This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
Proposed Rules Federal Register
40495
Vol. 82, No. 164
Friday, August 25, 2017
DEPARTMENT OF TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket ID OCC–2017–0012]
RIN 1557–AE 23
FEDERAL RESERVE SYSTEM
12 CFR Part 217
[Regulation Q; Docket No. R–1571]
RIN 7100–AE 83
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 324
RIN 3064–AE 63
Regulatory Capital Rules: Retention of
Certain Existing Transition Provisions
for Banking Organizations That Are
Not Subject to the Advanced
Approaches Capital Rules
AGENCY: Office of the Comptroller of the
Currency, Treasury; the Board of
Governors of the Federal Reserve
System; and the Federal Deposit
Insurance Corporation.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Office of the Comptroller
of the Currency (OCC), the Board of
Governors of the Federal Reserve
System (Board), and the Federal Deposit
Insurance Corporation (FDIC)
(collectively, the agencies) are inviting
public comment on a notice of proposed
rulemaking (NPR) that would extend the
current treatment under the regulatory
capital rules (capital rules) for certain
regulatory capital deductions and risk
weights and certain minority interest
requirements, as they apply to banking
organizations that are not subject to the
advanced approaches capital rules (non-
advanced approaches banking
organizations). Specifically, for non-
advanced approaches banking
organizations, the agencies propose to
extend the current regulatory capital
treatment of: Mortgage servicing assets;
deferred tax assets arising from
temporary differences that could not be
realized through net operating loss
carrybacks; significant investments in
the capital of unconsolidated financial
institutions in the form of common
stock; non-significant investments in the
capital of unconsolidated financial
institutions; significant investments in
the capital of unconsolidated financial
institutions that are not in the form of
common stock; and common equity tier
1 minority interest, tier 1 minority
interest, and total capital minority
interest exceeding the capital rules’
minority interest limitations. The
agencies expect in the near term to issue
a separate NPR seeking public comment
on a proposal to simplify the regulatory
capital treatment of these items.
Providing the proposed extension to
non-advanced approaches banking
organizations for these items would
avoid potential burden on banking
organizations that may be subject in the
near future to a different regulatory
capital treatment for these items.
DATES: Comments must be received by
September 25, 2017.
ADDRESSES: Comments should be
directed to:
OCC: Because paper mail in the
Washington, DC area and at the OCC is
subject to delay, commenters are
encouraged to submit comments
through the Federal eRulemaking Portal
or email, if possible. Please use the title
‘‘Retaining existing transition provisions
for certain elements of the regulatory
capital rules’’ to facilitate the
organization and distribution of the
comments. You may submit comments
by any of the following methods:
• Federal eRulemaking Portal—
‘‘Regulations.gov’’: Go to
www.regulations.gov. Enter ‘‘Docket ID
OCC–2017–0012’’ in the Search Box and
click ‘‘Search.’’ Click on ‘‘Comment
Now’’ to submit public comments.
• Click on the ‘‘Help’’ tab on the
Regulations.gov home page to get
information on using Regulations.gov,
including instructions for submitting
public comments.
• Email: regs.comments@
occ.treas.gov.
• Mail: Legislative and Regulatory
Activities Division, Office of the
Comptroller of the Currency, 400 7th
Street SW., Suite 3E–218, Mail Stop
9W–11, Washington, DC 20219.
• Hand Delivery/Courier: 400 7th
Street SW., Suite 3E–218, Mail Stop
9W–11, Washington, DC 20219.
• Fax: (571) 465–4326.
Instructions: You must include
‘‘OCC’’ as the agency name and ‘‘Docket
ID OCC–2017–0012’’ in your comment.
In general, OCC will enter all comments
received into the docket and publish
them on the Regulations.gov Web site
without change, including any business
or personal information that you
provide such as name and address
information, email addresses, or phone
numbers. Comments received, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. Do not
include any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
You may review comments and other
related materials that pertain to this
rulemaking action by any of the
following methods:
• Viewing Comments Electronically:
Go to www.regulations.gov. Enter
‘‘Docket ID OCC–2017–0012’’ in the
Search box and click ‘‘Search.’’ Click on
‘‘Open Docket Folder’’ on the right side
of the screen and then ‘‘Comments.’’
Comments can be filtered by clicking on
‘‘View All’’ and then using the filtering
tools on the left side of the screen.
