81 FR 22173 - Regulatory Capital Rules: Regulatory Capital, Final Revisions Applicable to Banking Organizations Subject to the Advanced Approaches Risk-Based Capital Rule
FEDERAL DEPOSIT INSURANCE CORPORATION Federal Register Volume 81, Issue 73 (April 15, 2016)
Federal Register Volume 81, Issue 73 (April 15, 2016)
| Page Range | 22173-22174 | |
| FR Document | 2016-08717 |
[Federal Register Volume 81, Number 73 (Friday, April 15, 2016)] [Rules and Regulations] [Pages 22173-22174] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-08717] ======================================================================== Rules and Regulations Federal Register ________________________________________________________________________ This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each week. ======================================================================== Federal Register / Vol. 81, No. 73 / Friday, April 15, 2016 / Rules and Regulations [[Page 22173]] FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 324 RIN 3064-AE12 Regulatory Capital Rules: Regulatory Capital, Final Revisions Applicable to Banking Organizations Subject to the Advanced Approaches Risk-Based Capital Rule AGENCY: Federal Deposit Insurance Corporation (FDIC). ACTION: Correcting amendment. ----------------------------------------------------------------------- SUMMARY: The FDIC is correcting a Final Rule that appeared in the Federal Register on July 15, 2015 (80 FR 41409), regarding Regulatory Capital Rules: Regulatory Capital, Final Revisions Applicable to Banking Organizations Subject to the Advanced Approaches Risk-Based Capital Rule (``prior Federal Register publication''). This publication corrects a technical error in the instructions to the regulatory text appearing at page 41426 of the prior Federal Register publication, where the inadvertent omission of certain language in the instructions to the FDIC's amendatory text in Sec. 324.403 caused the unintended deletion of Sec. 324.403(b)(2) through Sec. 324.403(d) as published in the Code of Federal Regulations. DATES: The correction is effective April 15, 2016. FOR FURTHER INFORMATION CONTACT: Ryan Billingsley, Acting Associate Director, [email protected]; or Benedetto Bosco, Chief, Capital Policy Section, [email protected]; Capital Markets Branch, Division of Risk Management Supervision, (202) 898-6888; or Michael Phillips, Counsel, [email protected]; Rachel Ackmann, Counsel, [email protected]; Supervision Branch, Legal Division, Federal Deposit Insurance Corporation, 550 17th Street NW., Washington, DC 20429. SUPPLEMENTARY INFORMATION: This document sets out in full the text of section 324.403 as adopted by the FDIC Board of Directors, including the revisions published in the Federal Register of July 15, 2015 (80 FR 41426) and the text inadvertently deleted in the Code of Federal Regulations as 12 CFR 324.403. List of Subjects in 12 CFR Part 324 Administrative practice and procedure, Banks, Banking, Capital adequacy, Reporting and recordkeeping requirements, Savings associations, State non-member banks. 12 CFR CHAPTER III Authority and Issuance For the reasons stated in the preamble, the Federal Deposit Insurance Corporation amends part 324 of chapter III of Title 12, Code of Federal Regulations as follows: PART 324--CAPITAL ADEQUACY 0 1. The authority citation for part 324 continues 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). 0 2. Section 324.403 is revised to read as follows: Sec. 324.403 Capital measures and capital category definitions. (a) Capital measures. For purposes of section 38 of the FDI Act and this subpart H, the relevant capital measures shall be: (1) The total risk-based capital ratio; (2) The Tier 1 risk-based capital ratio; and (3) The common equity tier 1 ratio; (4) The leverage ratio; (5) The tangible equity to total assets ratio; and (6) Beginning January 1, 2018, the supplementary leverage ratio calculated in accordance with Sec. 324.11 for advanced approaches FDIC-supervised institutions that are subject to subpart E of this part. (b) Capital categories. For purposes of section 38 of the FDI Act and this subpart, an FDIC-supervised institution shall be deemed to be: (1) ``Well capitalized'' if it: (i) Has a total risk-based capital ratio of 10.0 percent or greater; and (ii) Has a Tier 1 risk-based capital ratio of 8.0 percent or greater; and (iii) Has a common equity tier 1 capital ratio of 6.5 percent or greater; and (iv) Has a leverage ratio of 5.0 percent or greater; (v) Is not subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the FDIC pursuant to section 8 of the