Regulatory Capital Rule: Temporary Exclusion of U.S. Treasury Securities and Deposits at Federal Reserve Banks From the Supplementary Leverage Ratio for Depository Institutions

Citation85 FR 32980
Record Number2020-10962
Published date01 June 2020
SectionRules and Regulations
CourtTreasury Department
Federal Register, Volume 85 Issue 105 (Monday, June 1, 2020)
[Federal Register Volume 85, Number 105 (Monday, June 1, 2020)]
                [Rules and Regulations]
                [Pages 32980-32990]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-10962]
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                DEPARTMENT OF TREASURY
                Office of the Comptroller of the Currency
                12 CFR Parts 3 and 6
                [Docket No. OCC-2020-0013]
                RIN 1557-AE85
                FEDERAL RESERVE SYSTEM
                12 CFR Parts 208 and 217
                [Regulations H and Q; Docket No. R-1718]
                RIN 7100-AF91
                FEDERAL DEPOSIT INSURANCE CORPORATION
                12 CFR Part 324
                RIN 3064-AF44
                Regulatory Capital Rule: Temporary Exclusion of U.S. Treasury
                Securities and Deposits at Federal Reserve Banks From the Supplementary
                Leverage Ratio for Depository Institutions
                AGENCY: Office of the Comptroller of the Currency (OCC), Board of
                Governors of the Federal Reserve System (Board), and Federal Deposit
                Insurance Corporation (FDIC).
                ACTION: Interim final rule and request for comment.
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                SUMMARY: In light of recent disruptions in economic conditions caused
                by the coronavirus disease 2019 and strains in U.S. financial markets,
                the OCC, the Board, and the FDIC (together, the agencies) are issuing
                an interim final rule that temporarily revises the supplementary
                leverage ratio calculation for depository institutions. Under the
                interim final rule, any depository institution subsidiary of a U.S.
                global systemically important bank holding company or any depository
                institution subject to Category II or Category III capital standards
                may elect to exclude temporarily U.S. Treasury securities and deposits
                at Federal Reserve Banks from the supplementary leverage ratio
                denominator. Additionally, under this interim final rule, any
                depository institution making this election must request approval from
                its primary Federal banking regulator prior to making certain capital
                distributions so long as the exclusion is in effect. The interim final
                rule is effective as of the date of Federal Register publication and
                will remain in effect through March 31, 2021. The agencies are adopting
                this interim final rule to allow depository institutions that elect to
                opt into this treatment additional flexibility to act as financial
                intermediaries during this period of financial disruption. The tier 1
                leverage ratio is not affected by this interim final rule.
                DATES:
                 Effective date: This rule is effective on June 1, 2020.
                 Comment date: Comments on the interim final rule must be received
                no later than July 16, 2020.
                ADDRESSES:
                 OCC: Commenters are encouraged to submit comments through the
                Federal eRulemaking Portal or email, if possible. Please use the title
                ``Regulatory Capital Rule: Temporary Exclusion of U.S. Treasury
                Securities and Deposits at Federal Reserve Banks from the Supplementary
                Leverage Ratio'' 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-2020-0013'' 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
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                to get information on using Regulations.gov, including instructions for
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                the Regulations.gov Classic homepage. Enter ``Docket ID OCC-2020-0013''
                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, Attention: Comment
                Processing, Office of the Comptroller of the Currency, 400 7th Street
                SW, suite 3E-218, Washington, DC 20219.
                 Hand Delivery/Courier: 400 7th Street, SW, suite 3E-218,
                Washington, DC 20219.
                [[Page 32981]]
                 Fax: (571) 465-4326.
                 Instructions: You must include ``OCC'' as the agency name and
                ``Docket ID OCC-2020-0013'' 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 provided 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-2020-0013'' 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-2020-0013'' in the Search Box and click
                ``Search.'' Click on the ``Comments'' tab. Comments can be viewed and
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                Monday-Friday, 9 a.m.-5 p.m. ET 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-1718;
                RIN 7100-AF91, by any of the following methods:
                 Agency website: http://www.federalreserve.gov. Follow the
                instructions for submitting comments at http://www.federalreserve.gov/apps/foia/proposedregs.aspx.
                 Email: [email protected]. Include docket
                and RIN numbers in the subject line of the message.
                 FAX: (202) 452-3819 or (202) 452-3102.
                 Mail: Ann E. Misback, Secretary, Board of Governors of the
                Federal Reserve System, 20th Street and Constitution Avenue NW,
                Washington, DC 20551.
                 All public comments 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
                personally identifiable information at the commenter's request. Public
                comments may also be viewed electronically or in paper 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-AF44, by any
                of the following methods:
                 Agency website: https://www.fdic.gov/regulations/laws/federal. Follow instructions for submitting comments on the Agency
                website.
                 Email: [email protected]. Include ``RIN 3064-AF44'' on the
                subject line of the message.
                 Mail: Robert E. Feldman, Executive Secretary, Attention:
                Comments/RIN 3064-AF44, 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 building (located
                on F Street) on business days between 7 a.m. and 5 p.m. All comments
                received must include the agency name (FDIC) and RIN 3064-AF44 and will
                be posted without change to https://www.fdic.gov/regulations/laws/federal, including any personal information provided.
                FOR FURTHER INFORMATION CONTACT: OCC: Margot Schwadron, Director, or
                Venus Fan, Risk Expert, Capital and Regulatory Policy, (202) 649-6370;
                or Carl Kaminski, Special Counsel, or Chris Rafferty, 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: Anna Lee Hewko, Associate Director, (202) 530-6360;
                Constance Horsley, Deputy Associate Director, (202) 452-5239; Elizabeth
                MacDonald, Manager, (202) 475-6316; Sviatlana Phelan, Lead Financial
                Institution Policy Analyst, (202) 912-4306; or Christopher Appel,
                Senior Financial Institution Policy Analyst II, (202) 973-6862,
                Division of Supervision and Regulation; Benjamin McDonough, Assistant
                General Counsel, (202) 452-2036; Mark Buresh, Senior Counsel, (202)
                452-5270; Andrew Hartlage, Counsel, (202) 452-6483; Jonah Kind, Senior
                Attorney, (202) 452-2045; or Jasmin Keskinen, Legal Assistant, (202)
                475-6650, Legal Division, Board of Governors of the Federal Reserve
                System, 20th Street and Constitution Avenue NW, Washington, DC 20551.
                Users of Telecommunication Device for 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]; Francis Kuo, 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
                II. The Interim Final Rule
                III. Impact Assessment
                IV. Technical Amendments
                V. 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
                 The spread of the coronavirus disease 2019 (COVID-19) has
                significantly and adversely affected global financial markets,
                including depository institutions' role as financial intermediaries. In
                particular,
                [[Page 32982]]
                disruptions in financial markets, and the resulting flight to liquid
                assets by market participants, have caused depository institutions'
                balance sheets to expand to accommodate inflows of deposits. This
                balance sheet expansion has contributed to depository institutions
                making substantial deposits in their accounts at Federal Reserve Banks
                (deposits at Federal Reserve Banks). In addition, customer draws on
                credit lines and depository institutions' holdings of significant
                amounts of U.S. Treasury securities (Treasuries) have contributed to
                balance sheet expansion. These trends are expected to continue
                temporarily while depository institutions and their customers respond
                to disruptions in the financial markets.
                 For a depository institution subsidiary of a U.S. global
                systemically important bank holding company (GSIB), or a depository
                institution subject to the Category II or Category III capital
                standards, the agencies' regulatory capital rule (capital rule)
                requires a minimum supplementary leverage ratio of 3 percent, measured
                as the ratio of a depository institution's tier 1 capital to its total
                leverage exposure.\1\ Total leverage exposure, the denominator of the
                supplementary leverage ratio, includes certain off-balance sheet
                exposures in addition to on-balance sheet assets.
