primary
Federal banking regulator, as well as the
request for approval that an electing
depository institution must submit to its
primary Federal banking regulator prior
to making certain capital distributions.
The Board has determined that these
revisions to the FR Q described above
must be instituted quickly and that
public participation in the approval
process would defeat the purpose of the
collection of information, as delaying
the revisions would result in the
collection of inaccurate information,
and would interfere with the Board’s
ability to perform its statutory duties.
The Board also invites comment on a
proposal to extend the FR Y–Q for three
years, with the revision described
above. This revision would be effective
for FR Q through March 31, 2021, the
date after which the exclusions in this
interim final rule will no longer be
effective.
D
ection of inaccurate information,
and would interfere with the Board’s
ability to perform its statutory duties.
The Board also invites comment on a
proposal to extend the FR Y–Q for three
years, with the revision described
above. This revision would be effective
for FR Q through March 31, 2021, the
date after which the exclusions in this
interim final rule will no longer be
effective.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act
(RFA) 29 requires an agency to consider
whether the rules it proposes will have
a significant economic impact on a
substantial number of small entities.30
The RFA applies only to rules for which
an agency publishes a general notice of
proposed rulemaking pursuant to 5
U.S.C. 553(b). As discussed previously,
consistent with section 553(b)(B) of the
APA, the agencies have determined for
good cause that general notice and
opportunity for public comment is
unnecessary, and therefore the agencies
are not issuing a notice of proposed
rulemaking. Accordingly, the agencies
have concluded that the RFA’s
requirements relating to initial and final
regulatory flexibility analysis do not
apply.
Nevertheless, the agencies seek
comment on whether, and the extent to
which, the interim final rule would
affect a significant number of small
entities.
E. Riegle Community Development and
Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the
Riegle Community Development and
Regulatory Improvement Act
(RCDRIA),31 in determining the effective
date and administrative compliance
requirements for new regulations that
impose additional reporting, disclosure,
or other requirements on IDIs, each
Federal banking agency must consider,
consistent with the principle of safety
and soundness and the public interest,
any administrative burdens that such
regulations would place on depository
institutions, including small depository
institutions, and customers of
depository institutions, as well as the
benefits of such regulations
eporting, disclosure,
or other requirements on IDIs, each
Federal banking agency must consider,
consistent with the principle of safety
and soundness and the public interest,
any administrative burdens that such
regulations would place on depository
institutions, including small depository
institutions, and customers of
depository institutions, as well as the
benefits of such regulations. In addition,
section 302(b) of RCDRIA requires new
regulations and amendments to
regulations that impose additional
reporting, disclosures, or other new
requirements on IDIs generally to take
effect on the first day of a calendar
quarter that begins on or after the date
on which the regulations are published
in final form, with certain exceptions,
including for good cause.32 For the
reasons described above, the agencies
find good cause exists under section 302
of RCDRIA to publish this interim final
rule with an immediate effective date.
As such, the final rule will be
effective on immediately. Nevertheless,
the agencies seek comment on RCDRIA.
F. Use of Plain Language
Section 722 of the Gramm-Leach-
Bliley Act 33 requires the Federal
banking agencies to use plain language
in all proposed and final rules
published after January 1, 2000. The
agencies have sought to present the
interim final rule in a simple and
straightforward manner. The agencies
invite comments on whether there are
additional steps it could take to make
the rule easier to understand
Section 722 of the Gramm-Leach-
Bliley Act 33 requires the Federal
banking agencies to use plain language
in all proposed and final rules
published after January 1, 2000. The
agencies have sought to present the
interim final rule in a simple and
straightforward manner. The agencies
invite comments on whether there are
additional steps it could take to make
the rule easier to understand. For
example:
• Have we organized the material to
suit your needs? If not, how could this
material be better organized?
• Are the requirements in the
regulation clearly stated? If not, how
could the regulation be more clearly
stated?
• Does the regulation contain
language or jargon that is not clear? If
so, which language requires
clarification?
• Would a different format (grouping
and order of sections, use of headings,
paragraphing) make the regulation
easier to understand? If so, what
changes to the format would make the
regulation easier to understand? What
else could we do to make the regulation
easier to understand?
G. Unfunded Mandates Reform Act of
1995
As a general matter, the Unfunded
Mandates Reform Act of 1995 (UMRA),
2 U.S.C. 1531 et seq., requires the
preparation of a budgetary impact
statement before promulgating a rule
that includes a Federal mandate that
may result in the expenditure by State,
local, and tribal governments, in the
aggregate, or by the private sector, of
$100 million or more in any one year.
