FEDERAL DEPOSIT INSURANCE CORPORATION, 22924-22930 [2020-07449]

Download as PDF 22924 Federal Register / Vol. 85, No. 79 / Thursday, April 23, 2020 / Rules and Regulations DEPARTMENT OF TREASURY Office of the Comptroller of the Currency 12 CFR Part 3 [Docket ID OCC–2020–0016] RIN 1557–AE88 FEDERAL RESERVE SYSTEM 12 CFR Part 217, 12 CFR Part 324 [Regulation Q; Docket No. R–1710] RIN 7100–AF84, RIN 3064–AF45 FEDERAL DEPOSIT INSURANCE CORPORATION Regulatory Capital Rule: Temporary Changes to the Community Bank Leverage Ratio Framework Office of the Comptroller of the Currency, Treasury; the Board of Governors of the Federal Reserve System; and the Federal Deposit Insurance Corporation. ACTION: Interim final rule; request for comment. AGENCY: This interim final rule makes temporary changes to the community bank leverage ratio framework, pursuant to section 4012 of the Coronavirus Aid, Relief, and Economic Security Act (statutory interim final rule). As of the second quarter 2020, a banking organization with a leverage ratio of 8 percent or greater (and that meets other qualifying criteria) may elect to use the community bank leverage ratio framework. The statutory interim final rule also establishes a two-quarter grace period for a qualifying community banking organization whose leverage ratio falls below the 8-percent community bank leverage ratio requirement, so long as the banking organization maintains a leverage ratio of 7 percent or greater. The temporary changes to the community bank leverage ratio framework implemented by this statutory interim final rule will cease to be effective as of the earlier of the termination date of the national emergency concerning the coronavirus disease declared by the President on March 13, 2020, under the National Emergencies Act, or December 31, 2020. To provide clarity to banking organizations, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation issued concurrently an interim final rule that provides a transition from the temporary lotter on DSKBCFDHB2PROD with RULES3 SUMMARY: VerDate Sep<11>2014 20:58 Apr 22, 2020 Jkt 250001 8-percent community bank leverage ratio requirement to a 9-percent community bank leverage ratio requirement. DATES: The interim final rule is effective April 23, 2020. Comments on the interim final rule must be received no later than June 8, 2020. ADDRESSES: Interested parties are encouraged to submit written comments jointly to all of the agencies. Commenters are encouraged to use the title ‘‘Regulatory Capital Rule: Temporary Changes to the Community Bank Leverage Ratio Framework’’ to facilitate the organization and distribution of comments among the agencies. Commenters are also encouraged to identify the number of the specific question for comment to which they are responding. Comments should be directed to: OCC: You may submit comments to the OCC by any of the methods set forth below. Commenters are encouraged to submit comments through the Federal eRulemaking Portal or email, if possible. Please use the title ‘‘Regulatory Capital Rule: Temporary Changes to the Community Bank Leverage Ratio Framework’’ to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods: Federal eRulemaking Portal— ‘‘Regulations.gov Classic or Regulations.gov Beta’’: Regulations.gov Classic: Go to https:// www.regulations.gov/. Enter ‘‘Docket ID OCC–2020–0016’’ in the Search Box and click ‘‘Search.’’ Click on ‘‘Comment Now’’ to submit public comments. For help with submitting effective comments please click on ‘‘View Commenter’s Checklist.’’ Click on the ‘‘Help’’ tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting public comments. Regulations.gov Beta: Go to https:// beta.regulations.gov/ or click ‘‘Visit New Regulations.gov Site’’ from the Regulations.gov Classic homepage. Enter ‘‘Docket ID OCC–2020–0016’’ in the Search Box and click ‘‘Search.’’ Public comments can be submitted via the ‘‘Comment’’ box below the displayed document information or by clicking on the document title and then clicking the ‘‘Comment’’ box on the topleft side of the screen. For help with submitting effective comments please click on ‘‘Commenter’s Checklist.’’ For assistance with the Regulations.gov Beta site, please call (877) 378–5457 (toll free) or (703) 454–9859 Monday–Friday, 9 a.m.–5 p.m. ET or email regulations@ erulemakinghelpdesk.com. PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 • Email: regs.comments@ occ.treas.gov. • Mail: Chief Counsel’s Office, Office of the Comptroller of the Currency, 400 7th Street SW, Suite 3E–218, Washington, DC 20219. Instructions: You must include ‘‘OCC’’ as the agency name and ‘‘Docket ID OCC–2020–0016’’ in your comment. In general, the OCC will enter all comments received into the docket and publish the comments on the Regulations.gov website 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— Regulations.gov Classic or Regulations.gov Beta: Regulations.gov Classic: Go to https:// www.regulations.gov/. Enter ‘‘Docket ID OCC–2020–0016’’ in the Search box and click ‘‘Search.’’ Click on ‘‘Open Docket Folder’’ on the right side of the screen. Comments and supporting materials can be viewed and filtered by clicking on ‘‘View all documents and comments in this docket’’ 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. The docket may be viewed after the close of the comment period in the same manner as during the comment period. Regulations.gov Beta: Go to https:// beta.regulations.gov/ or click ‘‘Visit New Regulations.gov Site’’ from the Regulations.gov Classic homepage. Enter ‘‘Docket ID OCC–2020–0016’’ in the Search Box and click ‘‘Search.’’ Click on the ‘‘Comments’’ tab. Comments can be viewed and filtered by clicking on the ‘‘Sort By’’ drop-down on the right side of the screen or the ‘‘Refine Results’’ options on the left side of the screen. Supporting materials can be viewed by clicking on the ‘‘Documents’’ tab and filtered by clicking on the ‘‘Sort By’’ drop-down on the right side of the screen or the ‘‘Refine Results’’ options on the left side of the screen. For assistance with the Regulations.gov Beta site, please call (877) 378–5457 (toll free) or (703) 454– 9859 Monday–Friday, 9 a.m.–5 p.m. ET E:\FR\FM\23APR3.SGM 23APR3 lotter on DSKBCFDHB2PROD with RULES3 Federal Register / Vol. 85, No. 79 / Thursday, April 23, 2020 / Rules and Regulations or email regulations@ erulemakinghelpdesk.com. The docket may be viewed after the close of the comment period in the same manner as during the comment period. Board: You may submit comments, identified by Docket No. R–1710 and RIN 7100–AF84, by any of the following methods: 1. Agency website: http:// www.federalreserve.gov. Follow the instructions for submitting comments at https://www.federalreserve.gov/apps/ foia/proposedregs.aspx. 2. Email: regs.comments@ federalreserve.gov. Include docket and RIN numbers in the subject line of the message. 3. FAX: (202) 452–3819 or (202) 452– 3102. 4. 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 will be made available on the Board’s website at http://www.federalreserve.gov/ generalinfo/foia/ProposedRegs.cfm as submitted, unless modified for technical reasons or to remove sensitive personally identifiable information at the commenter’s request. Public comments may also be viewed electronically or in paper form in Room 146, 1709 New York Avenue NW, Washington, DC 20006, between 9:00 a.m. and 5:00 p.m. on weekdays. For security reasons, the Board requires that visitors make an appointment to inspect comments. You may do so by calling (202) 452–3684. FDIC: You may submit comments, identified by RIN 3064–AF45, by any of the following methods: • Agency website: http:// www.FDIC.gov/regulations/laws/ Federal/. Follow the instructions for submitting comments on the Agency website. • Email: comments@fdic.gov. Include the RIN 3064–AF45 in the subject line of the message. • Mail: Robert E. Feldman, Executive Secretary, Attention: Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429. • Hand Delivery/Courier: Comments may be hand-delivered to the guard station at the rear of the 550 17th Street NW, Building (located on F Street) on business days between 7:00 a.m. and 5:00 p.m. Instructions: Comments submitted must include ‘‘FDIC’’ and ‘‘RIN 3064– AF45.’’ Comments received will be posted without change to http:// www.FDIC.gov/regulations/laws/ VerDate Sep<11>2014 20:58 Apr 22, 2020 Jkt 250001 Federal/, including any personal information provided. FOR FURTHER INFORMATION CONTACT: OCC: Margot Schwadron, Director, or Benjamin Pegg, Risk Expert, Capital and Regulatory Policy, (202) 649–6370; or Carl Kaminski, Special Counsel, or Daniel Perez, Senior Attorney, Chief Counsel’s Office, (202) 649–5490, for persons who are deaf or hearing impaired, 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; Elizabeth MacDonald, Manager, (202) 872–7526; Christopher Appel, Senior Financial Institution Policy Analyst II, (202) 973–6862; or Brendan Rowan, Senior Financial Institution Policy Analyst I, (202) 475–6685, Division of Supervision and Regulation; or Benjamin W. McDonough, Assistant General Counsel, (202) 452–2036; Mark Buresh, Senior Counsel, (202) 452–2877; Andrew Hartlage, Counsel, (202) 452– 6483; or Jonah Kind, Senior Attorney, (202) 452–2045, Legal Division, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW, Washington, DC 20551. Users of Telecommunication Device for the Deaf (TDD) only, call (202) 263– 4869. FDIC: Bobby R. Bean, Associate Director, bbean@fdic.gov; Benedetto Bosco, Chief, Capital Policy Section, bbosco@fdic.gov; Noah Cuttler, Senior Policy Analyst, ncuttler@fdic.gov; regulatorycapital@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; Supervision and Legislation Branch, Legal Division, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429. For the hearing impaired only, Telecommunication Device for the Deaf (TDD), (800) 925–4618. SUPPLEMENTARY INFORMATION: Table of Contents I. Background on the Community Bank Leverage Ratio Framework II. Section 4012 of the Coronavirus Aid, Relief, and Economic Security Act III. Temporary Changes to the Community Bank Leverage Ratio Framework IV. Effective Date of the Statutory Interim Final Rule V. Transition Interim Final Rule VI. Administrative Law Matters A. Administrative Procedure Act B. Congressional Review Act C. Paperwork Reduction Act D. Regulatory Flexibility Act E. Riegle Community Development and Regulatory Improvement Act of 1994 PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 22925 F. Use of Plain Language G. Unfunded Mandates Act I. Background on the Community Bank Leverage Ratio Framework The community bank leverage ratio framework provides a simple measure of capital adequacy for community banking organizations that meet certain qualifying criteria. The community bank leverage ratio framework implements section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), which requires 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) to establish a community bank leverage ratio of not less than 8 percent and not more than 10 percent for qualifying community banking organizations.1 Under section 201(c) of EGRRCPA, a qualifying community banking organization that exceeds the community bank leverage ratio, as established by the agencies, shall be considered to have met the generally applicable risk-based and leverage capital requirements in the capital rule (generally applicable rule), any other applicable capital or leverage requirements, and, if applicable, the ‘‘well capitalized’’ capital ratio requirements for purposes of section 38 of the Federal Deposit Insurance Act. Section 201(b) of EGRRCPA also requires the agencies to establish procedures for the treatment of a qualifying community banking organization whose leverage ratio falls below the community bank leverage ratio requirement as established by the agencies. In 2019, the agencies issued a final rule establishing the community bank leverage ratio framework, which became effective January 1, 2020 (2019 final rule).2 Under the 2019 final rule, the agencies established a community bank leverage ratio of 9 percent using the capital rule’s existing leverage ratio. A 1 Public Law 115–174, 132 Stat. 1296, 1306–07 (2018) (codified at 12 U.S.C. 5371 note). The authorizing statues use the term ‘‘qualifying community bank,’’ whereas the regulation implementing the statues uses the term ‘‘qualifying community banking organization.’’ The terms generally have the same meaning. Section 201(a)(3) of EGRRCPA provides that a qualifying community banking organization is a depository institution or depository institution holding company with total consolidated assets of less than $10 billion that satisfies such other factors, based on the banking organization’s risk profile, that the agencies determine are appropriate. This determination shall be based on consideration of off-balance sheet exposures, trading assets and liabilities, total notional derivatives exposures, and such other factors that the agencies determine appropriate. 2 84 FR 61776 (November 13, 2019). E:\FR\FM\23APR3.SGM 23APR3 22926 Federal Register / Vol. 85, No. 79 / Thursday, April 23, 2020 / Rules and Regulations qualifying community banking organization that maintains a leverage ratio of greater than 9 percent and elects to use the community bank leverage ratio framework will be considered to have satisfied the generally applicable rule and any other applicable capital or leverage requirements, and, if applicable, will be considered to be well capitalized.3 Under the 2019 final rule, a qualifying community banking organization is any depository institution or depository institution holding company that has less than $10 billion in total consolidated assets, off-balance sheet exposures (excluding derivatives other than sold credit derivatives and unconditionally cancelable commitments) of 25 percent or less of total consolidated assets, and trading assets and liabilities of 5 percent or less of total consolidated assets. The banking organization also cannot be an advanced approaches banking organization.4 In addition, the 2019 final rule established a two-quarter grace period during which a qualifying community banking organization that temporarily fails to meet any of the qualifying criteria, including the greater-than-9percent leverage ratio requirement, generally would still be considered well capitalized so long as the banking organization maintains a leverage ratio of greater than 8 percent. A banking organization that either fails to meet all the qualifying criteria within the grace period or fails to maintain a leverage ratio of greater than 8 percent is required to comply with the generally applicable rule and file the appropriate regulatory reports. II. Section 4012 of the Coronavirus Aid, Relief, and Economic Security Act lotter on DSKBCFDHB2PROD with RULES3 On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act 3 Under existing PCA requirements applicable to insured depository institutions, to be considered ‘‘well capitalized’’ a banking organization must demonstrate that it is not subject to any written agreement, order, capital directive, or as applicable, prompt corrective action directive, to meet and maintain a specific capital level for any capital measure. See 12 CFR 6.4(b)(1)(iv) (OCC); 12 CFR 208.43(b)(1)(v) (Board); 12 CFR 324.403(b)(1)(v) (FDIC). The same legal requirements continue to apply under the community bank leverage ratio framework. 4 A banking organization is an advanced approaches banking organization if it (1) is a global systemically important bank holding company, (2) is a Category II banking organization, (3) has elected to be an advanced approached banking organization, (4) is a subsidiary of a company that is an advanced approaches banking organization, or (5) has a subsidiary depository institution that is an advanced approaches banking organization. See 12 CFR 3.100 (OCC); 12 CFR 217.100 (Board); 12 CFR 324.100 (FDIC). VerDate Sep<11>2014 20:58 Apr 22, 2020 Jkt 250001 (CARES Act) was signed into law.5 The CARES Act directs the agencies to make temporary changes to the community bank leverage ratio framework. Specifically, section 4012 of the CARES Act directs the agencies to issue an interim final rule that provides that, for purposes of section 201 of EGRRCPA, the community bank leverage ratio shall be 8 percent and that a qualifying community banking organization whose leverage ratio falls below the community bank leverage ratio requirement established under the CARES Act shall have a reasonable grace period to satisfy that requirement. A qualifying community banking organization to which the grace period applies may continue to be treated as a qualifying community banking organization and shall be presumed to satisfy the capital and leverage requirements described in section 201(c) of EGRRCPA. Under section 4012 of the CARES Act, this interim final rule (statutory interim final rule) is effective during the period beginning on the date on which the agencies issue the statutory interim final rule and ending on the sooner of the termination date of the national emergency concerning the coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020, under the National Emergencies Act, or December 31, 2020 (termination date). III. Temporary Changes to the Community Bank Leverage Ratio Framework In accordance with section 4012 of the CARES Act, the statutory interim final rule makes certain temporary changes to the community bank leverage ratio framework. Effective as of April 23, 2020, the community bank leverage ratio will be 8 percent until the termination date of the statutory interim final rule. A banking organization with a leverage ratio of 8 percent or greater (and that meets the other qualifying criteria) may elect to use the community bank leverage ratio framework during the time the interim final rule is in effect. In addition, under the statutory interim final rule, a community banking organization that temporarily fails to meet any of the qualifying criteria, including the 8-percent community bank leverage ratio requirement, generally will still be considered well capitalized so long as the banking organization maintains a leverage ratio equal to 7 percent or greater. A banking organization that fails to meet the 5 Coronavirus Aid, Relief, and Economic Security Act, Public Law 116–136, 134 Stat. 281. PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 qualifying criteria after the end of the grace period or reports a leverage ratio of less than 7 percent will be required to comply with the generally applicable rule and file the appropriate regulatory reports.6 The statutory interim final rule does not make any changes to the other qualifying criteria in the community bank leverage ratio framework. The agencies adopted, in the 2019 final rule, a two-quarter grace period with a leverage ratio requirement that is 1 percentage point below the community bank leverage ratio on the basis that these requirements appropriately mitigate potential volatility in capital and associated regulatory reporting requirements based on temporary changes in a banking organization’s risk profile from quarter to quarter, while capturing more permanent changes in a banking organization’s risk profile. The agencies continue to believe that this approach is appropriate and provides a qualifying community banking organization whose leverage ratio falls below the 8-percent community bank leverage ratio requirement a reasonable amount of time to satisfy that requirement, consistent with section 4012 of the CARES Act. IV. Effective Date of the Statutory Interim Final Rule The statutory interim final rule is effective as of April 23, 2020. Banking organizations may utilize the requirements under the statutory interim final rule for purposes of filing their Call Report or Form FR Y–9C, as applicable, for the second quarter of 2020 (i.e., as of June 30, 2020). V. Transition Interim Final Rule The agencies are issuing concurrently an interim final rule that provides a transition from the temporary 8-percent community bank leverage ratio requirement, as mandated under section 4012 of the CARES Act, to the 9-percent community bank leverage ratio requirement, as established by the agencies in the 2019 final rule (transition interim final rule). When the requirements in the transition interim final rule become applicable, the community bank leverage ratio will be 8 percent in the second quarter through fourth quarter of calendar year 2020, 8.5 percent in calendar year 2021, and 9 percent thereafter. Section 201 of EGRRCPA requires a qualifying 6 In addition, consistent with the 2019 final rule, a banking organization that ceases to satisfy the qualifying criteria as a result of a business combination also will receive no grace period and will be required to comply with the generally applicable rule. E:\FR\FM\23APR3.SGM 23APR3 Federal Register / Vol. 85, No. 79 / Thursday, April 23, 2020 / Rules and Regulations community banking organization to exceed the community bank leverage ratio established by the agencies in order to be considered to have met the generally applicable rule, any other applicable capital or leverage requirements, and, if applicable, the ‘‘well capitalized’’ capital ratio requirements, whereas section 4012 of the CARES Act requires that a qualifying community banking organization meet or exceed an 8 percent community bank leverage ratio to be considered the same. The agencies are issuing the transition interim final rule to provide community banking organizations with sufficient time and clarity to meet the requirements under the community bank leverage ratio framework while they also focus on supporting lending to creditworthy households and businesses given the recent strains on the U.S. economy caused by the COVID–19 emergency. Question 1: The agencies invite comment on the grace period under the statutory interim final rule. Specifically, what are the advantages and disadvantages of the period of time the statutory interim final rule provides for a banking organization that no longer meets the qualifying criteria to transition to the generally applicable rule? What other alternatives should the agencies consider providing as a reasonable grace period, as required under section 4012 of the CARES Act, for a banking organization that no longer meets the definition of a qualifying community banking organization and why? VI. Administrative Law Matters lotter on DSKBCFDHB2PROD with RULES3 A. Administrative Procedure Act The agencies are issuing the statutory interim final rule without prior notice and the opportunity for public comment and the 30-day delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA).7 Pursuant to section 553(b) of the APA, general notice and the opportunity for public comment are not required with respect to a rulemaking when an ‘‘agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.’’ 