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                 \1\ See 84 FR 59230 (Nov. 1, 2019). Banking organizations that
                are subject to Category II standards include those with (1) at least
                $700 billion in total consolidated assets or (2) at least $75
                billion in cross-jurisdictional activity and at least $100 billion
                in total consolidated assets. Banking organizations that are subject
                to Category III standards include those with (1) at least $250
                billion in average total consolidated assets or (2) at least $100
                billion in average total consolidated assets and at least $75
                billion in average total nonbank assets, average weighted short-term
                wholesale funding; or average off-balance sheet exposure. See 12 CFR
                217.2.
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                 GSIB depository institution subsidiaries also are subject to
                enhanced supplementary leverage ratio (eSLR) standards established by
                the agencies in 2014.\2\ Under the eSLR standards, GSIB depository
                institution subsidiaries must maintain a 6-percent supplementary
                leverage ratio to be considered ``well capitalized'' under the prompt
                corrective action (PCA) framework of each agency.
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                 \2\ See 79 FR 24528 (May 1, 2014). The eSLR standards, as
                adopted in 2014, applied to U.S. top-tier bank holding companies
                with consolidated assets over $700 billion or more than $10 trillion
                in assets under custody, and depository institution subsidiaries of
                holding companies that meet those thresholds. The Board subsequently
                revised its capital rule so that the applicability of the eSLR
                standards is to bank holding companies identified as U.S. GSIBs and
                their depository institution subsidiaries. See 80 FR 49082 (August
                14, 2015). The banking organizations currently subject to the eSLR
                standards are the same under either applicability standard.
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                 In contrast to the risk-based capital requirements in the capital
                rule, a leverage ratio does not differentiate the amount of capital
                required by the type of exposure. Rather, a leverage ratio places an
                upper bound on depository institution leverage. A leverage ratio
                protects against underestimating risk and serves to complement the
                risk-based capital requirements. Under the supplementary leverage
                ratio, depository institutions include all on-balance sheet assets,
                including Treasuries and deposits at Federal Reserve Banks, in their
                total leverage exposure calculation.\3\
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                 \3\ The agencies recently issued a final rule, effective April
                1, 2020, which implements section 402 of the Economic Growth,
                Regulatory Relief, and Consumer Protection Act (EGRRCPA), 12 U.S.C.
                1831o note, by amending the capital rule to allow a banking
                organization that qualifies as a custodial banking organization to
                exclude from total leverage exposure deposits at qualifying central
                banks, subject to limits (402 rule). 85 FR 4569 (January 27, 2020).
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                II. The Interim Final Rule
                 The ability of depository institutions to hold certain assets, most
                notably deposits at a Federal Reserve Bank and Treasuries, is essential
                to market functioning, financial intermediation, and funding market
                activity, particularly in periods of financial uncertainty. In response
                to volatility and market strains, the Federal Reserve has taken a
                number of actions to support market functioning and the flow of credit
                to the economy. The response to COVID-19 has notably increased the size
                of the Federal Reserve's balance sheet and resulted in a large increase
                in the amount of reserves in the banking system. The agencies
                anticipate that the Federal Reserve's balance sheet may continue to
                expand in the near term, as customer deposits continue to expand, and
                recently announced facilities to support the flow of credit to
                households and businesses begin or continue operations. In addition,
                market participants have liquidated a high volume of assets, and
                customers have drawn down credit lines and deposited the cash proceeds
                with depository institutions in recent weeks, further increasing the
                size of depository institutions' balance sheets. Absent any adjustments
                to the supplementary leverage ratio, the resulting increase in the size
                of depository institutions' balance sheets may cause a sudden and
                significant increase in the regulatory capital needed to meet a
                depository institution's leverage ratio requirement.\4\ This is
                particularly the case for many of the depository institutions subject
                to the supplementary leverage ratio, which are significant participants
                in financial intermediation services, including as clearing banks for
                dealers in the open market operations of the Federal Open Market
                Committee and as major custodians of securities.
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                 \4\ The Board recently issued an interim final rule to revise,
                on a temporary basis for bank holding companies, savings and loan
                holding companies, and U.S. intermediate holding companies of
                foreign banking organizations, the calculation of total leverage
                exposure, the denominator of the supplementary leverage ratio in the
                Board's capital rule, to exclude Treasuries and deposits at Federal
                Reserve Banks. The exclusion will remain in effect until March 31,
                2021. 85 FR 20578 (April 14, 2020).
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                 In order to facilitate depository institutions' significant
                increase in reserve balances resulting from the Federal Reserve's asset
                purchases and the establishment of various programs to support the flow
                of credit to the economy, as well as the need to continue to accept
                exceptionally high levels of customer deposits, the agencies are
                issuing this interim final rule to provide depository institutions
                subject to the supplementary leverage ratio (qualifying depository
                institutions) the ability to exclude temporarily Treasuries and
                deposits at Federal Reserve Banks from total leverage exposure through
                March 31, 2021. For example, depository institutions would be able to
                exclude temporarily on-balance sheet Treasuries that they hold,
                including Treasuries that they have borrowed and re-pledged in a repo-
                style transaction, provided such Treasuries are included in the
                depository institution's total leverage exposure prior to the effect of
                the exclusion.\5\
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                 \5\ This scope is consistent with the Board's recent interim
                final rule to revise the supplementary leverage ratio. See supra
                note 4.
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                 Under the interim final rule, a depository institution that opts
                into this treatment (electing depository institution) would be required
                to obtain prior approval of distributions from its primary Federal
                banking regulator. An electing depository institution must notify its
                primary Federal banking regulator of its election within 30 days after
                the interim final rule is effective.\6\ The primary Federal banking
                regulator will consider a notice received from a qualifying depository
                institution more than 30 days after the effective date of the interim
                final rule on a case-by-case basis. The election will not affect the
                electing depository institution's ability to pay distributions already
                declared or to declare distributions for payment in the second quarter
                of 2020. The prior
                [[Page 32983]]
                approval requirement applies to distributions to be paid beginning in
                the third quarter of 2020. The interim final rule will terminate after
                March 31, 2021.
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                 \6\ An FDIC supervised institution must provide this notice in
                writing to the appropriate FDIC regional director of the FDIC
                Division of Risk Management Supervision.
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                 For purposes of reporting the supplementary leverage ratio as of
                June 30, 2020, an electing depository institution may reflect the
                exclusion of Treasuries and deposits at Federal Reserve Banks from
                total leverage exposure as if this interim final rule had been in
                effect for the entire second quarter of 2020. Because the supplementary
                leverage ratio is calculated as an average over the quarter, this will
                have the effect of maximizing the effect of the exclusion starting in
                the second quarter of 2020. The agencies are not making similar
                adjustments to risk-based capital ratios because Treasuries and
                deposits at Federal Reserve Banks are risk-weighted at zero percent.
                 Under the interim final rule, beginning in the third quarter of
                2020, an electing depository institution will be required to obtain
                approval from its primary Federal banking regulator before making a
                distribution \7\ or creating an obligation to make such a distribution
                so long as the temporary exclusion is in effect. The primary Federal
                banking regulator will endeavor to respond within 14 days to the
                request with an approval, disapproval, or request for additional
                information. This prior-approval requirement will help support the
                objective of the interim final rule to strengthen the ability of
                electing depository institutions to continue taking deposits, lending,
                and conducting other financial intermediation activities during this
                period of stress.
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                 \7\ See 12 CFR 3.2 (defining ``distribution'') (OCC); 12 CFR
                217.2 (defining ``distribution'') (Board); 12 CFR 324.2 (defining
                ``distribution'') (FDIC).