• Click on the ‘‘Help’’ tab on the
Regulations.gov home page to get
information on using Regulations.gov.
Supporting materials may be viewed by
clicking on ‘‘Open Docket Folder’’ and
then clicking on ‘‘Supporting
Documents.’’ The docket may be viewed
after the close of the comment period in
the same manner as during the comment
period.
• Viewing Comments Personally: You
may personally inspect and photocopy
comments at the OCC, 400 7th Street
SW., Washington, DC 20219. For
security reasons, the OCC requires that
visitors make an appointment to inspect
comments. You may do so by calling
(202) 649–6700 or, for persons who are
deaf or hard of hearing, TTY, (202) 649–
5597. Upon arrival, visitors will be
required to present valid government-
issued photo identification and submit
to security screening in order to inspect
and photocopy comments.
Board: You may submit comments,
identified by Docket No. R–1571 and
VerDate Sep<11>2014 14:55 Aug 24, 2017 Jkt 241001 PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 E:\FR\FM\25AUP1.SGM 25AUP1
pmangrum on DSK3GDR082PROD with PROPOSALS
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
Proposed Rules Federal Register
40495
Vol. 82, No. 164
Friday, August 25, 2017
DEPARTMENT OF TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 3
[Docket ID OCC–2017–0012]
RIN 1557–AE 23
FEDERAL RESERVE SYSTEM
12 CFR Part 217
[Regulation Q; Docket No. R–1571]
RIN 7100–AE 83
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 324
RIN 3064–AE 63
Regulatory Capital Rules: Retention of
Certain Existing Transition Provisions
for Banking Organizations That Are
Not Subject to the Advanced
Approaches Capital Rules
AGENCY: Office of the Comptroller of the
Currency, Treasury; the Board of
Governors of the Federal Reserve
System; and the Federal Deposit
Insurance Corporation.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Office of the Comptroller
of the Currency (OCC), the Board of
Governors of the Federal Reserve
System (Board), and the Federal Deposit
Insurance Corporation (FDIC)
(collectively, the agencies) are inviting
public comment on a notice of proposed
rulemaking (NPR) that would extend the
current treatment under the regulatory
capital rules (capital rules) for certain
regulatory capital deductions and risk
weights and certain minority interest
requirements, as they apply to banking
organizations that are not subject to the
advanced approaches capital rules (non-
advanced approaches banking
organizations). Specifically, for non-
advanced approaches banking
organizations, the agencies propose to
extend the current regulatory capital
treatment of: Mortgage servicing assets;
deferred tax assets arising from
temporary differences that could not be
realized through net operating loss
carrybacks; significant investments in
the capital of unconsolidated financial
institutions in the form of common
stock; non-significant investments in the
capital of unconsolidated financial
institutions; significant investments in
the capital of unconsolidated financial
institutions that are not in the form of
common stock; and common equity tier
1 minority interest, tier 1 minority
interest, and total capital minority
interest exceeding the capital rules’
minority interest limitations. The
agencies expect in the near term to issue
a separate NPR seeking public comment
on a proposal to simplify the regulatory
capital treatment of these items.
Providing the proposed extension to
non-advanced approaches banking
organizations for these items would
avoid potential burden on banking
organizations that may be subject in the
near future to a different regulatory
capital treatment for these items.
DATES: Comments must be received by
September 25, 2017.
ADDRESSES: Comments should be
directed to:
OCC: Because paper mail in the
Washington, DC area and at the OCC is
subject to delay, commenters are
encouraged to submit comments
through the Federal eRulemaking Portal
or email, if possible. Please use the title
‘‘Retaining existing transition provisions
for certain elements of the regulatory
capital rules’’ to facilitate the
organization and distribution of the
comments. You may submit comments
by any of the following methods:
• Federal eRulemaking Portal—
‘‘Regulations.gov’’: Go to
www.regulations.gov. Enter ‘‘Docket ID
OCC–2017–0012’’ in the Search Box and
click ‘‘Search.’’ Click on ‘‘Comment
Now’’ to submit public comments.
• Click on the ‘‘Help’’ tab on the
Regulations.gov home page to get
information on using Regulations.gov,
including instructions for submitting
public comments.
• Email: regs.comments@
occ.treas.gov.
