Sens. Crapo, Moran Call for 8% Community Bank Leverage Ratio

Senate Banking Committee Chairman Mike Crapo (R-Idaho) and committee member Jerry Moran (R-Kan.) on Friday called for the banking agencies to set the community bank leverage ratio at 8%. The agencies have the discretion under the S. 2155 regulatory reform law to set a CBLR of 8 to 10%; community banks with that leverage ratio may elect to be exempt from Basel III capital requirements and calculations.

While the agencies last fall proposed setting the CBLR at 9%, Crapo and Moran pointed out that this is “well above the current Tier 1 leverage requirement for well-capitalized banks.” They added that setting the CBLR at 8% would “result in banks receiving relief under the CBLR while maintaining significant capital.” Comments on the agencies’ proposal are due tomorrow. For more information, contact ABA’s Hugh Carney.