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                 When evaluating any such request, the primary Federal banking
                regulator will consider all relevant factors, including whether any
                distribution would be contrary to safety and soundness and limitations
                on distributions in the existing rules applicable to the electing
                depository institution.\8\ Factors that the primary Federal banking
                regulator will take into account include the depository institution's
                current earnings and forecasts, the nature, purpose, and extent of the
                request, and the particular circumstances giving rise to the
                request.\9\ For example, the primary Federal banking regulator may
                consider the expected future capital needs of the depository
                institution and its ability to meet capital requirements after the
                temporary relief provided under this interim final rule expires. The
                requirement that a depository institution request approval for
                distributions is not intended to prohibit electing depository
                institutions from paying dividends in all cases. Rather, the primary
                Federal banking regulator will evaluate each request to ensure that the
                electing depository institution will be able to continue supporting the
                economy by lending and accepting deposits consistent with the goal of
                this interim final rule.
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                 \8\ Additional limitations on distributions may apply under 12
                CFR part 3, subparts H and I; 12 CFR 5.46, 12 CFR part 5, subpart E;
                12 CFR part 6; 12 CFR part 208, subparts A and D; 12 CFR part 303,
                subparts K and M. The restrictions set forth in this interim final
                rule are in addition to, and therefore do not supersede, any
                existing statutory or regulatory limitations on making capital
                distributions. For purposes of the FDIC's PCA rules, regarding
                capital distribution restrictions for undercapitalized FDIC-
                supervised institutions, see 12 CFR 324.405.
                 \9\ Holding companies use dividends from their subsidiaries for
                various purposes. For example, dividends to the holding company can
                support the efficient internal allocation of capital within a
                holding company, allowing excess capital from one subsidiary, such
                as the depository institution, to be redeployed to other
                subsidiaries. As such, an effective dividend strategy can both
                ensure the safety and soundness of the depository institution and
                promote the safety and soundness of the entire banking organization.
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                 The interim final rule revises the measure of total leverage
                exposure on a temporary basis for electing depository institutions for
                the limited purposes of the agencies' capital rule. Depository
                institutions subject to supplementary leverage ratio requirements
                report their supplementary leverage ratios on the Consolidated Reports
                of Condition and Income (Call Reports), Schedule RC-R and Regulatory
                Capital Reporting for Institutions Subject to the Advanced Capital
                Adequacy Framework (FFIEC 101), Schedule A.\10\ The agencies expect in
                the near future to make all necessary revisions to the Call Reports and
                the FFIEC 101, Schedule A to implement the interim final rule's
                revisions to the supplementary leverage ratio for electing depository
                institutions and to require such institutions to disclose the election
                publicly.\11\ In addition, the interim final rule provides for the
                necessary modifications of the disclosure requirements of section 173
                of the capital rule to reflect the optional temporary exclusion
                provided by the interim final rule.
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                 \10\ Depository institutions that are required to submit the OCC
                Reporting Form DFAST-14A on April 6, 2021, or the FDIC DFAST-14A,
                have the option to include these changes in their company-run stress
                test results.
                 \11\ The instructions for Board's FR Y-9C, Schedule HC-R, Line
                Item 45 (Advanced approaches holding companies only: Supplementary
                leverage ratio) state that respondents must report the supplementary
                leverage ratio from FFIEC 101 Schedule A, Table 2, Item 2.22.
                Therefore, revisions to the FFIEC 101 regarding how to report the
                supplementary leverage ratio would flow through to the FR Y-9C. The
                Board plans to amend the instructions for FR Y-9C as necessary.
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                 The agencies seek comment on all aspects of this interim final
                rule.
                 Question 1: Discuss the advantages and disadvantages of removing
                temporarily Treasuries and deposits at Federal Reserve Banks from total
                leverage exposure for depository institutions. How does the interim
                final rule support the objectives of facilitating financial
                intermediation by depository institutions? How does the interim final
                rule affect the concurrent objective of safety and soundness? How would
                the end date of March 31, 2021, for the exclusion under the interim
                final rule be consistent with the objectives of the rule, or what
                earlier or later end date should be used instead?
                 Question 2: What additional assets or exposure types should the
                agencies consider to exclude temporarily from total leverage exposure
                in order to achieve the interim final rule's objectives? For example,
                what consideration should the agencies give to excluding deposits at
                certain foreign central banks, foreign sovereign debt instruments, or
                exposures guaranteed by the U.S. Federal Government and why? Which
                specific repo-style transactions that would support depository
                institutions' role serving as financial intermediaries should the
                agencies exclude, if any, and why?
                III. Impact Assessment
                 The supplementary leverage ratio requirement generally has not
                prevented depository institutions from accommodating customer deposit
                inflows or serving as financial intermediaries. However, as a result of
                the spread of COVID-19, stress has materialized in numerous financial
                markets. Disruptions in financial markets have resulted in expansion of
                depository institutions' balance sheets to accommodate inflows of
                deposits. In particular, using data from the fourth quarter of 2019,
                the agencies expect that the interim final rule would temporarily
                decrease binding tier 1 capital requirements by approximately $55
                billion for depository institutions if all depository institutions
                subject to the supplementary leverage ratio elect to opt in.\12\ In
                light of the exclusions under
                [[Page 32984]]
                this interim final rule, this temporary reduction in capital
                requirements is expected to increase leverage exposure capacity at
                depository institutions by approximately $1.2 trillion. In particular,
                the agencies expect that the increase in leverage exposure capacity
                will strengthen the depository institutions' ability to continue to
                accept customer deposits, and therefore ensure that depository
                institutions remain able to fulfill this important function.
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                 \12\ This analysis takes into account the exclusion of
                qualifying central bank deposits for custodial banking organizations
                as provided under the capital rule. As of April 1, 2020, custodial
                banking organizations may exclude deposits with qualifying foreign
                central banks, in addition to the exclusions of deposits at Federal
                Reserve Banks provided under this interim final rule. (See supra
                note 3.) In addition, the analysis in this interim final rule uses
                balances due from banks in foreign countries and foreign central
                banks, as reported under line item 3 of Schedule RC-A of the Call
                Report. Line item 3 of Schedule RC-A may slightly overstate amounts
                eligible for exclusion by custodial banking organizations because it
                includes balances due from banks in foreign countries and foreign
                central banks that are not eligible for exclusion under this interim
                final rule.
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                 Depository institutions that opt into the temporary exclusion of
                Treasuries and deposits at Federal Reserve Banks from the denominator
                of the supplementary leverage ratio will likely incur some costs
                associated with making changes to internal systems or processes for
                managing supplementary leverage ratio compliance. However, these costs
                are likely to be very small.
                 Aside from increases in balance sheets caused by increases in
                customer deposits, the balance sheets of depository institutions also
                have increased as households and businesses draw down credit lines. If
                depository institutions become constrained by supplementary leverage
                ratio requirements, this could adversely affect their ability to
                intermediate in financial markets and hamper their ability to provide
                credit to households and businesses. Therefore, the temporary increase
                in leverage exposure capacity could have countercyclical benefits as it
                supports financial market liquidity and increases depository
                institutions' lending capacities in a time of economic stress.
                 Although a temporary increase in leverage exposure capacity could
                lead to an increase in overall leverage in the banking system, the
                temporary exclusion of Treasuries and deposits at Federal Reserve Banks
                will help alleviate ongoing stresses on the financial system and the
                real economy arising from COVID-19. The agencies will closely monitor
                the balance sheets of electing depository institutions in the coming
                months while the exclusion is in effect with a particular view toward
                any resulting increase in risks in conjunction with this interim final
                rule.