• Mail: Legislative and Regulatory
Activities Division, Office of the
Comptroller of the Currency, 400 7th
Street SW., Suite 3E–218, Mail Stop
9W–11, Washington, DC 20219.
• Hand Delivery/Courier: 400 7th
Street SW., Suite 3E–218, Mail Stop
9W–11, Washington, DC 20219.
• Fax: (571) 465–4326.
Instructions: You must include
‘‘OCC’’ as the agency name and ‘‘Docket
ID OCC–2017–0012’’ in your comment.
In general, OCC will enter all comments
received into the docket and publish
them on the Regulations.gov Web site
without change, including any business
or personal information that you
provide such as name and address
information, email addresses, or phone
numbers. Comments received, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. Do not
include any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
You may review comments and other
related materials that pertain to this
rulemaking action by any of the
following methods:
• Viewing Comments Electronically:
Go to www.regulations.gov. Enter
‘‘Docket ID OCC–2017–0012’’ in the
Search box and click ‘‘Search.’’ Click on
‘‘Open Docket Folder’’ on the right side
of the screen and then ‘‘Comments.’’
Comments can be filtered by clicking on
‘‘View All’’ and then using the filtering
tools on the left side of the screen.
• Click on the ‘‘Help’’ tab on the
Regulations.gov home page to get
information on using Regulations.gov.
Supporting materials may be viewed by
clicking on ‘‘Open Docket Folder’’ and
then clicking on ‘‘Supporting
Documents.’’ The docket may be viewed
after the close of the comment period in
the same manner as during the comment
period.
• Viewing Comments Personally: You
may personally inspect and photocopy
comments at the OCC, 400 7th Street
SW., Washington, DC 20219. For
security reasons, the OCC requires that
visitors make an appointment to inspect
comments. You may do so by calling
(202) 649–6700 or, for persons who are
deaf or hard of hearing, TTY, (202) 649–
5597. Upon arrival, visitors will be
required to present valid government-
issued photo identification and submit
to security screening in order to inspect
and photocopy comments.
Board: You may submit comments,
identified by Docket No. R–1571 and
VerDate Sep<11>2014 14:55 Aug 24, 2017 Jkt 241001 PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 E:\FR\FM\25AUP1.SGM 25AUP1
pmangrum on DSK3GDR082PROD with PROPOSALS
40496 Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Proposed Rules
1 Banking organizations covered by the agencies’
capital rules include national banks, state member
banks, state nonmember banks, savings
associations, and top-tier bank holding companies
and savings and loan holding companies domiciled
in the United States not subject to the Board’s Small
Bank Holding Company Policy Statement (12 CFR
part 225, appendix C), but excluding certain savings
and loan holding companies that are substantially
engaged in insurance underwriting or commercial
activities or that are estate trusts, or bank holding
companies and savings and loan holding companies
that are employee stock ownership plans. The
Board and the OCC issued a joint final rule on
October 11, 2013 (78 FR 62018) and the FDIC issued
a substantially identical interim final rule on
September 10, 2013 (78 FR 55340). In April 2014,
the FDIC adopted the interim final rule as a final
rule with no substantive changes. 79 FR 20754
(April 14, 2014).
2 See 12 CFR 217.21 (Board); 12 CFR 3.21 (OCC);
12 CFR 324.21 (FDIC).
3 12 CFR 217.21 (Board); 12 CFR 3.21 (OCC); 12
CFR 324.21 (FDIC).
4 See 12 CFR 217.22(c)(4), (c)(5), and (d)(1)
(Board); 12 CFR 3.22(c)(4), (c)(5), and (d)(1) (OCC);
12 CFR 324.22(c)(4), (c)(5), and (d)(1) (FDIC).
Banking organizations are permitted to net
associated deferred tax liabilities against assets
subject to deduction.
5 12 CFR 217.300 (Board); 12 CFR 3.300 (OCC);
12 CFR 324.300 (FDIC).
6 12 CFR 217.300(b)(4) and (d) (Board); 12 CFR
3.300(b)(4) and (d) (OCC); 12 CFR 324.300(b)(4) and
(d) (FDIC).
RIN 7100 AE 83, by any of the following
methods:
• Agency Web site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• Email: regs.comments@
federalreserve.gov. Include docket
number and RIN in the subject line of
the message.
• Fax: (202) 452–3819 or (202) 452–
3102.
