Thursday,
January 28, 2010
Part II
Department of the Treasury
Office of the Comptroller of the
Currency
12 CFR Part 3
Office of Thrift Supervision
12 CFR Part 567
Federal Reserve System
12 CFR Parts 208 and 225
Federal Deposit Insurance
Corporation
12 CFR Part 325
Risk-Based Capital Guidelines; Capital
Adequacy Guidelines; Capital
Maintenance: Regulatory Capital; Impact
of Modifications to Generally Accepted
Accounting Principles; Consolidation of
Asset-Backed Commercial Paper Programs;
and Other Related Issues; Final Rule
VerDate Nov<24>2008 17:46 Jan 27, 2010 Jkt 220001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\28JAR2.SGM 28JAR2
jlentini on DSKJ8SOYB1PROD with RULES2
January 28, 2010
Part II
Department of the Treasury
Office of the Comptroller of the
Currency
12 CFR Part 3
Office of Thrift Supervision
12 CFR Part 567
Federal Reserve System
12 CFR Parts 208 and 225
Federal Deposit Insurance
Corporation
12 CFR Part 325
Risk-Based Capital Guidelines; Capital
Adequacy Guidelines; Capital
Maintenance: Regulatory Capital; Impact
of Modifications to Generally Accepted
Accounting Principles; Consolidation of
Asset-Backed Commercial Paper Programs;
and Other Related Issues; Final Rule
VerDate Nov<24>2008 17:46 Jan 27, 2010 Jkt 220001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\28JAR2.SGM 28JAR2
jlentini on DSKJ8SOYB1PROD with RULES2
4636 Federal Register / Vol. 75, No. 18 / Thursday, January 28, 2010 / Rules and Regulations
1 The accounting treatment of these transactions
and structures was previously governed by the
FASB’s Statement of Financial Accounting
Standards No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments
of Liabilities (2000) (FAS 140) and FASB
Interpretation No. 46(R), Consolidation of Variable
Interest Entities (2003) (FIN 46(R)). References
herein to FASB Statements of Financial Accounting
Standards and Interpretations are to the FASB’s
‘‘pre-Codification standards’’ documents and do not
reflect modifications that have been made by the
FASB as the related text is incorporated in the
FASB Accounting Standards Codification that
FASB announced on July 1, 2009.
2 Unless otherwise indicated, the term ‘‘banking
organization’’ includes banks, savings associations,
and bank holding companies (BHCs). The terms
‘‘bank holding company’’ and ‘‘BHC’’ refer only to
bank holding companies regulated by the Board.
3 See relevant provisions in FAS 166, paragraphs
5–7, and FAS 167, paragraphs 7–10.
4 12 CFR part 3, appendix A (OCC); 12 CFR parts
208 and 225, appendix A (Board); 12 CFR part 325,
appendix A (FDIC); and 12 CFR part 567, subpart
B (OTS). The risk-based capital rules generally do
not apply to BHCs with $500 million or less in
consolidated assets.
5 12 CFR part 3, appendix C (OCC); 12 CFR part
208, appendix F; and 12 CFR part 225, appendix
G (Board); 12 CFR part 325, appendix D (FDIC); 12
CFR 567, Appendix C (OTS).
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket ID: OCC–2009–0020]
RIN 1557–AD26
FEDERAL RESERVE SYSTEM
12 CFR Parts 208 and 225
[Regulations H and Y; Docket No. R–1368]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 325
RIN 3064–AD48
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 567
[No. OTS–2010–0002]
RIN 1550–AC36
Risk-Based Capital Guidelines; Capital
Adequacy Guidelines; Capital
Maintenance: Regulatory Capital;
Impact of Modifications to Generally
Accepted Accounting Principles;
Consolidation of Asset-Backed
Commercial Paper Programs; and
Other Related Issues
AGENCIES: Office of the Comptroller of
the Currency, Department of the
Treasury; Board of Governors of the
Federal Reserve System; Federal Deposit
Insurance Corporation; and Office of
Thrift Supervision, Department of the
Treasury.