                IV. Technical Amendments
                 Finally, the agencies are making technical corrections and
                clarifications to the Prompt Corrective Action regulations. In their
                respective Prompt Corrective Action regulations, the agencies are
                correcting an unintentional omission of ``Category III'' to clarify
                that depository institutions subject to Category III standards must
                meet their minimum supplementary leverage ratio requirement of 3
                percent in order to be considered ``adequately capitalized.'' \13\ When
                the minimum supplementary leverage ratio requirement was initially
                added to the capital rule in 2013, the term ``advanced approaches''
                banking organizations referred to all banking organizations that were
                subject to the supplementary leverage ratio.\14\ However, the tailoring
                rule that became effective on December 31, 2019, redefined ``advanced
                approaches.'' Under that rule, advanced approaches banking
                organizations now include a smaller group of banking organizations
                (i.e., banking organizations subject to Category I and II standards),
                while certain banking organizations are no longer defined as advanced
                approaches but remain subject to the supplementary leverage ratio
                requirements (i.e., banking organizations subject to Category III
                standards). The agencies did not intend to change the applicability of
                the minimum supplementary leverage ratio requirement in their
                respective Prompt Corrective Action regulations. Rather, the Prompt
                Corrective Action requirement should continue to apply to all banking
                organizations that are required to calculate the supplementary leverage
                ratio. Therefore, consistent with the capital rule, the agencies are
                now clarifying that the supplementary leverage ratio provisions in
                their respective Prompt Corrective Action regulations apply to all
                banking organizations subject to Category III standards, in addition to
                banking organizations subject to Category I and II standards.
                ---------------------------------------------------------------------------
                 \13\ 12 CFR 6.4(b) (OCC); 12 CFR 208.43(b) (Board); 12 CFR
                324.403(b) (FDIC).
                 \14\ 78 FR 62018 (Oct. 11, 2013).
                ---------------------------------------------------------------------------
                V. Administrative Law Matters
                A. Administrative Procedure Act
                 The agencies are issuing the interim final rule and its
                accompanying technical edits without prior notice and the opportunity
                for public comment and the delayed effective date ordinarily prescribed
                by the Administrative Procedure Act (APA).\15\ Pursuant to section
                553(b)(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.'' \16\
                ---------------------------------------------------------------------------
                 \15\ 5 U.S.C. 553.
                 \16\ 5 U.S.C. 553(b)(B).
                ---------------------------------------------------------------------------
                 The agencies believe that the public interest is best served by
                implementing the interim final rule immediately upon publication in the
                Federal Register. As discussed above, the spread of COVID-19 has slowed
                economic activity in many countries, including the United States.
                Specifically, the disruptions in financial markets have caused
                depository institutions to receive inflows of deposits--contributing to
                the increase of deposits at Federal Reserve Banks--and to hold
                significant amounts of Treasuries. Notably, these deposits at Federal
                Reserve Banks and holdings of Treasuries are essential to the normal
                functioning of the financial markets, especially in times of stress. If
                depository institutions cannot sustain the rapid increase in deposits
                at Federal Reserve Banks and holdings of Treasuries, the financial
                markets would experience a marked decline in financial intermediation
                and a further increase in general market volatility. Because the
                interim final rule will mitigate these potential negative effects, the
                agencies find that there is good cause consistent with the public
                interest to issue the rule without advance notice and comment.\17\ This
                final rule makes additional technical edits and corrections to more
                clearly articulate the scope of the supplementary leverage ratio
                requirements. Because the additional technical edits and corrections
                are not substantive, the agencies find there is good cause to issue the
                rule without advance notice and comment.
                ---------------------------------------------------------------------------
                 \17\ 5 U.S.C. 553(b)(B); 553(d)(3).
                ---------------------------------------------------------------------------
                 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.\18\ Because the
                interim final rule will provide temporary capital relief, the interim
                final rule is exempt from the APA's delayed effective date
                requirement.\19\ Additionally, the agencies find good cause to publish
                the technical edits and corrections, which clarify the scope of the
                supplementary
                [[Page 32985]]
                leverage ratio for purposes of the Prompt Corrective Action
                regulations, with an immediate effective date for the same reasons set
                forth above under the discussion of section 553(b)(B) of the APA.
                ---------------------------------------------------------------------------
                 \18\ 5 U.S.C. 553(d).
                 \19\ 5 U.S.C. 553(d)(1).
                ---------------------------------------------------------------------------
                 While the agencies believe that there is good cause to issue this
                interim final rule without advance notice and comment and with an
                immediate effective date, the agencies are interested in the views of
                the public and request comment on all aspects of the interim final
                rule.
                B. Congressional Review Act
                 For purposes of Congressional Review Act, the OMB makes a
                determination as to whether a final rule constitutes a ``major''
                rule.\20\ If a rule is deemed a ``major rule'' by the Office of
                Management and Budget (OMB), the Congressional Review Act generally
                provides that the rule may not take effect until at least 60 days
                following its publication.\21\
                ---------------------------------------------------------------------------
                 \20\ 5 U.S.C. 801 et seq.
                 \21\ 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.\22\
                ---------------------------------------------------------------------------
                 \22\ 5 U.S.C. 804(2).
                ---------------------------------------------------------------------------
                 For the same reasons set forth above, the agencies are adopting the
                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.\23\ In light of
                current market uncertainty, the agencies believe that delaying the
                effective date of the rule would be contrary to the public interest.
                ---------------------------------------------------------------------------
                 \23\ 5 U.S.C. 808.
                ---------------------------------------------------------------------------
                 As required by the Congressional Review Act, the agencies will
                submit the 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 interim final rule affects the
                agencies' current information collections for the Call Reports (OCC OMB
                No. 1557-0081; Board OMB No. 7100-0036; and FDIC OMB No. 3064-0052) and
                the Regulatory Capital Reporting for Institutions Subject to the
                Advanced Capital Adequacy Framework (FFIEC 101; OCC OMB No. 1557-0239;
                Board OMB No. 7100-0319; and FDIC OMB No. 3064-0159). The revisions to
                the Call Reports and the FFIEC 101 will be addressed in a separate
                Federal Register notice.
                 The interim final rule also introduces a new notice opt-in
                requirement and a requirement for prior approval for distributions,
                which would affect the agencies' capital rule information collections.
                The agencies believe that these new requirements will amount to 12
                burden hours per respondent (two responses per respondent at six hours
                per response).
                 OCC:
                 Title of Information Collection: Risk-Based Capital Standards:
                Advanced Capital Adequacy Framework.
                 OMB Control No.: 1557-0318.
                 Respondents for Interim Final Rule: 21.
                 Responses per Respondent: 2.
                 Burden per Response: 6 hours.
                 Burden for Interim Final Rule: 252 hours.
                 Total Burden for Collection: 66,333 hours.
                 FDIC:
                 Title of Information Collection: Regulatory Capital Rules.
                 OMB Control No.: 3064-0153.
                 Respondents for Interim Final Rule: 7.
                 Responses per Respondent: 2.
                 Burden per Response: 6 hours.
                 Burden for Interim Final Rule: 84 hours.
                 Total Burden for Collection: 128,140 burden hours.
                 The agencies request comment on:
                 a. Whether the collections of information are necessary for the
                proper performance of the agencies' functions, including whether the
                information has practical utility;
                 b. The accuracy of the agencies' estimates of the burden of the
                information collections, including the validity of the methodology and
                assumptions used;
                 c. Ways to enhance the quality, utility, and clarity of the
                information to be collected;
                 d. Ways to minimize the burden of information collections on
                respondents, including through the use of automated collection
                techniques or other forms of information technology; and
                 e. Estimates of capital or startup costs and costs of operation,
                maintenance, and purchase of services to provide information.
                 The Board has temporarily revised the Financial Statements for
                Holding Companies (FR Y-9C; OMB No. 7100-0128) and the Recordkeeping
                and Disclosure Requirements Associated with Regulation Q (FR Q; OMB No.
                7100-0313) information collections to accurately reflect certain
                aspects of this and other interim final rules. On June 15, 1984, OMB
                delegated to the Board authority under the PRA to temporarily approve a
                revision to a collection of information without providing opportunity
                for public comment if the Board determines that a change in an existing
                collection must be instituted quickly and that public participation in
                the approval process would defeat the purpose of the collection or
                substantially interfere with the Board's ability to perform its
                statutory obligation. The Board's delegated authority requires that the
                Board, after temporarily approving a collection, solicit public comment
                to extend information collections for a period not to exceed three
                years. Therefore, the Board is inviting comment to extend the FR Q
                information collection for three years, with the revisions discussed
                below. The Board is not inviting comment on the FR Y-9 information
                collection for the reasons discussed below.
