12 CFR 217.1 - Purpose, applicability, reservations of authority, and timing.

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§ 217.1 Purpose, applicability, reservations of authority, and timing.
(a) Purpose. This part establishes minimum capital requirements and overall capital adequacy standards for entities described in paragraph (c)(1) of this section. This part includes methodologies for calculating minimum capital requirements, public disclosure requirements related to the capital requirements, and transition provisions for the application of this part.
(b) Limitation of authority. Nothing in this part shall be read to limit the authority of the Board to take action under other provisions of law, including action to address unsafe or unsound practices or conditions, deficient capital levels, or violations of law or regulation, under section 8 of the Federal Deposit Insurance Act, section 8 of the Bank Holding Company Act, or section 10 of the Home Owners' Loan Act.
(c) Applicability. (1) This part applies on a consolidated basis to every Board-regulated institution that is:
(i) A state member bank;
(ii) A bank holding company domiciled in the United States that is not subject to 12 CFR part 225, appendix C, provided that the Board may by order apply any or all of this part 217 to any bank holding company, based on the institution's size, level of complexity, risk profile, scope of operations, or financial condition; or
(iii) A covered savings and loan holding company domiciled in the United States. For purposes of compliance with the capital adequacy requirements and calculations in this part, savings and loan holding companies that do not file the FR Y-9C should follow the instructions to the FR Y-9C.
(2) Minimum capital requirements and overall capital adequacy standards. Each Board-regulated institution must calculate its minimum capital requirements and meet the overall capital adequacy standards in subpart B of this part.
(3) Regulatory capital. Each Board-regulated institution must calculate its regulatory capital in accordance with subpart C of this part.
(4) Risk-weighted assets. (i) Each Board-regulated institution must use the methodologies in subpart D of this part (and subpart F of this part for a market risk Board-regulated institution) to calculate standardized total risk-weighted assets.
(ii) Each advanced approaches Board-regulated institution must use the methodologies in subpart E (and subpart F of this part for a market risk Board-regulated institution) to calculate advanced approaches total risk-weighted assets.
(5) Disclosures. (i) Except for an advanced approaches Board-regulated institution that is making public disclosures pursuant to the requirements in subpart E of this part, each Board-regulated institution with total consolidated assets of $50 billion or more must make the public disclosures described in subpart D of this part.
(ii) Each market risk Board-regulated institution must make the public disclosures described in subpart F of this part.
(iii) Each advanced approaches Board-regulated institution must make the public disclosures described in subpart E of this part.
(d) Reservation of authority. (1) Additional capital in the aggregate. The Board may require a Board-regulated institution to hold an amount of regulatory capital greater than otherwise required under this part if the Board determines that the Board-regulated institution's capital requirements under this part are not commensurate with the Board-regulated institution's credit, market, operational, or other risks.
(2) Regulatory capital elements. (i) If the Board determines that a particular common equity tier 1, additional tier 1, or tier 2 capital element has characteristics or terms that diminish its ability to absorb losses, or otherwise present safety and soundness concerns, the Board may require the Board-regulated institution to exclude all or a portion of such element from common equity tier 1 capital, additional tier 1 capital, or tier 2 capital, as appropriate.
(ii) Notwithstanding the criteria for regulatory capital instruments set forth in subpart C of this part, the Board may find that a capital element may be included in a Board-regulated institution's common equity tier 1 capital, additional tier 1 capital, or tier 2 capital on a permanent or temporary basis consistent with the loss absorption capacity of the element and in accordance with § 217.20(e).
(3) Risk-weighted asset amounts. If the Board determines that the risk-weighted asset amount calculated under this part by the Board-regulated institution for one or more exposures is not commensurate with the risks associated with those exposures, the Board may require the Board-regulated institution to assign a different risk-weighted asset amount to the exposure(s) or to deduct the amount of the exposure(s) from its regulatory capital.
(4) Total leverage. If the Board determines that the leverage exposure amount, or the amount reflected in the Board-regulated institution's reported average total consolidated assets, for an on- or off-balance sheet exposure calculated by a Board-regulated institution under § 217.10 is inappropriate for the exposure(s) or the circumstances of the Board-regulated institution, the Board may require the Board-regulated institution to adjust this exposure amount in the numerator and the denominator for purposes of the leverage ratio calculations.
(5) Consolidation of certain exposures. The Board may determine that the risk-based capital treatment for an exposure or the treatment provided to an entity that is not consolidated on the Board-regulated institution's balance sheet is not commensurate with the risk of the exposure and the relationship of the Board-regulated institution to the entity. Upon making this determination, the Board may require the Board-regulated institution to treat the exposure or entity as if it were consolidated on the balance sheet of the Board-regulated institution for purposes of determining the Board-regulated institution's risk-based capital requirements and calculating the Board-regulated institution's risk-based capital ratios accordingly. The Board will look to the substance of, and risk associated with, the transaction, as well as other relevant factors the Board deems appropriate in determining whether to require such treatment.
(6) Other reservation of authority. With respect to any deduction or limitation required under this part, the Board may require a different deduction or limitation, provided that such alternative deduction or limitation is commensurate with the Board-regulated institution's risk and consistent with safety and soundness.
(e) Notice and response procedures. In making a determination under this section, the Board will apply notice and response procedures in the same manner and to the same extent as the notice and response procedures in 12 CFR 263.202.
(f) Timing. (1) Subject to the transition provisions in subpart G of this part, an advanced approaches Board-regulated institution that is not a savings and loan holding company must:
(i) Except as described in paragraph (f)(1)(ii) of this section, beginning on January 1, 2014, calculate advanced approaches total risk-weighted assets in accordance with subpart E and, if applicable, subpart F of this part and, beginning on January 1, 2015, calculate standardized total risk-weighted assets in accordance with subpart D and, if applicable, subpart F of this part;
(ii) From January 1, 2014 to December 31, 2014:
(A) Calculate risk-weighted assets in accordance with the general risk-based capital rules under 12 CFR parts 208 or 225, appendix A, and, if applicable, appendix E (state member banks or bank holding companies, respectively) 1 and substitute such risk-weighted assets for standardized total risk-weighted assets for purposes of § 217.10;