8 The agencies believe that the public interest is best served by implementing the statutory interim final rule immediately upon publication in the Federal Register. As discussed above, section 4012 of the CARES Act directs the agencies to issue an interim final rule that provides that, for purposes of section 201 of EGRRCPA, the community bank leverage ratio shall be 8 percent and that a qualifying community banking organization whose leverage ratio falls below the community bank leverage ratio requirement established under the CARES Act shall have a reasonable grace period to satisfy that requirement. A qualifying community banking organization to which the grace period applies may continue to be treated as a qualifying community banking organization and shall be presumed to satisfy the capital and leverage requirements described in section 201(c) of EGRRCPA. The APA also requires a 30-day delayed effective date, except for (1) substantive rules, which grant or recognize an exemption or relieve a restriction; (2) interpretative rules and statements of policy; or (3) as otherwise provided by the agency for good cause.9 Because the rules relieve a restriction, the statutory interim final rule is exempt from the APA’s delayed effective date requirement.10 Additionally, the agencies find good cause to publish the statutory interim final rule with an immediate effective date for the same reasons set forth above under the discussion of section 553(b)(B) of the APA. While the agencies believe that there is good cause to issue the statutory interim final rule without advance notice and comment and with an immediate effective date as of the date of Federal Register publication, the agencies are interested in the views of the public and request comment on all aspects of the statutory interim final rule. B. Congressional Review Act For purposes of Congressional Review Act, the Office of Management and Budget (OMB) makes a determination as to whether a final rule constitutes a ‘‘major’’ rule.11 If a rule is deemed a ‘‘major rule’’ by OMB, the Congressional Review Act generally provides that the rule may not take effect until at least 60 days following its publication.12 The Congressional Review Act defines a ‘‘major rule’’ as any rule that the Administrator of the Office of Information and Regulatory Affairs of the OMB finds has resulted in or is 95 U.S.C. 553(d). U.S.C. 553(d)(1). 11 5 U.S.C. 801 et seq. 12 5 U.S.C. 801(a)(3). likely to result in (A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies or geographic regions, or (C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreignbased enterprises in domestic and export markets.13 For the same reasons set forth above, the agencies are adopting the statutory interim final rule without the delayed effective date generally prescribed under the Congressional Review Act. The delayed effective date required by the Congressional Review Act does not apply to any rule for which an agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.14 In light of section 4012 of the CARES Act, the agencies believe that delaying the effective date of the statutory interim final rule would be contrary to the public interest. As required by the Congressional Review Act, the agencies will submit the statutory interim final rule and other appropriate reports to Congress and the Government Accountability Office for review. C. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3521) (PRA) states that no agency may conduct or sponsor, nor is the respondent required to respond to, an information collection unless it displays a currently valid OMB control number. The statutory interim final rule affects the agencies’ current information collections for the Call Reports (OCC OMB Control No. 1557–0081; Board OMB Control No. 7100–0036; and FDIC OMB Control No. 3064–0052). The Board has reviewed the statutory interim final rule pursuant to authority delegated by the OMB. While the statutory interim final rule contains no information collection requirements, the agencies have determined that there are changes that should be made to the Call Reports as a result of this rulemaking. Although there may be a substantive change resulting from changes to the community bank leverage ratio framework for purposes of the Call Reports, the change should be minimal 10 5 75 85 U.S.C. 553. U.S.C. 553(b)(B). VerDate Sep<11>2014 20:58 Apr 22, 2020 Jkt 250001 PO 00000 Frm 00005 Fmt 4701 13 5 14 5 Sfmt 4700 22927 E:\FR\FM\23APR3.SGM U.S.C. 804(2). U.S.C. 808. 23APR3 22928 Federal Register / Vol. 85, No. 79 / Thursday, April 23, 2020 / Rules and Regulations and result in a zero net change in hourly burden under the agencies’ information collections. Submissions will, however, be made by the agencies to OMB. The changes to the Call Reports and their related instructions will be addressed in a separate Federal Register notice. In addition, there are changes that the Board should make to the Financial Statements for Holding Companies (FR Y–9 reports; OMB No. 7100–0128) to accurately reflect the changes of the statutory interim final rule. The Board will separately address these changes to the FR Y–9 reports and their instructions in the transition interim final rule. D. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) 15 requires an agency to consider whether the rules it proposes will have a significant economic impact on a substantial number of small entities.16 The RFA applies only to rules for which an agency publishes a general notice of proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed previously, consistent with section 553(b)(B) of the APA, the agencies have determined for good cause that general notice and opportunity for public comment is impracticable and contrary to the public’s interest, and therefore the agencies are not issuing a notice of proposed rulemaking. Accordingly, the agencies have concluded that the RFA’s requirements relating to initial and final regulatory flexibility analysis do not apply. Nevertheless, the agencies are interested in receiving feedback on ways that they could reduce any potential burden of the statutory interim final rule on small entities. lotter on DSKBCFDHB2PROD with RULES3 E. Riegle Community Development and Regulatory Improvement Act of 1994 Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),17 in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions (IDIs), each Federal banking agency must consider, consistent with the principle of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository 15 5 U.S.C. 601 et seq. regulations issued by the Small Business Administration, a small entity includes a depository institution, bank holding company, or savings and loan holding company with total assets of $600 million or less and trust companies with total assets of $41.5 million or less. See 13 CFR 121.201. 17 12 U.S.C. 4802(a). 16 Under VerDate Sep<11>2014 20:58 Apr 22, 2020 Jkt 250001 institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, section 302(b) of RCDRIA requires new regulations and amendments to regulations that impose additional reporting, disclosures, or other new requirements on IDIs generally to take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form, with certain exceptions, including for good cause.18 For the reasons described above, the agencies find good cause exists under section 302 of RCDRIA to publish the statutory interim final rule with an immediate effective date. F. Use of Plain Language Section 722 of the Gramm-LeachBliley Act 19 requires the Federal banking agencies to use ‘‘plain language’’ in all proposed and final rules published after January 1, 2000. In light of this requirement, the agencies have sought to present the statutory interim final rule in a simple and straightforward manner. The agencies invite comments on whether there are additional steps they could take to make the rule easier to understand. For example: • Have we organized the material to suit your needs? If not, how could this material be better organized? • Are the requirements in the regulation clearly stated? If not, how could the regulation be more clearly stated? • Does the regulation contain language or jargon that is not clear? If so, which language requires clarification? • Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes to the format would make the regulation easier to understand? • What else could we do to make the regulation easier to understand? G. Unfunded Mandates Act As a general matter, the Unfunded Mandates Act of 1995 (UMRA), 2 U.S.C. 1531 et seq., requires the preparation of a budgetary impact statement before promulgating a rule that includes a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. However, the UMRA does not apply to final rules for which 18 12 19 12 PO 00000 U.S.C. 4802. U.S.C. 4809. Frm 00006 Fmt 4701 Sfmt 4700 a general notice of proposed rulemaking was not published. See 2 U.S.C. 1532(a). Therefore, because the OCC has found good cause to dispense with notice and comment for this statutory interim final rule, the OCC concludes that the requirements of UMRA do not apply to this statutory interim final rule. List of Subjects in 12 CFR 12 CFR Part 3 Administrative practice and procedure, Capital, Federal savings associations, National banks, Risk. 12 CFR Part 217 Administrative practice and procedure, Banks, Banking, Capital, Federal Reserve System, Holding companies, Reporting and recordkeeping requirements, Risk, Securities. 12 CFR Part 324 Administrative practice and procedure, Banks, banking, Reporting and recordkeeping requirements, Savings associations, State non-member banks. Office of the Comptroller of the Currency 12 CFR Chapter I Authority and Issuance For the reasons set forth in the preamble, the OCC amends chapter I of Title 12 of the Code of Federal Regulations as follows: PART 3—CAPITAL ADEQUACY STANDARDS 1. The authority citation for part 3 is revised to read as follows: ■ Authority: 12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818, 1828(n), 1828 note, 1831n note, 1835, 3907, 3909, 5412(b)(2)(B), and Pub. L. 116–136, 134 Stat. 281. ■ 2. Add § 3.303 to read as follows: § 3.303 Temporary changes to the community bank leverage ratio framework. (a)(1) A national bank or Federal savings association that is not an advanced approaches national bank or Federal savings association and that meets all the criteria to be a qualifying community banking organization under § 3.12(a)(2) but for § 3.12(a)(2)(i) is a qualifying community banking organization if it has a leverage ratio equal to or greater than 8 percent. (2) Notwithstanding § 3.12(a)(1), a qualifying community banking organization that has made an election to use the community bank leverage ratio framework under § 3.12(a)(3) shall be considered to have met the minimum E:\FR\FM\23APR3.SGM 23APR3 Federal Register / Vol. 85, No. 79 / Thursday, April 23, 2020 / Rules and Regulations capital requirements under § 3.10, the capital ratio requirements for the well capitalized capital category under § 6.4(b)(1) of this chapter, and any other capital or leverage requirements to which the qualifying community banking organization is subject, if it has a leverage ratio equal to or greater than 8 percent. (b) Notwithstanding § 3.12(c)(6) and subject to § 3.12(c)(5), a qualifying community banking