                 The Board invites public comment on the FR Q information
                collection, which is being reviewed under authority delegated by the
                OMB under the PRA. Comments must be submitted on or before July 31,
                2020. Comments are invited on the following:
                 a. Whether the collections of information are necessary for the
                proper performance of the Board's functions, including whether the
                information has practical utility;
                 b. The accuracy of the Board's estimate of the burden of the
                information collections, including the validity of the methodology
                and assumptions used;
                 c. Ways to enhance the quality, utility, and clarity of the
                information to be collected;
                 d. Ways to minimize the burden of information collections on
                respondents, including through the use of automated collection
                techniques or other forms of information technology; and
                [[Page 32986]]
                 e. Estimates of capital or startup costs and costs of operation,
                maintenance, and purchase of services to provide information.
                 At the end of the comment period, the comments and recommendations
                received will be analyzed to determine the extent to which the Board
                should modify the collections.
                Final Approval Under OMB Delegated Authority of the Temporary Revision
                of the Following Information Collection
                 Report Title: Financial Statements for Holding Companies.
                 Agency form number: FR Y-9C, FR Y-9LP, FR Y-9SP, FR Y-9ES, and FR
                Y-9CS.
                 OMB control number: 7100-0128.
                 Effective Date: March 31, 2020
                 Frequency: Quarterly, semiannually, and annually.
                 Respondents: Bank holding companies, savings and loan holding
                companies,\24\ securities holding companies, and U.S. intermediate
                holding companies (collectively, HCs).
                ---------------------------------------------------------------------------
                 \24\ An SLHC must file one or more of the FR Y-9 series of
                reports unless it is: (1) A grandfathered unitary SLHC with
                primarily commercial assets and thrifts that make up less than 5
                percent of its consolidated assets; or (2) a SLHC that primarily
                holds insurance-related assets and does not otherwise submit
                financial reports with the SEC pursuant to section 13 or 15(d) of
                the Securities Exchange Act of 1934.
                ---------------------------------------------------------------------------
                 Estimated number of respondents: FR Y-9C (non-advanced approaches
                CBLR HCs with less than $5 billion in total assets): 7; FR Y-9C (non-
                advanced approaches CBLR HCs with $5 billion or more in total assets):
                35; FR Y-9C (non-advanced approaches, non CBLR, HCs with less than $5
                billion in total assets): 84; FR Y-9C (non-advanced approaches, non
                CBLR HCs, with $5 billion or more in total assets): 154; FR Y-9C
                (advanced approaches HCs): 19; FR Y-9LP: 434; FR Y-9SP: 3,960; FR Y-
                9ES: 83; FR Y-9CS: 236.
                 Estimated average hours per response:
                Reporting
                 FR Y-9C (non-advanced approaches CBLR HCs with less than $5 billion
                in total assets): 29.14 hours; FR Y-9C (non-advanced approaches CBLR
                HCs with $5 billion or more in total assets): 35.11; FR Y-9C (non-
                advanced approaches, non CBLR HCs, with less than $5 billion in total
                assets): 40.98; FR Y-9C (non-advanced approaches, non CBLR, HCs with $5
                billion or more in total assets): 46.95 hours; FR Y-9C (advanced
                approaches HCs): 48.59 hours; FR Y-9LP: 5.27 hours; FR Y-9SP: 5.40
                hours; FR Y-9ES: 0.50 hours; FR Y-9CS: 0.50 hours.
                Recordkeeping
                 FR Y-9C (non-advanced approaches HCs with less than $5 billion in
                total assets), FR Y-9C (non-advanced approaches HCs with $5 billion or
                more in total assets), FR Y-9C (advanced approaches HCs), and FR Y-9LP:
                1.00 hour; FR Y-9SP, FR Y-9ES, and FR Y-9CS: 0.50 hours.
                 Estimated annual burden hours:
                Reporting
                 FR Y-9C (non-advanced approaches CBLR HCs with less than $5 billion
                in total assets): 8,276 hours; FR Y-9C (non-advanced approaches CBLR
                HCs with $5 billion or more in total assets): 4,915; FR Y-9C (non-
                advanced approaches non CBLR HCs with less than $5 billion in total
                assets): 13,769; FR Y-9C (non-advanced approaches non CBLR HCs with $5
                billion or more in total assets): 28,921 hours; FR Y-9C (advanced
                approaches HCs): 3,693 hours; FR Y-9LP: 9,149 hours; FR Y-9SP: 42,768
                hours; FR Y-9ES: 42 hours; FR Y-9CS: 472 hours.
                Recordkeeping
                 FR Y-9C (non-advanced approaches HCs with less than $5 billion in
                total assets): 620 hours; FR Y-9C (non-advanced approaches HCs with $5
                billion or more in total assets): 756 hours; FR Y-9C (advanced
                approaches HCs): 76 hours; FR Y-9LP: 1,736 hours; FR Y-9SP: 3,960
                hours; FR Y-9ES: 42 hours; FR Y-9CS: 472 hours.
                 General description of report: The FR Y-9C consists of standardized
                financial statements similar to the Call Reports filed by commercial
                banks.\25\ The FR Y-9C collects consolidated data from HCs and is filed
                quarterly by top-tier HCs with total consolidated assets of $3 billion
                or more.\26\
                ---------------------------------------------------------------------------
                 \25\ The Call Reports consist of the Consolidated Reports of
                Condition and Income for a Bank with Domestic Offices Only and Total
                Assets Less Than $5 Billion (FFIEC 051), the Consolidated Reports of
                Condition and Income for a Bank with Domestic Offices Only (FFIEC
                041) and the Consolidated Reports of Condition and Income for a Bank
                with Domestic and Foreign Offices (FFIEC 031).
                 \26\ Under certain circumstances described in the FR Y-9C's
                General Instructions, HCs with assets under $3 billion may be
                required to file the FR Y-9C.
                ---------------------------------------------------------------------------
                 The FR Y-9LP, which collects parent company only financial data,
                must be submitted by each HC that files the FR Y-9C, as well as by each
                of its subsidiary HCs.\27\ The report consists of standardized
                financial statements.
                ---------------------------------------------------------------------------
                 \27\ A top-tier HC may submit a separate FR Y-9LP on behalf of
                each of its lower-tier HCs.
                ---------------------------------------------------------------------------
                 The FR Y-9SP is a parent company only financial statement filed
                semiannually by HCs with total consolidated assets of less than $3
                billion. In a banking organization with total consolidated assets of
                less than $3 billion that has tiered HCs, each HC in the organization
                must submit, or have the top-tier HC submit on its behalf, a separate
                FR Y-9SP. This report is designed to obtain basic balance sheet and
                income data for the parent company, and data on its intangible assets
                and intercompany transactions.
                 The FR Y-9ES is filed annually by each employee stock ownership
                plan (ESOP) that is also an HC. The report collects financial data on
                the ESOP's benefit plan activities. The FR Y-9ES consists of four
                schedules: A Statement of Changes in Net Assets Available for Benefits,
                a Statement of Net Assets Available for Benefits, Memoranda, and Notes
                to the Financial Statements.
                 The FR Y-9CS is a free-form supplemental report that the Board may
                utilize to collect critical additional data deemed to be needed in an
                expedited manner from HCs on a voluntary basis. The data are used to
                assess and monitor emerging issues related to HCs, and the report is
                intended to supplement the other FR Y-9 reports. The data items
                included on the FR Y-9CS may change as needed.
