The federal bank and thrift regulatory agencies announced today the publication of a joint Federal Register notice and request for comment on proposed guidance for Internal Ratings-Based Systems for Retail Credit Risk for Regulatory Capital. The proposed guidance provides banking organizations with a description of the agencies' current views regarding the components and characteristics of a qualifying internal ratings-based (IRB) system for measuring credit risk of retail exposures. Retail exposures include various types of consumer credit such as residential mortgages, consumer credit cards, and automobile and personal loans as well as some small business loans.

The proposed retail guidance, like the August 4, 2003, proposed corporate IRB guidance and the Advanced Measurement Approaches for operational risk guidance, includes a number of supervisory standards that ultimately may become part of the qualification criteria for IRB systems in a future interagency notice of proposed rulemaking regarding the Basel II framework in the United States.

Comments on the proposed guidance are requested by January 25, 2005. Specific information on how to file a comment is contained in the Federal Register notice.