[Federal Register Volume 81, Number 73 (Friday, April 15, 2016)]
[Rules and Regulations]
[Pages 22173-22174]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-08717]



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 Rules and Regulations
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  Federal Register / Vol. 81, No. 73 / Friday, April 15, 2016 / Rules 
and Regulations  

[[Page 22173]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 324

RIN 3064-AE12


Regulatory Capital Rules: Regulatory Capital, Final Revisions 
Applicable to Banking Organizations Subject to the Advanced Approaches 
Risk-Based Capital Rule

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Correcting amendment.

-----------------------------------------------------------------------

SUMMARY: The FDIC is correcting a Final Rule that appeared in the 
Federal Register on July 15, 2015 (80 FR 41409), regarding Regulatory 
Capital Rules: Regulatory Capital, Final Revisions Applicable to 
Banking Organizations Subject to the Advanced Approaches Risk-Based 
Capital Rule (``prior Federal Register publication''). This publication 
corrects a technical error in the instructions to the regulatory text 
appearing at page 41426 of the prior Federal Register publication, 
where the inadvertent omission of certain language in the instructions 
to the FDIC's amendatory text in Sec.  324.403 caused the unintended 
deletion of Sec.  324.403(b)(2) through Sec.  324.403(d) as published 
in the Code of Federal Regulations.

DATES: The correction is effective April 15, 2016.

FOR FURTHER INFORMATION CONTACT: Ryan Billingsley, Acting Associate 
Director, [email protected]; or Benedetto Bosco, Chief, Capital 
Policy Section, [email protected]; Capital Markets Branch, Division of 
Risk Management Supervision, (202) 898-6888; or Michael Phillips, 
Counsel, [email protected]; Rachel Ackmann, Counsel, 
[email protected]; Supervision Branch, Legal Division, Federal Deposit 
Insurance Corporation, 550 17th Street NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: This document sets out in full the text of 
section 324.403 as adopted by the FDIC Board of Directors, including 
the revisions published in the Federal Register of July 15, 2015 (80 FR 
41426) and the text inadvertently deleted in the Code of Federal 
Regulations as 12 CFR 324.403.

List of Subjects in 12 CFR Part 324

    Administrative practice and procedure, Banks, Banking, Capital 
adequacy, Reporting and recordkeeping requirements, Savings 
associations, State non-member banks.

12 CFR CHAPTER III

Authority and Issuance

    For the reasons stated in the preamble, the Federal Deposit 
Insurance Corporation amends part 324 of chapter III of Title 12, Code 
of Federal Regulations as follows:

PART 324--CAPITAL ADEQUACY

0
1. The authority citation for part 324 continues to read as follows:

    Authority:  12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b), 
1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n), 
1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub. L. 102-233, 
105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242, 
105 Stat. 2236, 2355, as amended by Pub. L. 103-325, 108 Stat. 2160, 
2233 (12 U.S.C. 1828 note); Pub. L. 102-242, 105 Stat. 2236, 2386, 
as amended by Pub. L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828 
note); Pub. L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note).


0
2. Section 324.403 is revised to read as follows:


Sec.  324.403  Capital measures and capital category definitions.

    (a) Capital measures. For purposes of section 38 of the FDI Act and 
this subpart H, the relevant capital measures shall be:
    (1) The total risk-based capital ratio;
    (2) The Tier 1 risk-based capital ratio; and
    (3) The common equity tier 1 ratio;
    (4) The leverage ratio;
    (5) The tangible equity to total assets ratio; and
    (6) Beginning January 1, 2018, the supplementary leverage ratio 
calculated in accordance with Sec.  324.11 for advanced approaches 
FDIC-supervised institutions that are subject to subpart E of this 
part.
    (b) Capital categories. For purposes of section 38 of the FDI Act 
and this subpart, an FDIC-supervised institution shall be deemed to be:
    (1) ``Well capitalized'' if it:
    (i) Has a total risk-based capital ratio of 10.0 percent or 
greater; and
    (ii) Has a Tier 1 risk-based capital ratio of 8.0 percent or 
greater; and
    (iii) Has a common equity tier 1 capital ratio of 6.5 percent or 
greater; and
    (iv) Has a leverage ratio of 5.0 percent or greater;
    (v) Is not subject to any written agreement, order, capital 
directive, or prompt corrective action directive issued by the FDIC 
pursuant to section 8 of the FDI Act (12 U.S.C. 1818), the 
International Lending Supervision Act of 1983 (12 U.S.C. 3907), or the 
Home Owners' Loan Act (12 U.S.C. 1464(t)(6)(A)(ii)), or section 38 of 
the FDI Act (12 U.S.C. 1831o), or any regulation thereunder, to meet 
and maintain a specific capital level for any capital measure; and
    (vi) Beginning on January 1, 2018 and thereafter, an FDIC-
supervised institution that is a subsidiary of a covered BHC will be 
deemed to be well capitalized if the FDIC-supervised institution 
satisfies paragraphs (b)(1)(i) through (v) of this section and has a 
supplementary leverage ratio of 6.0 percent or greater. For purposes of 
this paragraph, a covered BHC means a U.S. top-tier bank holding 
company with more than $700 billion in total assets as reported on the 
company's most recent Consolidated Financial Statement for Bank Holding 
Companies (FR Y-9C) or more than $10 trillion in assets under custody 
as reported on the company's most recent Banking Organization Systemic 
Risk Report (FR Y-15).
    (2) ``Adequately capitalized'' if it:
    (i) Has a total risk-based capital ratio of 8.0 percent or greater; 
and
    (ii) Has a Tier 1 risk-based capital ratio of 6.0 percent or 
greater; and
    (iii) Has a common equity tier 1 capital ratio of 4.5 percent or 
greater; and
    (iv) Has a leverage ratio of 4.0 percent or greater; and
    (v) Does not meet the definition of a well capitalized bank.
    (vi) Beginning January 1, 2018, an advanced approaches FDIC-
supervised institution will be deemed to be ``adequately capitalized'' 
if it satisfies

