Voglio sapere a riguardo di…

59280

Federal Register / Vol. 86, No. 205 / Wednesday, October 27, 2021 / Rules and Regulations
appropriate allowance for credit losses 6
in the denominator. The proposed amendment would provide a consistent approach for calculating the ratio of loans in excess of the supervisory LTV
Limits for all FDIC-supervised institutions. The proposed amendment would also approximate the historical methodology specified in the Real Estate Lending Standards for calculating the loans in excess of the supervisory LTV
Limits without creating any regulatory burden for Electing CBOs and other banking organizations.7 Further, the FDIC noted in the proposal that this approach would provide regulatory clarity and avoid any regulatory burden that could arise if Electing CBOs subsequently decide to switch between the CBLR framework and the generally applicable capital rules. The FDIC
proposed to amend the Real Estate Lending Standards only relative to the calculation of loans in excess of the supervisory LTV Limits due to the change in the type of capital information that will be available, and did not consider any revisions to other sections of the Real Estate Lending Standards. Additionally, due to a publishing error, which excluded the third paragraph in this section in the Code of Federal Regulations in prior versions, the FDIC included the complete text of the section on loans in excess of the supervisory loan-to-value limits.

lotter on DSK11XQN23PROD with RULES1

IV. Comments The FDIC received only one comment on the proposal. The commenter, a trade organization, commended the FDIC for proposing this amendment to the calculation of supervisory LTV ratios as a sensible way to help provide uniform application of the measurement of the safety and soundness of all community banking organization on a consistent 6 Banking organizations that have not adopted the current expected credit losses CECL methodology will use tier 1 capital plus the allowance for loan and lease losses ALLL as the denominator.
Banking organizations that have adopted the CECL
methodology will use tier 1 capital plus the portion of the allowance for credit losses ACL attributable to loans and leases.
7 The proposed amendment approximates the historical methodology in the sense that both the proposed and historical approach for calculating the ratio of loans in excess of the LTV Limits involve adding a measure of loss absorbing capacity to tier 1 capital, and an institutions ALLL or ACL
is a component of tier 2 capital. Under the agencies capital rules, an institutions entire amount of ALLL
or ACL could be included in its tier 2 capital, depending on the amount of its risk-weighted assets base. Based on December 31, 2019, Call Report datathe last Call Report date prior to the introduction of the CBLR framework96.0 percent of FDIC-supervised institutions reported that their entire ALLL or ACL was included in their tier 2
capital, and 50.5 percent reported that their tier 2
capital was entirely composed of their ALLL.

VerDate Sep<11>2014

18:39 Oct 26, 2021

Jkt 256001

basis, and it noted that such consistency will allow community banking organizations to be assessed more effectively regardless of their decision to elect the CBLR for regulatory capital reporting.
V. The Final Rule For the reasons stated herein and in the NPR, the FDIC is adopting the proposal without change.
VI. Expected Effects As of March 31, 2021, the FDIC
supervises 3,215 insured depository institutions. The revisions to the Real Estate Lending Standards apply to all FDIC-supervised institutions. The effect of the revisions at an individual bank would depend on whether the amount of its current or future real estate loans with loan-to-value ratios that exceed the supervisory LTV thresholds is greater than, or less than, the sum of its tier 1
capital and allowance or credit reserve in the case of CECL adopters for loan and lease losses. Allowance levels, credit reserves, and the volume of real estate loans and their loan to value ratios can vary considerably over time.
Moreover, the FDIC does not have comprehensive information about the distribution of current loan to value ratios. For these reasons, it is not possible to identify how many institutions have real estate loans that exceed the supervisory LTV thresholds that would be directly implicated by either the current Real Estate Lending Standards or the revisions.
Currently, 3,055 FDIC supervised institutions have total real estate loans that exceed the tier 1 capital plus allowance or reserve benchmark adopted in this final rule, and are thus potentially affected by these revisions depending on the distribution of their loan to value ratios. In comparison, 3,063 FDIC supervised institutions have total real estate loans exceeding the current total capital benchmark and are thus potentially affected by the current Real Estate Lending Standards. As described in more detail below, the population of banks potentially subject to the Real Estate Lending Standards is therefore almost unchanged by these revisions, and their substantive effects are likely to be minimal.8
The FDIC believes that a threshold of tier 1 capital plus an allowance for credit losses is consistent with the way the FDIC and institutions historically have applied the Real Estate Lending Standards. Also, the typical or median FDIC-supervised institution that had not elected the CBLR framework reported 8 March
PO 00000

31, 2021, Call Report data.

Frm 00002

Fmt 4700

Sfmt 4700

almost no difference between the amount of its allowance for credit losses and its tier 2 capital.9 Consequently, although the FDIC does not have information about the amount of real estate loans at each institution that currently exceeds, or could exceed, the supervisory LTV limits, the FDIC does not expect the final rule to have material effects on the safety-and-soundness of, or compliance costs incurred by, FDICsupervised institutions.
VII. Alternatives The FDIC considered two alternatives;
however, it believes that none are preferable to the final rule. The alternatives are discussed below.
First, the FDIC considered making no change to its Real Estate Lending Standards. The FDIC is not in favor of this approach because the FDIC does not favor an approach in which some banks use a tier 1 capital threshold and other banks use a total capital threshold, and because the existing provision could be confusing for institutions.
Second, the FDIC considered revising its Real Estate Lending Standards so that both Electing CBOs and other institutions would use tier 1 capital in place of total capital for the purpose of calculating the supervisory LTV Limits.
While this would subject both Electing CBOs and other institutions to the same approach, because the amount of tier 1
capital at an institution is typically less than the amount of total capital, this alternative would result in a relative tightening of the supervisory standards with respect to loans made in excess of the supervisory LTV Limits. The FDIC
believes that the general level of the current supervisory LTV Limits, which are retained by this final rule, is appropriately reflective of the safety and soundness risk of depository institutions, and therefore the FDIC does not consider this alternative preferable to the final rule.
VIII. Regulatory Analysis A. Effective Date In the proposal, the FDIC proposed to make all provisions of the final rule effective upon publication in the Federal Register. The FDIC noted that the Administrative Procedure Act APA
allows for an effective date of less than 30 days after publication as otherwise provided by the agency for good cause found and published with the rule. 10
9 According to March 31, 2021, Call Report data, the median FDIC-supervised institution that had not elected the CBLR framework reported an allowance for credit losses or allowance for loan and lease losses if applicable that was $3,000 or about 0.45 percent greater than tier 2 capital.
10 5 U.S.C. 553d3.

E:FRFM27OCR1.SGM

27OCR1