However, the UMRA does not apply to
final rules for which a general notice of
proposed rulemaking was not
published. See 2 U.S.C. 1532(a).
Therefore, because the OCC has found
good cause to dispense with notice and
comment for this interim final rule, the
OCC has not prepared an economic
analysis of the rule under the UMRA.
List of Subjects
12 CFR Part 3
Administrative practice and
procedure, Capital, Federal savings
associations, National banks, Risk.
12 CFR Part 6
Federal savings associations, National
banks, Prompt corrective action
ause the OCC has found
good cause to dispense with notice and
comment for this interim final rule, the
OCC has not prepared an economic
analysis of the rule under the UMRA.
List of Subjects
12 CFR Part 3
Administrative practice and
procedure, Capital, Federal savings
associations, National banks, Risk.
12 CFR Part 6
Federal savings associations, National
banks, Prompt corrective action.
12 CFR Part 208
Accounting, Agriculture, Banks,
banking, Confidential business
information, Consumer protection,
Crime, Currency, Federal Reserve
System, Flood insurance, Insurance,
Investments, Mortgages, Reporting and
recordkeeping requirements, Securities.
12 CFR Part 217
Administrative practice and
procedure, Banks, banking, Federal
Reserve System, Holding companies,
Reporting and recordkeeping
requirements, Securities.
12 CFR Part 324
Administrative practice and
procedure, Banks, banking, Reporting
and recordkeeping requirements,
Savings associations, State non-member
banks.
Authority and Issuance
For the reasons stated in the joint
preamble, the Office of the Comptroller
of the Currency amends part 3 of
chapter I of title 12, Code of Federal
Regulations as follows:
PART 3—CAPITAL ADEQUACY
STANDARDS
■1. The authority citation for part 3
continues to read as follows:
Authority: 12 U.S.C. 93a, 161, 1462, 1462a,
1463, 1464, 1818, 1828(n), 1828 note, 1831n
note, 1835, 3907, 3909, 5412(b)(2)(B), and
Pub. L. 116–136, 134 Stat. 281.
■2. Section 3.304 is added to read as
follows:
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32989
Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations
§ 3.304
Temporary exclusions from total
leverage exposure.
(a) In general. Subject to paragraphs
t. 281.
■2. Section 3.304 is added to read as
follows:
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32989
Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations
§ 3.304
Temporary exclusions from total
leverage exposure.
(a) In general. Subject to paragraphs
(b) through (g) of this section, and
notwithstanding any other requirement
in this part, a national bank or Federal
savings association, when calculating
on-balance sheet assets as of each day of
a reporting quarter for purposes of
determining the national bank’s or
Federal savings association’s total
leverage exposure under § 3.10(c)(4),
may exclude the balance sheet carrying
value of the following items:
(1) U.S. Treasury securities; and
(2) Funds on deposit at a Federal
Reserve Bank.
(b) Opt-in period. Before applying the
relief provided in paragraph (a) of this
section, a national bank or Federal
savings association must first notify the
OCC before July 1, 2020.
(c) Calculation of relief. When
calculating on-balance sheet assets as of
each day of a reporting quarter, the
relief provided in paragraph (a) of this
section applies from the beginning of
the reporting quarter in which the
national bank or Federal savings
association filed an opt-in notice
through the termination date specified
in paragraph (d) of this section.
(d) Termination of exclusions. This
section shall cease to be effective after
the reporting period that ends March 31,
2021.
(e) Custody bank. A custody bank
must reduce the amount in
§ 3.10(c)(4)(ii)(J)(1) (to no less than zero)
by any amount excluded under
paragraph (a)(2) of this section.
(f) Disclosure. Notwithstanding Table
13 to § 3.173, a national bank or Federal
savings association that is required to
make the disclosures pursuant to § 3.173
must exclude the items excluded
pursuant to paragraph (a) of this section
from Table 13 to § 3.173.
educe the amount in
§ 3.10(c)(4)(ii)(J)(1) (to no less than zero)
by any amount excluded under
paragraph (a)(2) of this section.
(f) Disclosure. Notwithstanding Table
13 to § 3.173, a national bank or Federal
savings association that is required to
make the disclosures pursuant to § 3.173
must exclude the items excluded
pursuant to paragraph (a) of this section
from Table 13 to § 3.173.
(g) OCC approval for distributions.
During the calendar quarter beginning
on July 1, 2020, and until March 31,
2021, no national bank or Federal
savings association that has opted in to
the relief provided under paragraph (a)
of this section may make a distribution,
or create an obligation to make such a
distribution, without prior OCC
approval. When reviewing a request
under this paragraph (g), the OCC will
consider all relevant factors, including
whether the distribution would be
contrary to the safety and soundness of
the national bank or Federal savings
association; the nature, purpose, and
extent of the request; and the particular
circumstances giving rise to the request.