ACTION: Final rule.
SUMMARY: The Office of the Comptroller
of the Currency (OCC), Board of
Governors of the Federal Reserve
System (Board), Federal Deposit
Insurance Corporation (FDIC), and the
Office of Thrift Supervision (OTS)
(collectively, the agencies) are amending
their general risk-based and advanced
risk-based capital adequacy frameworks
by adopting a final rule that eliminates
the exclusion of certain consolidated
asset-backed commercial paper
programs from risk-weighted assets;
provides for an optional two-quarter
implementation delay followed by an
optional two-quarter partial
implementation of the effect on risk-
weighted assets that will result from
changes to U.S. generally accepted
accounting principles; provides for an
optional two-quarter delay, followed by
an optional two-quarter phase-in, of the
application of the agencies’ regulatory
limit on the inclusion of the allowance
for loan and lease losses (ALLL) in tier
2 capital for the portion of the ALLL
associated with the assets a banking
organization consolidates as a result of
changes to U.S. generally accepted
accounting principles; and provides a
reservation of authority to permit the
agencies to require a banking
organization to treat entities that are not
consolidated under accounting
standards as if they were consolidated
for risk-based capital purposes,
commensurate with the risk relationship
of the banking organization to the
structure. The delay and subsequent
phase-in periods of the implementation
will apply only to the agencies’ risk-
based capital requirements, not the
leverage ratio requirement.
DATES: This rule is effective March 29,
2010. Banking organizations may elect
to comply with this final rule as of the
beginning of their first annual reporting
period that begins after November 15,
2009.
FOR FURTHER INFORMATION CONTACT:
OCC: Paul Podgorski, Risk Expert,
Capital Policy Division, (202) 874–5070,
or Carl Kaminski, Senior Attorney, (202)
874–5090, or Hugh Carney, Attorney,
Legislative and Regulatory Activities
Division, (202) 874–5090, Office of the
Comptroller of the Currency, 250 E
Street, SW., Washington, DC 20219.
Board: Barbara J. Bouchard, Associate
Director, (202) 452–3072, or Anna Lee
Hewko, Manager, Supervisory Policy
and Guidance, (202) 530–6260, Division
of Banking Supervision and Regulation;
or April C. Snyder, Counsel, (202) 452–
3099, or Benjamin W. McDonough,
Counsel, (202) 452–2036, Legal
Division. For the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), (202) 263–4869.
FDIC: James Weinberger, Senior
Policy Analyst (Capital Markets), (202)
898–7034, Christine Bouvier, Senior
Policy Analyst (Bank Accounting), (202)
898–7289, Division of Supervision and
Consumer Protection; or Mark Handzlik,
Senior Attorney, (202) 898–3990, or
Michael Phillips, Counsel, (202) 898–
3581, Supervision Branch, Legal
Division.
OTS: Teresa A. Scott, Senior Policy
Analyst, (202) 906–6478, Capital Risk,
Christine Smith, Senior Policy Analyst,
(202) 906–5740, Capital Risk, or Marvin
Shaw, Senior Attorney, (202) 906–6639,
Legislation and Regulation Division,
Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552.