organization that has a leverage ratio of 7 percent or greater has the grace period described in § 3.12(c)(1) through (4). A national bank or Federal savings association that has a leverage ratio of less than 7 percent does not have a grace period and must comply with the minimum capital requirements under § 3.10(a)(1) and must report the required capital measures under § 3.10(a)(1) for the quarter in which it reports a leverage ratio of less than 7 percent. (c) Pursuant to section 4012 of the Coronavirus Aid, Relief, and Economic Security Act, the requirements provided under paragraphs (a) and (b) of this section are effective during the period beginning on April 23, 2020 and ending on the sooner of: (1) The termination date of the national emergency concerning the novel coronavirus disease outbreak declared by the President on March 13, 2020, under the National Emergencies Act (50 U.S.C. 1601 et seq.); or (2) December 31, 2020. * * * * * 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 is revised to read as follows: lotter on DSKBCFDHB2PROD with RULES3 ■ 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, 5371 note, and sec. 4012, Pub. L. 116–136, 134 Stat. 281. Subpart G—Transition Provisions ■ 4. Add § 217.304 to read as follows: VerDate Sep<11>2014 20:58 Apr 22, 2020 Jkt 250001 § 217.304 Temporary changes to the community bank leverage ratio framework. (a)(1) A Board-regulated institution that is not an advanced approaches Board-regulated institution and that meets all the criteria to be a qualifying community banking organization under § 217.12(a)(2) but for § 217.12(a)(2)(i) is a qualifying community banking organization if it has a leverage ratio equal to or greater than 8 percent. (2) Notwithstanding § 217.12(a)(1), a qualifying community banking organization that has made an election to use the community bank leverage ratio framework under § 217.12(a)(3) shall be considered to have met the minimum capital requirements under § 217.10, the capital ratio requirements for the well capitalized capital category under § 208.43(b)(1) of this chapter, if applicable, and any other capital or leverage requirements to which the qualifying community banking organization is subject, if it has a leverage ratio equal to or greater than 8 percent. (b) Notwithstanding § 217.12(c)(6) and subject to § 217.12(c)(5), a Boardregulated institution that has a leverage ratio of 7 percent or greater has the grace period described in § 217.12(c)(1) through (4). A Board-regulated institution that has a leverage ratio of less than 7 percent does not have a grace period and must comply with the minimum capital requirements under § 217.10(a)(1) and must report the required capital measures under § 217.10(a)(1) for the quarter in which it reports a leverage ratio of less than 7 percent. (c) Pursuant to section 4012 of the Coronavirus Aid, Relief, and Economic Security Act, the requirements provided under paragraphs (a) and (b) of this section are effective during the period beginning on April 23, 2020 and ending on the sooner of: (1) The termination date of the national emergency concerning the novel coronavirus disease outbreak declared by the President on March 13, 2020, under the National Emergencies Act (50 U.S.C. 1601 et seq.); or (2) December 31, 2020. Federal Deposit Insurance Corporation 12 CFR Chapter III Authority and Issuance For the reasons stated in the preamble, the Federal Deposit Insurance Corporation amends chapter III of Title 12, Code of Federal Regulations as follows: PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 22929 PART 324—CAPITAL ADEQUACY OF FDIC–SUPERVISED INSTITUTIONS 5. The authority citation for part 324 is revised 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); Pub. L. 115–174; Pub. L. 116–136, 134 Stat. 281. ■ 6. Add § 324.303 to read as follows: § 324.303 Temporary changes to the community bank leverage ratio framework. (a)(1) An FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution and that meets all the criteria to be a qualifying community banking organization under § 324.12(a)(2) but for § 324.12(a)(2)(i) is a qualifying community banking organization if it has a leverage ratio equal to or greater than 8 percent. (2) Notwithstanding § 324.12(a)(1), a qualifying community banking organization that has made an election to use the community bank leverage ratio framework under § 324.12(a)(3) shall be considered to have met the minimum capital requirements under § 324.10, the capital ratio requirements for the well capitalized capital category under § 324.403(b)(1) of this part, and any other capital or leverage requirements to which the qualifying community banking organization is subject, if it has a leverage ratio equal to or greater than 8 percent. (b) Notwithstanding § 324.12(c)(6) and subject to § 324.12(c)(5), a qualifying community banking organization that has a leverage ratio of 7 percent or greater has the grace period described in § 324.12(c)(1) through (4). An FDICsupervised institution that has a leverage ratio of less than 7 percent does not have a grace period and must comply with the minimum capital requirements under § 324.10(a)(1) and must report the required capital measures under § 324.10(a)(1) for the quarter in which it reports a leverage ratio of less than 7 percent. (c) Pursuant to section 4012 of the Coronavirus Aid, Relief, and Economic Security Act, the requirements provided under paragraphs (a) and (b) of this section are effective during the period beginning on April 23, 2020 and ending on the sooner of: E:\FR\FM\23APR3.SGM 23APR3 22930 Federal Register / Vol. 85, No. 79 / Thursday, April 23, 2020 / Rules and Regulations (1) The termination date of the national emergency concerning the novel coronavirus disease outbreak declared by the President on March 13, 2020, under the National Emergencies Act (50 U.S.C. 1601 et seq.); or (2) December 31, 2020. Brian P. Brooks, First Deputy Comptroller of the Currency By order of the Board of Governors of the Federal Reserve System. Ann Misback, Secretary of the Board. Federal Deposit Insurance Corporation. By order of the Board of Directors. Dated at Washington, DC, on or about April 3, 2020. Robert E. Feldman, Executive Secretary. [FR Doc. 2020–07449 Filed 4–22–20; 8:45 am] BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P DEPARTMENT OF TREASURY Office of the Comptroller of the Currency 12 CFR Part 3 [Docket ID OCC–2020–0017] RIN 1557–AE89 FEDERAL RESERVE SYSTEM 12 CFR Part 217 [Regulation Q; Docket No. R–1711] RIN 7100–AF85 FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 324 RIN 3064–AF47 Regulatory Capital Rule: Transition for the Community Bank Leverage Ratio Framework Office of the Comptroller of the Currency, Treasury; the Board of Governors of the Federal Reserve System; and the Federal Deposit Insurance Corporation. ACTION: Interim final rule; request for comment. AGENCY: This interim final rule provides a graduated transition to a community bank leverage ratio requirement of 9 percent from the temporary 8-percent community bank leverage ratio requirement (transition interim final rule). When the requirements in the transition interim final rule become applicable, the community bank leverage ratio will be lotter on DSKBCFDHB2PROD with RULES3 SUMMARY: VerDate Sep<11>2014 20:58 Apr 22, 2020 Jkt 250001 8 percent beginning in the second quarter of calendar year 2020, 8.5 percent through calendar year 2021, and 9 percent thereafter. The transition interim final rule also maintains a twoquarter grace period for a qualifying community banking organization whose leverage ratio falls no more than 1 percentage point below the applicable community bank leverage ratio requirement. The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (together, the agencies) issued concurrently an interim final rule that established an 8-percent community bank leverage ratio, as mandated under the Coronavirus Aid, Relief, and Economic Security Act. The agencies are issuing the transition interim final rule to provide community banking organizations with sufficient time and clarity to meet the 9 percent leverage ratio requirement under the community bank leverage ratio framework while they also focus on supporting lending to creditworthy households and businesses given the recent strains on the U.S. economy caused by the coronavirus disease emergency. DATES: The interim final rule is effective April 23, 2020. Comments on the interim final rule must be received no later than June 8, 2020. ADDRESSES: Interested parties are encouraged to submit written comments jointly to all of the agencies. Commenters are encouraged to use the title ‘‘Regulatory Capital Rule: Transition for the Community Bank Leverage Ratio Framework’’ to facilitate the organization and distribution of comments among the agencies. Commenters are also encouraged to identify the number of the specific question for comment to which they are responding. Comments should be directed to: OCC: You may submit comments to the OCC by any of the methods set forth below. Commenters are encouraged to submit comments through the Federal eRulemaking Portal or email, if possible. Please use the title ‘‘Regulatory Capital Rule: Transition for the Community Bank Leverage Ratio Framework’’ to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods: Federal eRulemaking Portal— ‘‘Regulations.gov Classic or Regulations.gov Beta’’: Regulations.gov Classic: Go to https:// www.regulations.gov/. Enter ‘‘Docket ID OCC–2020–0017’’ in the Search Box and PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 click ‘‘Search.’’ Click on ‘‘Comment Now’’ to submit public comments. For help with submitting effective comments please click on ‘‘View Commenter’s Checklist.’’ Click on the ‘‘Help’’ tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting public comments. Regulations.gov Beta: Go to https:// beta.regulations.gov/ or click ‘‘Visit New Regulations.gov Site’’ from the Regulations.gov Classic homepage. Enter ‘‘Docket ID OCC–2020–0017’’ in the Search Box and click ‘‘Search.’’ Public comments can be submitted via the ‘‘Comment’’ box below the displayed document information or by clicking on the document title and then clicking the ‘‘Comment’’ box on the topleft side of the screen. For help with submitting effective comments please click on ‘‘Commenter’s Checklist.’’ For assistance with the Regulations.gov Beta site, please call (877) 378–5457 (toll free) or (703) 454–9859 Monday–Friday, 9 a.m.–5 p.m. ET or email regulations@ erulemakinghelpdesk.com. • Email: regs.comments@ occ.treas.gov. • Mail: Chief Counsel’s Office, Office of the Comptroller of the Currency, 400 7th Street SW, Suite 3E–218, Washington, DC 20219. Instructions: You must include ‘‘OCC’’ as the agency name and ‘‘Docket ID OCC–2020–0017’’ in your comment. In general, the OCC will enter all comments received into the docket and publish the comments on the Regulations.gov website 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— Regulations.gov Classic or Regulations.gov Beta: Regulations.gov Classic: Go to https:// www.regulations.gov/. Enter ‘‘Docket ID OCC–2020–0017’’ in the Search box and click ‘‘Search.’’ Click on ‘‘Open Docket Folder’’ on the right side of the screen. Comments and supporting materials can be viewed and filtered by clicking on ‘‘View all documents and comments in this docket’’ and then using the filtering E:\FR\FM\23APR3.SGM 23APR3

