Federal Agencies Announce CBLR Framework Changes
On December 21, 2021, the Federal Reserve Board, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC), (collectively, the “federal agencies”) issued an interagency statement[1] regarding changes to the optional community bank leverage ratio (CBLR) framework.
Under the CBLR framework, a community bank that “elects” the CBLR framework “will be subject to a community bank leverage ratio requirement of greater than 9 percent when it submits its March 31, 2022, call report.”
Additionally, after January 1, 2022, “a qualifying community bank must report a leverage ratio greater than 8 percent to use the two-quarter grace period.” Under this grace period, a qualifying community bank is granted “additional time to build capital and manage its balance sheet” to comply with framework requirements of the CLRB or to “prepare to comply with the generally applicable risk-based and leverage capital requirements.”
Election of the CBLR framework and maintenance of the framework requirements can be a complicated and substantial process. Kennedy Sutherland is well-versed in this process and remains available to assist you in any manner necessary, pursuant to this interagency statement.
If you have any questions or concerns about this statement, please contact Kennedy Sutherland.
[1] https://www.occ.gov/news-issuances/bulletins/2021/bulletin-2021-66.html