Footnote(s):
1 For the purpose of calculating its general risk-based capital ratios from January 1, 2014 to December 31, 2014, an advanced approaches Board-regulated institution shall adjust, as appropriate, its risk-weighted asset measure (as that amount is calculated under 12 CFR parts 208 and 225, and, if applicable, appendix E (state member banks or bank holding companies, respectively) in the general risk-based capital rules) by excluding those assets that are deducted from its regulatory capital under § 217.22.

(B) If applicable, calculate general market risk equivalent assets in accordance with 12 CFR parts 208 or 225, appendix E, section 4(a)(3) (state member banks or bank holding companies, respectively) and substitute such general market risk equivalent assets for standardized market risk-weighted assets for purposes of § 217.20(d)(3); and
(C) Substitute the corresponding provision or provisions of 12 CFR parts 208 or 225, appendix A, and, if applicable, appendix E (state member banks or bank holding companies, respectively) for any reference to subpart D of this part in: § 217.121(c); § 217.124(a) and (b); § 217.144(b); § 217.154(c) and (d); § 217.202(b) (definition of covered position in paragraph (b)(3)(iv)); and § 217.211(b); 2

Footnote(s):
2 In addition, for purposes of § 217.201(c)(3), from January 1, 2014 to December 31, 2014, for any circumstance in which the Board may require a Board-regulated institution to calculate risk-based capital requirements for specific positions or portfolios under subpart D of this part, the Board will instead require the Board-regulated institution to make such calculations according to 12 CFR parts 208 and 225, appendix A and, if applicable, appendix E (state member banks or bank holding companies, respectively).

(iii) Beginning on January 1, 2014, calculate and maintain minimum capital ratios in accordance with subparts A, B, and C of this part, provided, however, that such Board-regulated institution must:
(A) From January 1, 2014 to December 31, 2014, maintain a minimum common equity tier 1 capital ratio of 4 percent, a minimum tier 1 capital ratio of 5.5 percent, a minimum total capital ratio of 8 percent, and a minimum leverage ratio of 4 percent; and
(B) From January 1, 2015 to December 31, 2017, an advanced approaches Board-regulated institution:
(1) Is not required to maintain a supplementary leverage ratio; and
(2) Must calculate a supplementary leverage ratio in accordance with § 217.10(c), and must report the calculated supplementary leverage ratio on any applicable regulatory reports.
(2) Subject to the transition provisions in subpart G of this part, a Board-regulated institution that is not an advanced approaches Board-regulated institution or a savings and loan holding company that is an advanced approaches Board-regulated institution must:
(i) Beginning on January 1, 2015, calculate standardized total risk-weighted assets in accordance with subpart D, and if applicable, subpart F of this part; and
(ii) Beginning on January 1, 2015, calculate and maintain minimum capital ratios in accordance with subparts A, B and C of this part, provided, however, that from January 1, 2015 to December 31, 2017, a savings and loan holding company that is an advanced approaches Board-regulated institution:
(A) Is not required to maintain a supplementary leverage ratio; and
(B) Must calculate a supplementary leverage ratio in accordance with § 217.10(c), and must report the calculated supplementary leverage ratio on any applicable regulatory reports.
(3) Beginning on January 1, 2016, and subject to the transition provisions in subpart G of this part, a Board-regulated institution is subject to limitations on distributions and discretionary bonus payments with respect to its capital conservation buffer and any applicable countercyclical capital buffer amount, in accordance with subpart B of this part.
(4) This part shall not apply until January 1, 2015, to any Board-regulated institution that is not an advanced approaches Board-regulated institution or to any covered savings and loan holding company.

