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OCC Bulletin 2019-64
December 13, 2019
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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, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) are publishing a final rule, in accordance with section 214 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), to revise the capital rule to make the definition of high volatility commercial real estate (HVCRE) exposure consistent with the statutory definition. The final rule is effective on April 1, 2020.
The final rule will apply to all national banks and federal savings associations (collectively, banks), including community banks, except for qualifying community banking organizations electing to use the Community Bank Leverage Ratio Framework.
On May 24, 2018, the EGRRCPA became law. Section 214 of the EGRRCPA amends the Federal Deposit Insurance Act by adding a new section 51 to provide a definition of an HVCRE ADC loan. The statute states the agencies may only require a depository institution to assign a heightened risk weight to an HVCRE exposure, as defined under the capital rule, if such exposure is an HVCRE ADC loan under the EGRRCPA. The statutory HVCRE ADC loan definition excludes any loan made before January 1, 2015. Section 214 was effective upon enactment of the statute.
Please contact Benjamin Pegg, Risk Expert, Capital Policy Division, at (202) 649-6370; or Carl Kaminski, Special Counsel, or Rima Kundnani, Senior Attorney, Chief Counsel's Office, at (202) 649-5490.
Jonathan V. Gould
Senior Deputy Comptroller and Chief Counsel