Agencies

[Federal Register Volume 85, Number 79 (Thursday, April 23, 2020)]
[Rules and Regulations]
[Pages 22924-22930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07449]



[[Page 22923]]

Vol. 85

Thursday,

No. 79

April 23, 2020

Part IV





Department of the Treasury





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Office of the Comptroller of the Currency





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12 CFR Part 3





Federal Reserve System





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12 CFR Parts 217 and 324





Federal Deposit Insurance Corporation





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12 CFR Part 324





Regulatory Capital Rule: Temporary Changes to the Community Bank 
Leverage Ratio Framework; Rules

Federal Register / Vol. 85, No. 79 / Thursday, April 23, 2020 / Rules 
and Regulations

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DEPARTMENT OF TREASURY

Office of the Comptroller of the Currency

12 CFR Part 3

[Docket ID OCC-2020-0016]
RIN 1557-AE88

FEDERAL RESERVE SYSTEM

12 CFR Part 217, 12 CFR Part 324

[Regulation Q; Docket No. R-1710]
RIN 7100-AF84, RIN 3064-AF45


FEDERAL DEPOSIT INSURANCE CORPORATION

Regulatory Capital Rule: Temporary Changes to the Community Bank 
Leverage Ratio Framework

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: Interim final rule; request for comment.

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SUMMARY: This interim final rule makes temporary changes to the 
community bank leverage ratio framework, pursuant to section 4012 of 
the Coronavirus Aid, Relief, and Economic Security Act (statutory 
interim final rule). As of the second quarter 2020, a banking 
organization with a leverage ratio of 8 percent or greater (and that 
meets other qualifying criteria) may elect to use the community bank 
leverage ratio framework. The statutory interim final rule also 
establishes a two-quarter grace period for a qualifying community 
banking organization whose leverage ratio falls below the 8-percent 
community bank leverage ratio requirement, so long as the banking 
organization maintains a leverage ratio of 7 percent or greater. The 
temporary changes to the community bank leverage ratio framework 
implemented by this statutory interim final rule will cease to be 
effective as of the earlier of the termination date of the national 
emergency concerning the coronavirus disease declared by the President 
on March 13, 2020, under the National Emergencies Act, or December 31, 
2020. To provide clarity to banking organizations, the Office of the 
Comptroller of the Currency, the Board of Governors of the Federal 
Reserve System, and the Federal Deposit Insurance Corporation issued 
concurrently an interim final rule that provides a transition from the 
temporary 8-percent community bank leverage ratio requirement to a 9-
percent community bank leverage ratio requirement.

DATES: The interim final rule is effective April 23, 2020. Comments on 
the interim final rule must be received no later than June 8, 2020.

ADDRESSES: Interested parties are encouraged to submit written comments 
jointly to all of the agencies. Commenters are encouraged to use the 
title ``Regulatory Capital Rule: Temporary Changes to the Community 
Bank Leverage Ratio Framework'' to facilitate the organization and 
distribution of comments among the agencies. Commenters are also 
encouraged to identify the number of the specific question for comment 
to which they are responding. Comments should be directed to:
    OCC: You may submit comments to the OCC by any of the methods set 
forth below. Commenters are encouraged to submit comments through the 
Federal eRulemaking Portal or email, if possible. Please use the title 
``Regulatory Capital Rule: Temporary Changes to the Community Bank 
Leverage Ratio Framework'' to facilitate the organization and 
distribution of the comments. You may submit comments by any of the 
following methods:
    Federal eRulemaking Portal--``Regulations.gov Classic or 
Regulations.gov Beta'':
    Regulations.gov Classic: Go to https://www.regulations.gov/. Enter 
``Docket ID OCC-2020-0016'' in the Search Box and click ``Search.'' 
Click on ``Comment Now'' to submit public comments. For help with 
submitting effective comments please click on ``View Commenter's 
Checklist.'' Click on the ``Help'' tab on the Regulations.gov home page 
to get information on using Regulations.gov, including instructions for 
submitting public comments.
    Regulations.gov Beta: Go to https://beta.regulations.gov/ or click 
``Visit New Regulations.gov Site'' from the Regulations.gov Classic 
homepage. Enter ``Docket ID OCC-2020-0016'' in the Search Box and click 
``Search.'' Public comments can be submitted via the ``Comment'' box 
below the displayed document information or by clicking on the document 
title and then clicking the ``Comment'' box on the top-left side of the 
screen. For help with submitting effective comments please click on 
``Commenter's Checklist.'' For assistance with the Regulations.gov Beta 
site, please call (877) 378-5457 (toll free) or (703) 454-9859 Monday-
Friday, 9 a.m.-5 p.m. ET or email [email protected].
     Email: [email protected].
     Mail: Chief Counsel's Office, Office of the Comptroller of 
the Currency, 400 7th Street SW, Suite 3E-218, Washington, DC 20219.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket ID OCC-2020-0016'' in your comment. In general, the OCC will 
enter all comments received into the docket and publish the comments on 
the Regulations.gov website 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--Regulations.gov Classic 
or Regulations.gov Beta:
    Regulations.gov Classic: Go to https://www.regulations.gov/. Enter 
``Docket ID OCC-2020-0016'' in the Search box and click ``Search.'' 
Click on ``Open Docket Folder'' on the right side of the screen. 
Comments and supporting materials can be viewed and filtered by 
clicking on ``View all documents and comments in this docket'' 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. The docket may be viewed after the close of the 
comment period in the same manner as during the comment period.
    Regulations.gov Beta: Go to https://beta.regulations.gov/ or click 
``Visit New Regulations.gov Site'' from the Regulations.gov Classic 
homepage. Enter ``Docket ID OCC-2020-0016'' in the Search Box and click 
``Search.'' Click on the ``Comments'' tab. Comments can be viewed and 
filtered by clicking on the ``Sort By'' drop-down on the right side of 
the screen or the ``Refine Results'' options on the left side of the 
screen. Supporting materials can be viewed by clicking on the 
``Documents'' tab and filtered by clicking on the ``Sort By'' drop-down 
on the right side of the screen or the ``Refine Results'' options on 
the left side of the screen. For assistance with the Regulations.gov 
Beta site, please call (877) 378-5457 (toll free) or (703) 454-9859 
Monday-Friday, 9 a.m.-5 p.m. ET

[[Page 22925]]

or email [email protected].
    The docket may be viewed after the close of the comment period in 
the same manner as during the comment period.
    Board: You may submit comments, identified by Docket No. R-1710 and 
RIN 7100-AF84, by any of the following methods:
    1. Agency website: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at https://www.federalreserve.gov/apps/foia/proposedregs.aspx.
    2. Email: [email protected]. Include docket and RIN 
numbers in the subject line of the message.
    3. FAX: (202) 452-3819 or (202) 452-3102.
    4. 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 will be made available on the Board's website 
at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as 
submitted, unless modified for technical reasons or to remove sensitive 
personally identifiable information at the commenter's request. Public 
comments may also be viewed electronically or in paper form in Room 
146, 1709 New York Avenue NW, Washington, DC 20006, between 9:00 a.m. 
and 5:00 p.m. on weekdays. For security reasons, the Board requires 
that visitors make an appointment to inspect comments. You may do so by 
calling (202) 452-3684.
    FDIC: You may submit comments, identified by RIN 3064-AF45, by any 
of the following methods:
     Agency website: http://www.FDIC.gov/regulations/laws/Federal/. Follow the instructions for submitting comments on the Agency 
website.
     Email: [email protected]. Include the RIN 3064-AF45 in the 
subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th 
Street NW, Washington, DC 20429.
     Hand Delivery/Courier: Comments may be hand-delivered to 
the guard station at the rear of the 550 17th Street NW, Building 
(located on F Street) on business days between 7:00 a.m. and 5:00 p.m.
    Instructions: Comments submitted must include ``FDIC'' and ``RIN 
3064-AF45.'' Comments received will be posted without change to http://www.FDIC.gov/regulations/laws/Federal/, including any personal 
information provided.