PART 6—PROMPT CORRECTIVE
ACTION
■3. The authority citation for part 6
continues to read as follows:
Authority: 12 U.S.C. 93a, 1831o,
5412(b)(2)(B).
■4. Amend § 6.4 by revising paragraphs
(b)(2)(iv)(B) and (b)(3)(iv)(B) to read as
follows:
§ 6.4
Capital measures and capital
categories.
*
*
*
*
*
(b) * * *
(2) * * *
(iv) * * *
(B) With respect to an advanced
approaches or Category III national bank
or advanced approaches or Category III
Federal savings association, the national
bank or Federal savings association has
a supplementary leverage ratio of 3.0
percent or greater; and
*
*
*
*
*
B) to read as
follows:
§ 6.4
Capital measures and capital
categories.
*
*
*
*
*
(b) * * *
(2) * * *
(iv) * * *
(B) With respect to an advanced
approaches or Category III national bank
or advanced approaches or Category III
Federal savings association, the national
bank or Federal savings association has
a supplementary leverage ratio of 3.0
percent or greater; and
*
*
*
*
*
(3) * * *
(iv) * * *
(B) With respect to an advanced
approaches or Category III national bank
or advanced approaches or Category III
Federal savings association, on January
1, 2018, and thereafter, the national
bank or Federal savings association has
a supplementary leverage ratio of less
than 3.0 percent.
*
*
*
*
*
Authority and Issuance
For the reasons stated in the joint
preamble, the Board of Governors of the
Federal Reserve System amends 12 CFR
chapter II as follows:
PART 208—MEMBERSHIP OF STATE
BANKING INSTITUTIONS IN THE
FEDERAL RESERVE SYSTEM
(REGULATION H)
■5. The authority citation for part 208
continues to read as follows:
Authority: 12 U.S.C. 24, 36, 92a, 93a,
248(a), 248(c), 321–338a, 371d, 461, 481–486,
601, 611, 1814, 1816, 1817(a)(3), 1817(a)(12),
1818, 1820(d)(9), 1833(j), 1828(o), 1831,
1831o, 1831p–1, 1831r–1, 1831w, 1831x,
1835a, 1882, 2901–2907, 3105, 3310, 3331–
3351, 3905–3909, 5371, and 5371 note; 15
U.S.C. 78b, 78I(b), 78l(i), 780–4(c)(5), 78q,
78q-1, 78w, 1681s, 1681w, 6801, and 6805;
31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a,
4104b, 4106, and 4128.
■6. Section 208.43(b)(2)(iv)(B) and
(b)(3)(iv)(B) are revised to read as
follows:
§ 208.43
Capital measures and capital
categories.
*
*
*
*
*
1831x,
1835a, 1882, 2901–2907, 3105, 3310, 3331–
3351, 3905–3909, 5371, and 5371 note; 15
U.S.C. 78b, 78I(b), 78l(i), 780–4(c)(5), 78q,
78q-1, 78w, 1681s, 1681w, 6801, and 6805;
31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a,
4104b, 4106, and 4128.
■6. Section 208.43(b)(2)(iv)(B) and
(b)(3)(iv)(B) are revised to read as
follows:
§ 208.43
Capital measures and capital
categories.
*
*
*
*
*
(b) * * *
(2) * * *
(iv) * * *
(B) With respect to an advanced
approaches bank or bank that is a
Category III Board-regulated institution
(as defined in § 217.2 of this chapter),
the bank has a supplementary leverage
ratio of 3.0 percent or greater; and
*
*
*
*
*
(3) * * *
(iv) * * *
(B) With respect to an advanced
approaches bank or bank that is a
Category III Board-regulated institution
(as defined in § 217.2 of this chapter),
the bank has a supplementary leverage
ratio of less than 3.0 percent.
*
*
*
*
*
PART 217—CAPITAL ADEQUACY OF
BANK HOLDING COMPANIES,
SAVINGS AND LOAN HOLDING
COMPANIES, AND STATE MEMBER
BANKS (REGULATION Q)
■7. The authority citation for part 217
continues to read as follows:
Authority: 12 U.S.C. 248(a), 321–338a,
481–486, 1462a, 1467a, 1818, 1828, 1831n,
1831o, 1831p–1, 1831w, 1835, 1844(b), 1851,
3904, 3906–3909, 4808, 5365, 5368, 5371,
5371 note, and sec. 4012, Pub. L. 116–136,
134 Stat. 281.
Subpart G—Transition Provisions
■8. Revise § 217.303 to read as follows:
§ 217.303
Temporary exclusions from total
leverage exposure.
