1. Short title
This Act may be cited as the “Determination of Appropriate Risk-Based Capital Requirements for Community Financial Institutions Act of 2013”.
Determination of Appropriate Risk-Based Capital Requirements for Community Financial Institutions Act of 2013
A BILL
To determine appropriate risk based capital requirements for community, mid-size, and regional institutions.
2. Final rules pending impact study
In general— The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (in this Act collectively referred to as the Federal banking agencies) shall conduct an empirical study in accordance with subsection (b) prior to issuing any final rule in relation to all proposed regulatory capital rules issued by the Federal banking agencies for the international Basel III agreement (Basel III Rules).
Issues To be studied— The study required by this section shall include—
the potential impact of the Basel III Rules on the financial services sector of the United States, and specifically community, mid-size, and regional financial institutions, including changes to required capital levels in the aggregate, per asset class and institution size;
the long-term potential impact of the Basel III Rules, including changes to the current risk-weight framework;
the cost and complexity of the Basel III Rules for community financial institutions;
the potential indicators of community banks having to maintain higher leverage capital ratios and higher total risk-based capital ratios than non-community banks, and if such capital levels are commensurate with higher historical losses or greater risk;
the historical probability of default and loss given default of residential mortgage loans and the proposed risk weightings in the Basel III Rules, and whether such proposed risk weightings are appropriately and fairly calibrated, specifically for community, mid-size, and regional financial institutions; and
the impact of the Basel III Rules on real estate markets, and specifically, residential mortgage lending and home equity lines of credit.
Exception for global systemically important banks— The delay in rulemaking required under subsection (a) shall not apply to rules applicable to global systemically important banks, as identified by the Financial Stability Board.
3. Voluntary participation
Any financial institution may voluntarily provide information for the study upon the request of the agencies, but may not be required to provide such information.
4. Final report
Availability to the public— A final report on the completed study required by this Act shall be made available to the public for notice and comment for a period of not less than 90 days.
Report to Congress— The Federal banking agencies shall issue a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, and testify before such committees, on the results of the study required by this Act and a summary of the comments received under subsection (a).
Review— The Federal banking agencies shall review any comments submitted under subsections (a) and (b) and considerations provided pursuant to subsections (a) and (b), and following such review, shall prescribe new rules, if appropriate, based on the results of the study and such comments and considerations. Notwithstanding any other provision of law, a new rulemaking following such comment period shall include an additional comment period of not less than 90 days.
5. Delay of rulemaking
A regulation issued by the Federal banking agencies to implement the International Basel III agreement on general risk-based capital requirements may not take effect until after the end of the 1-year period beginning on the date of the enactment of this Act.