FOR FURTHER INFORMATION CONTACT: 
    OCC: Margot Schwadron, Director, or Benjamin Pegg, Risk Expert, 
Capital and Regulatory Policy, (202) 649-6370; or Carl Kaminski, 
Special Counsel, or Daniel Perez, Senior Attorney, Chief Counsel's 
Office, (202) 649-5490, for persons who are deaf or hearing impaired, 
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; Elizabeth MacDonald, Manager, (202) 872-7526; Christopher Appel, 
Senior Financial Institution Policy Analyst II, (202) 973-6862; or 
Brendan Rowan, Senior Financial Institution Policy Analyst I, (202) 
475-6685, Division of Supervision and Regulation; or Benjamin W. 
McDonough, Assistant General Counsel, (202) 452-2036; Mark Buresh, 
Senior Counsel, (202) 452-2877; Andrew Hartlage, Counsel, (202) 452-
6483; or Jonah Kind, Senior Attorney, (202) 452-2045, Legal Division, 
Board of Governors of the Federal Reserve System, 20th Street and 
Constitution Avenue NW, Washington, DC 20551. Users of 
Telecommunication Device for the Deaf (TDD) only, call (202) 263-4869.
    FDIC: Bobby R. Bean, Associate Director, [email protected]; Benedetto 
Bosco, Chief, Capital Policy Section, [email protected]; Noah Cuttler, 
Senior Policy Analyst, [email protected]; [email protected]; 
Capital Markets Branch, Division of Risk Management Supervision, (202) 
898-6888; or Michael Phillips, Counsel, [email protected]; Catherine 
Wood, Counsel, [email protected]; Supervision and Legislation Branch, 
Legal Division, Federal Deposit Insurance Corporation, 550 17th Street 
NW, Washington, DC 20429. For the hearing impaired only, 
Telecommunication Device for the Deaf (TDD), (800) 925-4618.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background on the Community Bank Leverage Ratio Framework
II. Section 4012 of the Coronavirus Aid, Relief, and Economic 
Security Act
III. Temporary Changes to the Community Bank Leverage Ratio 
Framework
IV. Effective Date of the Statutory Interim Final Rule
V. Transition Interim Final Rule
VI. Administrative Law Matters
    A. Administrative Procedure Act
    B. Congressional Review Act
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act
    E. Riegle Community Development and Regulatory Improvement Act 
of 1994
    F. Use of Plain Language
    G. Unfunded Mandates Act

I. Background on the Community Bank Leverage Ratio Framework

    The community bank leverage ratio framework provides a simple 
measure of capital adequacy for community banking organizations that 
meet certain qualifying criteria. The community bank leverage ratio 
framework implements section 201 of the Economic Growth, Regulatory 
Relief, and Consumer Protection Act (EGRRCPA), which requires 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) to establish 
a community bank leverage ratio of not less than 8 percent and not more 
than 10 percent for qualifying community banking organizations.\1\ 
Under section 201(c) of EGRRCPA, a qualifying community banking 
organization that exceeds the community bank leverage ratio, as 
established by the agencies, shall be considered to have met the 
generally applicable risk-based and leverage capital requirements in 
the capital rule (generally applicable rule), any other applicable 
capital or leverage requirements, and, if applicable, the ``well 
capitalized'' capital ratio requirements for purposes of section 38 of 
the Federal Deposit Insurance Act. Section 201(b) of EGRRCPA also 
requires the agencies to establish procedures for the treatment of a 
qualifying community banking organization whose leverage ratio falls 
below the community bank leverage ratio requirement as established by 
the agencies.
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    \1\ Public Law 115-174, 132 Stat. 1296, 1306-07 (2018) (codified 
at 12 U.S.C. 5371 note). The authorizing statues use the term 
``qualifying community bank,'' whereas the regulation implementing 
the statues uses the term ``qualifying community banking 
organization.'' The terms generally have the same meaning. Section 
201(a)(3) of EGRRCPA provides that a qualifying community banking 
organization is a depository institution or depository institution 
holding company with total consolidated assets of less than $10 
billion that satisfies such other factors, based on the banking 
organization's risk profile, that the agencies determine are 
appropriate. This determination shall be based on consideration of 
off-balance sheet exposures, trading assets and liabilities, total 
notional derivatives exposures, and such other factors that the 
agencies determine appropriate.
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    In 2019, the agencies issued a final rule establishing the 
community bank leverage ratio framework, which became effective January 
1, 2020 (2019 final rule).\2\ Under the 2019 final rule, the agencies 
established a community bank leverage ratio of 9 percent using the 
capital rule's existing leverage ratio. A

[[Page 22926]]

qualifying community banking organization that maintains a leverage 
ratio of greater than 9 percent and elects to use the community bank 
leverage ratio framework will be considered to have satisfied the 
generally applicable rule and any other applicable capital or leverage 
requirements, and, if applicable, will be considered to be well 
capitalized.\3\
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    \2\ 84 FR 61776 (November 13, 2019).
    \3\ Under existing PCA requirements applicable to insured 
depository institutions, to be considered ``well capitalized'' a 
banking organization must demonstrate that it is not subject to any 
written agreement, order, capital directive, or as applicable, 
prompt corrective action directive, to meet and maintain a specific 
capital level for any capital measure. See 12 CFR 6.4(b)(1)(iv) 
(OCC); 12 CFR 208.43(b)(1)(v) (Board); 12 CFR 324.403(b)(1)(v) 
(FDIC). The same legal requirements continue to apply under the 
community bank leverage ratio framework.
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    Under the 2019 final rule, a qualifying community banking 
organization is any depository institution or depository institution 
holding company that has less than $10 billion in total consolidated 
assets, off-balance sheet exposures (excluding derivatives other than 
sold credit derivatives and unconditionally cancelable commitments) of 
25 percent or less of total consolidated assets, and trading assets and 
liabilities of 5 percent or less of total consolidated assets. The 
banking organization also cannot be an advanced approaches banking 
organization.\4\
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    \4\ A banking organization is an advanced approaches banking 
organization if it (1) is a global systemically important bank 
holding company, (2) is a Category II banking organization, (3) has 
elected to be an advanced approached banking organization, (4) is a 
subsidiary of a company that is an advanced approaches banking 
organization, or (5) has a subsidiary depository institution that is 
an advanced approaches banking organization. See 12 CFR 3.100 (OCC); 
12 CFR 217.100 (Board); 12 CFR 324.100 (FDIC).
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    In addition, the 2019 final rule established a two-quarter grace 
period during which a qualifying community banking organization that 
temporarily fails to meet any of the qualifying criteria, including the 
greater-than-9-percent leverage ratio requirement, generally would 
still be considered well capitalized so long as the banking 
organization maintains a leverage ratio of greater than 8 percent. A 
banking organization that either fails to meet all the qualifying 
criteria within the grace period or fails to maintain a leverage ratio 
of greater than 8 percent is required to comply with the generally 
applicable rule and file the appropriate regulatory reports.

II. Section 4012 of the Coronavirus Aid, Relief, and Economic Security 
Act

    On March 27, 2020, the Coronavirus Aid, Relief, and Economic 
Security Act (CARES Act) was signed into law.\5\ The CARES Act directs 
the agencies to make temporary changes to the community bank leverage 
ratio framework. Specifically, section 4012 of the CARES Act directs 
the agencies to issue an interim final rule that provides that, for 
purposes of section 201 of EGRRCPA, the community bank leverage ratio 
shall be 8 percent and that a qualifying community banking organization 
whose leverage ratio falls below the community bank leverage ratio 
requirement established under the CARES Act shall have a reasonable 
grace period to satisfy that requirement. A qualifying community 
banking organization to which the grace period applies may continue to 
be treated as a qualifying community banking organization and shall be 
presumed to satisfy the capital and leverage requirements described in 
section 201(c) of EGRRCPA.
---------------------------------------------------------------------------

    \5\ Coronavirus Aid, Relief, and Economic Security Act, Public 
Law 116-136, 134 Stat. 281.
---------------------------------------------------------------------------

    Under section 4012 of the CARES Act, this interim final rule 
(statutory interim final rule) is effective during the period beginning 
on the date on which the agencies issue the statutory interim final 
rule and ending on the sooner of the termination date of the national 
emergency concerning the coronavirus disease (COVID-19) outbreak 
declared by the President on March 13, 2020, under the National 
Emergencies Act, or December 31, 2020 (termination date).

III. Temporary Changes to the Community Bank Leverage Ratio Framework

    In accordance with section 4012 of the CARES Act, the statutory 
interim final rule makes certain temporary changes to the community 
bank leverage ratio framework. Effective as of April 23, 2020, the 
community bank leverage ratio will be 8 percent until the termination 
date of the statutory interim final rule. A banking organization with a 
leverage ratio of 8 percent or greater (and that meets the other 
qualifying criteria) may elect to use the community bank leverage ratio 
framework during the time the interim final rule is in effect.
    In addition, under the statutory interim final rule, a community 
banking organization that temporarily fails to meet any of the 
qualifying criteria, including the 8-percent community bank leverage 
ratio requirement, generally will still be considered well capitalized 
so long as the banking organization maintains a leverage ratio equal to 
7 percent or greater. A banking organization that fails to meet the 
qualifying criteria after the end of the grace period or reports a 
leverage ratio of less than 7 percent will be required to comply with 
the generally applicable rule and file the appropriate regulatory 
reports.\6\ The statutory interim final rule does not make any changes 
to the other qualifying criteria in the community bank leverage ratio 
framework.
---------------------------------------------------------------------------

    \6\ In addition, consistent with the 2019 final rule, a banking 
organization that ceases to satisfy the qualifying criteria as a 
result of a business combination also will receive no grace period 
and will be required to comply with the generally applicable rule.
---------------------------------------------------------------------------

    The agencies adopted, in the 2019 final rule, a two-quarter grace 
period with a leverage ratio requirement that is 1 percentage point 
below the community bank leverage ratio on the basis that these 
requirements appropriately mitigate potential volatility in capital and 
associated regulatory reporting requirements based on temporary changes 
in a banking organization's risk profile from quarter to quarter, while 
capturing more permanent changes in a banking organization's risk 
profile. The agencies continue to believe that this approach is 
appropriate and provides a qualifying community banking organization 
whose leverage ratio falls below the 8-percent community bank leverage 
ratio requirement a reasonable amount of time to satisfy that 
requirement, consistent with section 4012 of the CARES Act.

