OCC BULLETIN 2014-6
Subject: Basel III Conforming Amendments
Date: March 7, 2014
To: Chief Executive Officers of All National Banks and Federal Savings Associations, Federal Branches and Agencies, Department and Division Heads, All Examining Personnel, and Other Interested Parties
Description: Interim Final Rule
The Office of the Comptroller of the Currency (OCC) has issued an interim final rule with request for comments (final rule) that makes technical and conforming amendments to its regulations governing national banks and federal savings associations. The final rule, which is effective March 31, 2014, amends various regulations in order to make those regulations consistent with the recently adopted Basel III Capital Framework. The Basel III final rule revised the OCC's regulatory capital rules, adding a new common equity tier 1 requirement, revising the definitions of tier 1 and tier 2 capital, and integrating federal savings associations into 12 CFR part 3 and 12 CFR part 6 (Prompt Corrective Action). The final rule makes technical, clarifying, and conforming amendments to the OCC's rules, by providing cross-references to new capital rules, where necessary, and deleting obsolete references. The final rule also makes changes to subordinated debt rules to clarify the requirements subordinated debt must meet and the procedures required to issue and redeem subordinated debt.
The Licensing Activities Division of the Office of the Chief Counsel is currently updating related sections of the Licensing Manuals, appendixes, and forms to reflect the Basel III final rule requirements.
Technical and Conforming Amendments
Subordinated Debt – 12 CFR 5.47 and 12 CFR 163.81
Note for Community Banks
The amendments made by this rulemaking apply to all banks, including community banks. Community banks must comply with the Basel III Capital Framework (and statutory limitations that cross-reference the regulatory capital rules) beginning January 1, 2015, while advanced approaches national banks and federal savings associations must comply with the Basel III Capital Framework beginning January 1, 2014.
On October 21, 2013, the OCC published in the Federal Register the Basel III final rule (78 Fed. Reg. 62018, Oct. 11, 2013), which completely revised the OCC's regulatory capital rules for national banks and federal savings associations. The final rule, in part, reflected agreements reached by the Basel Committee on Banking Supervision (BCBS) in "Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems."2 The Basel III agreements are intended to improve both the quality and quantity of banking organizations' capital, as well as to strengthen various aspects of the international capital standards for calculating regulatory capital. The OCC issued the Basel III final rule in conjunction with the Federal Deposit Insurance Corporation and the Board of the Governors of the Federal Reserve System.
Please contact Jean Campbell, Senior Attorney, Legislative and Regulatory Activities Division, (202) 649-5490; or Patricia D. Goings, Senior Licensing Analyst, or Patricia Roberts, Senior Licensing Analyst, Licensing Division, (202) 649-6260.
Amy S. Friend
1 The timing requirements are located at 12 CFR 3.1(f) and the description of national banks and federal savings associations that must comply with the advanced approaches rules is located at 12 CFR 3.100(b)(1).
2 Basel III was published in December 2010 and revised in June 2011. The text is available at www.bis.org/publ/bcbs189.htm. The BCBS is a committee of banking supervisory authorities, which was established by the central bank governors of the G–10 countries in 1975. More information regarding the BCBS and its membership is available at www.bis.org/bcbs/about.htm. Documents issued by the BCBS are available through the Bank for International Settlements Web site at www.bis.org.