The Federal Deposit Insurance Corporation, together with the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency, issued a proposal to revise elements of the standardized approach for calculating risk-weighted assets and to make adjustments to the definition of regulatory capital. The proposal applies to FDIC-insured institutions subject to risk-based capital requirements that do not apply the expanded risk-based approach. Key changes include modified risk weights for certain residential mortgage, retail, and corporate exposures, with a broader range of mortgage risk weights based on more granular factors including loan-to-value ratios. The proposal also makes targeted adjustments to methodologies for counterparty credit risk exposure amounts and securitization risk-weighted assets, updates the recognition of benefits from certain synthetic risk transactions, and adjusts the recognition of credit risk mitigants. For Category III and Category IV banking organizations, most components of AOCI would be included in regulatory capital with a five-year transition period. Mortgage servicing assets would no longer be subject to a regulatory capital deduction, with additional changes on this topic requested for comment, and this revision would apply to all banking organizations including those using the community bank leverage ratio framework; certain dollar-based thresholds in the capital rule would be adjusted in the future to reflect inflation under a pre-determined indexing methodology. Comments are due June 18, 2026.
Federal Deposit Insurance Corporation 2026-03-19
Federal Deposit Insurance Corporation, Board of Governors of the Federal Reserve System and Office of the Comptroller of the Currency propose revisions to standardized risk-weighted assets and regulatory capital including AOCI for Category III and IV banks
The Federal Deposit Insurance Corporation, Federal Reserve, and Office of the Comptroller of the Currency proposed revisions to the standardized approach for risk-weighted assets and regulatory capital definitions. Changes include modified risk weights for various exposures, adjustments to counterparty credit risk methodologies, and updates to synthetic risk transactions. The proposal affects Category III and IV banking organizations by including most components of Accumulated Other Comprehensive Income in regulatory capital over a five-year transition.