2015-02-19

Deputy Secretary's Letter PA All-State AOCI Notice

Pennsylvania Deputy Secretary Wendy S. Spicher directs all state-chartered non-advanced approaches banks to make an irrevocable election by March 31, 2015, regarding the inclusion of Accumulated Other Comprehensive Income in common equity tier 1 capital under Basel III rules. Institutions must choose to either opt out, preserving pre-2015 capital treatment, or opt in, which includes most AOCI items in capital calculations and affects legal lending limits. The letter urges boards to document their decisions and consider long-term implications, noting that examiners will still assess unrealized investment losses when determining CAMELS ratings.

United States

Pennsylvania Department of Banking and Securities

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