Federal Reserve Board

DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency

12 CFR Parts 3 and 6

[Docket No. 98-10]
RIN 1557-AB14

FEDERAL RESERVE SYSTEM

12 CFR Parts 208 and 225

[Regulations H and Y; Docket No. R-0976]

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 325

RIN 3064-AC07

DEPARTMENT OF THE TREASURY
Office of Thrift Supervision

12 CFR Part 565 and 567

[Docket No. 98-68]
RIN 1550-AB11

Capital; Risk-Based Capital Guidelines;
Capital Adequacy Guidelines; Capital Maintenance:
Servicing Assets

AGENCIES:: Office of the Comptroller of the Currency, Treasury; Board of Governors of the Federal Reserve System; Federal Deposit Insurance Corporation; and Office of Thrift Supervision, Treasury.

ACTION: Final rule.

SUMMARY: The Office of the Comptroller of the Currency (OCC); the Board of Governors of the Federal Reserve System (Board); the Federal Deposit Insurance Corporation (FDIC); and the Office of Thrift Supervision (OTS) (collectively, the Agencies) are amending their capital adequacy standards for banks, bank holding companies, and savings associations (collectively, institutions or banking organizations) to address the regulatory capital treatment of servicing assets on both mortgage assets and financial assets other than mortgages (nonmortgages). This rule increases the maximum amount of servicing assets (when combined with purchased credit card relationships (PCCRs)) that are includable in regulatory capital from 50 percent to 100 percent of Tier 1 capital. Servicing assets include the aggregate amount of mortgage servicing assets (MSAs) and nonmortgage servicing assets (NMSAs). It also applies a further sublimit of 25 percent of Tier 1 capital to the aggregate amount of NMSAs and PCCRs. The rule also subjects the valuation of MSAs, NMSAs, and PCCRs to a 10 percent discount. The final rule also modifies certain terms used in the Agencies' capital rules to be more consistent with the terminology found in accounting standards recently prescribed by the Financial Accounting Standards Board (FASB) for the reporting of these assets.

EFFECTIVE DATE: The rule is effective October 1, 1998. The Agencies will not object if an institution wishes to apply the provisions of this final rule beginning with the date it is published in the Federal Register.

FOR FURTHER INFORMATION CONTACT:

OCC: Gene Green, Deputy Chief Accountant (202/874-5180); Roger Tufts, Senior Economic Adviser, or Tom Rollo, National Bank Examiner, Capital Policy Division (202/874-5070); Mitchell Stengel, Senior Financial Economist, Risk Analysis Division (202/874-5431); Saumya Bhavsar, Attorney or Ronald Shimabukuro, Senior Attorney (202/874-5090), Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 250 E Street, S.W., Washington, D.C. 20219.

Board: Arleen Lustig, Supervisory Financial Analyst (202/452-2987), Arthur W. Lindo, Supervisory Financial Analyst, (202/452-2695) or Thomas R. Boemio, Senior Supervisory Financial Analyst, (202/452-2982), Division of Banking Supervision and Regulation. For the hearing impaired only, Telecommunication Device for the Deaf (TDD), Diane Jenkins (202) 452-3544, Board of Governors of the Federal Reserve System, 20th and C Streets, N.W., Washington, D.C. 20551.

FDIC: For supervisory issues, Stephen G. Pfeifer, Examination Specialist, (202/898-8904), Accounting Section, Division of Supervision; for legal issues, Marc J. Goldstom, Counsel, (202/898-8807), Legal Division.

OTS: Michael D. Solomon, Senior Program Manager for Capital Policy, (202/906-5654), Christine Smith, Capital and Accounting Policy Analyst, (202/906-5740), or Timothy J. Stier, Chief Accountant, (202/906-5699), Vern McKinley, Senior Attorney, Regulations and Legislation Division (202/906-6241), Office of Thrift Supervision, 1700 G Street, N.W., Washington, D.C. 20552.

Summary and joint final rule (87 KB PDF)

1998 Banking and consumer regulatory policy


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Last update: August 5, 1998, 2:30 PM