SUPPLEMENTARY INFORMATION:
I. Background
A. Changes to U.S. Accounting
Standards and the Effect on Regulatory
Capital
On June 12, 2009, the Financial
Accounting Standard Board (FASB)
issued Statement of Financial
Accounting Standards No. 166,
Accounting for Transfers of Financial
Assets, an Amendment of FASB
Statement No. 140 (FAS 166), and
Statement of Financial Accounting
Standards No. 167, Amendments to
FASB Interpretation No. 46(R) (FAS
167). Among other things, FAS 166 and
FAS 167 modified the accounting
treatment under U.S. generally accepted
accounting principles (GAAP) of certain
structured finance transactions
involving a special purpose entity.1 FAS
166 and FAS 167 are effective as of the
beginning of a banking organization’s 2
first annual reporting period that begins
after November 15, 2009
(implementation date), including
interim periods therein, and for interim
and annual periods thereafter.3
The agencies’ risk-based measures for
banking organizations (the general risk-
based capital rules4 and the advanced
approaches rules,5 collectively the risk-
based capital rules) establish capital
requirements intended to reflect the
risks associated with on-balance sheet
exposures as well as off-balance sheet
exposures, such as guarantees,
commitments, and derivative
transactions. The agencies use GAAP as
the initial basis for determining whether
an exposure is treated as on- or off-
balance sheet for risk-based capital
VerDate Nov<24>2008 17:46 Jan 27, 2010 Jkt 220001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\28JAR2.SGM 28JAR2
jlentini on DSKJ8SOYB1PROD with RULES2
1 The accounting treatment of these transactions
and structures was previously governed by the
FASB’s Statement of Financial Accounting
Standards No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments
of Liabilities (2000) (FAS 140) and FASB
Interpretation No. 46(R), Consolidation of Variable
Interest Entities (2003) (FIN 46(R)). References
herein to FASB Statements of Financial Accounting
Standards and Interpretations are to the FASB’s
‘‘pre-Codification standards’’ documents and do not
reflect modifications that have been made by the
FASB as the related text is incorporated in the
FASB Accounting Standards Codification that
FASB announced on July 1, 2009.
2 Unless otherwise indicated, the term ‘‘banking
organization’’ includes banks, savings associations,
and bank holding companies (BHCs). The terms
‘‘bank holding company’’ and ‘‘BHC’’ refer only to
bank holding companies regulated by the Board.
3 See relevant provisions in FAS 166, paragraphs
5–7, and FAS 167, paragraphs 7–10.
4 12 CFR part 3, appendix A (OCC); 12 CFR parts
208 and 225, appendix A (Board); 12 CFR part 325,
appendix A (FDIC); and 12 CFR part 567, subpart
B (OTS). The risk-based capital rules generally do
not apply to BHCs with $500 million or less in
consolidated assets.
5 12 CFR part 3, appendix C (OCC); 12 CFR part
208, appendix F; and 12 CFR part 225, appendix
G (Board); 12 CFR part 325, appendix D (FDIC); 12
CFR 567, Appendix C (OTS).
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket ID: OCC–2009–0020]
RIN 1557–AD26
FEDERAL RESERVE SYSTEM
12 CFR Parts 208 and 225
[Regulations H and Y; Docket No. R–1368]
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 325
RIN 3064–AD48
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 567
[No. OTS–2010–0002]
RIN 1550–AC36
Risk-Based Capital Guidelines; Capital
Adequacy Guidelines; Capital
Maintenance: Regulatory Capital;
Impact of Modifications to Generally
Accepted Accounting Principles;
Consolidation of Asset-Backed
Commercial Paper Programs; and
Other Related Issues
AGENCIES: Office of the Comptroller of
the Currency, Department of the
Treasury; Board of Governors of the
Federal Reserve System; Federal Deposit
Insurance Corporation; and Office of
Thrift Supervision, Department of the
Treasury.
ACTION: Final rule.
SUMMARY: The Office of the Comptroller
of the Currency (OCC), Board of
Governors of the Federal Reserve
System (Board), Federal Deposit
Insurance Corporation (FDIC), and the
Office of Thrift Supervision (OTS)
(collectively, the agencies) are amending
their general risk-based and advanced
risk-based capital adequacy frameworks
by adopting a final rule that eliminates
the exclusion of certain consolidated
asset-backed commercial paper
programs from risk-weighted assets;
provides for an optional two-quarter
implementation delay followed by an
optional two-quarter partial
implementation of the effect on risk-
weighted assets that will result from
changes to U.S. generally accepted
accounting principles; provides for an
optional two-quarter delay, followed by
an optional two-quarter phase-in, of the
application of the agencies’ regulatory
limit on the inclusion of the allowance
for loan and lease losses (ALLL) in tier
2 capital for the portion of the ALLL
associated with the assets a banking
organization consolidates as a result of
changes to U.S. generally accepted
accounting principles; and provides a
reservation of authority to permit the
agencies to require a banking
organization to treat entities that are not
consolidated under accounting
standards as if they were consolidated
for risk-based capital purposes,
commensurate with the risk relationship
of the banking organization to the
structure. The delay and subsequent
phase-in periods of the implementation
will apply only to the agencies’ risk-
based capital requirements, not the
leverage ratio requirement.
