Wednesday,
March 8, 2000
Part II
Department of the
Treasury
Office of the Comptroller of the
Currency
Office of Thrift Supervision
Federal Reserve
System
Federal Deposit
Insurance
Corporation
12 CFR Parts 3, 208, 225, 325 and 567
Risk-Based Capital Standards; Recourse
and Direct Credit Substitutes; Proposed
Rule
VerDate 07<MAR>2000 20:04 Mar 07, 2000 Jkt 190000 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\08MRP2.SGM pfrm08 PsN: 08MRP2
March 8, 2000
Part II
Department of the
Treasury
Office of the Comptroller of the
Currency
Office of Thrift Supervision
Federal Reserve
System
Federal Deposit
Insurance
Corporation
12 CFR Parts 3, 208, 225, 325 and 567
Risk-Based Capital Standards; Recourse
and Direct Credit Substitutes; Proposed
Rule
VerDate 07<MAR>2000 20:04 Mar 07, 2000 Jkt 190000 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\08MRP2.SGM pfrm08 PsN: 08MRP2
12320 Federal Register / Vol. 65, No. 46 / Wednesday, March 8, 2000 / Proposed Rules
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket No. 00–06]
RIN 1557–AB14
FEDERAL RESERVE SYSTEM
12 CFR Parts 208 and 225
[Regulations H and Y; Docket No. R–1055]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 325
RIN 3064–AB31
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 567
[Docket No. 2000–15]
RIN 1550–AB11
Risk-Based Capital Standards;
Recourse and Direct Credit Substitutes
AGENCIES: Office of the Comptroller of
the Currency, Treasury; Board of
Governors of the Federal Reserve
System; Federal Deposit Insurance
Corporation; and Office of Thrift
Supervision, Treasury.
ACTION: Joint notice of proposed
rulemaking.
SUMMARY: The Office of the Comptroller
of the Currency (OCC), the Board of
Governors of the Federal Reserve
System (Board), the Federal Deposit
Insurance Corporation (FDIC), and the
Office of Thrift Supervision (OTS)
(collectively, the agencies) are
proposing changes to their risk-based
capital standards to address the
regulatory capital treatment of recourse
obligations and direct credit substitutes
that expose banks, bank holding
companies, and thrifts (collectively,
banking organizations) to credit risk.
The proposal treats recourse obligations
and direct credit substitutes more
consistently than under the agencies’
current risk-based capital standards. In
addition, the agencies would use credit
ratings and certain alternative
approaches to match the risk-based
capital requirement more closely to a
banking organization’s relative risk of
loss in asset securitizations. The
proposal also requires the sponsor of a
revolving credit securitization that
involves an early amortization feature to
hold capital against the amount of assets
under management, i.e. the off-balance
sheet securitized receivables.
This proposal is intended to result in
more consistent treatment of recourse
obligations and similar transactions
among the agencies, more consistent
risk-based capital treatment for certain
types of transactions involving similar
risk, and capital requirements that more
closely reflect a banking organization’s
relative exposure to credit risk.
DATES: Your comments must be received
by June 7, 2000.
ADDRESSES: Comments should be
directed to:
OCC: You may send comments
electronically to regs.comments@
occ.treas.gov or by mail to Docket No.
00–06, Communications Division, Third
Floor, Office of the Comptroller of the
Currency, 250 E Street, SW,
Washington, DC 20219. In addition, you
may send comments by facsimile
transmission to (202) 874–5274. You
can inspect and photocopy comments at
that address.
Board: Comments, which should refer
to Docket No. R–1055, may be mailed to
Jennifer J. Johnson, Secretary, Board of
Governors of the Federal Reserve
System, 20th Street and Constitution
Avenue, NW, Washington, DC 20551.
Comments may also be delivered to
Room B–2222 of the Eccles Building
between 8:45 a.m. and 5:15 p.m.
weekdays, or to the guard station in the
Eccles Building courtyard on 20th Street
between Constitution Avenue and C
Street, NW, at any time. Comments may
be inspected in Room MP–500 of the
Martin Building between 9 a.m. and 5
p.m. weekdays, except as provided in 12
CFR 261.8 of the Board’s Rules
Regarding Availability of Information.
FDIC: Written comments should be
addressed to Robert E. Feldman,
Executive Secretary, Attention:
Comments/OES, Federal Deposit
Insurance Corporation, 550 17th Street,
NW, Washington, DC 20429. 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.
(Fax number: (202) 898–3838; Internet
address: comments@fdic.gov).
