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OCC Bulletin 2020-89 | October 15, 2020

Regulatory Capital Rule: Temporary Changes to and Transition for the Community Bank Leverage Ratio Framework


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


The Office of the Comptroller of the Currency (OCC), along with the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (collectively, the agencies), published a final rule in the Federal Register on October 9, 2020, that adopts without change two interim final rules: "Temporary Changes to the Community Bank Leverage Ratio Framework" and "Transition for the Community Bank Leverage Ratio Framework."1

Consistent with the interim final rules, the final rule implements a temporary change to the community bank leverage ratio (CBLR) framework, pursuant to section 4012 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and provides a graduated increase from the temporary 8 percent CBLR requirement to the 9 percent CBLR requirement as established under the CBLR final rule published in 2019.2 The final rule is effective November 9, 2020.

This bulletin replaces and rescinds OCC Bulletin 2020-33, "Community Bank Leverage Ratio: Interim Final Rules."

Note for Community Banks

This final rule applies to qualifying community banks3 with less than $10 billion in total consolidated assets that meet other prudential criteria and opt into the CBLR framework.


The CBLR framework provides a simple measure of capital adequacy for certain community banking organizations. In 2019, the agencies issued a final rule establishing the CBLR framework, which became effective January 1, 2020. The final rule published October 9, 2020, adopts the two interim final rules without change and provides that, for purposes of the CBLR framework,

  • the leverage ratio requirement is
    • 8 percent, effective the second quarter of 2020.
    • 8.5 percent, effective January 1, 2021.
    • 9 percent, effective January 1, 2022.
  • a bank that elects to use the CBLR framework but temporarily fails to meet all of the qualifying criteria, including the leverage ratio requirement, has a grace period of two calendar quarters to return to compliance provided that the bank maintains a leverage ratio greater than
    • 7 percent, effective the second quarter of 2020.
    • 7.5 percent, effective January 1, 2021.
    • 8 percent, effective January 1, 2022.
  • a bank that has a leverage ratio equal to or less than the grace period minimums must immediately apply the risk-based capital standards.

Further Information

Please contact Benjamin Pegg, Risk Expert, or JungSup Kim, Risk Specialist, Capital Policy, at (202) 649-6370; or Carl Kaminski, Special Counsel, or Daniel Perez, Counsel, Chief Counsel’s Office, at (202) 649-5490.


Jonathan V. Gould
Senior Deputy Comptroller and Chief Counsel

Related Link

1 Refer to 85 Fed. Reg. 22924 (April 23, 2020) and 85 Fed. Reg. 22930 (April 23, 2020).

2 Refer to OCC Bulletin 2019-55, "Regulatory Capital Rule: Capital Simplification for Qualifying Community Banking Organizations: Final Rule."

3 "Banks" refers to national banks and federal savings associations.