WASHINGTON–The Independent Community Bankers of America has issued a statement of support for plans by federal agencies to simplify the Basel III regulatory capital standards for community banks and to pause the full phase-in for some regulatory capital deductions and risk weights set to take effect for community banks on Jan. 1, 2018.
“ICBA has been a longstanding vocal advocate for simplifying capital standards for the nation’s community banks,” said ICBA President Camden Fine. “This move by the federal banking regulators signals an acknowledgment that community banks maintain strong capital positions and high-quality balance sheets and should not be subjected to overly burdensome standards meant to reign in Wall Street excesses.
“ICBA applauds the agencies’ intention to simplify certain aspects of the capital rules for community banks, as well as their proposal to put on hold the current Basel III transition period that would have increased capital deductions and risk weights beginning in 2018 for certain assets like mortgage servicing assets (MSAs) and deferred tax assets (DTAs),” Fine added.
Fine called the decision “welcome news” for community banks, which have been “hit hard by the punitive Basel III capital treatment on quality assets like retained mortgage servicing rights. ICBA looks forward to working with the agencies as they work to implement this new policy.”