In a final rule designed to simplify capital requirements for qualifying community banks, the Federal Reserve Board ("FRB") corrected instructional errors. The corrections were published in the Federal Register.
As previously covered, the community bank leverage ratio framework is a "simple alternative methodology to measure capital adequacy." The final rule is intended to provide regulatory relief to smaller banking organizations, consistent with Section 201 of the Economic Growth, Regulatory Relief and Consumer Protection Act.
The final rule will become effective on January 1, 2020, and the community bank leverage ratio framework will become available on March 31, 2020. The correction is effective as of January 1, 2020.