Title 12 published on 2014-01-01

The following are only the Rules published in the Federal Register after the published date of Title 12.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-09-26; vol. 79 # 187 - Friday, September 26, 2014
    1. 79 FR 57725 - Regulatory Capital Rules: Regulatory Capital, Revisions to the Supplementary Leverage Ratio
      GPO FDSys XML | Text
      FEDERAL RESERVE SYSTEM, FEDERAL DEPOSIT INSURANCE CORPORATION, DEPARTMENT OF TREASURY, Office of the Comptroller of the Currency
      Final rule.
      The final rule is effective January 1, 2015.
      12 CFR Part 3

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.


United States Code
U.S. Code: Title 12 - BANKS AND BANKING

§ 248 - Enumerated powers

§ 321 - Application for membership

§ 322 - Determination on application

§ 323 - Stock in Federal reserve banks; method of payment

§ 324 - Laws applicable on becoming members

§ 325 - Examinations

§ 326 - Acceptance of examinations and reports by State authorities; special examinations

§ 327 - Surrender of stock and cancellation of memberships

§ 328 - Withdrawals from membership

§ 329 - Capital stock required as condition precedent to membership

§ 329a - Omitted

§ 330 - Laws applicable on becoming members; discounts for State banks

§ 331 - Certifying checks on State banks admitted as members

§ 332 - Depositaries of public money; financial agents; security required

§ 333 - Mutual savings banks; application and admission to membership in Federal Reserve System

§ 334 - Reports from affiliates; penalty for failure to furnish

§ 335 - Dealing in investment securities; limitations and conditions

§ 336 - Certificates of stock; representation of stock of other corporations

§ 337 - Repealed.

§ 338 - Examination of affiliates; forfeiture of membership on refusal of affiliate to give information or pay expense

§ 338a - Investments to promote public welfare and community development; limitation on investments

§ 481 - Appointment of examiners; examination of member banks, State banks, and trust companies; reports

§ 482 - Employees of Office of Comptroller of the Currency; appointment; compensation and benefits

§ 483 - Special examination of member banks; information of condition furnished to Board of Governors of the Federal Reserve System

§ 484 - Limitation on visitorial powers

§ 485 - Examination of Federal reserve banks

§ 486 - Waiver of requirements as to reports from or examinations of affiliates

§ 1462a - Administrative provisions

§ 1467a - Regulation of holding companies

§ 1818 - Termination of status as insured depository institution

§ 1828 - Regulations governing insured depository institutions

§ 1831n - Accounting objectives, standards, and requirements

12 U.S. Code § -

§ 1831p - Transferred

§ 1831w - Safety and soundness firewalls applicable to financial subsidiaries of banks

§ 1835 - Insured depository institution capital requirements for transfers of small business obligations

§ 1844 - Administration

§ 1851 - Prohibitions on proprietary trading and certain relationships with hedge funds and private equity funds

§ 3904 - Reserves

§ 3906 - Collection and disclosure of international lending data

§ 3907 - Capital adequacy

§ 3908 - Foreign loan evaluations

§ 3909 - General authorities

§ 4808 - Revising regulatory requirements for transfers of all types of assets with recourse

§ 5365 - Enhanced supervision and prudential standards for nonbank financial companies supervised by the Board of Governors and certain bank holding companies

§ 5371 - Leverage and risk-based capital requirements

Title 12 published on 2014-01-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 12 CFR 217 after this date.

  • 2014-09-26; vol. 79 # 187 - Friday, September 26, 2014
    1. 79 FR 57725 - Regulatory Capital Rules: Regulatory Capital, Revisions to the Supplementary Leverage Ratio
      GPO FDSys XML | Text
      FEDERAL RESERVE SYSTEM, FEDERAL DEPOSIT INSURANCE CORPORATION, DEPARTMENT OF TREASURY, Office of the Comptroller of the Currency
      Final rule.
      The final rule is effective January 1, 2015.
      12 CFR Part 3