• Mail: Ann E. Misback, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue NW., Washington,
DC 20551. All public comments are
available from the Board’s Web site at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm as
submitted, unless modified for technical
reasons. Accordingly, comments will
not be edited to remove any identifying
or contact information. Public
comments may also be viewed
electronically or in paper form in Room
3515, 1801 K Street NW. (between 18th
and 19th Streets NW.), Washington, DC
20006 between 9:00 a.m. and 5:00 p.m.
on weekdays.
FDIC: You may submit comments,
identified by RIN 3064–AE 63 by any of
the following methods:
• Agency Web site: http://
www.FDIC.gov/regulations/laws/
federal/propose.html. Follow
instructions for submitting comments
on the Agency Web site.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments/Legal
ESS, Federal Deposit Insurance
Corporation, 550 17th Street NW.,
Washington, DC 20429.
• Hand Delivered/Courier: 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 7:00 a.m. and
5:00 p.m.
• Email: comments@FDIC.gov.
Include the RIN 3064–AE 63 on the
subject line of the message.
• Public Inspection: All comments
received must include the agency name
and RIN 3064–AE 63 for this
rulemaking. All comments received will
be posted without change to http://
www.fdic.gov/regulations/laws/federal/,
including any personal information
provided. Paper copies of public
comments may be ordered from the
FDIC Public Information Center, 3501
North Fairfax Drive, Room E–1002,
Arlington, VA 22226 by telephone at
(877) 275–3342 or (703) 562–2200.
FOR FURTHER INFORMATION CONTACT:
OCC: Mark Ginsberg, Senior Risk
Expert (202) 649–6983; or Benjamin
Pegg, Risk Expert (202) 649–7146,
Capital and Regulatory Policy; or Carl
Kaminski, Special Counsel (202) 649–
5869; or Rima Kundnani, Attorney (202)
649–5545, Legislative and Regulatory
Activities Division, (202) 649–5490, for
persons who are deaf or hard of hearing,
TTY, (202) 649–5597, Office of the
Comptroller of the Currency, 400 7th
Street SW., Washington, DC 20219.
Board: Constance M. Horsley, Deputy
Associate Director, (202) 452–5239; Juan
Climent, Manager, (202) 872–7526;
Elizabeth MacDonald, Manager, (202)
475–6316; Andrew Willis, Supervisory
Financial Analyst, (202) 912–4323; Sean
Healey, Supervisory Financial Analyst,
(202) 912–4611 or Matthew McQueeney,
Senior Financial Analyst, (202) 425–
2942, Division of Supervision and
Regulation; or Benjamin McDonough,
Assistant General Counsel, (202) 452–
2036; David W. Alexander, Counsel
(202) 452–2877, or Mark Buresh, Senior
Attorney (202) 452–5270, Legal
Division, Board of Governors of the
Federal Reserve System, 20th and C
Streets NW., Washington, DC 20551. For
the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), (202) 263–4869.
FDIC: Benedetto Bosco, Chief, Capital
Policy Section, bbosco@fdic.gov;
Michael Maloney, Capital Markets
Senior Policy Analyst, mmaloney@
fdic.gov, Capital Markets Branch,
Division of Risk Management
Supervision, (202) 898–6888; or Michael
Phillips, Counsel, mphillips@fdic.gov;
Catherine Wood, Counsel, cawood@
fdic.gov; Rachel Ackmann, Counsel,
rackmann@fdic.gov; Supervision
Branch, Legal Division, Federal Deposit
Insurance Corporation, 550 17th Street
NW., Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
In 2013, the Office of the Comptroller
of the Currency (OCC), the Board of
Governors of the Federal Reserve
System (Board), and the Federal Deposit
Insurance Corporation (FDIC)
(collectively, the agencies) adopted
rules that strengthened the capital
requirements applicable to banking
organizations supervised by the
agencies (capital rules).1 The capital
rules include limits on the amount of
capital that would count toward these
regulatory requirements in cases where
the capital is issued by a consolidated
subsidiary of a banking organization and
not owned by the banking organization
(minority interest).2 Because capital
issued at the subsidiary level is not
always available to absorb losses at the
consolidated level, these limits prevent
highly-capitalized subsidiaries from
overstating the amount of capital
available to absorb losses at the
consolidated level.3 With the goal of
