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Agencies Finalize Extension of Certain Capital Rule Transitions
On Tuesday, November 21, 2017, the Federal Reserve, FDIC and OCC finalized a rule extending existing capital requirements for mortgage servicing assets and other items for certain financial institutions. The rule sought to prevent other policies from taking effect while the agencies consider a broader simplification of the capital rules. The rule will be effective on January 1, 2018.
The final rule (1) is substantively similar to the proposal issued by the agencies to extend the existing capital requirements for certain banking organizations for a targeted set of items: mortgage servicing assets, certain deferred tax assets, investments in the capital instruments of unconsolidated financial institutions, and minority interest and (2) would apply only to banking organizations that are not subject to the agencies’ “advanced approaches” capital rules, which are generally firms with less than $250 billion in total consolidated assets and less than $10 billion in total foreign exposure. Banking organizations that are subject to the advanced approaches rules are not affected by this rule.