FDI Act (12 U.S.C. 1818), the International Lending Supervision Act of 1983 (12 U.S.C. 3907), or the Home Owners' Loan Act (12 U.S.C. 1464(t)(6)(A)(ii)), or section 38 of the FDI Act (12 U.S.C. 1831o), or any regulation thereunder, to meet and maintain a specific capital level for any capital measure; and (vi) Beginning on January 1, 2018 and thereafter, an FDIC- supervised institution that is a subsidiary of a covered BHC will be deemed to be well capitalized if the FDIC-supervised institution satisfies paragraphs (b)(1)(i) through (v) of this section and has a supplementary leverage ratio of 6.0 percent or greater. For purposes of this paragraph, a covered BHC means a U.S. top-tier bank holding company with more than $700 billion in total assets as reported on the company's most recent Consolidated Financial Statement for Bank Holding Companies (FR Y-9C) or more than $10 trillion in assets under custody as reported on the company's most recent Banking Organization Systemic Risk Report (FR Y-15). (2) ``Adequately capitalized'' if it: (i) Has a total risk-based capital ratio of 8.0 percent or greater; and (ii) Has a Tier 1 risk-based capital ratio of 6.0 percent or greater; and (iii) Has a common equity tier 1 capital ratio of 4.5 percent or greater; and (iv) Has a leverage ratio of 4.0 percent or greater; and (v) Does not meet the definition of a well capitalized bank. (vi) Beginning January 1, 2018, an advanced approaches FDIC- supervised institution will be deemed to be ``adequately capitalized'' if it satisfies [[Page 22174]] paragraphs (b)(2)(i) through (v) of this section and has a supplementary leverage ratio of 3.0 percent or greater, as calculated in accordance with Sec. 324.11 of subpart B of this part. (3) ``Undercapitalized'' if it: (i) Has a total risk-based capital ratio that is less than 8.0 percent; or (ii) Has a Tier 1 risk-based capital ratio that is less than 6.0 percent; or (iii) Has a common equity tier 1 capital ratio that is less than 4.5 percent; or (iv) Has a leverage ratio that is less than 4.0 percent. (v) Beginning January 1, 2018, an advanced approaches FDIC- supervised institution will be deemed to be ``undercapitalized'' if it has a supplementary leverage ratio of less than 3.0 percent, as calculated in accordance with Sec. 324.11. (4) ``Significantly undercapitalized'' if it has: (i) A total risk-based capital ratio that is less than 6.0 percent; or (ii) A Tier 1 risk-based capital ratio that is less than 4.0 percent; or (iii) A common equity tier 1 capital ratio that is less than 3.0 percent; or (iv) A leverage ratio that is less than 3.0 percent. (5) ``Critically undercapitalized'' if the insured depository institution has a ratio of tangible equity to total assets that is equal to or less than 2.0 percent. (c) Capital categories for insured branches of foreign banks. For purposes of the provisions of section 38 of the FDI Act and this subpart H, an insured branch of a foreign bank shall be deemed to be: (1) ``Well capitalized'' if the insured branch: (i) Maintains the pledge of assets required under Sec. 347.209 of this chapter; and (ii) Maintains the eligible assets prescribed under Sec. 347.210 of this chapter at 108 percent or more of the preceding quarter's average book value of the insured branch's third-party liabilities; and (iii) Has not received written notification from: (A) The OCC to increase its capital equivalency deposit pursuant to 12 CFR 28.15, or to comply with asset maintenance requirements pursuant to 12 CFR 28.20; or (B) The FDIC to pledge additional assets pursuant to Sec. 347.209 of this chapter or to maintain a higher ratio of eligible assets pursuant to Sec. 347.210 of this chapter. (2) ``Adequately capitalized'' if the insured branch: (i) Maintains the pledge of assets required under Sec. 347.209 of this chapter; and (ii) Maintains the eligible assets prescribed under Sec. 347.210 of this chapter at 106 percent or more of the preceding quarter's average book value of the insured branch's third-party liabilities; and (iii) Does not meet the definition of a well capitalized insured branch. (3) ``Undercapitalized'' if the insured branch: (i) Fails to maintain the pledge of assets required under Sec. 347.209 of this chapter; or (ii) Fails to maintain the eligible assets prescribed under Sec. 347.210 of this chapter at 106 percent or more of the preceding quarter's average book value of the insured branch's third-party liabilities. (4) ``Significantly undercapitalized'' if it fails to maintain the eligible assets prescribed under Sec. 347.210 of this chapter at 104 percent or more of