DATES: This rule is effective March 29,
2010. Banking organizations may elect
to comply with this final rule as of the
beginning of their first annual reporting
period that begins after November 15,
2009.
FOR FURTHER INFORMATION CONTACT:
OCC: Paul Podgorski, Risk Expert,
Capital Policy Division, (202) 874–5070,
or Carl Kaminski, Senior Attorney, (202)
874–5090, or Hugh Carney, Attorney,
Legislative and Regulatory Activities
Division, (202) 874–5090, Office of the
Comptroller of the Currency, 250 E
Street, SW., Washington, DC 20219.
Board: Barbara J. Bouchard, Associate
Director, (202) 452–3072, or Anna Lee
Hewko, Manager, Supervisory Policy
and Guidance, (202) 530–6260, Division
of Banking Supervision and Regulation;
or April C. Snyder, Counsel, (202) 452–
3099, or Benjamin W. McDonough,
Counsel, (202) 452–2036, Legal
Division. For the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), (202) 263–4869.
FDIC: James Weinberger, Senior
Policy Analyst (Capital Markets), (202)
898–7034, Christine Bouvier, Senior
Policy Analyst (Bank Accounting), (202)
898–7289, Division of Supervision and
Consumer Protection; or Mark Handzlik,
Senior Attorney, (202) 898–3990, or
Michael Phillips, Counsel, (202) 898–
3581, Supervision Branch, Legal
Division.
OTS: Teresa A. Scott, Senior Policy
Analyst, (202) 906–6478, Capital Risk,
Christine Smith, Senior Policy Analyst,
(202) 906–5740, Capital Risk, or Marvin
Shaw, Senior Attorney, (202) 906–6639,
Legislation and Regulation Division,
Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552.
SUPPLEMENTARY INFORMATION:
I. Background
A. Changes to U.S. Accounting
Standards and the Effect on Regulatory
Capital
On June 12, 2009, the Financial
Accounting Standard Board (FASB)
issued Statement of Financial
Accounting Standards No. 166,
Accounting for Transfers of Financial
Assets, an Amendment of FASB
Statement No. 140 (FAS 166), and
Statement of Financial Accounting
Standards No. 167, Amendments to
FASB Interpretation No. 46(R) (FAS
167). Among other things, FAS 166 and
FAS 167 modified the accounting
treatment under U.S. generally accepted
accounting principles (GAAP) of certain
structured finance transactions
involving a special purpose entity.1 FAS
166 and FAS 167 are effective as of the
beginning of a banking organization’s 2
first annual reporting period that begins
after November 15, 2009
(implementation date), including
interim periods therein, and for interim
and annual periods thereafter.3
The agencies’ risk-based measures for
banking organizations (the general risk-
based capital rules4 and the advanced
approaches rules,5 collectively the risk-
based capital rules) establish capital
requirements intended to reflect the
risks associated with on-balance sheet
exposures as well as off-balance sheet
exposures, such as guarantees,
commitments, and derivative
transactions. The agencies use GAAP as
the initial basis for determining whether
an exposure is treated as on- or off-
balance sheet for risk-based capital
VerDate Nov<24>2008 17:46 Jan 27, 2010 Jkt 220001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\28JAR2.SGM 28JAR2
jlentini on DSKJ8SOYB1PROD with RULES2