View all text of Part C [§ 5361 - § 5374]
§ 5371. Leverage and risk-based capital requirements
(a) Definitions
For purposes of this section, the following definitions shall apply:
(1) Generally applicable leverage capital requirements
(A) the minimum ratios of tier 1 capital to average total assets, as established by the appropriate Federal banking agencies to apply to insured depository institutions under the prompt corrective action regulations implementing section 1831o of this title, regardless of total consolidated asset size or foreign financial exposure; and
(B) includes the regulatory capital components in the numerator of that capital requirement, average total assets in the denominator of that capital requirement, and the required ratio of the numerator to the denominator.
(2) Generally applicable risk-based capital requirements
The term “generally applicable risk-based capital requirements” means—
(A) the risk-based capital requirements, as established by the appropriate Federal banking agencies to apply to insured depository institutions under the prompt corrective action regulations implementing section 1831o of this title, regardless of total consolidated asset size or foreign financial exposure; and
(B) includes the regulatory capital components in the numerator of those capital requirements, the risk-weighted assets in the denominator of those capital requirements, and the required ratio of the numerator to the denominator.
(3) Definition of depository institution holding company
(4) Business of insurance
(5) Person regulated by a State insurance regulator
(6) Regulated foreign subsidiary and regulated foreign affiliate
The terms “regulated foreign subsidiary” and “regulated foreign affiliate” mean a person engaged in the business of insurance in a foreign country that is regulated by a foreign insurance regulatory authority that is a member of the International Association of Insurance Supervisors or other comparable foreign insurance regulatory authority as determined by the Board of Governors following consultation with the State insurance regulators, including the lead State insurance commissioner (or similar State official) of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners, where the person, or its principal United States insurance affiliate, has its principal place of business or is domiciled, but only to the extent that—
(A) such person acts in its capacity as a regulated insurance entity; and
(B) the Board of Governors does not determine that the capital requirements in a specific foreign jurisdiction are inadequate.
(7) Capacity as a regulated insurance entity
The term “capacity as a regulated insurance entity”—
(A) includes any action or activity undertaken by a person regulated by a State insurance regulator or a regulated foreign subsidiary or regulated foreign affiliate of such person, as those actions relate to the provision of insurance, or other activities necessary to engage in the business of insurance; and
(B) does not include any action or activity, including any financial activity, that is not regulated by a State insurance regulator or a foreign agency or authority and subject to State insurance capital requirements or, in the case of a regulated foreign subsidiary or regulated foreign affiliate, capital requirements imposed by a foreign insurance regulatory authority.
(b) Minimum capital requirements
(1) Minimum leverage capital requirements
(2) Minimum risk-based capital requirements
(3) Investments in financial subsidiaries
(4) Effective dates and phase-in periods
(A) Debt or equity instruments on or after May 19, 2010
(B) Debt or equity instruments issued before May 19, 2010
(C) Debt or equity instruments of smaller institutions
(D) Depository institution holding companies not previously supervised by the Board of Governors
(E) Certain bank holding company subsidiaries of foreign banking organizations
(5) Exceptions
This section shall not apply to—
(A) debt or equity instruments issued to the United States or any agency or instrumentality thereof pursuant to the Emergency Economic Stabilization Act of 2008 [12 U.S.C. 5201 et seq.], and prior to October 4, 2010;
(B) any Federal home loan bank; or
(C) any bank holding company or savings and loan holding company that is subject to the application of appendix C to part 225 of title 12, Code of Federal Regulations (commonly known as the “Small Bank Holding Company and Savings and Loan Holding Company Policy Statement”).
(6) Study and report on small institution access to capital
(A) Study required
(B) Scope
(C) Report to Congress
(7) Capital requirements to address activities that pose risks to the financial system
(A) In general
(B) Content
Such rules shall address, at a minimum, the risks arising from—
(i) significant volumes of activity in derivatives, securitized products purchased and sold, financial guarantees purchased and sold, securities borrowing and lending, and repurchase agreements and reverse repurchase agreements;
(ii) concentrations in assets for which the values presented in financial reports are based on models rather than historical cost or prices deriving from deep and liquid 2-way markets; and
(iii) concentrations in market share for any activity that would substantially disrupt financial markets if the institution is forced to unexpectedly cease the activity.
(c) Clarification
(1) In general
(2) Rule of construction on Board’s authority
(3) Rule of construction on accounting principles
(A) In general
(B) Preservation of authority
(Pub. L. 111–203, title I, § 171, July 21, 2010, 124 Stat. 1435; Pub. L. 113–250, § 2(a), Dec. 18, 2014, 128 Stat. 2886; Pub. L. 113–279, § 2, Dec. 18, 2014, 128 Stat. 3017; Pub. L. 114–94, div. G, title LXXXVII, § 87001, Dec. 4, 2015, 129 Stat. 1798; Pub. L. 115–174, title II, § 207(d), May 24, 2018, 132 Stat. 1312.)