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OCC Bulletin 2020-29 | March 30, 2020

Credit Concentrations: Joint Statement on Adjustment to the Calculation for Credit Concentration Ratios Used in the Supervisory Approach


Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division Heads; All Examining Personnel; and Other Interested Parties


The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) published the "Joint Statement on Adjustment to the Calculation for Credit Concentration Ratios Used in the Supervisory Approach" on March 30, 2020. This joint statement is in response to changes in the type of capital information available after the implementation of the Community Bank Leverage Ratio (CBLR) rule. The joint statement provides a consistent approach for calculating credit concentrations for all banking organizations. The calculation in the joint statement is consistent with current OCC bank supervision processes.

Note for Community Banks

The joint statement applies to community banks.


The joint statement explains that

  • as of March 31, 2020, the agencies will consistently calculate credit concentrations using tier 1 capital plus the appropriate allowance for loan and lease losses (ALLL) or allowance for credit losses (ACL) as the denominator, as reported on the Consolidated Reports of Condition and Income.1
  • this approach applies only to supervisory calculations for credit concentration ratios and does not affect the calculation of total capital used for other purposes.

Further Information

Please contact Beth Nalyvayko, Bank Examiner, Commercial Credit Risk, Bank Supervision Policy, at (202) 649-6670.


Grovetta N. Gardineer
Senior Deputy Comptroller for Bank Supervision Policy

Related Link

1 Tier 1 plus the ALLL will be used for banks that have not adopted Accounting Standards Codification (ASC) Topic 326, "Financial Instruments – Credit Losses." Tier 1 plus the ACL will be used for banks that have adopted ASC Topic 326.