Comments may be inspected and
photocopied in the FDIC Public
Information Center, Room 100, 801 17th
Street, NW, Washington, DC, between 9
a.m. and 4:30 p.m. on business days.
OTS: Send comments to Manager,
Dissemination Branch, Records
Management and Information Policy,
Office of Thrift Supervision, 1700 G
Street, NW, Washington, DC 20552,
Attention Docket No. 2000–15. These
submissions may be hand-delivered to
1700 G Street, NW, from 9 a.m. to 5 p.m.
on business days or may be sent by
facsimile transmission to FAX number
(202) 906–7755; or by e-mail:
public.info@ots.treas.gov. Those
commenting by e-mail should include
their name and telephone number.
Comments will be available for
inspection at 1700 G Street, NW, from
9 to 4 p.m. on business days.
FOR FURTHER INFORMATION CONTACT:
OCC: Roger Tufts, Senior Economic
Advisor or Amrit Sekhon, Risk
Specialist, Capital Policy Division, (202)
874–5070; Laura Goldman, Senior
Attorney, Legislative and Regulatory
Activities Division, (202) 874–5090,
Office of the Comptroller of the
Currency, 250 E Street, SW,
Washington, DC 20219.
Board: Thomas R. Boemio, Senior
Supervisory Financial Analyst, (202)
452–2982, or Norah Barger, Assistant
Director (202) 452–2402, Division of
Banking Supervision and Regulation.
For the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), Diane Jenkins, (202) 452–3544,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW, Washington,
DC 20551.
FDIC: Robert F. Storch, Chief,
Accounting Section, Division of
Supervision, (202) 898–8906; or Jamey
Basham, Counsel, Legal Division, (202)
898–7265, Federal Deposit Insurance
Corporation, 550 17th Street, NW,
Washington, DC 20429.
OTS: Michael D. Solomon, Senior
Program Manager for Capital Policy,
Supervision Policy, (202) 906–5654; or
Karen Osterloh, Assistant Chief Counsel
(202) 906–6639, Office of Thrift
Supervision, 1700 G Street, NW,
Washington, DC 20552.
SUPPLEMENTARY INFORMATION:
I. Introduction
The agencies are proposing to amend
their risk-based capital standards to
change the treatment of certain recourse
obligations, direct credit substitutes,
and securitized transactions that expose
banking organizations to credit risk.
This proposal amends the agencies’ risk-
based capital standards to align more
closely the risk-based capital treatment
of recourse obligations and direct credit
substitutes and to vary the capital
requirements for positions in securitized
transactions (and certain other credit
exposures) according to their relative
risk. The proposal also requires the
sponsor of a revolving credit
securitization that involves an early
amortization feature to hold capital
VerDate 07<MAR>2000 20:04 Mar 07, 2000 Jkt 190000 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\08MRP2.SGM pfrm08 PsN: 08MRP2
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket No. 00–06]
RIN 1557–AB14
FEDERAL RESERVE SYSTEM
12 CFR Parts 208 and 225
[Regulations H and Y; Docket No. R–1055]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 325
RIN 3064–AB31
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 567
[Docket No. 2000–15]
RIN 1550–AB11
Risk-Based Capital Standards;
Recourse and Direct Credit Substitutes
AGENCIES: Office of the Comptroller of
the Currency, Treasury; Board of
Governors of the Federal Reserve
System; Federal Deposit Insurance
Corporation; and Office of Thrift
Supervision, Treasury.
ACTION: Joint notice of proposed
rulemaking.
SUMMARY: The Office of the Comptroller
of the Currency (OCC), the Board of
Governors of the Federal Reserve
System (Board), the Federal Deposit
Insurance Corporation (FDIC), and the
Office of Thrift Supervision (OTS)
(collectively, the agencies) are
proposing changes to their risk-based
capital standards to address the
regulatory capital treatment of recourse
obligations and direct credit substitutes
that expose banks, bank holding
companies, and thrifts (collectively,
banking organizations) to credit risk.
The proposal treats recourse obligations
and direct credit substitutes more
consistently than under the agencies’
current risk-based capital standards. In
addition, the agencies would use credit
ratings and certain alternative
approaches to match the risk-based
capital requirement more closely to a
banking organization’s relative risk of
loss in asset securitizations. The
proposal also requires the sponsor of a
revolving credit securitization that
involves an early amortization feature to
hold capital against the amount of assets
under management, i.e. the off-balance
sheet securitized receivables.