strengthening the resiliency of banking
organizations, the capital rules also
require that amounts of mortgage
servicing assets (MSAs), deferred tax
assets arising from temporary
differences that could not be realized
through net operating loss carrybacks
(temporary difference DTAs), and
certain investments in the capital of
unconsolidated financial institutions
above certain thresholds be deducted
from a banking organization’s regulatory
capital.4
The capital rules contain transition
provisions that phase in certain
requirements over several years in order
to give banking organizations sufficient
time to adjust and adapt to such
requirements.5 The minority interest
limitations in the capital rules will
become fully effective on January 1,
2018. The deduction treatments for
investments in the capital of
unconsolidated financial institutions,
MSAs, and temporary difference DTAs
are subject to transition provisions until
December 31, 2017.6 Also starting on
January 1, 2018, the risk weight for
MSAs, temporary difference DTAs, and
significant investments in the capital of
unconsolidated financial institutions in
VerDate Sep<11>2014 14:55 Aug 24, 2017 Jkt 241001 PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 E:\FR\FM\25AUP1.SGM 25AUP1
pmangrum on DSK3GDR082PROD with PROPOSALS
1 Banking organizations covered by the agencies’
capital rules include national banks, state member
banks, state nonmember banks, savings
associations, and top-tier bank holding companies
and savings and loan holding companies domiciled
in the United States not subject to the Board’s Small
Bank Holding Company Policy Statement (12 CFR
part 225, appendix C), but excluding certain savings
and loan holding companies that are substantially
engaged in insurance underwriting or commercial
activities or that are estate trusts, or bank holding
companies and savings and loan holding companies
that are employee stock ownership plans. The
Board and the OCC issued a joint final rule on
October 11, 2013 (78 FR 62018) and the FDIC issued
a substantially identical interim final rule on
September 10, 2013 (78 FR 55340). In April 2014,
the FDIC adopted the interim final rule as a final
rule with no substantive changes. 79 FR 20754
(April 14, 2014).
2 See 12 CFR 217.21 (Board); 12 CFR 3.21 (OCC);
12 CFR 324.21 (FDIC).
3 12 CFR 217.21 (Board); 12 CFR 3.21 (OCC); 12
CFR 324.21 (FDIC).
4 See 12 CFR 217.22(c)(4), (c)(5), and (d)(1)
(Board); 12 CFR 3.22(c)(4), (c)(5), and (d)(1) (OCC);
12 CFR 324.22(c)(4), (c)(5), and (d)(1) (FDIC).
Banking organizations are permitted to net
associated deferred tax liabilities against assets
subject to deduction.
5 12 CFR 217.300 (Board); 12 CFR 3.300 (OCC);
12 CFR 324.300 (FDIC).
6 12 CFR 217.300(b)(4) and (d) (Board); 12 CFR
3.300(b)(4) and (d) (OCC); 12 CFR 324.300(b)(4) and
(d) (FDIC).
RIN 7100 AE 83, by any of the following
methods:
• Agency Web site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• Email: regs.comments@
federalreserve.gov. Include docket
number and RIN in the subject line of
the message.
• Fax: (202) 452–3819 or (202) 452–
3102.
• Mail: Ann E. Misback, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue NW., Washington,
DC 20551. All public comments are
available from the Board’s Web site at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm as
submitted, unless modified for technical
reasons. Accordingly, comments will
not be edited to remove any identifying
or contact information. Public
comments may also be viewed
electronically or in paper form in Room
3515, 1801 K Street NW. (between 18th
and 19th Streets NW.), Washington, DC
20006 between 9:00 a.m. and 5:00 p.m.
on weekdays.
FDIC: You may submit comments,
identified by RIN 3064–AE 63 by any of
the following methods:
• Agency Web site: http://
www.FDIC.gov/regulations/laws/
federal/propose.html. Follow
instructions for submitting comments
on the Agency Web site.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments/Legal
ESS, Federal Deposit Insurance
Corporation, 550 17th Street NW.,
Washington, DC 20429.
• Hand Delivered/Courier: 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 7:00 a.m. and
5:00 p.m.
• Email: comments@FDIC.gov.
Include the RIN 3064–AE 63 on the
subject line of the message.
