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OCC Bulletin 2020-87
October 8, 2020
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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
On October 8, 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) jointly issued a final rule that revises the definition of eligible retained income in the agencies' regulatory capital rule.1 The rule finalizes without changes an interim final rule that the agencies issued on March 20, 2020.2 The final rule is effective for banks3 January 1, 2021.
This final rule applies to community banks except for qualifying community banking organizations electing to use the community bank leverage ratio framework.
Under the capital rule, if a bank's capital ratios fall within its buffer requirements, the maximum amount of capital distributions it can make is a function of its eligible retained income. The final rule revises the definition of eligible retained income to the greater of
Please contact Benjamin Pegg, Risk Expert for Capital and Regulatory Policy, (202) 649–6370; or Kevin Korzeniewski, Counsel, or Marta Stewart-Bates, Counsel, Chief Counsel's Office, (202) 649–5490.
Jonathan V. Gould
Senior Deputy Comptroller and Chief Counsel
1 Refer to 12 CFR 3.11, "Capital conservation buffer and countercyclical capital buffer amount."
2 Refer to 85 Fed. Reg. 15909. The interim final rule went into effect March 20, 2020.
3 "Banks" refers to national banks and federal savings associations.