ABA, State Bankers Associations Call for Early Adoption for Regulatory Capital Relief

The American Bankers Association and 52 state associations wrote to the heads of the financial regulatory agencies yesterday urging them to allow the early adoption of relief provisions included in the recently finalized capital simplification rule. The rule simplifies the Basel III regulatory calculations for all but the very largest banks, simplifying the treatment of assets subject to common equity tier 1 threshold deductions and limitations on minority interest.

While the groups welcomed this effort to streamline the onerous Basel III requirements, they pointed out that “the overall benefit is delayed by an April 1, 2020 effective date. We encourage the banking agencies to allow for more immediate benefits to banks and their customers by permitting institutions to opt for early adoption of the simplification rule before the rule’s April 1, 2020, effective date.”