OCC and Federal Reserve Board Approve Final Capital Rules

The OCC and Federal Reserve Board approved final rules to implement the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Act.  The rule is intended to minimize the burden on smaller, less complex financial institutions, while establishing an integrated regulatory capital framework that addresses shortcomings in capital requirements, particularly for large, internationally active banking organizations.

Minimum requirements under this final rule will increase for both the quantity and quality of capital held by banking organizations. The rule also addresses particular concerns about the regulatory burden on community banks. As with financial institutions subject to the rule, community banks will have a significant transition period to meet the new requirements.

The phase-in period will begin in January 2014 for larger banking organizations and in January 2015 for smaller, less complex institutions.

See: Rule Release and Federal Reserve Press Release.
See also: Statement by Chairman Ben S. Bernanke; Statement by Governor Daniel K. Tarullo; Statement by Governor Elizabeth A. Duke.

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