Regulatory Capital Rule: Capital Simplification for Qualifying Community Banking Organizations; Correction

1 84 FR 61776 (Nov. 13, 2019). 2See the definition of ‘‘total capital’’ in the FDIC’s capital rules in 12 CFR 324.2. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM 12 CFR Chapter II 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 217—CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q) ■ 3. 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, and 5371 note. ■ 4. Section 217.11 is amended by revising paragraph (a)(2)(i) to read as follows: § 217.11 Capital conservation buffer, countercyclical capital buffer amount, and GSIB surcharge. (a) * * * (2) * * * (i) Eligible retained income. The eligible retained income of a Board￾regulated institution is the greater of: (A) The Board-regulated institution’s net income, calculated in accordance with the instructions to the FR Y–9C or Call Report, as applicable, for the four calendar quarters preceding the current calendar quarter, net of any distributions and associated tax effects not already reflected in net income; and (B) The average of the Board-regulated institution’s net income, calculated in accordance with the instructions to the FR Y–9C or Call Report, as applicable, for the four calendar quarters preceding the current calendar quarter.

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Federal Deposit Insurance Corporation 12 CFR Chapter III Authority and Issuance For the reasons set forth in the joint preamble, chapter III of title 12 of the Code of Federal Regulations is amended as follows: PART 324—CAPITAL ADEQUACY OF FDIC–SUPERVISED INSTITUTIONS ■ 5. 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). ■ 6. Section 324.11 is amended by revising paragraph (a)(2)(i) to read as follows: § 324.11 Capital conservation buffer and countercyclical capital buffer amount. (a) * * * (2) * * * (i) Eligible retained income. The eligible retained income of an FDIC￾supervised institution is the greater of: (A) The FDIC-supervised institution’s net income, calculated in accordance with the instructions to the Call Report, for the four calendar quarters preceding the current calendar quarter, net of any distributions and associated tax effects not already reflected in net income; and (B) The average of the FDIC￾supervised institution’s net income, calculated in accordance with the instructions to Call Report, for the four calendar quarters preceding the current calendar quarter.

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Dated: March 17, 2020. Morris R. Morgan, First Deputy Comptroller, 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 March 16, 2020. Robert E. Feldman, Executive Secretary. [FR Doc. 2020–06051 Filed 3–19–20; 8:45 am] BILLING CODE 6210–01–P FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 365 RIN 3064–AE91 Regulatory Capital Rule: Capital Simplification for Qualifying Community Banking Organizations; Correction AGENCY: Federal Deposit Insurance Corporation. ACTION: Correcting amendment. SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is correcting an interagency final rule that appeared in the Federal Register on November 13, 2019, regarding the final rule titled ‘‘Regulatory Capital Rule: Capital Simplification for Qualifying Community Banking Organizations.’’ These corrections are necessary to conform a footnote citation in the FDIC’s amendment to its codified appendix for the Interagency Guidelines for Real Estate Lending Policies with the footnote citation in the regulations of the other federal banking agencies that issued that final rule. DATES: Effective March 20, 2020. FOR FURTHER INFORMATION CONTACT: FDIC: Beverlea S. Gardner, Senior Examination Specialist, bgardner@ fdic.gov, 202–898–3640; Policy and Program Development Section, Division of Risk Management Supervision; or Michael Phillips, Counsel, mphillips@ fdic.gov; Catherine Wood, Counsel, cawood@fdic.gov; Francis Kuo, Counsel, fkuo@fdic.gov, Supervision Branch, Legal Division, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429. SUPPLEMENTARY INFORMATION: On November 13, 2019, the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), and the FDIC (collectively, the agencies) published a final rule ‘‘Regulatory Capital Rule: Capital Simplification for Qualifying Community Banking Organizations’’ (CBLR final rule).1 The CBLR final rule provides for a simple measure of capital adequacy for certain community banking organizations, consistent with section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. Under the CBLR final rule, depository institutions and depository institution holding companies that have less than $10 billion in total consolidated assets and meet other qualifying criteria, including a leverage ratio of greater than 9 percent, will be eligible to opt into the community bank leverage ratio framework (CBLR banks). In addition, under the CBLR final rule, the community bank leverage ratio framework incorporates tier I capital in the numerator of that leverage ratio. The CBLR final rule also amends standards referencing total capital so that an electing CBLR bank uses tier I capital in the numerator of that leverage ratio instead of total capital, which includes tier 2 capital.2 This correcting amendment will conform appendix A to subpart A of

1Other factors the Bureau considers in determining how to resolve violations of Federal consumer financial law include, without limitation, (1) the nature, extent, and severity of the violations identified and any associated consumer harm; (2) an entity’s demonstrated effectiveness and willingness to address the violations; and (3) the importance of deterrence, considering the significance and pervasiveness of the potential consumer harm. part 365 of the FDIC’s Real Estate Lending Standards regulation to that of the other Federal banking agencies. List of Subjects in 12 CFR Part 365 Banks, Banking, Mortgages. For the reasons stated in the preamble, the FDIC corrects 12 CFR part 365 by making the following correcting amendment: PART 365—REAL ESTATE LENDING STANDARDS ■ 1. The authority citation for part 365 is revised to read as follows: Authority: 12 U.S.C. 1828(o) and 5101 et seq. ■ 2. Amend appendix A to subpart A of part 365 by revising footnote 4 to read as follows: Appendix A to Subpart A of Part 365— Interagency Guidelines for Real Estate Lending Policies

• • • • • 4For state non-member banks and state savings associations, ‘‘total capital’’ refers to that term described in § 324.2 of this chapter.

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Federal Deposit Insurance Corporation. Dated in Washington, DC, on March 12, 2020. Robert E. Feldman, Executive Secretary. [FR Doc. 2020–05441 Filed 3–19–20; 8:45 am] BILLING CODE 6714–01–P