This proposal is intended to result in
more consistent treatment of recourse
obligations and similar transactions
among the agencies, more consistent
risk-based capital treatment for certain
types of transactions involving similar
risk, and capital requirements that more
closely reflect a banking organization’s
relative exposure to credit risk.
DATES: Your comments must be received
by June 7, 2000.
ADDRESSES: Comments should be
directed to:
OCC: You may send comments
electronically to regs.comments@
occ.treas.gov or by mail to Docket No.
00–06, Communications Division, Third
Floor, Office of the Comptroller of the
Currency, 250 E Street, SW,
Washington, DC 20219. In addition, you
may send comments by facsimile
transmission to (202) 874–5274. You
can inspect and photocopy comments at
that address.
Board: Comments, which should refer
to Docket No. R–1055, may be mailed to
Jennifer J. Johnson, Secretary, Board of
Governors of the Federal Reserve
System, 20th Street and Constitution
Avenue, NW, Washington, DC 20551.
Comments may also be delivered to
Room B–2222 of the Eccles Building
between 8:45 a.m. and 5:15 p.m.
weekdays, or to the guard station in the
Eccles Building courtyard on 20th Street
between Constitution Avenue and C
Street, NW, at any time. Comments may
be inspected in Room MP–500 of the
Martin Building between 9 a.m. and 5
p.m. weekdays, except as provided in 12
CFR 261.8 of the Board’s Rules
Regarding Availability of Information.
FDIC: Written comments should be
addressed to Robert E. Feldman,
Executive Secretary, Attention:
Comments/OES, Federal Deposit
Insurance Corporation, 550 17th Street,
NW, Washington, DC 20429. 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.
(Fax number: (202) 898–3838; Internet
address: comments@fdic.gov).
Comments may be inspected and
photocopied in the FDIC Public
Information Center, Room 100, 801 17th
Street, NW, Washington, DC, between 9
a.m. and 4:30 p.m. on business days.
OTS: Send comments to Manager,
Dissemination Branch, Records
Management and Information Policy,
Office of Thrift Supervision, 1700 G
Street, NW, Washington, DC 20552,
Attention Docket No. 2000–15. These
submissions may be hand-delivered to
1700 G Street, NW, from 9 a.m. to 5 p.m.
on business days or may be sent by
facsimile transmission to FAX number
(202) 906–7755; or by e-mail:
public.info@ots.treas.gov. Those
commenting by e-mail should include
their name and telephone number.
Comments will be available for
inspection at 1700 G Street, NW, from
9 to 4 p.m. on business days.
FOR FURTHER INFORMATION CONTACT:
OCC: Roger Tufts, Senior Economic
Advisor or Amrit Sekhon, Risk
Specialist, Capital Policy Division, (202)
874–5070; Laura Goldman, Senior
Attorney, Legislative and Regulatory
Activities Division, (202) 874–5090,
Office of the Comptroller of the
Currency, 250 E Street, SW,
Washington, DC 20219.
Board: Thomas R. Boemio, Senior
Supervisory Financial Analyst, (202)
452–2982, or Norah Barger, Assistant
Director (202) 452–2402, Division of
Banking Supervision and Regulation.
For the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), Diane Jenkins, (202) 452–3544,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW, Washington,
DC 20551.
FDIC: Robert F. Storch, Chief,
Accounting Section, Division of
Supervision, (202) 898–8906; or Jamey
Basham, Counsel, Legal Division, (202)
898–7265, Federal Deposit Insurance
Corporation, 550 17th Street, NW,
Washington, DC 20429.
OTS: Michael D. Solomon, Senior
Program Manager for Capital Policy,
Supervision Policy, (202) 906–5654; or
Karen Osterloh, Assistant Chief Counsel
(202) 906–6639, Office of Thrift
Supervision, 1700 G Street, NW,
Washington, DC 20552.
SUPPLEMENTARY INFORMATION:
I. Introduction
The agencies are proposing to amend
their risk-based capital standards to
change the treatment of certain recourse
obligations, direct credit substitutes,
and securitized transactions that expose
banking organizations to credit risk.
This proposal amends the agencies’ risk-
based capital standards to align more
closely the risk-based capital treatment
of recourse obligations and direct credit
substitutes and to vary the capital
requirements for positions in securitized
transactions (and certain other credit
exposures) according to their relative
risk. The proposal also requires the
sponsor of a revolving credit
securitization that involves an early
amortization feature to hold capital
VerDate 07<MAR>2000 20:04 Mar 07, 2000 Jkt 190000 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\08MRP2.SGM pfrm08 PsN: 08MRP2