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OCC Bulletin 2020-53
May 20, 2020
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Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division Heads; All Examining Personnel; and Other Interested Parties
On January 27, 2020, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) issued a final rule that excludes from the supplementary leverage ratio (SLR) certain central bank deposits of banking organizations predominantly engaged in custody, safekeeping, and asset servicing activities consistent with section 402 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). Advanced approaches and Category III banking organizations are subject to the SLR requirement.
The final rule does not apply to community banks.
Section 402 of the EGRRCPA directs the agencies to amend the capital rule to specify that funds of a "custodial bank" that are deposited with certain central banks shall not be taken into account when calculating the SLR, subject to a specified limit. The SLR applies to advanced approaches and Category III banking organizations and measures a bank's tier 1 capital relative to its total leverage exposure, which includes on-balance-sheet assets (including deposits at central banks) and certain off-balance-sheet exposures.
Please contact Venus Fan, Risk Expert, or Guowei Zhang, Risk Expert, Capital and Regulatory Policy, at (202) 649-6370; or Rima Kundnani, Attorney, or Christopher Rafferty, Attorney, Chief Counsel's Office, at (202) 649-5490.
Jonathan V. Gould
Senior Deputy Comptroller and Chief Counsel