FDIC Finalizes Rules to Simplify Capital Calculation for Qualifying Community Banking Organizations


On September 17, the Federal Deposit Insurance Corporation (FDIC) finalized a rule that introduces an optional community bank leverage ratio (CBLR) framework for measuring capital adequacy of qualifying community banking organizations. In order to qualify for the CBLR framework, a community banking organization must have a tier 1 leverage ratio of greater than 9 percent, less than $10 billion in total consolidated assets, and limited amounts of off-balance-sheet exposures and trading assets and liabilities. A qualifying community banking organization that opts into the CBLR framework and meets all requirements will be considered to have met the well-capitalized ratio requirements under the Prompt Corrective Action regulations and will not be required to report or calculate risk-based capital. Release. Final Rule.