                 Legal authorization and confidentiality: The Board has the
                authority to impose the reporting and recordkeeping requirements
                associated with the Y-9 family of reports on bank holding companies
                (``BHCs'') pursuant to section 5 of the Bank Holding Company Act (``BHC
                Act''), (12 U.S.C. 1844); on savings and loan holding companies
                pursuant to section 10(b)(2) and (3) of the Home Owners' Loan Act, (12
                U.S.C. 1467a(b)(2) and (3)); on U.S. intermediate holding companies
                (``U.S. IHCs'') pursuant to section 5 of the BHC Act, (12 U.S.C. 1844),
                as well as pursuant to sections 102(a)(1) and 165 of the Dodd-Frank
                Wall Street Reform and Consumer Protection Act (``Dodd-Frank Act''),
                (12 U.S.C. 511(a)(1) and 5365); and on securities holding companies
                pursuant to section 618 of the Dodd-Frank Act, (12 U.S.C.
                1850a(c)(1)(A)). The FR Y-9 series of reports, and the recordkeeping
                requirements set forth in the respective instructions to each report,
                are mandatory, except for the FR Y-9CS, which is voluntary. With
                respect to the FR Y-9C, Schedule HI's memoranda item 7(g), Schedule HC-
                P's item 7(a), and Schedule HC-P's item 7(b) are considered
                confidential commercial and financial information under exemption 4 of
                the Freedom of Information Act (``FOIA''), (5 U.S.C. 552(b)(4)), as is
                Schedule HC's memorandum item 2.b. for both the FR Y-9C and FR Y-9SP
                reports.
                [[Page 32987]]
                 Aside from the data items described above, the remaining data items
                on the FR Y-9 reports are generally not accorded confidential
                treatment. As provided in the Board's Rules Regarding Availability of
                Information (12 CFR part 261), however, a respondent may request
                confidential treatment for any data items the respondent believes
                should be withheld pursuant to a FOIA exemption. The Board will review
                any such request to determine if confidential treatment is appropriate,
                and will inform the respondent if the request for confidential
                treatment has been denied.
                 To the extent that the instructions, to the FR Y-9C, FR Y-9LP, FR
                Y-9SP, and FR Y-9ES reports, each respectively direct a financial
                institution to retain the workpapers and related materials used in
                preparation of each report, such material would only be obtained by the
                Board as part of the examination or supervision of the financial
                institution. Accordingly, such information may be considered
                confidential pursuant to exemption 8 of the FOIA (5 U.S.C. 552(b)(8)).
                In addition, the financial institution's workpapers and related
                materials may also be protected by exemption 4 of the FOIA, to the
                extent such financial information is treated as confidential by the
                respondent (5 U.S.C. 552(b)(4)).
                 Current Actions: On April 1, 2020, the Board announced that it had
                temporarily revised the instructions to the FR Y-9C to accurately
                reflect the calculation of the supplementary leverage ratio pursuant to
                the Board's interim final rule (the ``holding company SLR IFR'') that
                revised, on a temporary basis for bank holding companies, savings and
                loan holding companies, and U.S. intermediate holding companies of
                foreign banking organizations, the calculation of total leverage
                exposure, the denominator of the supplementary leverage ratio in the
                Board's capital rule, to exclude the on-balance sheet amounts of
                Treasuries and deposits at Federal Reserve Banks.\28\ This temporary
                revision to the FR Y-9C was necessary because holding companies were
                previously instructed to report their supplementary leverage ratio as
                reported in the FFIEC 101; because the FFIEC 101 was not revised to
                account for the holding company SLR IFR, retaining these instructions
                would have resulted in inaccurate reporting by holding companies on the
                FR Y-9C.
                ---------------------------------------------------------------------------
                 \28\ 85 FR 20578 (April 14, 2020).
                ---------------------------------------------------------------------------
                 The agencies now intend to revise the FFIEC 101 to account for this
                interim final rule and the holding company SLR IFR. Following such
                revisions, holding companies would be able to report their
                supplementary leverage ratio on the FR Y-9C using the data reported on
                the FFIEC 101, as they did previously. Therefore, the temporary
                revisions to the FR Y-9C to account for the holding company SLR IFR,
                announced by the Board on April 1, 2020, are no longer necessary, and
                the Board has retracted these revisions. The Board has determined that
                this revision to the FR Y-9C must be instituted quickly and that public
                participation in the approval process would defeat the purpose of the
                collection of information, as delaying the revisions would result in
                the collection of inaccurate information, and would interfere with the
                Board's ability to perform its statutory duties.
                 Because these revisions result completely revert the temporary
                revisions made by the Board to the FR Y-9C in connection with the
                holding company SLR IFR, the resulting instructions regarding the
                supplementary leverage ratio are identical to those adopted following
                notice and comment. Therefore, the Board does not intend to request
                further comment in order to retain these instructions.
                Final Approval Under OMB Delegated Authority of the Temporary Revision
                of, and Solicitation of Comment To Extend for Three Years, With
                Revision, of the Following Information Collections
                 Title of Information Collection: Recordkeeping and Disclosure
                Requirements Associated with Regulation Q.
                 Agency form number: FR Q.
                 OMB control number: 7100-0313.
                 Frequency: Quarterly, annual.
                 Affected Public: Businesses or other for-profit.
                 Respondents: State member banks (SMBs), bank holding companies
                (BHCs), U.S. intermediate holding companies (IHCs), savings and loan
                holding companies (SLHCs), and global systemically important bank
                holding companies (GSIBs).
                 Legal authorization and confidentiality: This information
                collection is authorized by section 38(o) of the Federal Deposit
                Insurance Act (12 U.S.C. 1831o(c)), section 908 of the International
                Lending Supervision Act of 1983 (12 U.S.C. 3907(a)(1)), section 9(6) of
                the Federal Reserve Act (12 U.S.C. 324), and section 5(c) of the Bank
                Holding Company Act (12 U.S.C. 1844(c)). The obligation to respond to
                this information collection is mandatory. If a respondent considers the
                information to be trade secrets and/or privileged such information
                could be withheld from the public under the authority of the Freedom of
                Information Act (5 U.S.C. 552(b)(4)). Additionally, to the extent that
                such information may be contained in an examination report such
                information could also be withheld from the public (5 U.S.C. 552
                (b)(8)). Estimated number of respondents: 1,431 (of which 19 are
                advanced approaches institutions).
                 Estimated average hours per response:
                Minimum Capital Ratios
                Recordkeeping (Ongoing)--16.
                Standardized Approach
                Recordkeeping (Initial setup)--122.
                Recordkeeping (Ongoing)--20.
                Disclosure (Initial setup)--226.25.
                Disclosure (Ongoing quarterly)--131.25.
                Advanced Approach
                Recordkeeping (Initial setup)--460.
                Recordkeeping (Ongoing)--540.77.
                Recordkeeping (Ongoing quarterly)--20.
                Disclosure (Initial setup)--328.
                Disclosure (Ongoing)--5.78.
                Disclosure (Ongoing quarterly)--41.
                Disclosure (Table 13 quarterly)--5.
                Risk-based Capital Surcharge for GSIBs
                Recordkeeping (Ongoing)--0.5.
                Reporting (Twice)--6.
                 Total estimated annual burden: 1,136 hours initial setup, 80,245
                hours for ongoing.
                 Current actions: The Board has temporarily revised the FR Q
                information collection to reflect a revision to the disclosure
                requirements contained in the Board's Regulation Q. Generally, Sec.
                217.173 of the Board's Regulation Q requires each advanced approaches
                Board-regulated institution and a Category III Board-regulated
                institution that is required to publicly disclose its supplementary
                leverage ratio pursuant to Sec. 217.172(d) of Regulation Q to make
                certain disclosures, which are listed in Table 13 of Sec. 217.173.
