Basel III Capital Impact Study Act

Summary: Basel III Capital Impact Study Act - Directs the federal banking agencies (the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation [FDIC]), prior to issuing any final rule amending the agencies' general risk-based capital requirements for determining risk-weighted assets and minimum regulatory capital ratios as proposed in certain June 2012 notices of proposed rule making, to study and report regarding the impact of the approaches on the minimum regulatory capital requirements of insured depository institutions and insured depository institution holding companies. Requires the banking agencies to separately identify provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) that affect capital quality, capital levels, asset quality, and the risk management activities of insured depository institutions and insured depository holding companies and take into consideration the impact of such provisions. Specifies Dodd-Frank provisions to be included. Permits the banking agencies to solicit participation in the study from insured depository institutions and insured depository institution holding companies on a voluntary basis. Amends the International Lending Supervision Act of 1983 to revise capital adequacy requirements by directing the banking agencies to seek to ensure that any differences in rules implementing the capital standards do not: (1) give competitive advantages to any class or group of institutions unless otherwise required by federal law, or (2) undermine Dodd-Frank requirements for enhanced supervision and prudential standards.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Basel III Capital Impact Study 
Act''.

SEC. 2. STUDY REQUIRED.

    The Office of the Comptroller of the Currency, the Board of 
Governors of the Federal Reserve System, and the Federal Deposit 
Insurance Corporation (hereinafter, the ``Federal banking agencies'') 
shall conduct the study and issue the report to Congress required by 
section 3, prior to issuing any final rule amending the agencies' 
general risk-based capital requirements for--
            (1) determining risk-weighted assets as proposed in the 
        Standardized Approach for Risk Weighted Assets Notice of 
        Proposed Rulemaking issued in June 2012 (hereinafter, the 
        ``Standardized Approach NPR'');
            (2) determining risk-weighted assets as proposed in the 
        Advanced Approaches Risk-based Capital Rule; Market Risk 
        Capital Rule Notice of Proposed Rulemaking issued in June 2012 
        (hereinafter, the ``Advanced Approach NPR''); and
            (3) determining minimum regulatory capital ratios as 
        proposed in the Regulatory Capital, Implementation of Basel 
        III, Minimum Regulatory Capital Ratios, Capital Adequacy, 
        Transition Provisions, and Prompt Corrective Action Notice of 
        Proposed Rulemaking issued in June 2012 (hereinafter, the 
        ``Basel III NPR'').

SEC. 3. STUDY AND REPORT.

    (a) Study.--
            (1) In general.--The Federal banking agencies shall, 
        jointly, conduct a study of the impact of the Standardized 
        Approach NPR and the Advanced Approach NPR, respectively, on 
        the minimum regulatory capital requirements of insured 
        depository institutions and insured depository institution 
        holding companies. As part of this study, the Federal banking 
        agencies shall separately identify the various provisions of 
        the Dodd-Frank Wall Street Reform and Consumer Protection Act, 
        and of amendments made by that Act, that affect capital 
        quality, capital levels, asset quality, and the risk management 
        activities of insured depository institutions and insured 
        depository holding companies (hereinafter ``identified 
        provisions'') and take into consideration the impact of such 
        provisions. Without excluding any provisions the Federal 
        banking agencies identify as affecting capital quality, capital 
        levels, asset quality, and the risk management activities of 
        insured depository institutions and insured depository holding 
        companies, the identified provisions shall include the 
        following provisions of the Dodd-Frank Wall Street Reform and 
        Consumer Protection Act, and the amendments made by such 
        provisions of such Act:
                    (A) Section 115 (regarding enhanced supervision and 
                prudential standards).
                    (B) Section 165 (regarding enhanced supervision and 
                prudential standards).
                    (C) Section 166 (regarding early remediation 
                requirements).
                    (D) Section 171 (regarding leverage and risk-based 
                capital requirements).
                    (E) Section 619 (regarding prohibitions on 
                proprietary trading and certain relationships with 
                hedge funds and private equity funds).
                    (F) Section 939 (regarding the removal of statutory 
                references to credit ratings).
                    (G) Section 941 (regarding regulation of credit 
                risk retention and exemption of qualified residential 
                mortgages).
                    (H) Section 1412 (regarding safe harbor and 
                rebuttable presumptions for qualified mortgages).
            (2) Contents of study.--In conducting the study required in 
        paragraph (1), the Federal banking agencies shall determine and 
        make projections of the likely cumulative impact of the 
        Standardized Approach NPR, the Advanced Approach NPR, the Basel 
        III NPR, and the identified provisions on required regulatory 
        capital levels, capital quality, asset quality, and risk 
        management at covered financial institutions. Based on these 
        findings, the Federal banking agencies shall provide an 
        assessment regarding--
                    (A) changes to required capital levels;
                    (B) the aggregate increase or decrease of total 
                risk-weighted asset levels for the institutions to 
                which the Standardized Approach NPR or Advanced 
                Approach NPR would be applicable based on current 
                assets;
                    (C) whether the NPRs and identified provisions will 
                cause capital levels at covered institutions to 
                fluctuate with more frequency or by greater amounts 
                than the current rules and indicate what, if any, 
                safety and soundness issues such fluctuations raise for 
                financial institutions or the financial system;
                    (D) whether the NPRs and the identified provisions 
                will result in the discontinuation of the use of 
                certain risk management tools by covered financial 
                institutions and the impact on the safety and soundness 
                of financial institutions and the financial system;
                    (E) the impact the NPRs and the identified 
                provisions will have on residential mortgage lending 
                and home equity lines of credit;
                    (F) the likely cumulative impact of the NPRs and 
                the identified provisions will have on the availability 
                of credit, generally and in low- and moderate-income 
                areas;
                    (G) the variance in required capital levels, 
                assets, and asset quality between institutions that 
                implement the advanced approaches or approaches to risk 
                weighting of assets and those that use the Standardized 
                Approach NPR or the Advanced Approach NPR and the 
                impact on competition between entities using different 
                approaches; and
                    (H) historical probability of default and loss 
                given default of residential mortgage loans and the 
                proposed risk weightings in the Standardized Approach 
                NPR and the Advanced Approach NPR, and whether such 
                proposed risk weightings are appropriately and fairly 
                calibrated.
            (3) Voluntary participation.--The Federal banking agencies 
        may seek input and participation from insured depository 
        institutions and insured depository institution holding 
        companies, however, participation in the study by insured 
        depository institutions and insured depository institution 
        holding companies shall be voluntary.
    (b) Report.--
            (1) In general.--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 on the results of the study required 
        by subsection (a).
            (2) Contents.--The Federal banking agencies shall include 
        the methodologies and assumptions used in the study as well as 
        the required elements of the study listed in subsection (a) in 
        the report required in this subsection.

SEC. 4. COMPETITIVE EQUALITY.

    Section 908(a)(1) of the International Lending Supervision Act of 
1983 (12 U.S.C. 3907(a)(1)) is amended by inserting at the end the 
following:
    ``Each appropriate Federal banking agency shall, consistent with 
safety and soundness, seek to ensure that any differences in rules 
implementing the capital standards required under this section or other 
provisions of Federal law for banking institutions, savings 
associations, bank holding companies, and savings and loan holding 
companies do not give competitive advantages to any class or group of 
such institutions, associations, or companies unless required by other 
Federal law, and do not undermine any requirements for enhanced 
supervision and prudential standards required by section 115 of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 
5325).''.