the preceding quarter's average book value of the insured branch's third-party liabilities. (5) ``Critically undercapitalized'' if it fails to maintain the eligible assets prescribed under Sec. 347.210 of this chapter at 102 percent or more of the preceding quarter's average book value of the insured branch's third-party liabilities. (d) Reclassifications based on supervisory criteria other than capital. The FDIC may reclassify a well capitalized FDIC-supervised institution as adequately capitalized and may require an adequately capitalized FDIC-supervised institution or an undercapitalized FDIC- supervised institution to comply with certain mandatory or discretionary supervisory actions as if the FDIC-supervised institution were in the next lower capital category (except that the FDIC may not reclassify a significantly undercapitalized FDIC-supervised institution as critically undercapitalized) (each of these actions are hereinafter referred to generally as ``reclassifications'') in the following circumstances: (1) Unsafe or unsound condition. The FDIC has determined, after notice and opportunity for hearing pursuant to Sec. 308.202(a) of this chapter, that the FDIC-supervised institution is in unsafe or unsound condition; or (2) Unsafe or unsound practice. The FDIC has determined, after notice and opportunity for hearing pursuant to Sec. 308.202(a) of this chapter, that, in the most recent examination of the FDIC-supervised institution, the FDIC-supervised institution received and has not corrected a less-than-satisfactory rating for any of the categories of asset quality, management, earnings, or liquidity. Dated at Washington, DC, this 12th day of April, 2016. By order of the Board of Directors. Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary. [FR Doc. 2016-08717 Filed 4-14-16; 8:45 am] BILLING CODE 6714-01-P
![22174 Federal Register / Vol. 81, No. 73 / Friday, April 15, 2016 / Rules and Regulations
paragraphs (b)(2)(i) through (v) of this (ii) Maintains the eligible assets quality, management, earnings, or
section and has a supplementary prescribed under § 347.210 of this liquidity.
leverage ratio of 3.0 percent or greater, chapter at 106 percent or more of the Dated at Washington, DC, this 12th day of
as calculated in accordance with preceding quarter’s average book value April, 2016.
§ 324.11 of subpart B of this part. of the insured branch’s third-party By order of the Board of Directors.
(3) ‘‘Undercapitalized’’ if it: liabilities; and
(i) Has a total risk-based capital ratio Federal Deposit Insurance Corporation.
(iii) Does not meet the definition of a
that is less than 8.0 percent; or Robert E. Feldman,
well capitalized insured branch.
(ii) Has a Tier 1 risk-based capital Executive Secretary.
(3) ‘‘Undercapitalized’’ if the insured
ratio that is less than 6.0 percent; or branch: [FR Doc. 2016–08717 Filed 4–14–16; 8:45 am]
(iii) Has a common equity tier 1 BILLING CODE 6714–01–P
(i) Fails to maintain the pledge of
capital ratio that is less than 4.5 percent;
assets required under § 347.209 of this
or
(iv) Has a leverage ratio that is less chapter; or
(ii) Fails to maintain the eligible DEPARTMENT OF HEALTH AND
than 4.0 percent. HUMAN SERVICES
(v) Beginning January 1, 2018, an assets prescribed under § 347.210 of this
advanced approaches FDIC-supervised chapter at 106 percent or more of the
preceding quarter’s average book value Food and Drug Administration
institution will be deemed to be
‘‘undercapitalized’’ if it has a of the insured branch’s third-party
liabilities. 21 CFR Part 106
supplementary leverage ratio of less
than 3.0 percent, as calculated in (4) ‘‘Significantly undercapitalized’’ if [Docket No. FDA–2014–D–0044]
accordance with § 324.11. it fails to maintain the eligible assets
(4) ‘‘Significantly undercapitalized’’ if prescribed under § 347.210 of this Exempt Infant Formula Production:
it has: chapter at 104 percent or more of the Current Good Manufacturing Practices,
(i) A total risk-based capital ratio that preceding quarter’s average book value Quality Control Procedures, Conduct
is less than 6.0 percent; or of the insured branch’s third-party of Audits, and Records and Reports;
(ii) A Tier 1 risk-based capital ratio liabilities. Guidance for Industry; Availability
that is less than 4.0 percent; or (5) ‘‘Critically undercapitalized’’ if it AGENCY: Food and Drug Administration,
(iii) A common equity tier 1 capital fails to maintain the eligible assets HHS.
ratio that is less than 3.0 percent; or prescribed under § 347.210 of this
(iv) A leverage ratio that is less than ACTION: Notification of availability.