[[Page 22174]]

paragraphs (b)(2)(i) through (v) of this section and has a 
supplementary leverage ratio of 3.0 percent or greater, as calculated 
in accordance with Sec.  324.11 of subpart B of this part.
    (3) ``Undercapitalized'' if it:
    (i) Has a total risk-based capital ratio that is less than 8.0 
percent; or
    (ii) Has a Tier 1 risk-based capital ratio that is less than 6.0 
percent; or
    (iii) Has a common equity tier 1 capital ratio that is less than 
4.5 percent; or
    (iv) Has a leverage ratio that is less than 4.0 percent.
    (v) Beginning January 1, 2018, an advanced approaches FDIC-
supervised institution will be deemed to be ``undercapitalized'' if it 
has a supplementary leverage ratio of less than 3.0 percent, as 
calculated in accordance with Sec.  324.11.
    (4) ``Significantly undercapitalized'' if it has:
    (i) A total risk-based capital ratio that is less than 6.0 percent; 
or
    (ii) A Tier 1 risk-based capital ratio that is less than 4.0 
percent; or
    (iii) A common equity tier 1 capital ratio that is less than 3.0 
percent; or
    (iv) A leverage ratio that is less than 3.0 percent.
    (5) ``Critically undercapitalized'' if the insured depository 
institution has a ratio of tangible equity to total assets that is 
equal to or less than 2.0 percent.
    (c) Capital categories for insured branches of foreign banks. For 
purposes of the provisions of section 38 of the FDI Act and this 
subpart H, an insured branch of a foreign bank shall be deemed to be:
    (1) ``Well capitalized'' if the insured branch:
    (i) Maintains the pledge of assets required under Sec.  347.209 of 
this chapter; and
    (ii) Maintains the eligible assets prescribed under Sec.  347.210 
of this chapter at 108 percent or more of the preceding quarter's 
average book value of the insured branch's third-party liabilities; and
    (iii) Has not received written notification from:
    (A) The OCC to increase its capital equivalency deposit pursuant to 
12 CFR 28.15, or to comply with asset maintenance requirements pursuant 
to 12 CFR 28.20; or
    (B) The FDIC to pledge additional assets pursuant to Sec.  347.209 
of this chapter or to maintain a higher ratio of eligible assets 
pursuant to Sec.  347.210 of this chapter.
    (2) ``Adequately capitalized'' if the insured branch:
    (i) Maintains the pledge of assets required under Sec.  347.209 of 
this chapter; and
    (ii) Maintains the eligible assets prescribed under Sec.  347.210 
of this chapter at 106 percent or more of the preceding quarter's 
average book value of the insured branch's third-party liabilities; and
    (iii) Does not meet the definition of a well capitalized insured 
branch.
    (3) ``Undercapitalized'' if the insured branch:
    (i) Fails to maintain the pledge of assets required under Sec.  
347.209 of this chapter; or
    (ii) Fails to maintain the eligible assets prescribed under Sec.  
347.210 of this chapter at 106 percent or more of the preceding 
quarter's average book value of the insured branch's third-party 
liabilities.
    (4) ``Significantly undercapitalized'' if it fails to maintain the 
eligible assets prescribed under Sec.  347.210 of this chapter at 104 
percent or more of the preceding quarter's average book value of the 
insured branch's third-party liabilities.
    (5) ``Critically undercapitalized'' if it fails to maintain the 
eligible assets prescribed under Sec.  347.210 of this chapter at 102 
percent or more of the preceding quarter's average book value of the 
insured branch's third-party liabilities.
    (d) Reclassifications based on supervisory criteria other than 
capital. The FDIC may reclassify a well capitalized FDIC-supervised 
institution as adequately capitalized and may require an adequately 
capitalized FDIC-supervised institution or an undercapitalized FDIC-
supervised institution to comply with certain mandatory or 
discretionary supervisory actions as if the FDIC-supervised institution 
were in the next lower capital category (except that the FDIC may not 
reclassify a significantly undercapitalized FDIC-supervised institution 
as critically undercapitalized) (each of these actions are hereinafter 
referred to generally as ``reclassifications'') in the following 
circumstances:
    (1) Unsafe or unsound condition. The FDIC has determined, after 
notice and opportunity for hearing pursuant to Sec.  308.202(a) of this 
chapter, that the FDIC-supervised institution is in unsafe or unsound 
condition; or
    (2) Unsafe or unsound practice. The FDIC has determined, after 
notice and opportunity for hearing pursuant to Sec.  308.202(a) of this 
chapter, that, in the most recent examination of the FDIC-supervised 
institution, the FDIC-supervised institution received and has not 
corrected a less-than-satisfactory rating for any of the categories of 
asset quality, management, earnings, or liquidity.

    Dated at Washington, DC, this 12th day of April, 2016.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2016-08717 Filed 4-14-16; 8:45 am]
 BILLING CODE 6714-01-P