IV. Effective Date of the Statutory Interim Final Rule

    The statutory interim final rule is effective as of April 23, 2020. 
Banking organizations may utilize the requirements under the statutory 
interim final rule for purposes of filing their Call Report or Form FR 
Y-9C, as applicable, for the second quarter of 2020 (i.e., as of June 
30, 2020).

V. Transition Interim Final Rule

    The agencies are issuing concurrently an interim final rule that 
provides a transition from the temporary 8-percent community bank 
leverage ratio requirement, as mandated under section 4012 of the CARES 
Act, to the 9-percent community bank leverage ratio requirement, as 
established by the agencies in the 2019 final rule (transition interim 
final rule). When the requirements in the transition interim final rule 
become applicable, the community bank leverage ratio will be 8 percent 
in the second quarter through fourth quarter of calendar year 2020, 8.5 
percent in calendar year 2021, and 9 percent thereafter. Section 201 of 
EGRRCPA requires a qualifying

[[Page 22927]]

community banking organization to exceed the community bank leverage 
ratio established by the agencies in order to be considered to have met 
the generally applicable rule, any other applicable capital or leverage 
requirements, and, if applicable, the ``well capitalized'' capital 
ratio requirements, whereas section 4012 of the CARES Act requires that 
a qualifying community banking organization meet or exceed an 8 percent 
community bank leverage ratio to be considered the same. The agencies 
are issuing the transition interim final rule to provide community 
banking organizations with sufficient time and clarity to meet the 
requirements under the community bank leverage ratio framework while 
they also focus on supporting lending to creditworthy households and 
businesses given the recent strains on the U.S. economy caused by the 
COVID-19 emergency.
    Question 1: The agencies invite comment on the grace period under 
the statutory interim final rule. Specifically, what are the advantages 
and disadvantages of the period of time the statutory interim final 
rule provides for a banking organization that no longer meets the 
qualifying criteria to transition to the generally applicable rule? 
What other alternatives should the agencies consider providing as a 
reasonable grace period, as required under section 4012 of the CARES 
Act, for a banking organization that no longer meets the definition of 
a qualifying community banking organization and why?

VI. Administrative Law Matters

A. Administrative Procedure Act

    The agencies are issuing the statutory interim final rule without 
prior notice and the opportunity for public comment and the 30-day 
delayed effective date ordinarily prescribed by the Administrative 
Procedure Act (APA).\7\ Pursuant to section 553(b) of the APA, general 
notice and the opportunity for public comment are not required with 
respect to a rulemaking when an ``agency for good cause finds (and 
incorporates the finding and a brief statement of reasons therefor in 
the rules issued) that notice and public procedure thereon are 
impracticable, unnecessary, or contrary to the public interest.'' \8\
---------------------------------------------------------------------------

    \7\ 5 U.S.C. 553.
    \8\ 5 U.S.C. 553(b)(B).
---------------------------------------------------------------------------

    The agencies believe that the public interest is best served by 
implementing the statutory interim final rule immediately upon 
publication in the Federal Register. As discussed above, section 4012 
of the CARES Act directs the agencies to issue an interim final rule 
that provides that, for purposes of section 201 of EGRRCPA, the 
community bank leverage ratio shall be 8 percent and that a qualifying 
community banking organization whose leverage ratio falls below the 
community bank leverage ratio requirement established under the CARES 
Act shall have a reasonable grace period to satisfy that requirement. A 
qualifying community banking organization to which the grace period 
applies may continue to be treated as a qualifying community banking 
organization and shall be presumed to satisfy the capital and leverage 
requirements described in section 201(c) of EGRRCPA.
    The APA also requires a 30-day delayed effective date, except for 
(1) substantive rules, which grant or recognize an exemption or relieve 
a restriction; (2) interpretative rules and statements of policy; or 
(3) as otherwise provided by the agency for good cause.\9\ Because the 
rules relieve a restriction, the statutory interim final rule is exempt 
from the APA's delayed effective date requirement.\10\ Additionally, 
the agencies find good cause to publish the statutory interim final 
rule with an immediate effective date for the same reasons set forth 
above under the discussion of section 553(b)(B) of the APA.
---------------------------------------------------------------------------

    \9\ 5 U.S.C. 553(d).
    \10\ 5 U.S.C. 553(d)(1).
---------------------------------------------------------------------------

    While the agencies believe that there is good cause to issue the 
statutory interim final rule without advance notice and comment and 
with an immediate effective date as of the date of Federal Register 
publication, the agencies are interested in the views of the public and 
request comment on all aspects of the statutory interim final rule.

B. Congressional Review Act

    For purposes of Congressional Review Act, the Office of Management 
and Budget (OMB) makes a determination as to whether a final rule 
constitutes a ``major'' rule.\11\ If a rule is deemed a ``major rule'' 
by OMB, the Congressional Review Act generally provides that the rule 
may not take effect until at least 60 days following its 
publication.\12\
---------------------------------------------------------------------------

    \11\ 5 U.S.C. 801 et seq.
    \12\ 5 U.S.C. 801(a)(3).
---------------------------------------------------------------------------

    The Congressional Review Act defines a ``major rule'' as any rule 
that the Administrator of the Office of Information and Regulatory 
Affairs of the OMB finds has resulted in or is likely to result in (A) 
an annual effect on the economy of $100,000,000 or more; (B) a major 
increase in costs or prices for consumers, individual industries, 
Federal, State, or local government agencies or geographic regions, or 
(C) significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic and 
export markets.\13\
---------------------------------------------------------------------------

    \13\ 5 U.S.C. 804(2).
---------------------------------------------------------------------------

    For the same reasons set forth above, the agencies are adopting the 
statutory interim final rule without the delayed effective date 
generally prescribed under the Congressional Review Act. The delayed 
effective date required by the Congressional Review Act does not apply 
to any rule for which an agency for good cause finds (and incorporates 
the finding and a brief statement of reasons therefor in the rule 
issued) that notice and public procedure thereon are impracticable, 
unnecessary, or contrary to the public interest.\14\ In light of 
section 4012 of the CARES Act, the agencies believe that delaying the 
effective date of the statutory interim final rule would be contrary to 
the public interest.
---------------------------------------------------------------------------

    \14\ 5 U.S.C. 808.
---------------------------------------------------------------------------

    As required by the Congressional Review Act, the agencies will 
submit the statutory interim final rule and other appropriate reports 
to Congress and the Government Accountability Office for review.

C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA) 
states that no agency may conduct or sponsor, nor is the respondent 
required to respond to, an information collection unless it displays a 
currently valid OMB control number. The statutory interim final rule 
affects the agencies' current information collections for the Call 
Reports (OCC OMB Control No. 1557-0081; Board OMB Control No. 7100-
0036; and FDIC OMB Control No. 3064-0052). The Board has reviewed the 
statutory interim final rule pursuant to authority delegated by the 
OMB.
    While the statutory interim final rule contains no information 
collection requirements, the agencies have determined that there are 
changes that should be made to the Call Reports as a result of this 
rulemaking. Although there may be a substantive change resulting from 
changes to the community bank leverage ratio framework for purposes of 
the Call Reports, the change should be minimal

[[Page 22928]]

and result in a zero net change in hourly burden under the agencies' 
information collections. Submissions will, however, be made by the 
agencies to OMB. The changes to the Call Reports and their related 
instructions will be addressed in a separate Federal Register notice.
    In addition, there are changes that the Board should make to the 
Financial Statements for Holding Companies (FR Y-9 reports; OMB No. 
7100-0128) to accurately reflect the changes of the statutory interim 
final rule. The Board will separately address these changes to the FR 
Y-9 reports and their instructions in the transition interim final 
rule.

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) \15\ requires an agency to 
consider whether the rules it proposes will have a significant economic 
impact on a substantial number of small entities.\16\ The RFA applies 
only to rules for which an agency publishes a general notice of 
proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed 
previously, consistent with section 553(b)(B) of the APA, the agencies 
have determined for good cause that general notice and opportunity for 
public comment is impracticable and contrary to the public's interest, 
and therefore the agencies are not issuing a notice of proposed 
rulemaking. Accordingly, the agencies have concluded that the RFA's 
requirements relating to initial and final regulatory flexibility 
analysis do not apply. Nevertheless, the agencies are interested in 
receiving feedback on ways that they could reduce any potential burden 
of the statutory interim final rule on small entities.
---------------------------------------------------------------------------

    \15\ 5 U.S.C. 601 et seq.
    \16\ Under regulations issued by the Small Business 
Administration, a small entity includes a depository institution, 
bank holding company, or savings and loan holding company with total 
assets of $600 million or less and trust companies with total assets 
of $41.5 million or less. See 13 CFR 121.201.
---------------------------------------------------------------------------

E. Riegle Community Development and Regulatory Improvement Act of 1994

    Pursuant to section 302(a) of the Riegle Community Development and 
Regulatory Improvement Act (RCDRIA),\17\ in determining the effective 
date and administrative compliance requirements for new regulations 
that impose additional reporting, disclosure, or other requirements on 
insured depository institutions (IDIs), each Federal banking agency 
must consider, consistent with the principle of safety and soundness 
and the public interest, any administrative burdens that such 
regulations would place on depository institutions, including small 
depository institutions, and customers of depository institutions, as 
well as the benefits of such regulations. In addition, section 302(b) 
of RCDRIA requires new regulations and amendments to regulations that 
impose additional reporting, disclosures, or other new requirements on 
IDIs generally to take effect on the first day of a calendar quarter 
that begins on or after the date on which the regulations are published 
in final form, with certain exceptions, including for good cause.\18\ 
For the reasons described above, the agencies find good cause exists 
under section 302 of RCDRIA to publish the statutory interim final rule 
with an immediate effective date.
---------------------------------------------------------------------------

    \17\ 12 U.S.C. 4802(a).
    \18\ 12 U.S.C. 4802.
---------------------------------------------------------------------------

F. Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act \19\ requires the Federal 
banking agencies to use ``plain language'' in all proposed and final 
rules published after January 1, 2000. In light of this requirement, 
the agencies have sought to present the statutory interim final rule in 
a simple and straightforward manner. The agencies invite comments on 
whether there are additional steps they could take to make the rule 
easier to understand. For example:
---------------------------------------------------------------------------

    \19\ 12 U.S.C. 4809.
---------------------------------------------------------------------------

     Have we organized the material to suit your needs? If not, 
how could this material be better organized?
     Are the requirements in the regulation clearly stated? If 
not, how could the regulation be more clearly stated?
     Does the regulation contain language or jargon that is not 
clear? If so, which language requires clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the regulation easier to 
understand? If so, what changes to the format would make the regulation 
easier to understand?
     What else could we do to make the regulation easier to 
understand?

