ICBA Advocates Stronger Capital Simplification

Apr 10, 2019

ICBA called on federal banking regulators to exempt more community banks from risk-based capital requirements, as authorized by Congress in the S. 2155 regulatory relief law.

The agencies are proposing a 9 percent leverage ratio that banks with less than $10 billion in assets must meet to be exempt from the risk-based capital rules, which include the Basel III capital standards.

ICBA called on the agencies to lower the community bank leverage ratio to 8 percent, which would include roughly 600 highly capitalized community banks that would otherwise be ineligible to opt in to the new standard.

ICBA also advocated:

  • paying close attention to the impact of the Current Expected Credit Loss accounting standard on community bank capital levels,
  • raising eligibility limits on high-quality community bank assets, such as mortgage-servicing assets,
  • removing the current prompt-corrective-action framework from the proposed CBLR framework, and
  • simplifying the CBLR and Basel III rules to avoid excessively complex and burdensome standards.

Read ICBA Letter
Read ICBA Release

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