---
kind: "section"
citation: "12 C.F.R. § 628.10"
title: "12"
number: "628.10"
heading: "Minimum capital requirements."
url: "https://uscodex.org/cfr/12/628.10"
---

# §628.10. Minimum capital requirements.

- (a) **Computation of regulatory capital ratios.** A System institution's regulatory capital ratios are determined on the basis of the financial statements of the institution prepared in accordance with GAAP using average daily balances for the most recent 3 months.
- (b) **Minimum capital requirements.** A System institution must maintain the following minimum capital ratios:
  - (1) A common equity tier 1 (CET1) capital ratio of 4.5 percent.
  - (2) **A tier 1 capital ratio of 6 percent.**
  - (3) **A total capital ratio of 8 percent.**
  - (4) A tier 1 leverage ratio of 4 percent, of which at least 1.5 percent must be composed of URE and URE equivalents.
  - (5) [Reserved]
  - (6) **A permanent capital ratio of 7 percent.**
- (c) **Capital ratio calculations.** A System institution's regulatory capital ratios are as follows:
  - (1) **CET1 capital ratio.** A System institution's CET1 capital ratio is the ratio of the System institution's CET1 capital to total risk-weighted assets;
  - (2) **Tier 1 capital ratio.** A System institution's tier 1 capital ratio is the ratio of the System institution's tier 1 capital to total risk-weighted assets;
  - (3) **Total capital ratio.** A System institution's total capital ratio is the ratio of the System institution's total (tier 1 and tier 2) capital to total risk-weighted assets; and
  - (4) **Tier 1 leverage ratio.**
    - (i) A System institution's leverage ratio is the ratio of the institution's tier 1 capital to the institution's average total consolidated assets as reported on the institution's Call Report net of deductions and adjustments from tier 1 capital under §§ [628.22(a)](/cfr/12/628.22.md?p=a), [(b)](/cfr/12/628.22.md?p=b), and [(c)](/cfr/12/628.22.md?p=c) and [628.23](/cfr/12/628.23.md).
    - (ii) To calculate the measure of URE and URE equivalents described in [paragraph (b)(4)](#b-4) of this section, a System institution must adjust URE and URE equivalents to reflect all the deductions and adjustments required under § [628.22(a)](/cfr/12/628.22.md?p=a), [(b)](/cfr/12/628.22.md?p=b), and [(c)](/cfr/12/628.22.md?p=c), and must use the denominator of the tier 1 leverage ratio.
  - (5) **Permanent capital ratio.** A System institution's permanent capital ratio is the ratio of the institution's permanent capital to its total risk-adjusted asset base as reported on the institution's Call Report, calculated in accordance with the regulations in [part 615](/cfr/12/part615.md), [subpart H](/cfr/12/subpartH.md), of this chapter.
- (d) [Reserved]
- (e) **Capital adequacy.**
  - (1) Notwithstanding the minimum requirements in this part, a System institution must maintain capital commensurate with the level and nature of all risks to which the System institution is exposed. FCA may evaluate a System institution's capital adequacy and require the institution to maintain higher minimum regulatory capital ratios using the factors listed in [§ 615.5350](/cfr/12/615.5350.md) of this chapter.
  - (2) A System institution must have a process for assessing its overall capital adequacy in relation to its risk profile and a comprehensive strategy for maintaining an appropriate level of capital under [§ 615.5200](/cfr/12/615.5200.md) of this chapter.

## Notes

### Amendments

[81 FR 49779, July 28, 2016, as amended at 86 FR 54358, Oct. 1, 2021]

### Authority

Authority: Secs. 1.5, 1.7, 1.10, 1.11, 1.12, 2.2, 2.3, 2.4, 2.5, 2.12, 3.1, 3.7, 3.11, 3.25, 4.3, 4.3A, 4.9, 4.14B, 4.25, 5.9, 5.17, 8.0, 8.3, 8.4, 8.6, 8.8, 8.10, 8.12 of the Farm Credit Act (12 U.S.C. 2013, 2015, 2018, 2019, 2020, 2073, 2074, 2075, 2076, 2093, 2122, 2128, 2132, 2146, 2154, 2154a, 2160, 2202b, 2211, 2243, 2252, 2279aa, 2279aa-3, 2279aa-4, 2279aa-6, 2279aa-8, 2279aa-10, 2279aa-12); sec. 301(a), Pub. L. 100-233, 101 Stat. 1568, 1608 as amended by sec. 301(a), Pub. L. 103-399, 102 Stat 989, 993 (12 U.S.C. 2154 note); sec. 939A, Pub. L. 111-203, 124 Stat. 1326, 1887 (15 U.S.C. 78o-7 note).

### Source

Source: 81 FR 49779, July 28, 2016, unless otherwise noted.

### Amendments

[81 FR 49779, July 28, 2016, as amended at 86 FR 54358, Oct. 1, 2021]