                Pursuant to this interim final rule, a Board-regulated institution that
                is required to make such disclosures will be required exclude the
                balance sheet carrying value of U.S. Treasury securities and funds on
                deposit at a Federal Reserve Bank from its disclosures under Table 13
                of Sec. 217.173. The interim final rule also introduces a new notice
                opt-in requirement and a requirement for prior approval for
                distributions, which would affect the agencies' capital rule
                information collections. The agencies believe that these new
                requirements will amount to 12 burden hours per respondent (two
                responses per respondent at six hours per response).
                 Additionally, the Board has temporarily revised the FR Q
                information collection to include the notification that an electing
                depository
                [[Page 32988]]
                institution must provide to its primary Federal banking regulator, as
                well as the request for approval that an electing depository
                institution must submit to its primary Federal banking regulator prior
                to making certain capital distributions.
                 The Board has determined that these revisions to the FR Q described
                above must be instituted quickly and that public participation in the
                approval process would defeat the purpose of the collection of
                information, as delaying the revisions would result in the collection
                of inaccurate information, and would interfere with the Board's ability
                to perform its statutory duties.
                 The Board also invites comment on a proposal to extend the FR Y-Q
                for three years, with the revision described above. This revision would
                be effective for FR Q through March 31, 2021, the date after which the
                exclusions in this interim final rule will no longer be effective.
                D. Regulatory Flexibility Act
                 The Regulatory Flexibility Act (RFA) \29\ requires an agency to
                consider whether the rules it proposes will have a significant economic
                impact on a substantial number of small entities.\30\ 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 unnecessary, 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.
                ---------------------------------------------------------------------------
                 \29\ 5 U.S.C. 601 et seq.
                 \30\ 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
                average annual receipts of $41.5 million or less. See 13 CFR
                121.201.
                ---------------------------------------------------------------------------
                 Nevertheless, the agencies seek comment on whether, and the extent
                to which, the interim final rule would affect a significant number of
                small entities.
                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),\31\ in determining the effective
                date and administrative compliance requirements for new regulations
                that impose additional reporting, disclosure, or other requirements on
                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.\32\ For the reasons described
                above, the agencies find good cause exists under section 302 of RCDRIA
                to publish this interim final rule with an immediate effective date.
                ---------------------------------------------------------------------------
                 \31\ 12 U.S.C. 4802(a).
                 \32\ 12 U.S.C. 4802.
                ---------------------------------------------------------------------------
                 As such, the final rule will be effective on immediately.
                Nevertheless, the agencies seek comment on RCDRIA.
                F. Use of Plain Language
                 Section 722 of the Gramm-Leach-Bliley Act \33\ requires the Federal
                banking agencies to use plain language in all proposed and final rules
                published after January 1, 2000. The agencies have sought to present
                the interim final rule in a simple and straightforward manner. The
                agencies invite comments on whether there are additional steps it could
                take to make the rule easier to understand. For example:
                ---------------------------------------------------------------------------
                 \33\ 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 Reform Act of 1995
                 As a general matter, the Unfunded Mandates Reform 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 interim final
                rule, the OCC has not prepared an economic analysis of the rule under
                the UMRA.
                List of Subjects
                12 CFR Part 3
                 Administrative practice and procedure, Capital, Federal savings
                associations, National banks, Risk.
                12 CFR Part 6
                 Federal savings associations, National banks, Prompt corrective
                action.
                12 CFR Part 208
                 Accounting, Agriculture, Banks, banking, Confidential business
                information, Consumer protection, Crime, Currency, Federal Reserve
                System, Flood insurance, Insurance, Investments, Mortgages, Reporting
                and recordkeeping requirements, Securities.
                12 CFR Part 217
                 Administrative practice and procedure, Banks, banking, Federal
                Reserve System, Holding companies, Reporting and recordkeeping
                requirements, Securities.
                12 CFR Part 324
                 Administrative practice and procedure, Banks, banking, Reporting
                and recordkeeping requirements, Savings associations, State non-member
                banks.
                Authority and Issuance
                 For the reasons stated in the joint preamble, the Office of the
                Comptroller of the Currency amends part 3 of chapter I of title 12,
                Code of Federal Regulations as follows:
                PART 3--CAPITAL ADEQUACY STANDARDS
                0
                1. The authority citation for part 3 continues 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. Section 3.304 is added to read as follows:
                [[Page 32989]]
                Sec. 3.304 Temporary exclusions from total leverage exposure.
                 (a) In general. Subject to paragraphs (b) through (g) of this
                section, and notwithstanding any other requirement in this part, a
                national bank or Federal savings association, when calculating on-
                balance sheet assets as of each day of a reporting quarter for purposes
                of determining the national bank's or Federal savings association's
                total leverage exposure under Sec. 3.10(c)(4), may exclude the balance
                sheet carrying value of the following items:
                 (1) U.S. Treasury securities; and
                 (2) Funds on deposit at a Federal Reserve Bank.
                 (b) Opt-in period. Before applying the relief provided in paragraph
                (a) of this section, a national bank or Federal savings association
                must first notify the OCC before July 11, 2020.
                (c) Calculation of relief. When calculating on-balance sheet assets
                as of each day of a reporting quarter, the relief provided in paragraph
                (a) of this section applies from the beginning of the reporting quarter
                in which the national bank or Federal savings association filed an opt-
                in notice through the termination date specified in paragraph (d) of
                this section.
                 (d) Termination of exclusions. This section shall cease to be
                effective after the reporting period that ends March 31, 2021.
                 (e) Custody bank. A custody bank must reduce the amount in Sec.
                3.10(c)(4)(ii)(J)(1) (to no less than zero) by any amount excluded
                under paragraph (a)(2) of this section.
                 (f) Disclosure. Notwithstanding Table 13 to Sec. 3.173, a national
                bank or Federal savings association that is required to make the
                disclosures pursuant to Sec. 3.173 must exclude the items excluded
                pursuant to paragraph (a) of this section from Table 13 to Sec. 3.173.
                 (g) OCC approval for distributions. During the calendar quarter
                beginning on July 1, 2020, and until March 31, 2021, no national bank
                or Federal savings association that has opted in to the relief provided
                under paragraph (a) of this section may make a distribution, or create
                an obligation to make such a distribution, without prior OCC approval.
                When reviewing a request under this paragraph (g), the OCC will
                consider all relevant factors, including whether the distribution would
                be contrary to the safety and soundness of the national bank or Federal
                savings association; the nature, purpose, and extent of the request;
                and the particular circumstances giving rise to the request.
                PART 6--PROMPT CORRECTIVE ACTION
                0
                 3. The authority citation for part 6 continues to read as follows:
                 Authority: 12 U.S.C. 93a, 1831o, 5412(b)(2)(B).
                0
                4. Amend Sec. 6.4 by revising paragraphs (b)(2)(iv)(B) and
                (b)(3)(iv)(B) to read as follows:
                Sec. 6.4 Capital measures and capital categories.
                * * * * *
                 (b) * * *
                 (2) * * *
                 (iv) * * *
                 (B) With respect to an advanced approaches or Category III national
                bank or advanced approaches or Category III Federal savings
                association, the national bank or Federal savings association has a
                supplementary leverage ratio of 3.0 percent or greater; and
                * * * * *
                 (3) * * *
                 (iv) * * *
                 (B) With respect to an advanced approaches or Category III national
                bank or advanced approaches or Category III Federal savings
                association, on January 1, 2018, and thereafter, the national bank or
                Federal savings association has a supplementary leverage ratio of less
                than 3.0 percent.
                * * * * *
                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 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL
                RESERVE SYSTEM (REGULATION H)
                0
                5. The authority citation for part 208 continues to read as follows:
                 Authority: 12 U.S.C. 24, 36, 92a, 93a, 248(a), 248(c), 321-
                338a, 371d, 461, 481-486, 601, 611, 1814, 1816, 1817(a)(3),
                1817(a)(12), 1818, 1820(d)(9), 1833(j), 1828(o), 1831, 1831o, 1831p-
                1, 1831r-1, 1831w, 1831x, 1835a, 1882, 2901-2907, 3105, 3310, 3331-
                3351, 3905-3909, 5371, and 5371 note; 15 U.S.C. 78b, 78I(b), 78l(i),
                780-4(c)(5), 78q, 78q-1, 78w, 1681s, 1681w, 6801, and 6805; 31
                U.S.C. 5318; 42 U.S.C. 4012a, 4104a, 4104b, 4106, and 4128.
