Banking Agencies Propose Community Bank Leverage Ratio Mr Cadwalader, Wickersham & Taft LLP

Author:Mr Cadwalader, Wickersham & Taft LLP
Profession:Cadwalader, Wickersham & Taft LLP
 
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The Federal Reserve Board, FDIC and Office of the Comptroller of the Currency (collectively, the "agencies") proposed a rule that would simplify capital requirements for qualifying community banking organizations that opt into a community bank leverage ratio ("CBLR") framework. According to the agencies, the proposed CBLR framework is a "simple alternative methodology to measure capital adequacy" and would provide substantial regulatory relief to smaller banking organizations, consistent with Section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act.

Under the proposal, a qualifying community banking organization would be defined as a depository institution or depository institution holding company that meets the following criteria:

total consolidated assets of less than $10 billion; total off-balance sheet exposures of 25 percent or less of total consolidated assets; total trading assets and trading liabilities of five percent or less of the total consolidated assets...

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