Bank Capital Calculations Get Standardized Tweaks
Published Date: 3/27/2026
Proposed Rule
Summary
Big banks and community banks are getting new rules to better measure the risks in their loans and investments. The changes update how banks count certain assets and income when figuring out their safety net money, called regulatory capital. These updates aim to make banks safer and smarter with their money, with some rules kicking in soon and affecting how much capital banks need to hold.
Analyzed Economic Effects
4 provisions identified: 3 benefits, 0 costs, 1 mixed.
Banks Stop Deducting Mortgage Servicing Assets
The rule would remove the current requirement that banks deduct mortgage servicing assets (MSAs) that exceed 25 percent of their common equity tier 1 capital. Instead, all MSAs would receive a 250 percent risk weight. This change would apply to all banking organizations subject to the capital rule, including those subject to the community bank leverage ratio framework.
New LTV-Based Mortgage Risk Weights
The proposal would introduce a loan-to-value (LTV) based approach and a broader range of risk weights for residential mortgage exposures. A residential mortgage exposure is defined to include first- or subsequent-lien one-to-four family mortgages and residential exposures of $1 million or less secured by residential property.
Lower Risk Weights for Corporate and Other Assets
The proposal would reduce the risk weight for corporate exposures from 100 percent to 95 percent and reduce the risk weight for assets not otherwise assigned a risk weight (the "other assets" category) from 100 percent to 90 percent.
Estimated Decline in Bank CET1 Requirements
The agencies estimate the proposal would reduce common equity tier 1 (CET1) capital requirements by 3.0 percent for Category III and IV holding companies and by 7.8 percent for smaller holding companies. They also estimate reductions of 4.7 percent for depository institution subsidiaries of Category III and IV organizations and 8.0 percent for smaller depository institutions.
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Key Dates
Department and Agencies
Related Federal Register Documents
2025-21626 — Regulatory Capital Rule: Modifications to the Enhanced Supplementary Leverage Ratio Standards for U.S. Global Systemically Important Bank Holding Companies and Their Subsidiary Depository Institutions; Total Loss-Absorbing Capacity and Long-Term Debt Requirements for U.S. Global Systemically Important Bank Holding Companies
Big U.S. banks that are super important to the economy are getting new rules to keep them safer and stronger. These changes tweak how much money they must keep on hand and how they handle long-term debt, helping prevent financial trouble. The new rules kick in soon and could affect how these banks manage billions in assets and debt.
2026-05958 — Proposed Agency Information Collection Activities; Comment Request
The Treasury, Federal Reserve, and FDIC want your thoughts on updating rules about how banks report their money and risks. These changes affect banks of all sizes, especially those with big trading activities, and aim to keep things clear and fair for the next three years. You’ve got until May 26, 2026, to share your ideas—no extra costs for banks, just smarter paperwork!
2025-22481 — Proposed Agency Information Collection Activities; Comment Request
The Treasury, Federal Reserve, and FDIC are updating important bank reports called Call Reports, which big banks use to share financial info. These changes, starting June 30, 2026, tweak how banks report certain capital rules to keep things clear and fair. If you have thoughts, you’ve got until January 12, 2026, to speak up—no cost to respond, but your input matters!
2025-21625 — Regulatory Capital Rule: Revisions to the Community Bank Leverage Ratio Framework
The government wants to make it easier for small banks to stay in a special low-risk capital program by lowering the required leverage ratio from 9% to 8%. They’re also giving banks more time—up to four quarters instead of two—to fix any issues without losing their spot. Banks and bank holding companies should weigh in by January 30, 2026, as these changes could save them money and reduce red tape.
2025-06748 — Temporary Exceptions to FIRREA Appraisal Requirements in Los Angeles County as Affected by California Wildfires and Straight-Line Winds
If you’re dealing with real estate loans or sales in Los Angeles County after the recent wildfires and strong winds, good news! The usual strict property appraisal rules are temporarily relaxed to help speed things up. These special rules last until January 8, 2028, giving banks and buyers more flexibility during recovery.
2026-05959 — Regulatory Capital Rule: Category I and II Banking Organizations, Banking Organizations With Significant Trading Activity, and Optional Adoption for Other Banking Organizations
Big banks and those with lots of trading will see new rules to make sure they keep enough money safe and sound. These changes make the rules clearer, fairer, and better at handling risks, helping banks lend money steadily even when the economy wobbles. Banks and holding companies should get ready to comment by June 18, 2026, as these updates could affect how they manage their money.
Previous / Next Documents
Previous: 2026-05959 — Regulatory Capital Rule: Category I and II Banking Organizations, Banking Organizations With Significant Trading Activity, and Optional Adoption for Other Banking Organizations
Big banks and those with lots of trading will see new rules to make sure they keep enough money safe and sound. These changes make the rules clearer, fairer, and better at handling risks, helping banks lend money steadily even when the economy wobbles. Banks and holding companies should get ready to comment by June 18, 2026, as these updates could affect how they manage their money.
Next: 2026-05961 — Regulatory Capital Rule (Regulation Q): Risk-Based Capital Surcharges for Global Systemically Important Bank Holding Companies; Systemic Risk Report (FR Y-15)
Big banks that matter most to the U.S. economy will see changes in how their risk-based capital surcharges are calculated. The new rules tweak formulas, smooth out data bumps, and update reports to better match real-world risks, with adjustments for growth and inflation each year. These updates aim to keep our financial system safer, and banks need to get ready by June 18, 2026, to share their thoughts.
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