(a) In general. Subject to paragraphs
ity: 12 U.S.C. 248(a), 321–338a,
481–486, 1462a, 1467a, 1818, 1828, 1831n,
1831o, 1831p–1, 1831w, 1835, 1844(b), 1851,
3904, 3906–3909, 4808, 5365, 5368, 5371,
5371 note, and sec. 4012, Pub. L. 116–136,
134 Stat. 281.
Subpart G—Transition Provisions
■8. Revise § 217.303 to read as follows:
§ 217.303
Temporary exclusions from total
leverage exposure.
(a) In general. Subject to paragraphs
(b) through (g) of this section and
notwithstanding any other requirement
in this part, when calculating on-
balance sheet assets as of each day of a
reporting quarter for purposes of
determining the Board-regulated
institution’s total leverage exposure
under § 217.10(c)(4), a Board-regulated
institution that is a depository
institution holding company or a U.S.
intermediate holding company must,
and a Board-regulated institution that is
a state member bank may, exclude the
balance sheet carrying value of the
following items:
(1) U.S. Treasury securities; and
(2) Funds on deposit at a Federal
Reserve Bank.
(b) Opt-in period. Before applying the
relief provided in paragraph (a) of this
section, a state member bank must first
notify the Board before July 1, 2020.
(c) Calculation of relief. When
calculating on-balance sheet assets as of
each day of a reporting quarter, the
relief provided in paragraph (a) of this
section applies from the beginning of
the reporting quarter in which the state
member bank filed an opt-in notice
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through the termination date specified
in paragraph (d) of this section.
(d) Termination of exclusions. This
section shall cease to be effective after
the reporting period that ends March 31,
2021.
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32990
Federal Register / Vol. 85, No. 105 / Monday, June 1, 2020 / Rules and Regulations
through the termination date specified
in paragraph (d) of this section.
(d) Termination of exclusions. This
section shall cease to be effective after
the reporting period that ends March 31,
2021.
(e) Custodial banking organizations. A
custodial banking organization must
reduce the amount in
§ 217.10(c)(4)(ii)(J)(1) (to no less than
zero) by any amount excluded under
paragraph (a)(2) of this section.
(f) Disclosure. Notwithstanding Table
13 to § 217.173, a Board-regulated
institution that is required to make the
disclosures pursuant to § 217.173 must
exclude the items excluded pursuant to
paragraph (a) of this section from Table
13 to § 217.173.
(g) Board approval for distributions.
During the calendar quarter beginning
on July 1, 2020, and until March 31,
2021, no state member bank that has
opted in to the relief provided under
paragraph (a) of this section may make
a distribution, or create an obligation to
make such a distribution, without prior
Board approval. When reviewing a
request under this paragraph (g), the
Board will consider all relevant factors,
including whether the distribution
would be contrary to the safety and
soundness of the state member bank; the
nature, purpose, and extent of the
request; and the particular
circumstances giving rise to the request.
Federal Deposit Insurance Corporation
12 CFR Chapter III
Authority and Issuance
For the reasons set forth in the joint
preamble, the Federal Deposit Insurance
Corporation amends chapter III of title
12 of the Code of Federal Regulations as
follows:
PART 324—CAPITAL ADEQUACY OF
FDIC–SUPERVISED INSTITUTIONS
■9. The authority citation for part 324
continues to read as follows:
Authority: 12 U.S.C
Deposit Insurance Corporation
12 CFR Chapter III
Authority and Issuance
For the reasons set forth in the joint
preamble, the Federal Deposit Insurance
Corporation amends chapter III of title
12 of the Code of Federal Regulations as
follows:
PART 324—CAPITAL ADEQUACY OF
FDIC–SUPERVISED INSTITUTIONS
■9. The authority citation for part 324
continues to read as follows:
Authority: 12 U.S.C. 1815(a), 1815(b),
1816, 1818(a), 1818(b), 1818(c), 1818(t),
1819(Tenth), 1828(c), 1828(d), 1828(i),
1828(n), 1828(o), 1831o, 1835, 3907, 3909,
4808; 5371; 5412; Pub. L. 102–233, 105 Stat.
1761, 1789, 1790 (12 U.S.C. 1831n note); Pub.
L. 102–242, 105 Stat. 2236, 2355, as amended
by Pub. L. 103–325, 108 Stat. 2160, 2233 (12
U.S.C. 1828 note); Pub. L. 102–242, 105 Stat.