                0
                6. Section 208.43(b)(2)(iv)(B) and (b)(3)(iv)(B) are revised to read as
                follows:
                Sec. 208.43 Capital measures and capital categories.
                * * * * *
                 (b) * * *
                 (2) * * *
                 (iv) * * *
                 (B) With respect to an advanced approaches bank or bank that is a
                Category III Board-regulated institution (as defined in Sec. 217.2 of
                this chapter), the bank has a supplementary leverage ratio of 3.0
                percent or greater; and
                * * * * *
                 (3) * * *
                 (iv) * * *
                 (B) With respect to an advanced approaches bank or bank that is a
                Category III Board-regulated institution (as defined in Sec. 217.2 of
                this chapter), the bank has a supplementary leverage ratio of less than
                3.0 percent.
                * * * * *
                PART 217--CAPITAL ADEQUACY OF BANK HOLDING COMPANIES, SAVINGS AND
                LOAN HOLDING COMPANIES, AND STATE MEMBER BANKS (REGULATION Q)
                0
                7. The authority citation for part 217 continues 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
                8. Revise Sec. 217.303 to read as follows:
                Sec. 217.303 Temporary exclusions from total leverage exposure.
                 (a) In general. Subject to paragraphs (b) through (g) of this
                section and notwithstanding any other requirement in this part, when
                calculating on-balance sheet assets as of each day of a reporting
                quarter for purposes of determining the Board-regulated institution's
                total leverage exposure under Sec. 217.10(c)(4), a Board-regulated
                institution that is a depository institution holding company or a U.S.
                intermediate holding company must, and a Board-regulated institution
                that is a state member bank may, exclude the balance sheet carrying
                value of the following items:
                 (1) U.S. Treasury securities; and
                 (2) Funds on deposit at a Federal Reserve Bank.
                 (b) Opt-in period. Before applying the relief provided in paragraph
                (a) of this section, a state member bank must first notify the Board
                before July 11, 2020.
                (c) Calculation of relief. When calculating on-balance sheet assets
                as of each day of a reporting quarter, the relief provided in paragraph
                (a) of this section applies from the beginning of the reporting quarter
                in which the state member bank filed an opt-in notice
                [[Page 32990]]
                through the termination date specified in paragraph (d) of this
                section.
                 (d) Termination of exclusions. This section shall cease to be
                effective after the reporting period that ends March 31, 2021.
                 (e) Custodial banking organizations. A custodial banking
                organization must reduce the amount in Sec. 217.10(c)(4)(ii)(J)(1) (to
                no less than zero) by any amount excluded under paragraph (a)(2) of
                this section.
                 (f) Disclosure. Notwithstanding Table 13 to Sec. 217.173, a Board-
                regulated institution that is required to make the disclosures pursuant
                to Sec. 217.173 must exclude the items excluded pursuant to paragraph
                (a) of this section from Table 13 to Sec. 217.173.
                 (g) Board approval for distributions. During the calendar quarter
                beginning on July 1, 2020, and until March 31, 2021, no state member
                bank that has opted in to the relief provided under paragraph (a) of
                this section may make a distribution, or create an obligation to make
                such a distribution, without prior Board approval. When reviewing a
                request under this paragraph (g), the Board will consider all relevant
                factors, including whether the distribution would be contrary to the
                safety and soundness of the state member bank; the nature, purpose, and
                extent of the request; and the particular circumstances giving rise to
                the request.
                Federal Deposit Insurance Corporation
                12 CFR Chapter III
                Authority and Issuance
                 For the reasons set forth in the joint preamble, the Federal
                Deposit Insurance Corporation amends chapter III of title 12 of the
                Code of Federal Regulations as follows:
                PART 324--CAPITAL ADEQUACY OF FDIC-SUPERVISED INSTITUTIONS
                0
                 9. 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);
                Pub. L. 115-174; Pub. L. 116-136, 134 Stat. 281.
                Subpart G--Transition Provisions
                Sec. 324.304 [Redesignated as Sec. 324.305]
                0
                10. Redesignate Sec. 324.304 as Sec. 324.305.
                0
                11. A new Sec. 324.304 is added to read as follows:
                Sec. 324.304 Temporary exclusions from total leverage exposure.
                 (a) In general. Subject to paragraphs (b) through (g) of this
                section, and notwithstanding any other requirement in this part, an
                FDIC-supervised institution, when calculating on-balance sheet assets
                as of each day of a reporting quarter for purposes of determining the
                FDIC-supervised institution's total leverage exposure under Sec.
                324.10(c)(4), may exclude the balance sheet carrying value of the
                following items:
                 (1) U.S. Treasury securities; and
                 (2) Funds on deposit at a Federal Reserve Bank.
                 (b) Opt-in period. Before applying the relief provided in paragraph
                (a) of this section, an FDIC-supervised institution must first notify
                the appropriate regional director of the FDIC Division of Risk
                Management Supervision before July 11, 2020.
                (c) Calculation of relief. When calculating on-balance sheet assets
                as of each day of a reporting quarter, the relief provided in paragraph
                (a) of this section applies from the beginning of the reporting quarter
                in which the FDIC-supervised institution filed an opt-in notice through
                the termination date specified in paragraph (d) of this section.
                 (d) Termination of exclusions. This section shall cease to be
                effective after the reporting period that ends March 31, 2021.
                 (e) Custody bank. A custody bank must reduce the amount in Sec.
                324.10(c)(4)(ii)(J)(1) (to no less than zero) by any amount excluded
                under paragraph (a)(2) of this section.
                 (f) Disclosure. Notwithstanding Table 13 to Sec. 324.173, an FDIC-
                supervised institution that is required to make the disclosures
                pursuant to Sec. 324.173 must exclude the items excluded pursuant to
                paragraph (a) of this section from Table 13 to Sec. 324.173.
                 (g) FDIC approval for distributions. During the calendar quarter
                beginning on July 1, 2020, and until March 31, 2021, no FDIC-supervised
                institution that has opted in to the relief provided under paragraph
                (a) of this section may make a distribution, or create an obligation to
                make such a distribution, without prior FDIC approval. When reviewing a
                request under this paragraph (g), the FDIC will consider all relevant
                factors, including whether the distribution would be contrary to the
                safety and soundness of the FDIC-supervised institution; the nature,
                purpose, and extent of the request; and the particular circumstances
                giving rise to the request.
                Subpart H--Prompt Corrective Action
                0
                12. Section 324.403(b)(2)(vi) and (b)(3)(v) are revised to read as
                follows:
                Sec. 324.403 Capital measures and capital categories definitions.
                * * * * *
                 (b) * * *
                 (2) * * *
                 (vi) Beginning January 1, 2018, an advanced approaches or Category
                III FDIC-supervised institution will be deemed to be ``adequately
                capitalized'' if it satisfies 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. 324.10.
                 (3) * * *
                 (v) Beginning January 1, 2018, an advanced approaches or Category
                III 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. 324.10.
                * * * * *
                Brian P. Brooks,
                First Deputy Comptroller of the Currency.
                 By order of the Board of Governors of the Federal Reserve
                System.
                Ann E. Misback,
                Secretary of the Board.
                Federal Deposit Insurance Corporation.
                 By order of the Board of Directors.
                 Dated at Washington, DC, on or about May 14, 2020.
                Robert E. Feldman,
                Executive Secretary.
                [FR Doc. 2020-10962 Filed 5-29-20; 8:45 am]
                BILLING CODE 4810-33-P
                

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