US Regulators to Simplify Capital Rules for Community Banks

--Fed/FDIC/OCC to Alter Treatment of Mortgage Servicing Assets

By Jean Yung

     WASHINGTON (MNI) - U.S. banking regulators said Tuesday they are preparing

a proposal to simplify some capital rules that would reduce the regulatory

burden for community banks in particular. 

     The proposal would simplify the capital rules' treatment of mortgage

servicing assets and other items, the Federal Reserve, Federal Deposit Insurance

Corp. and Office of the Comptroller of the Currency said in a joint statement. 

     Ahead of the release of the proposal, the regulators said they will extend

certain temporary capital rules that currently apply to less complex banking

organizations -- generally those with less than $250 billion in total

consolidated assets and less than $10 billion in total foreign exposure. 

     The capital rules deal with mortgage servicing assets, certain deferred tax

assets, investments in the capital instruments of unconsolidated financial

institutions, and minority interests, the regulators said. 

     They were intended to govern a transition period that ends on Jan. 1 but

will now be extended.  

     "The agencies anticipate proposing the simplified regulatory capital

requirements in the coming months," they said. 

--MNI Washington Bureau; +1 202-371-2121; email: jean.yung@marketnews.com

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