G. Unfunded Mandates Act

    As a general matter, the Unfunded Mandates Act of 1995 (UMRA), 2 
U.S.C. 1531 et seq., requires the preparation of a budgetary impact 
statement before promulgating a rule that includes a Federal mandate 
that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. However, the UMRA does not apply to 
final rules for which a general notice of proposed rulemaking was not 
published. See 2 U.S.C. 1532(a). Therefore, because the OCC has found 
good cause to dispense with notice and comment for this statutory 
interim final rule, the OCC concludes that the requirements of UMRA do 
not apply to this statutory interim final rule.

List of Subjects in 12 CFR

12 CFR Part 3

    Administrative practice and procedure, Capital, Federal savings 
associations, National banks, Risk.

12 CFR Part 217

    Administrative practice and procedure, Banks, Banking, Capital, 
Federal Reserve System, Holding companies, Reporting and recordkeeping 
requirements, Risk, Securities.

12 CFR Part 324

    Administrative practice and procedure, Banks, banking, Reporting 
and recordkeeping requirements, Savings associations, State non-member 
banks.

Office of the Comptroller of the Currency

12 CFR Chapter I

Authority and Issuance

    For the reasons set forth in the preamble, the OCC amends chapter I 
of Title 12 of the Code of Federal Regulations as follows:

PART 3--CAPITAL ADEQUACY STANDARDS

0
1. The authority citation for part 3 is revised to read as follows:

    Authority:  12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818, 
1828(n), 1828 note, 1831n note, 1835, 3907, 3909, 5412(b)(2)(B), and 
Pub. L. 116-136, 134 Stat. 281.

0
2. Add Sec.  3.303 to read as follows:


Sec.  3.303  Temporary changes to the community bank leverage ratio 
framework.

    (a)(1) A national bank or Federal savings association that is not 
an advanced approaches national bank or Federal savings association and 
that meets all the criteria to be a qualifying community banking 
organization under Sec.  3.12(a)(2) but for Sec.  3.12(a)(2)(i) is a 
qualifying community banking organization if it has a leverage ratio 
equal to or greater than 8 percent.
    (2) Notwithstanding Sec.  3.12(a)(1), a qualifying community 
banking organization that has made an election to use the community 
bank leverage ratio framework under Sec.  3.12(a)(3) shall be 
considered to have met the minimum

[[Page 22929]]

capital requirements under Sec.  3.10, the capital ratio requirements 
for the well capitalized capital category under Sec.  6.4(b)(1) of this 
chapter, and any other capital or leverage requirements to which the 
qualifying community banking organization is subject, if it has a 
leverage ratio equal to or greater than 8 percent.
    (b) Notwithstanding Sec.  3.12(c)(6) and subject to Sec.  
3.12(c)(5), a qualifying community banking organization that has a 
leverage ratio of 7 percent or greater has the grace period described 
in Sec.  3.12(c)(1) through (4). A national bank or Federal savings 
association that has a leverage ratio of less than 7 percent does not 
have a grace period and must comply with the minimum capital 
requirements under Sec.  3.10(a)(1) and must report the required 
capital measures under Sec.  3.10(a)(1) for the quarter in which it 
reports a leverage ratio of less than 7 percent.
    (c) Pursuant to section 4012 of the Coronavirus Aid, Relief, and 
Economic Security Act, the requirements provided under paragraphs (a) 
and (b) of this section are effective during the period beginning on 
April 23, 2020 and ending on the sooner of:
    (1) The termination date of the national emergency concerning the 
novel coronavirus disease outbreak declared by the President on March 
13, 2020, under the National Emergencies Act (50 U.S.C. 1601 et seq.); 
or
    (2) December 31, 2020.
* * * * *

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)

0
3. The authority citation for part 217 is revised 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, 5371 note, and sec. 4012, Pub. L. 
116-136, 134 Stat. 281.

Subpart G--Transition Provisions

0
4. Add Sec.  217.304 to read as follows:


Sec.  217.304  Temporary changes to the community bank leverage ratio 
framework.

    (a)(1) A Board-regulated institution that is not an advanced 
approaches Board-regulated institution and that meets all the criteria 
to be a qualifying community banking organization under Sec.  
217.12(a)(2) but for Sec.  217.12(a)(2)(i) is a qualifying community 
banking organization if it has a leverage ratio equal to or greater 
than 8 percent.
    (2) Notwithstanding Sec.  217.12(a)(1), a qualifying community 
banking organization that has made an election to use the community 
bank leverage ratio framework under Sec.  217.12(a)(3) shall be 
considered to have met the minimum capital requirements under Sec.  
217.10, the capital ratio requirements for the well capitalized capital 
category under Sec.  208.43(b)(1) of this chapter, if applicable, and 
any other capital or leverage requirements to which the qualifying 
community banking organization is subject, if it has a leverage ratio 
equal to or greater than 8 percent.
    (b) Notwithstanding Sec.  217.12(c)(6) and subject to Sec.  
217.12(c)(5), a Board-regulated institution that has a leverage ratio 
of 7 percent or greater has the grace period described in Sec.  
217.12(c)(1) through (4). A Board-regulated institution that has a 
leverage ratio of less than 7 percent does not have a grace period and 
must comply with the minimum capital requirements under Sec.  
217.10(a)(1) and must report the required capital measures under Sec.  
217.10(a)(1) for the quarter in which it reports a leverage ratio of 
less than 7 percent.
    (c) Pursuant to section 4012 of the Coronavirus Aid, Relief, and 
Economic Security Act, the requirements provided under paragraphs (a) 
and (b) of this section are effective during the period beginning on 
April 23, 2020 and ending on the sooner of:
    (1) The termination date of the national emergency concerning the 
novel coronavirus disease outbreak declared by the President on March 
13, 2020, under the National Emergencies Act (50 U.S.C. 1601 et seq.); 
or
    (2) December 31, 2020.

Federal Deposit Insurance Corporation

12 CFR Chapter III

Authority and Issuance

    For the reasons stated in the preamble, the Federal Deposit 
Insurance Corporation amends chapter III of Title 12, Code of Federal 
Regulations as follows:

PART 324--CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS

0
5. The authority citation for part 324 is revised 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); 
Pub. L. 115-174; Pub. L. 116-136, 134 Stat. 281.

0
6. Add Sec.  324.303 to read as follows:


Sec.  324.303  Temporary changes to the community bank leverage ratio 
framework.

    (a)(1) An FDIC-supervised institution that is not an advanced 
approaches FDIC-supervised institution and that meets all the criteria 
to be a qualifying community banking organization under Sec.  
324.12(a)(2) but for Sec.  324.12(a)(2)(i) is a qualifying community 
banking organization if it has a leverage ratio equal to or greater 
than 8 percent.
    (2) Notwithstanding Sec.  324.12(a)(1), a qualifying community 
banking organization that has made an election to use the community 
bank leverage ratio framework under Sec.  324.12(a)(3) shall be 
considered to have met the minimum capital requirements under Sec.  
324.10, the capital ratio requirements for the well capitalized capital 
category under Sec.  324.403(b)(1) of this part, and any other capital 
or leverage requirements to which the qualifying community banking 
organization is subject, if it has a leverage ratio equal to or greater 
than 8 percent.
    (b) Notwithstanding Sec.  324.12(c)(6) and subject to Sec.  
324.12(c)(5), a qualifying community banking organization that has a 
leverage ratio of 7 percent or greater has the grace period described 
in Sec.  324.12(c)(1) through (4). An FDIC-supervised institution that 
has a leverage ratio of less than 7 percent does not have a grace 
period and must comply with the minimum capital requirements under 
Sec.  324.10(a)(1) and must report the required capital measures under 
Sec.  324.10(a)(1) for the quarter in which it reports a leverage ratio 
of less than 7 percent.
    (c) Pursuant to section 4012 of the Coronavirus Aid, Relief, and 
Economic Security Act, the requirements provided under paragraphs (a) 
and (b) of this section are effective during the period beginning on 
April 23, 2020 and ending on the sooner of:

[[Page 22930]]

    (1) The termination date of the national emergency concerning the 
novel coronavirus disease outbreak declared by the President on March 
13, 2020, under the National Emergencies Act (50 U.S.C. 1601 et seq.); 
or
    (2) December 31, 2020.

Brian P. Brooks,
First Deputy Comptroller of the Currency
    By order of the Board of Governors of the Federal Reserve 
System.
Ann Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.

    By order of the Board of Directors.
    Dated at Washington, DC, on or about April 3, 2020.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2020-07449 Filed 4-22-20; 8:45 am]
 BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P