2236, 2386, as amended by Pub. L. 102–550,
106 Stat. 3672, 4089 (12 U.S.C. 1828 note);
Pub. L. 111–203, 124 Stat. 1376, 1887 (15
U.S.C. 78o–7 note); Pub. L. 115–174; Pub. L.
116–136, 134 Stat. 281.
Subpart G—Transition Provisions
§ 324.304
[Redesignated as § 324.305]
■10. Redesignate § 324.304 as
§ 324.305.
■11. A new § 324.304 is added to read
as follows:
§ 324.304
Temporary exclusions from total
leverage exposure.
(a) In general. Subject to paragraphs
(b) through (g) of this section, and
notwithstanding any other requirement
in this part, an FDIC-supervised
institution, when calculating on-balance
sheet assets as of each day of a reporting
quarter for purposes of determining the
FDIC-supervised institution’s total
leverage exposure under § 324.10(c)(4),
may exclude the balance sheet carrying
value of the following items:
(1) U.S. Treasury securities; and
(2) Funds on deposit at a Federal
Reserve Bank.
(b) Opt-in period. Before applying the
relief provided in paragraph (a) of this
section, an FDIC-supervised institution
must first notify the appropriate
regional director of the FDIC Division of
Risk Management Supervision before
July 1, 2020.
lude the balance sheet carrying
value of the following items:
(1) U.S. Treasury securities; and
(2) Funds on deposit at a Federal
Reserve Bank.
(b) Opt-in period. Before applying the
relief provided in paragraph (a) of this
section, an FDIC-supervised institution
must first notify the appropriate
regional director of the FDIC Division of
Risk Management Supervision before
July 1, 2020.
(c) Calculation of relief. When
calculating on-balance sheet assets as of
each day of a reporting quarter, the
relief provided in paragraph (a) of this
section applies from the beginning of
the reporting quarter in which the FDIC-
supervised institution filed an opt-in
notice through the termination date
specified in paragraph (d) of this
section.
(d) Termination of exclusions. This
section shall cease to be effective after
the reporting period that ends March 31,
2021.
(e) Custody bank. A custody bank
must reduce the amount in
§ 324.10(c)(4)(ii)(J)(1) (to no less than
zero) by any amount excluded under
paragraph (a)(2) of this section.
(f) Disclosure. Notwithstanding Table
13 to § 324.173, an FDIC-supervised
institution that is required to make the
disclosures pursuant to § 324.173 must
exclude the items excluded pursuant to
paragraph (a) of this section from Table
13 to § 324.173.
(g) FDIC approval for distributions.
During the calendar quarter beginning
on July 1, 2020, and until March 31,
2021, no FDIC-supervised institution
that has opted in to the relief provided
under paragraph (a) of this section may
make a distribution, or create an
obligation to make such a distribution,
without prior FDIC approval. When
reviewing a request under this
paragraph (g), the FDIC will consider all
relevant factors, including whether the
distribution would be contrary to the
safety and soundness of the FDIC-
supervised institution; the nature,
purpose, and extent of the request; and
the particular circumstances giving rise
to the request.
Subpart H—Prompt Corrective Action
■12
ithout prior FDIC approval. When
reviewing a request under this
paragraph (g), the FDIC will consider all
relevant factors, including whether the
distribution would be contrary to the
safety and soundness of the FDIC-
supervised institution; the nature,
purpose, and extent of the request; and
the particular circumstances giving rise
to the request.
Subpart H—Prompt Corrective Action
■12. Section 324.403(b)(2)(vi) and
(b)(3)(v) are revised to read as follows:
§ 324.403
Capital measures and capital
categories definitions.
*
*
*
*
*
(b) * * *
(2) * * *
(vi) Beginning January 1, 2018, an
advanced approaches or Category III
FDIC–supervised institution will be
deemed to be ‘‘adequately capitalized’’
if it satisfies paragraphs (b)(2)(i) through
(v) of this section and has a
supplementary leverage ratio of 3.0
percent or greater, as calculated in
accordance with § 324.10.
(3) * * *
(v) Beginning January 1, 2018, an
advanced approaches or Category III
FDIC–supervised institution will be
deemed to be ‘‘undercapitalized’’ if it
has a supplementary leverage ratio of
less than 3.0 percent, as calculated in
accordance with § 324.10.
*
*
*
*
*
Brian P. Brooks,
First Deputy Comptroller of the Currency.
By order of the Board of Governors of the
Federal Reserve System.
Ann E. Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on or about May
14, 2020.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2020–10962 Filed 5–29–20; 8:45 am]
BILLING CODE 4810–33–P
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---

Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FDIC_FIL20057. Check the current official text before relying on it. Not legal advice.