chapter at 102 percent or more of the
3.0 percent. preceding quarter’s average book value SUMMARY: The Food and Drug
(5) ‘‘Critically undercapitalized’’ if the of the insured branch’s third-party Administration (FDA or we) is
insured depository institution has a liabilities. announcing the availability of a
ratio of tangible equity to total assets (d) Reclassifications based on guidance for industry entitled ‘‘Exempt
that is equal to or less than 2.0 percent. supervisory criteria other than capital. Infant Formula Production: Current
(c) Capital categories for insured The FDIC may reclassify a well Good Manufacturing Practices (CGMPs),
branches of foreign banks. For purposes capitalized FDIC-supervised institution Quality Control Procedures, Conduct of
of the provisions of section 38 of the FDI as adequately capitalized and may Audits, and Records and Reports.’’ The
Act and this subpart H, an insured require an adequately capitalized FDIC- guidance describes our current thinking
branch of a foreign bank shall be supervised institution or an on the manufacturing of exempt infant
deemed to be: undercapitalized FDIC-supervised formula in relation to the requirements
(1) ‘‘Well capitalized’’ if the insured institution to comply with certain for CGMPs, quality control procedures,
branch: mandatory or discretionary supervisory conduct of audits, and records and
(i) Maintains the pledge of assets
actions as if the FDIC-supervised reports that apply to non-exempt infant
required under § 347.209 of this chapter;
institution were in the next lower formulas.
and
(ii) Maintains the eligible assets capital category (except that the FDIC DATES: Submit either electronic or
prescribed under § 347.210 of this may not reclassify a significantly written comments on FDA guidances at
chapter at 108 percent or more of the undercapitalized FDIC-supervised any time.
preceding quarter’s average book value institution as critically ADDRESSES: You may submit comments
of the insured branch’s third-party undercapitalized) (each of these actions as follows:
liabilities; and are hereinafter referred to generally as
‘‘reclassifications’’) in the following Electronic Submissions
(iii) Has not received written
notification from: circumstances: Submit electronic comments in the
(A) The OCC to increase its capital (1) Unsafe or unsound condition. The following way:
equivalency deposit pursuant to 12 CFR FDIC has determined, after notice and • Federal eRulemaking Portal: http://
28.15, or to comply with asset opportunity for hearing pursuant to www.regulations.gov. Follow the
maintenance requirements pursuant to § 308.202(a) of this chapter, that the instructions for submitting comments.
12 CFR 28.20; or FDIC-supervised institution is in unsafe Comments submitted electronically,
(B) The FDIC to pledge additional or unsound condition; or including attachments, to http://
assets pursuant to § 347.209 of this (2) Unsafe or unsound practice. The www.regulations.gov will be posted to
chapter or to maintain a higher ratio of FDIC has determined, after notice and the docket unchanged. Because your
jstallworth on DSK7TPTVN1PROD with RULES
eligible assets pursuant to § 347.210 of opportunity for hearing pursuant to comment will be made public, you are
this chapter. § 308.202(a) of this chapter, that, in the solely responsible for ensuring that your
(2) ‘‘Adequately capitalized’’ if the most recent examination of the FDIC- comment does not include any
insured branch: supervised institution, the FDIC- confidential information that you or a
(i) Maintains the pledge of assets supervised institution received and has third party may not wish to be posted,
required under § 347.209 of this chapter; not corrected a less-than-satisfactory such as medical information, your or
and rating for any of the categories of asset anyone else’s Social Security number, or
VerDate Sep<11>2014 14:40 Apr 14, 2016 Jkt 238001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\15APR1.SGM 15APR1](https://thefederalregister.org/doc/81_FR_22246/page/2.svg)
Document Created: 2016-04-15 00:55:22
Document Modified: 2016-04-15 00:55:22
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Correcting amendment. | |
| Dates | The correction is effective April 15, 2016. | |
| Contact | Ryan Billingsley, Acting Associate Director, [email protected]; or Benedetto Bosco, Chief, Capital Policy Section, [email protected]; Capital Markets Branch, Division of Risk Management Supervision, (202) 898-6888; or Michael Phillips, Counsel, [email protected]; Rachel Ackmann, Counsel, [email protected]; Supervision Branch, Legal Division, Federal Deposit Insurance Corporation, 550 17th Street NW., Washington, DC 20429. | |
| FR Citation | 81 FR 22173 | |
| RIN Number | 3064-AE12 | |
| CFR Associated | Administrative Practice and Procedure; Banks; Banking; Capital Adequacy; Reporting and Recordkeeping Requirements; Savings Associations and State Non-Member Banks |
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