Regulatory

The South Carolina Bankers Association actively monitors and comments on proposed and new regulatory requirements. We strive to give our members a comprehensive review of regulatory requirements in order to ensure that our banks are meeting compliance deadlines and successfully managing their bank’s operations.
 
Regulatory Capital – Basel III
 
On July 2, 2013 the Federal Reserve finalized its rule implementing the Basel III regulatory capital framework and related Dodd-Frank Act changes.  The final rule can be found here:
Highlights of the Final Rule:
  • Minimum Regulatory Capital Requirements – These levels remain unchanged from the proposed rule:
    • A common equity Tier 1 ratio of 4.5 percent of risk-weighted assets;
    • A minimum Tier 1 capital ratio from 4 percent to 6 percent of risk-weighted assets; and,
    • A new conservation buffer of 2.5 percent of risk-weighted assets.
  • Risk-Weights on Residential Mortgage Loans – The proposed changes were not adopted and the current risk-weighting rules will continue to apply.
  • Trust-Preferred Securities – Banking organizations with less than $15 billion in assets may continue to count existing trust preferred securities as capital, consistent with the grandfathering set by the Dodd-Frank Act.
  • Unrealized Losses and Gains – The proposed rule required banks to recognize in their capital the value of unrecognized gains and losses in “available for sale” securities.  The final rule applies this only to banks taking the Advanced Approach. All other banks will be able to choose whether or not to adopt this treatment of their unrecognized gains and losses on a one-time basis.
     
For further analysis of the final rule, the ABA has provided these materials:
The FDIC has also made available on its website several resources to help community bankers understand the capital rules.
 
 
Additional Regulatory and Compliance Resources
 
Dodd-Frank Resources
 
Mortgage Reform Resources
 
SCBA Comment Letters