• Public Inspection: All comments
received must include the agency name
and RIN 3064–AE 63 for this
rulemaking. All comments received will
be posted without change to http://
www.fdic.gov/regulations/laws/federal/,
including any personal information
provided. Paper copies of public
comments may be ordered from the
FDIC Public Information Center, 3501
North Fairfax Drive, Room E–1002,
Arlington, VA 22226 by telephone at
(877) 275–3342 or (703) 562–2200.
FOR FURTHER INFORMATION CONTACT:
OCC: Mark Ginsberg, Senior Risk
Expert (202) 649–6983; or Benjamin
Pegg, Risk Expert (202) 649–7146,
Capital and Regulatory Policy; or Carl
Kaminski, Special Counsel (202) 649–
5869; or Rima Kundnani, Attorney (202)
649–5545, Legislative and Regulatory
Activities Division, (202) 649–5490, for
persons who are deaf or hard of hearing,
TTY, (202) 649–5597, Office of the
Comptroller of the Currency, 400 7th
Street SW., Washington, DC 20219.
Board: Constance M. Horsley, Deputy
Associate Director, (202) 452–5239; Juan
Climent, Manager, (202) 872–7526;
Elizabeth MacDonald, Manager, (202)
475–6316; Andrew Willis, Supervisory
Financial Analyst, (202) 912–4323; Sean
Healey, Supervisory Financial Analyst,
(202) 912–4611 or Matthew McQueeney,
Senior Financial Analyst, (202) 425–
2942, Division of Supervision and
Regulation; or Benjamin McDonough,
Assistant General Counsel, (202) 452–
2036; David W. Alexander, Counsel
(202) 452–2877, or Mark Buresh, Senior
Attorney (202) 452–5270, Legal
Division, Board of Governors of the
Federal Reserve System, 20th and C
Streets NW., Washington, DC 20551. For
the hearing impaired only,
Telecommunication Device for the Deaf
(TDD), (202) 263–4869.
FDIC: Benedetto Bosco, Chief, Capital
Policy Section, bbosco@fdic.gov;
Michael Maloney, Capital Markets
Senior Policy Analyst, mmaloney@
fdic.gov, Capital Markets Branch,
Division of Risk Management
Supervision, (202) 898–6888; or Michael
Phillips, Counsel, mphillips@fdic.gov;
Catherine Wood, Counsel, cawood@
fdic.gov; Rachel Ackmann, Counsel,
rackmann@fdic.gov; Supervision
Branch, Legal Division, Federal Deposit
Insurance Corporation, 550 17th Street
NW., Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. Background
In 2013, the Office of the Comptroller
of the Currency (OCC), the Board of
Governors of the Federal Reserve
System (Board), and the Federal Deposit
Insurance Corporation (FDIC)
(collectively, the agencies) adopted
rules that strengthened the capital
requirements applicable to banking
organizations supervised by the
agencies (capital rules).1 The capital
rules include limits on the amount of
capital that would count toward these
regulatory requirements in cases where
the capital is issued by a consolidated
subsidiary of a banking organization and
not owned by the banking organization
(minority interest).2 Because capital
issued at the subsidiary level is not
always available to absorb losses at the
consolidated level, these limits prevent
highly-capitalized subsidiaries from
overstating the amount of capital
available to absorb losses at the
consolidated level.3 With the goal of
strengthening the resiliency of banking
organizations, the capital rules also
require that amounts of mortgage
servicing assets (MSAs), deferred tax
assets arising from temporary
differences that could not be realized
through net operating loss carrybacks
(temporary difference DTAs), and
certain investments in the capital of
unconsolidated financial institutions
above certain thresholds be deducted
from a banking organization’s regulatory
capital.4
The capital rules contain transition
provisions that phase in certain
requirements over several years in order
to give banking organizations sufficient
time to adjust and adapt to such
requirements.5 The minority interest
limitations in the capital rules will
become fully effective on January 1,
2018. The deduction treatments for
investments in the capital of
unconsolidated financial institutions,
MSAs, and temporary difference DTAs
are subject to transition provisions until
December 31, 2017.6 Also starting on
January 1, 2018, the risk weight for
MSAs, temporary difference DTAs, and
significant investments in the capital of
unconsolidated financial institutions in
VerDate Sep<11>2014 14:55 Aug 24, 2017 Jkt 241001 PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 E:\FR\FM\25AUP1.SGM 25AUP1
pmangrum on DSK3GDR082PROD with PROPOSALS